At BusinessPundit, we can’t think of a single business that would be more difficult to be in right now than that of real estate developer. With that in mind, we set out to find a land developer who’s still in the game and who would explain what’s necessary to survive and possibly thrive. To answer some of our questions we caught up with Grant Miller, the developer behind The Village of Sewanee Creek – a land development for people interested in green, sustainable living.

1. Tell us about some of the challenges of being a developer since we’ve entered the current economic crisis.

It’s been a really interesting ride because I began developing the Village just about the same time the sub-prime crisis hit. Early days were very slow. Most of the mountain developments were focusing on the high-end retirement buyer, while we focused on building a community of people more interested in frugal, self-sufficient living with an emphasis on simplicity and nature. As the economy worsened, the Village was actually in the sweet spot of the market. Now, almost all of those big, lavish developments have gone bankrupt and closed down. We continue to sell property, people are building and the community is beginning to fill out nicely.

2. What are some of the strategies you are using to succeed despite these challenges?

We’re staying the course we set at the outset. In our own lives, we are focused on making a successful transition from an executive lifestyle to rural self-sufficiency. By being an example (as developer, I also live in the development), we demonstrate that the changes aren’t so frightening, but truly rewarding. So, the Village is much more than beautiful, natural land. We help people ease into a simpler, slower stress-free lifestyle.

3. What are some of the issues you face with being a developer in an extremely rural location?

I guess keeping focused on marketing land over the web while learning to take care of animals, grow food and tinker with a lot of creative projects would be the biggest challenge. Not that different from life anywhere. It’s all about finding the balance that makes you feel good at the end of each day.

4. Why do developers’ roll out their development in phases? What’s the benefit of doing it this way?

There are huge capital costs in building roads and installing utilities. So, it’s only prudent not to spend too much ahead of actual sales. That’s one of the reasons many developers are no longer in business in this tough economy. Another reason for us is that we are carefully building a community where relationships are very important. So, by developing in phases, we avoid spreading people too far apart. The lots are pretty big to begin with, so if neighbors started out even further spaced out there’s a risk that the physical distances might evolve into a culture of social distance as well.

5. What personality traits and habits are required of a developer?

Steadiness, long term vision and consistency.

6. What motivated you to become a developer?

I’m probably different from most developers because I settled down in my own development. I had no prior experience developing land, but I had a clear vision of the kind of place I wanted to live in for the rest of my life. I’m more motivated to realize my vision than I am to make a lot of money. Every person I sell land to becomes my new neighbor. I want them to be happy and I want them to be a good neighbor to me. So far that formula seems to be working very well.

7. If one of our readers was interested in becoming a developer, what advice would you give them?

Be prepared for surprises and setbacks. Do a cost budget and then triple it. Know your target market, develop the product for that customer and deliver a clear consistent message.

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If you’re interested in reading more about what Grant is doing at The Village of Sewanee Creek, you should check out his website, especially the amazing picture gallery.

Why not just retool the slogan? “Extended Stay: Your Post-Foreclosure Home Away from Home.” The chain could turn into a sort of halfway house for people kicked out by the bank. The business traveler meme is so 2004.

The Highland Park, Chicago home featured in “Ferris Bueller’s Day Off” (1986) is being listed by Sotheby’s for $2.3 million. The Chicago Sun-Times has more:

The Ben Rose Home, set for Cameron Frye’s house and the infamous Ferrari scene in the movie staring Matthew Broderick, is comprised of two buildings of steel and glass construction, cantilevered over a ravine. They were designed by noted 20th Century architects A. James Speyer and David Haid.

• Built: 1953
• Bedrooms: 4
• Bathrooms: 4 (full)
• Rooms details: 20×18 master bedroom, 42×35 family room, 40×25 living room, 20×16 kitchen, and dining room
• Size: Approximately 5300 sq. ft., one story, approximately 3/4 acre.
• That garage: 3-car, detached
• Amenities: Gas fireplace, central air, Lake Michigan water

Does “as is” refer to a certain broken window that the owners haven’t fixed since, say, 1986? (See minute 4:44 of the YouTube clip above…)

The plummeting number on my retirement account statements is a monthly reminder of a back burner dream of mine: real estate investment. This economy seems the perfect time to pick up a few good deals at a fantastic rate. But when is the right time?

