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- 1. BY MARK PUENTEAND DARLA CAMERON Times Staff Writers Real estate investors have discovered a for- mula that transforms Tampa Bay’s housing crash into quick and easy profits. How quick? In Hillsborough County last year, 242 homes were bought and then resold within just one day. Another 113 sold the same way in Pinellas. To be clear, that’s not a seller finding a buyer in one day and entering into a contract that closes weeks later. It is a property bought and sold in one day, start to finish. How easy? The price markup on one-day flips averaged $9,728 in Hillsborough; $7,545 in Pinellas. Darren Wilson got a hard lesson in this fren- zied business in October when he offered $18,000 cash for a foreclosed house in Tam- pa’s Seminole Heights neighborhood. Wilson says he refused the real estate agent’s request to also represent both him and the seller, so she wouldn’t have to split the commission. The home later sold for $16,900. The same agent Wilson turned down wound up represent- ing the seller and the buyer, West Florida Whole- sale properties. West Florida sold the home again for $26,000, a 53 percent markup. Wilson lost the deal despite making the higher bid, and the bank lost $1,100. Said Wilson: “There is something strange going on here.” • • • Flipping isn’t new. It was common during the real estate boom that peaked in 2006. People profited by buying and reselling homes in a rap- idly appreciating market. Today, in a depressed market, astonishing speed stands out. In calendar year 2011, 587 homes sold twice in Hillsborough County. The median time between Quick flips profit a fewFour firms account for more than 30 percent of property flips that take a week or less. . See FLIPS, 15A A Tampa Bay Times investigation After gathering in Grant Park, protesters marched through the streets of Chicago last weekend, trying to get as close as they could to McCormick Place, where the NATO summit was held. Chicago police officers on foot, bicycle, horseback and Segway lined the streets. A COMING CLASH Tampa police Assistant Chief John Bennett stopped to watch it all from the dappled shade of a young elm tree. In August, Tampa will host the Republican National Convention, and many of the same pro- testers will converge on its streets. Bennett and other local public safety officers had come to get a peek at what to expect when 10,000 protesters mass in Tampa’s smaller, and much hotter, downtown. “This looks like the aftermath of Gasparilla right now,” Bennett said, as a caped man wearing a rubber boot as a hat circled four people carrying cardboard cornstalks. Bennett predicted that Tampa, with its experi- ence handling the Super Bowl and the Gasparilla parade’s drunken crowd of 500,000, could deal with this. As he spoke, the sun disappeared and the wind picked up. Thunder cracked. Less than 100 feet away, Chicago police officers in pale blue hel- mets and protesters in black bandannas began jostling. Bottles and sticks flew. A man scaled a skinny leafless tree and shook it violently. Bennett craned his neck. “They rushed the police,” he said. He climbed a barricade and turned on his video camera, zooming in on the fracas. It was hard to tell what was going on, but the swinging billy clubs didn’t look like Gasparilla. Tampa preps for protests at the Republican National Convention by studying a dress rehearsal of sorts: the NATO summit in Chicago. STORY BY LEONORA LAPETER ANTON | PHOTOS BY MELISSA LYTTLE | Times Staff CHICAGO T he socialists shouted and the Hare Krishnas hummed. Half a dozen men held up a Palestinian flag the size of a swimming pool. Middle-class moms in pink wielded cardboard guns, part of the antiwar crowd. On the first day of the NATO summit last weekend, an estimated 3,000 protesters with every message imag- inable swarmed south on Michigan Avenue. They were flanked on either side by compact lines of Chicago police officers. A scrum of young people dressed in black and wearing masks snaked through the crowd carrying a red and black anarchy flag. “What do we want?” they roared. “Dead cops! When do we want it? Now.” . See PROTEST, 8A “It’s got to be safe for everyone. It can’t be survival of the fittest,” Tampa police Assistant Chief John Bennett said, referring to expected protests during the RNC in Tampa. DANIEL WALLACE | Times