NW Arkansas Real Estate Rebounds, But Benton County OREO Stacks Up

by George Waldon  on Monday, Jun. 24, 2013 12:00 am  

Ron Pender, left, and Barry Cooksey are building houses in the Clower Farms neighborhood in Rogers and on other OREO lots acquired from Benton County lenders. Banks are working to convert into cash property recovered on failed development loans. (Photo by Brooke McNeely Galligan)

“It is something we monitor closely,” Marshall said. “Developed lots are easier to sell. The raw land obviously presents a challenge.”

Buying OREO

Ron Pender and Barry Cooksey of Re/Max Real Estate Results in Bentonville have joined forces to invest in OREO opportunities in Benton County.

They bought 33 lots in the Clower Farms subdivision in Rogers from BancorpSouth Bank of Tupelo, Miss., in a series of transactions that began last year. The bank recovered the property in February 2011 from John David Lindsey in the wake of his Chapter 7 bankruptcy.

“There are plenty of lots out there,” Pender said. “But there’s not as many available in what I would call good locations. That supply has been substantially reduced. The price is going up on those remaining lots.”

Pender and Cooksey also purchased 27 lots in the Maple Glenn subdivision of Pea Ridge from Great Southern Bank of Springfield, Mo., for $150,000. Pender thinks the time may be ripe for converting Pea Ridge renters into Pea Ridge homeowners.

“The rental market is very strong in Pea Ridge,” Pender said. “There is no supply of decent rental property. The interest rates are at all-time lows. Some of those renters should be able to get into a house. And in many cases, a house payment is cheaper than renting.”

Their two OREO plays were made in projects where they could buy all the inventory of home sites. They are finishing construction of two homes in Maple Glenn and two more in Clower, where they recently sold a third house.

“We’re trying to buy lots where we control the subdivision,” Pender said. “We want to put a certain product out there, and when you’re competing with other builders, you can’t always do that, even with restrictive covenants. We’re building a higher-quality home.

“We are getting calls from builders wanting to buy lots from us. But we’re not in it just to flip the lots. We’re in it to build and sell houses.”

In Name Only

Sometimes banks hold OREO — Other Real Estate Owned — properties in the name of affiliated limited liability companies or corporations.

 

 

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