Seeking Alpha’sThomas Smicklas thinks it’s now, citing:

• lower mortgage rates
• first time buyer tax credit
• continuing price pressure
• low appraisal values due to foreclosures in comps

In short, the landscape for real estate favors investor pools snapping up homes and lots at bargain prices. The balance between new and existing real estate sales remains in a state of flux – regardless of what politicians are doing – and the light at the end of the tunnel may still be an oncoming train.

If you are an investor, these are the best of times if you buy right and buy smart.

According to Zillow Mortgage Marketplace, rates for 30-year mortgages increased slightly last week. Last week’s rate was 5.07 %, up slightly from 5.05 % the week prior. On Monday, rates for 30-year fixed purchase mortgages fell below 5.00 percent, with the average rate on Zillow Mortgage Marketplace at 4.98 percent.

So what do you think? Is it time to buy real estate?

Image Credit: woodleywonderworks, Flickr

Victoria Gotti, the Gambino family daughter best known for her reality TV series “Growing Up Gotti,” is facing foreclosure on her $3.2-million Long Island estate. From the New York Post:

(JP Morgan Chase) has been given the go-ahead to foreclose on Victoria Gotti’s palatial estate on Long Island — the same used in the TV reality show “Growing Up Gotti” — saying she owes a whopping $650,000 in mortgage payments, according to court paper made public today.

The couple divorced in 2003, with the bank transferring the deed to the grandiose mansion and surrounding property over to Gotti. The bank said in court records that the mafia princess owed them $25,000 a month — and that she never made all the payments.

Even former mafioso heirs/celebrities aren’t immune to foreclosures. The major difference is that Chase waited two years to foreclose on Gotti’s home. They have far less patience for non-celebs.

People don’t like purchasing empty homes. At least according to home staging companies, which are now hiring temporary residents to create an occupied atmosphere to lure in potential buyers. The Wall Street Journal reports:

Home “staging” companies charge owners several thousand dollars to fill houses with attractive furniture — but no human props. Faux homeowners could be the next big thing in staging. They supply “that little extra mint on the pillow,” says Steve Rodgers, president of Windermere Exclusive Properties in San Diego, which has the listing on Windward Way. “Down-low and subtle is sometimes good.”

Showhomes Management LLC, a franchise operation based in Nashville, has 350 “resident managers” living in homes for sale in 46 high-end markets, including in Florida, Arizona and Illinois. The company has seen revenues increase 88% since last year, says vice president Thomas Scott. Unoccupied staged houses aren’t selling as well as those with people in them, he says, “because people can still tell they’re vacant.”

The article goes on to recount one temp inhabitant who used borrowed furniture and Wal-Mart curtains to create a home that looked like it was owned by a “wealthy world traveler.”

The real estate market may have crashed, but the circus continues.

Commercial property developer General Growth Properties Inc. filed for bankruptcy today. Bloomberg has more:

General Growth Properties Inc. filed the biggest real estate bankruptcy in U.S. history after amassing $27 billion in debt during an acquisition spree that turned it into the second-largest shopping mall owner.

“This is kind of the beginning of the end,” Fasulo said. “This bankruptcy will drive down the values of mall assets in the United States. It’s going to put, I believe, more supply on the market than can be absorbed by investors.”

Reuters has a list of General Growth Properties’ creditors and holdings, in which you can see the extent of the damage.

If this is the beginning of the end for commercial real estate, who’s next?

Scared yet? An ever-increasing pool of foreclosure rescue scammers are drooling at the prospect of capitalizing off your panic. And so far, they’re doing pretty well. From forgery to title transfer, these scamsters–some of them former real estate professionals–are making an art form of the foreclosure scam.