Hillsborough County’s chief medical examiner, Vernard Adams, 59, plans to take a college position after 21 years and thousands of autopsies. Endformedicalexaminer No, Hillsborough County’s chief pathologist isn’t dying. He’s retiring. BY PATTY RYAN Times Staff Writer TAMPA — Vernard Adams has the physique of a man who walks 3 miles a day, lifts weights and regularly dances the tango. He lunches on nutrient-rich sar- dines and broccoli. He’s 59 and healthy, with a father who is 90. But he does autopsies for a liv- ing, and so, yes, he has consid- ered how he might prefer to go. “A cardiac arrhythmia,” he said. “It’s instant death. The heart stops. Ten seconds later, you’re unconscious.” He pauses. Wry smile. “But on a water haz- ard at the golf course.” He doesn’t golf. He just likes the idea of leaving a challenge for fellow forensic pathologists. Hillsborough County’s chief medical examiner will retire from his post next month, after 21 years of solving the district’s puzzles. He has accepted a uni- versity position out of state. His 3,922 autopsy reports, the bulk of a career total near 5,500, will linger in color-coded files: red for homicide, yellow for sui- cide and black for traffic crashes. The plain manila ones, deaths from natural diseases, interested him the most, though television cameras came for the others. His first autopsy was a lung cancer patient at Tufts Univer- sity School of Medicine. His most recent: a possible drug overdose. Over the years, as he watched, death changed its robes. Drug abusers started arriving obese, with bad backs and oxy- codone habits, eclipsing gaunt . See ADAMS, 12A USF softball team heads to College World Series. Sports, 1C , Indianapolis 500 | Noon, Ch. 28, Indianapolis Motor Speedway A DAY FOR THE RACESSports, 1C TODAY’S WEATHER 8 a.m. Noon 4 p.m. 8 p.m. Rain likely 74° 85° 90° 81° 30% chance of rain More, back page of Sports IN PERSPECTIVE Bureaucratic praise Give it up for the boring bureaucrat who may have saved your life. 1P IN LATITUDES Are we there yet? School’s out! Time to take off. But before you do, read our vacation ideas and a survival guide for summer’s family road trip. 1L INDEX Arts 2-3L Astrology F Books 7-8L Business 1D Classified F Crossword 5P, F Editorials 2P Floridian 1E Letters 2P Lottery 2A Movies F Travel 4-6L © Times Publishing Co. Vol. 128 No. 308 FLORIDA’S BEST NEWSPAPER tampabay.com * * * * SUNDAY, MAY , | $1.50 Coca-Cola 600 | 6 p.m., Ch. 13, Charlotte Motor Speedway Syria blamed as attacks kill 32 children U.N. and U.S. officials condemn the violence, which raises new questions about a peace plan. Associated Press BEIRUT, Lebanon — Gruesome video Satur- day showed rows of dead Syrian children lying in a mosque in bloody shorts and T-shirts with gaping head wounds, haunting images of what activists called one of the deadliest regime attacks yet in Syria’s 14-month-old uprising. Syrian tanks and artillery pounded the village of Houla, near the restive city of Homs, during the day, opposition groups said, then soldiers andpro-governmentfightersstormedthevillage and killed families in their homes late at night. The attacks Friday killed more than 90 people, including at least 32 children under the age of 10, the head of the U.N. observer team in Syria said. The attacks sparked outrage from U.S. and other international leaders, and large protests in the suburbs of Syria’s capital of Damascus and its largest city. The attacks also renewed fears of the relevance of a month-old international peace plan that has not stopped almost daily violence. The United Nations denounced the attacks in . See SYRIA, 6A
- 2. * * ** Tampa Bay Times | Sunday, May 27, 2012 | 15A the first sale and the close of the second: three days.Pinellas expe- rienced a similar pattern. A Tampa Bay Times investi- gation of property deals in Hills- borough and Pinellas counties found that four firms account for more than 30 percent of the flips that take a week or less. One of them is West Florida Wholesale Properties, the firm that bought the house Wilson wanted. In 2011, West Florida bought and then resold 139 prop- erties within just 60 days. Most of West Florida’s flips took place in much less time. The average was nine days; the median 5.5 days. On average, the final selling price was 33 percent higher than what West Florida originally paid. Take