Real Estate Auctions Popular in 'Microwave World'

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Real Estate Auctions Popular in 'Microwave World'

ANDREW ASHBY | The Daily News
 

GOING ONCE: John Roebuck of Roebuck Auctions Thurday sold off 33 Midtown properties in about an hour. Auctions like this one are becoming more common locally and nationally, according to official data and anecdotal evidence.  -- Photograph by Andrew Ashby

The parking lot of Roebuck Auctions overflowed Thursday as almost 300 people packed into the large hall at 5932 Park Ave., trying to get the best deal on 33 Midtown properties.

John Roebuck, who started the business in 1973, talked a mile a minute. His employees roamed the aisles, shouting bids to him from investors in the back of the room.

"It was a little bit nerve-wracking, but it was interesting," said Tiger Bryant, owner of Young Avenue Deli in the Cooper-Young district. At the auction, Bryant bought three rental houses on Cooper, along with a lot behind them.

Emerging Trend

Real estate auctions like this one have grown nationally and locally over the years.

In 1994, $9 billion worth of items were auctioned, according to the National Association of Auctioneers. In 2006, the NAA projected that number to reach almost $300 billion.

Of those totals, 30 percent came from real estate auctions. Also, real estate is the fastest-growing segment of total auction sales, Roebuck said.

Getting rich quick

Memphis-based Roebuck, which also has offices in Destin, Fla., is one of the largest real estate auctioneers in the Southeast.

"Quite frankly, there are more people that need to sell today, not later. I tell people we're in a microwave world, and most people don't want it tomorrow, they want it today. Time means more to some sellers than money. They need to sell and move on."

- John Roebuck

Owner of Roebuck Auctions

In addition to its regular real estate auction business, the company also handles property auctions for Shelby County, where many properties are acquired through eminent domain and seizures because of money owed on back taxes.

In 1980, Roebuck sold $155,000 worth of property. That number rose to $15 million in 2000. Roebuck estimates the company will sell $70 million worth of property this year.

"It's been doubling every year for the past five to six years," he said.

In Memphis, 50 percent of the property Roebuck sells is residential, 25 percent is land and 25 percent is comprised of commercial and industrial properties.

"Quite frankly, there are more people that need to sell today, not later," Roebuck said. "I tell people we're in a microwave world, and most people don't want it tomorrow, they want it today. Time means more to some sellers than money. They need to sell and move on."

More bang for bucks

The auction last Thursday is an example of that.

Dick Moore, founder of Dick Moore Housing, owned all 33 of the properties for sale.

Since Moore bought some of the properties in the 1950s, he would have been forced to pay income taxes on their appreciation.

"So I was at a point where I can't make a profit doing what I'm doing, and if I sell them, I've got to give the money to Uncle Sam," Moore said.

He found out about a reverse 1031 exchange, an accounting process in which he could get a tax break on his property sales by buying similarly priced properties within six months.

So in November, Moore bought the 323-space Buck Island Mobile Home Community in Tunica and the Red Wood Estates, a 54-space mobile home park in Frayser, for a combined $2.7 million.

Then, through the auction, Moore sold his 33 Midtown properties for $3.3 million. That means he only has to pay taxes on $600,000 of his sale.

"There was no way I could market those 33 properties in six months," Moore said. "All in all, it's quick, it's easy and it's final. I can continue with my 1031, and I can take the Memphis real estate dollars and invest them elsewhere."