Dear Local Governments: We Can Save the Families We Love from Foreclosure
By Kevin Ra, Chairman and Founder at Parcel Revenue Corporation
At this time in history, every local government entity in America must work to keep its families in their homes. Local governments must also protect their incoming tax revenues. These funds are the oil that allows the gears of government to run smoothly and efficiently.
America’s communities and families cannot afford another 2008 housing crisis. Yet, the key issue that exacerbated the 2008 to 2012 housing crisis remains unsolved. In 2020, this same issue threatens the incoming tax revenues of local governments financially impacted by the COVID-19 pandemic. Many experts are predicting this housing crisis and the next 4-8 years will be far worse than 2008.
The issue: failure to be proactive by using predictive technology.
Local governments have failed to integrate modern technology available in today’s digital marketplace. Technology that can protect incoming tax revenues by predicting and preventing foreclosures, and deter unethical house flipping by opportunistic investors; all while enforcing local building and housing codes.
It is evident that cities have no way of understanding how current and future vacancies will impact future incoming tax revenues.
This is a huge problem!
Real estate investors and house-flippers are not the solution.
Waiting for homeowners to lose their homes to foreclosure or unethical real estate investors and house-flippers is ineffective. As a real estate investor, I have purchased more than 500 properties and consulted on the purchase and sale of thousands more. I can tell you first hand that the “appearance fee” charged by real estate investors is 25 to 40% of the real estate equity in your community.
In addition to taking that equity, we “house-flippers” also don’t mind the property sitting empty for 6–18 months. We accounted for that “carrying time” in our pro forma. For local governments, that means at least 6–18 months of that property not generating income tax revenue.
Remember the 2008 housing crisis? We can’t afford that again.
The next housing crisis can be avoided right now.
Digital tools like artificial intelligence, analytics, automation, and Application Programming Interfaces, or APIs, (snippets of computer code that link multiple applications together) allow us to store and analyze data on troubled homeowners. These innovative methods of computation were unimaginable when traditional code enforcement and foreclosure prevention methods were created decades ago.
Local governments must deploy the foreclosure prevention technology of tomorrow.
The time for technology that, 24/7/365, analyzes the money that houses generate for local governments and predicts what money will be needed in the future — is now. Right now!
You need a systematic approach.
My name is Kevin Ra, and with the intent of finding a way to eliminate Cleveland’s 20,000+ abandoned homes, I started a movement, a company, and a systematic approach to assist troubled homeowners called Parcel Revenue. Today, Parcel Revenue’s processes are deployed to assist homeowners via a technology platform called the Virtual Land Bank Platform.
Initially, my curiosity in vacant homes was sparked when my grandmother’s neighborhood in Birmingham, Alabama, called Enon Ridge, went from Eden to a war zone in less than a decade. I wanted to learn how this information could help families in Cleveland. I also wanted to purchase and renovate some of these homes.
As of this year, I have purchased 500 of them.
What I learned along the way is that the 500 transactions that closed taught me absolutely nothing. It was the 4,500 transactions that did not close that schooled me on the tragedies faced by struggling families.
Family feuds are common and often erupt over inherited property. What’s worse are the inherited properties that cannot be transferred because one sibling, out of many, suffers from mental illness or drug abuse and has not been seen in years.
Situations where an affair with the neighbor’s spouse can leave children utterly confused and can cause two foreclosures instead of one. Over half of all divorces in low-income communities trigger a home sale, foreclosure or loan modification in the 1-5 years that follow.
Along my journey, I faced multiple bankruptcies and foreclosures. I unexpectedly found myself in the role of a community activist. I encountered many local government agencies that fought me tooth-and-nail. A small army of attorneys that believed in me (a former litigation consultant and lobbyist myself) and this movement enough to fight and win these battles on our behalf — for free.
Our case study in Cleveland, Ohio proved program efficacy.
Parcel Revenue disrupted the status-quo of relying on community land banks and ineffective, reactionary methods. Rather than waiting for government officials in Cleveland to adopt a new way of thinking, we launched our own “virtual city” called the Abandoned Homes Project. Government officials , the “good guys” from multiple Ohio cities worked with me to improve Cleveland’s poorest urban communities.
The great pride we take in our work is nothing compared to the pride taken in knowing what was built. This process can now be of value to our fellow Americans at a critical time for America’s communities and families.
Parcel Revenue is modern technology’s answer to foreclosure prevention and code enforcement. It can simultaneously analyze every stage of a real estate transaction at the granular level.
- Why is the seller selling?
- Why is the buyer buying?
- Who is the buyer going to sell it to?
- Why are they buying it?
- How much will they pay for it?
- Where can I find them today?
We can start the marketing process before we even close on the house.
Knowing each of these details intricately allows us to understand the real estate transaction cycle, or deal cycles as we investors call it, begins when the seller decides to sell their home.
Parcel Revenue’s job is to tell us two things: Why did the seller decide to sell and, at that exact moment in time, was the real estate a burden or a benefit to that seller? The answer is based on over 5,000 real estate transactions loaded into its databases and analyzed 24/7/365.
How does this look in the real word?
The lawsuit filed today by a credit card company against a homeowner in your community is a signal of financial distress that will cause a foreclosure 1 to 5 years from now. This future foreclosure will cause a vacancy in your community; that vacancy will disrupt the flow of income taxes to the local government.
Local governments that want to protect those income tax revenues have limited choices. Their only option is to wait for the property to go into foreclosure and risk losing much-needed income and property tax dollars. The next step is to offer assistance to the homeowner.
The alternative option would be to deploy a tool that reacts the moment the credit card company files the lawsuit.
Parcel Revenue is the answer.
We created, patented, and now offer a free economic development model called the COVID-19 Foreclosure Prevention & Incoming Tax Revenue Model (Cov-Mod®).
By free, we mean free. We are extending a free, limited intellectual property license to every local government in America.
Over the next six months, our entire Parcel Revenue family will work diligently to create free blog posts, videos, and other content that will assist local governments in understanding and deploying COV-MOD®.
Many local government entities are understaffed and/or worried about the costs and manpower associated with complex marketing campaigns and IT deployments. We will offer paid plans that offer a range of services from consulting to fully managed, outsourced deployments.
We are all in this together. Another 2008 housing crisis does not have to be our collective fate. We want to do our part.
Local government entities who want to do their part to effectively provide desperately needed assistance to their constituents, may obtain a free intellectual property license and access to all free content required to implement COV-MOV® at http://www.preventforeclosures.org.
Our prayers are with you and your families. We are all in this together.