as an example West Flori- da’s flip of a three-bedroom, two- bath 1,864-square-foot house at 3909 Deleuil Ave. in Tampa. Fannie Mae, the government sponsored mortgage holder, had foreclosed on the home in November 2010 and subse- quently sold it two months later to California-based USA Rental Fund LLC for $19,000. On March 14, West Florida bought the house for $39,500. That same day, West Florida resold the house for $69,000. • • • The Times asked how West Florida Wholesale Properties can flip so many homes so quickly. Lee Kearney, a real estate agent and husband of company managing member Megan Zelin- skas, said West Florida finds potential buyers while still nego- tiating with the bank to buy the property. Kearney said many West Flor- ida customers are investors from France, Spain and England. He said the firm promises to fix up the homes after the sale, so the investors can then rent them out. West Florida profits on the quick flip by convincingbuyers thatthe home has future earning poten- tial, Kearney said He said the investors make more in rental profits than they could make in the stock market. “We send before and after pic- tures” to the investors, he said. “It’s a complete package.” Kearney has a connection to one of the other firms that dom- inate the bay area’s quick flip market. Bay Area Trust, formed in 2008 by Gregory Vander Wel, received $478,400 more than it paid by flipping 59 houses in a week or less last year, according to public records. That’s an aver- age increase of more than 24 per- cent. Kearney holds only a sales associate license. In 2011, he han- dled a few transactions under Vander Wel’s broker’s license, a common practice within the industry. Vander Wel, through a spokes- person, declined to talk to the Times. • • • Christopher Smith of Bay to Gulf Holdings laughed when asked about West Florida Whole- sale Properties’ practice of mak- ing improvements after selling homes. That is not how Smith’s com- pany does business. “You buy and fix, then sell,” he said. Smith’s Tampa firm received $301,000 more than it origi- nally paid by flipping 31 homes in a week or less in 2011, accord- ing to public records. Smith said the firm buys most of its proper- ties from courthouse auctions in Hillsborough County. One of his firm’s flips was the 1,088-square-foot house at 1910 E Flora St. in Tampa. On March 18, Bay to Gulf bought the home from Fannie Mae for $25,000. That same day, Bay to Gulf flipped the home to FPNS Invest- ments LLC for $30,000. A tidy increase, to be sure, but noth- ing compared to what FPNS got the next month when it sold the same house to Yves Sellier for $70,000. Smith emphasized that he findsbuyerswhilethepaperwork for his bank deal is being final- ized. Although the prices appear low on many deals, he said lend- ers prefer cash buyers instead of deals contingent upon apprais- als, financing and repairs. “Which offer would you take if you were the bank?” Smith asked. “There is no secret to this.” Mark Helmling of St. Peters- burg-based CentralFlorida Hold- ings Group, said lenders are try- ing to get houses off their books. 3909 Deleuil Ave., Tampa Yearbuilt:1958 Sq.ft.:1,864 Beds/baths:3/2 Originallistprice: $39,900 Sale activity Nov.11,2010:Citi- Mortgagetransfers toFannieMae Jan.27,2011:Fan- nieMaesellsto California-based USARentalFund LLCfor$19,000 March14:USA RentalFundsellstoWestFloridaWholesalePropertiesfor$39,500 March14:WestFloridaWholesalePropertiessellsto3909Deleuil AvenueLLCfor$69,000 West Florida Wholesale Properties Flipsinaweekorless:60 Totalpriceincrease:$529,200 Avg.increase:$8,820 Flipsin60daysorless:139 Totalpriceincrease:$1,773,600 Avg.increase:$12,760 Bay Area Trust Flipsinaweekorless:59 Totalpriceincrease:$478,400 Avg.increase:$8,108 Flipsin60daysorless:76 Totalpriceincrease:$662,200 Avg.increase:$8,713 Bay to Gulf Holdings Flipsinaweekorless:31 Totalpriceincrease:$301,000 Avg.increase:$9,710 Flipsin60daysorless:58 Totalpriceincrease:$904,000 Avg.increase:$15,586 Central Florida Holdings Group Flipsinaweekorless:43 Totalpriceincrease:$234,000 Avg.increase:$5,442 Flipsin60daysorless:73 Totalpriceincrease:$473,700 Avg.increase:$6,489 He, like Smith, said his firm makes renovations before resell- ing homes to investors. His company received $234,000 more than what it paid by flipping 43 homes in a week or less, according to public