In 2008 and 2009, when the housing market cracked, David Dziedzic was a real estate investor left holding the bag. He spent those two years slogging through 25 of his own short sales and five foreclosures. At the time, banks were learning how to handle their growing lists of distressed properties, and efficiencies were nowhere to be found.
“Banks wouldn’t take an email. We would literally get up at 3 in the morning and start faxing information,” Dziedzic says.
But the former Canadian hockey pro leveraged his lessons from short-sale hell to create Housing Angels in 2009. Dziedzic partnered with Canadian and American investors who wanted to get in on the distressed real estate action in the U.S. But Housing Angels—which is based in Phoenix and expanded to Las Vegas two months ago—is different from distressed-property investment groups: It specializes in working with homeowners who would like to stay in their homes as renters after the home is sold short by the bank—and then possibly buy it back when they re-establish good credit.
“I was helping someone move across the street [after a short sale] one time,” Dziedzic says, “and it dawned on me ‘Geez, who could be a better tenant than the original owner?’”
Dziedzic pairs an investor with a home-seller prior to listing the property. His hope is that the investor will win the bidding early and, in turn, gain an established, responsible tenant right away. The former owner—and “new” tenant—sees a lower monthly housing payment, and the investor enjoys an income stream. After brokering about 1,000 transactions, Dziedzic says the tenant ends up being able to live in the home and re-purchase it about 50 percent of the time.
Sellers don’t pay Dziedzic’s team anything; Housing Angels makes its money from commissions on the sale. Which brings us to Dziedzic’s age-old advice for short sellers:
“If they want money upfront, it’s time to run,” he says.