Published July 12, 2005|Updated Aug. 25, 2005
He plays music at weddings in Connecticut, but one recent weekday afternoon Tom Shields was down in Hernando County to sell another house.
The place: a small, one-story, two-bedroom, pastel-painted home not far from U.S. 19.
The look: flip-flops, cargo shorts, polo shirt.
The goal: $$$.
Shields walked back from the fax machine in the kitchen to the glass-top dining room table. His "work station," he calls it.
"See?" he said.
"Here's the offer."
The ceiling fan made a couple of lazy go-arounds.
"All I've got to do," he said, "is sign this, send it back and it's sold."
More than 1,100 licensed real estate agents are working right now in Hernando County, population 150,000 and rising, and Shields _ well, he's not one of them. He's part of the uncounted, unregulated underbelly of the boom.
"I'm a flipper," he said.
He holds on to a house for two months, tops. He doesn't do fixer-uppers. But the market here is escalating so much, so fast, he doesn't have to. He buys, he cleans, he sells.
"You just kind of turn it," Re/Max agent Terri Osborn said. "You don't have to do much."
It's hard to say exactly how many "flippers" there are in Hernando at this point.
"We don't have any way of tracking," said Lisa Gurske of the county's Association of Realtors. "I can just tell you it's on the increase."
Around the country, too: There's no definitive way to count "speculative buyers, as such," said Iverson Moore of the National Association of Realtors.
What is certain, though, is this: Still-low interest rates, new tax breaks and real estate prices that keep going up like some sort of cartoon thermometer are creating what Money magazine calls a "perfect storm" for folks like Shields.
The National Association of Realtors says that only 3 percent of homes purchased in 2004 were for investment purposes. The mortgage tracker Loan Performance puts the number at 14 percent.
No matter the figure, it's happening, analysts say, in hot spots like Phoenix, Las Vegas, Austin, Texas and the New Jersey shore, as well as in in the condo market, particularly in Miami.
In the state: According to the Florida Association of Realtors, the median sales price for a single-family home went from $181,900 in May 2004 to $230,800 this May. In five years, it's up from $115,100 _ a 100 percent spike.
In Tampa Bay: The Tampa-St. Petersburg-Clearwater metropolitan statistical area had the largest number of resales in May.
In Hernando: There's land still to be had, of course, and with Northerners looking for better weather, city folks looking for a bigger house and baby boomers looking for a place to retire, the flippers . . .
"There's got to be hundreds," Shields said.
Maybe more than that.
"Oh, my goodness," said Re/Max agent Barbara Quist, who is Terri Osborn's mother. "I have no idea. But I'm sure it's a lot more than I even realize."
Some builders don't like the speculators. Some lenders don't work with them. Almost everyone agrees they're adding to the ever-escalating price tags on houses.
For now, though, they're not going away.
On the contrary:
The National Real Estate Investors Association had 44 chapters in 2002. Now it has 170.
Last year, 86 real estate investing books were published, three times as many as in 1998.
And the ultimate arbiter of what's hot and what's not in early 21st century America?
The Learning Channel last month launched a reality show called Property Ladder. Watch, the cable network's Web site says, "as novice real estate developers attempt to renovate properties considered "diamonds in the rough' and resell them for a lucrative profit."
"They're part of it, and it doesn't bother me at all," Brooksville real estate agent Ginger Garnett said. "As long as they've got that green stuff and plunk it down, they're okay with me."
Buddy Selph, a broker with Tommie Dawson Realty, added, "I don't know how you tell how many there are, but you know what?
"Everyone's speculating.
"Everyone's interested.
"Everyone's looking for a deal."
And Moore, from the National Association of Realtors, said: "People think it's a rapid way to get rich. But it's also a rapid way to lose your shirt."
Especially if a flipper is too heavily mortgaged.
Or if the real estate market makes like the go-go Internet stocks of the '90s and the so-called bubble bursts.
"But before it does," Shields said, "I'm getting in on it."
He lives in Branford, Conn., a suburb of New Haven. Down here, he has a red-cheeked tan to go with his dark gelled hair and careful goatee. He's 45 and single.
He was the kid with the lemonade stand. He was a paperboy. In middle school, he bought bikes, fixed them up and sold them to his buddies. He has been a truck driver, an assistant manager at a seafood restaurant and the owner of a tanning salon. He sells an occasional used car. He has been doing the DJ business for 15 years. He used to do birthday parties, christenings and bar mitzvahs, but now he just works weddings.
"Even my 75-year-old grandmother was groovin' on the dance floor," reads one testimonial on tomshieldsproductions.com.
He flies Southwest _ 79 bucks one way _ from Hartford to Tampa.
"I'm pretty good at buying and selling things," Shields said. "Now I'm trying my common sense and street smarts with houses here in Florida."
Shields started looking down here after his older brother bought a second home in the Glen Lakes community north of Weeki Wachee. He bought a house _ the one he now uses as his office _ in late 2003, just to "enjoy Florida."
In the two months between the purchase and the closing, the value went up.
"That right there," Shields said, "is what started me thinking."
So did this:
He began to get letters and postcards in the mail.
Money May Not Grow On Trees .. . . But in Hernando County It's Growing in the Pockets of Homeowners.
What Did You Pay For Your Home? Take a Wild Guess at What Its Value Is Now!
He drove around and looked at all the "For Sale" signs in yards. "You have your pick," he said.
So he sold his tanning salon. He got his sister involved, at least financially. She took out a mortgage on her house in Connecticut to join him. He took that money and started coming to Spring Hill, looking for more than just a vacation.
Shields bought his first house to flip in December. He paid $130,000 and sold it a month and a day later for $156,000. After paying a commission to an agent, he ended up making less than $10,000.
The next one he did himself. Bought it in January for $107,000. Sold it in February for $117,000.
Then the third: Bought it in March for $102,000. Sold it in April for $112,000.
"The first one we thought, "Maybe it's a fluke,' " he said. "The second one, "Maybe we were lucky.' Now? It's rolling."
Shields has the previous owner make any structural repairs. He cleans the carpets. He might paint some walls. He makes the house a little prettier. That's it.
"It's ready to sell," he said.
Back at the glass-top table, in his flip-flops, he was looking over the splotchy black fax. He had bought the home for $115,000. The offer in front of him, not quite six weeks later, was for $129,000.
The phone rang.
"Yes," Shields said. "Yes, I did.
"Let me look it over. I'll fax it over then.
"All right. Thanks."
One more question:
"Are you buying this for yourself? A family member?" Shields asked.
Pause.
"An investment," he said.
"Okay."
Researcher John Martin contributed to this report. Michael Kruse can be reached at mkrusesptimes.com or (352) 848-1434.