records. “We are aboveboard,” Helm- ling said. “The banks are the ones creating their own problems” by not seeking higher prices. Last year his firm flipped a 1,235-square-foot house at 7307 50th Ave. N, in St. Petersburg. It purchased the home from the U.S. Department of Hous- ing and Urban Development on Oct. 6 for $20,000 and sold it for $25,000 the next day to Hector Patino and Denise Baker-Winter. One day later, they sold the same house to Thomas and Janeadaire Durban for $35,000. • • • Making improvements after selling homes isn’t the only dif- ference that sets West Florida apart from its rivals. More than 85 percent of West Florida’s quick flips included a single real estate agent repre- senting both the bank and West Florida. Fifty-two of 60 to be pre- cise. At the other three firms, the same agent represented both buyer and seller on less than 35 percent of the quick flips. Darren Wilson says it cost him a deal. He’s the part-time inves- tor who offered to buy the home on N Cherokee Avenue in Tampa for $18,000 that West Florida secured for $16,900 and then quickly resold for $26,000. Christina Griffin, a Realtor with Coldwell Banker in Tampa, represented Bank of America in the sale. According to Wilson, she demanded that she also rep- resent him on the sale, a request he refused. She wound up representing the bank and West Florida on the deal, which allowed her to avoid splitting the commission with another agent, according to My Florida Regional Multiple List- ing Service data. Bank of America spokes- woman Jumana Bauwens said the bank rejected Wilson’s bid because a required form was missing. Wilson insists he signed the form. Griffin and Coldwell Banker did not respond to multiple requests for comment. “This is wrong,” Wilson said. “Nobody is looking at this.” • • • Should someone in author- ity be concerned about the new quick flip phenomenon? It may be nothing more than people trying to make a buck, just as they did with earlier, more are absorbing the losses.” Should real estate firms and Realtors transform this hypo- thetical scenariointoactual prac- tice, it might run afoul of the law, according to former prosecutors. “Brokers and real estate agents acting on behalf of a seller of real property have a duty to present all offers to purchase, whether high or low, to their seller,’’ said Brian Albritton, former U.S attor- ney for the Middle District of Florida and currently a partner at Phelps Dunbar in Tampa. Todd Foster, a former su- pervisory assis- tant U.S. attor- ney and man- aging attorney at Todd Foster Law Group in Tampa, said ac- tivity in which an agent fun- neled homes to onebuyercould be considered a ‘‘scheme to de- fraud’’ under federal law. In this context, Foster said: ‘‘This may include a buyer, seller, appraiser, Realtor or mortgage broker — the statute is broad enough to reach anyone who defrauds another. However, before being held criminally responsible, an individual must be shown to have specifically intended to defraud another. Merely being involved in a trans- action where there has been a loss, regardless of the amount of the loss, does not mean there has been a crime committed.” Foster pointed specifically to the bank fraud and mail fraud sections of the U.S. Code. The former “proscribes the use of a scheme or artifice ... to defraud a Federally chartered or insured financial institution.’’ The latter basically makes it a crime to use the U.S. mails to accomplish the same thing. Ann Fulmer, a former Georgia prosecutor who co-founded the Georgia Real Estate Fraud Pre- vention and Awareness Coali- tion, said a crime could be diffi- cult to prove even if taxpayers are absorbing losses. “Theshortertimebetweensales, the more likely it is shenanigans,” she said. “But it can be difficult to tell. You don’t know what the (real estateagent)toldthebank.” Mark Puente can be reached at mpuente@tampabay.com or (727) 893-8459. Follow his Twitter feed at twitter.com/markpuente. From the front page> tampabay.com for the latest news . FLIPS continued from 1A Quick flips bring in big bucks for a few 1910 E Flora St., Tampa Yearbuilt:1953 Sq.ft.:1,088 Beds/baths:3/1 Originallistprice: $49,900 Sale activity March18,2011: FannieMaesells toBaytoGulf HoldingsLLCfor $25,000 March18:Bayto GulfsellstoFPNS InvestmentsLLC for$30,000 April29:FPNSinvestmentssellstoYvesSellierfor$70,000 