So far, a few pervasive scams have popped up enough times in the media to be dubbed endemic. Here they are, in no particular order. Do yourself a favor and avoid these five nasty foreclosure rescue scams:

1. The Pay Me First Scam

Some foreclosure rescue scammers ask customers to pay them fees in exchange for delaying a foreclosure. It’s actually illegal for foreclosure rescue companies to collect fees before performing a service. They should be paid after negotiating new loans or monthly payments.

Unfortunately, some homeowners find out the hard way that paying companies before they perform a service leaves them without money or a home. The Star-Telegram reports on one San Francisco-area mortgage broker advertised foreclosure avoidance workshops on Craigslist. For a $2,500 upfront fee plus a $2,000 monthly payment, Freedom Financial Solutions claimed it would halt foreclosures by finding legal violations in homeowners’ mortgage agreements.

Instead, Cheryl Ann Montero, owner of the company, took an ownership stake in her clients’ houses, then filed for bankruptcy, which suspended foreclosures. Montero, who ended up delivering nothing to her clients, made off with $52,000 before declaring bankruptcy herself.

2. The Title Transfer Scam

This scam involves transferring the title of your home to the foreclosure rescue company. This is a very, very bad idea. If your name is not on the title, guess who owns your home? Hint: It’s not you.

Rip-off Report reader Cheri had a scam like this happen to her. Facing foreclosure, she contacted a mortgage rescue company. The scammers executed a buyback scheme that would allow her to re-purchase her house at a different appraisal value. In order to finish the deal, they said they needed to put someone else’s name on the title of the home. Cheri would be a trustee, “guaranteeing” her that she would maintain control of the property while staying inside a renter.

It turned out Cheri’s name never made it to the title. She was paying down a mortgage on a home she no longer owned. The scammers made off with the title, possibly some equity, and the willingness to evict her from the house.

3. Sending Mortgage Payments to a Fake Address

Some scammers ask to receive your payment in place of the lender. They claim they have a special relationship with the lender, or can renegotiate your mortgage if you send them payments. This is sketchy, to say the least. One California scammer, for example, made $1.2 million by pretending to be a lender—then fled to his native Mexico.

If someone tells you to ignore your lender letters, or to send the payments somewhere else, run the other direction.

4. Fake Lender Letters

Some fraudsters have taken to forging major lenders’ letterhead and convincing homeowners to sign up for “official” loan modification services. Mail, envelopes, and letterhead may look exactly like the lender’s, but the content will be fraudulent.

The Lake County News reports that one Los Angeles ring even filed a fictitious business permit. The swindlers forged lender and government envelopes with “Final Notice” written on the outside. The letters inside told homeowners that if they sent in their mortgage information, they could apply for a home rescue program.

Once homeowners applied, they received a confirmation note and a set of forged lender documents. In the meantime, they were instructed to send their mortgage payments to a “Payment Processing Dept” located at a scammer’s PO box, where the money was stolen.

5. The Obama Rescue Plan Scam

The Philadelphia Inquirer reports that some rescue companies are charging as much as $3,000 to modify customer loans under the new Obama relief plan. The truth is that you can find out about rescue plan yourself, either online at MakingHomeAffordable.gov, through the Homeownership Preservation Foundation at 995hope.org, or by calling 1-888-995-HOPE.

WASHINGTON — New-home sales climbed for the first time in seven months during February, another favorable sign for the housing sector, but the data also showed prices tumbled. Sales of single-family homes increased by 4.7% to a seasonally adjusted annual rate of 337,000, the Commerce Department said Wednesday. January new-home sales plunged 13.2% to an annual rate to 322,000; originally, the government said January sales fell 10.2% to 309,000.

Regionally last month, new-home sales increased 6.6% in the West and 9.7% in the South. Sales fell 9.1% in the Midwest and 3.3% in the Northeast. An estimated 27,000 homes were actually sold in February, up from 23,000 in January, based on figures not seasonally adjusted.

Note that home sales are still down 40% from last year. Calculated Risk says sales are just above a record low.

The news is light years from bullish, but in this market, anything good is worth printing.