3260 Laurel Dale Drive, Tampa Yearbuilt:1984 Sq.ft.:1,338 Beds/baths:2/2 Originallistprice: $75,000 Sale activity July2,2010:Wells Fargodeedsto U.S.Departmentof HousingandUrban Development June22,2011: HUDsellstoBay AreaTrustLLCfor $35,000 June24:BayAreaTrustsellstoSalmaPropertiesLLCfor$55,000 7307 50th Ave. N, St. Petersburg Yearbuilt:1957 Sq.ft.:1,235 Beds/baths:4/2 Originallistprice: $44,000 Sale activity Oct.6,2011:HUD sellstoCentral FloridaHoldings GroupInc.for $20,000 Oct.7:Central FloridaHoldings Groupsellsto HectorPatinoand DeniseBaker-Winterfor$25,000 Oct.7:PatinoandBaker-WinterselltoThomasandJaneadaireDurban for$35,000 Sources:FloridaDepartmentofState,DepartmentofCorporations;HillsboroughandPinellascountyrecords;MyFloridaRegionalMLSdata Four companiesstandout Here are government-owned homes flipped by each of the companies A look at deals in Hillsborough and Pinellas finds these four making more than 30 percent of flips that take a week or less. 5 miles 301 41 60 75 4 75 275 275 Tampa New Tampa Plant City Sun City Brandon Tampa Bay DARLA CAMERON | Times HILLSBOROUGH Source: Hillsborough County Property Appraiser 39 properties bought and sold twice in the same day West Florida Wholesale Properties bought and then resold 111 Hillsborough County homes in 60 days or less last year. The company flipped many of them in a week or less. 21 properties bought and sold twice in one week or less 51 properties bought and sold two to four times in two months Fast sales, for a profit DANIEL WALLACE | Times DANIEL WALLACE | Times DANIEL WALLACE | Times SCOTT KEELER | Times conventional forms of flipping. Further, state records contain no complaints against West Flor- ida, Bay to Gulf, Bay Area Trust or Central Florida Holdings. And the Times could find no exam- ples of federal authorities prose- cuting anyone for similar quick flips. That’s not to say that regula- tors aren’t curious about this new world of flipping. The Times sent a sample sale from each of the four firms that do many of the quick flips in Hillsborough and Pinellas to the U.S. Department of Housing and Urban Development. In response, HUD spokes- man Lemar Wooley said the Fed- eral Housing Administration “has received information about instances of investors who have ‘flipped’ FHA (foreclosed homes) acquisitions for a quick profit and is in the process of conduct- ing an internal review of these instances. As such, HUD has no comment on the specific cases cited in Florida at this time.’’ The combination of rapid-fire flips and a single agent repre- senting both the buyer and seller on the original sale raises con- cerns that banks and the federal government and ultimately tax- payers are losing money on the sale of foreclosed homes. JoniHerndon,vicechairwoman of the Florida Real EstateApprais- al Board, and other real estate observers are concerned about a potentially worrisome symbiotic relationship among a few inves- tors and real estate agents. “There’s too much monkey business going on,” said Hern- don, a 27-year industry veteran who testifies in court on real estate fraud.“It’s the little cliques that work all these deals.” The scenario she and others fear begins with a real estate firm trying to assure a steady supply of houses to flip in a highly com- petitive market for foreclosed properties. The firm joins with a Realtor who represents a bank or other lender needing to dispose of large numbers of foreclosed properties. The deal: The Realtor representing the bank funnels homes to the real estate firm, assuring a steady supply. In return, the Realtor also gets to represent the real estate firm in the sales, avoiding having to split the commission. In that arrangement, the Real- tor has no incentive to present the bank with other potentially higher offers from parties the Realtor does not represent. Torealestateexperts, therapid Joni Herndon fears there’s “monkey business” going on. resale suggests that the original seller did not get the best price for the property. And, since fed- eral agencies owned some of the homes or insured the mortgages on them, rapid flips could mean that taxpayers may be short- changed in the process. “How the heck does a home’s value go up by (thousands of dol- lars) in eight hours?” Herndon said. “Somebody dropped the ball at the bank. They’re not doing their due diligence. The taxpayers