Making More Money –Part 2 — The Foreclosure Bus

Making More Money:
Part 2 – The Foreclosure Bus
Easy question, easy answer: The more
hours per day you use your vehicle, the
more money you will make. Is it really that
simple? It can be, if you put your mind to
it, and can work your way around the
physical, geographical and institutional
constraints associated with your boundless
opportunities associated with it. This
example – the Foreclosure Bus – is only one
of a short (or not) blizzard of ideas to come
– few with as little risk or requiring as little
investment than this one. All are possible
– though not for every operator – in
every geographic location, during every
season, and for every situation. Regardless,
the challenge is always the same. You
have a bus in service some of the time:
What else can you do with it, with the constraints
cited above, to use it for more
hours? Here is one idea.
Organized Bargain Hunting
in the Foreclosure Abyss
This is an opportunity aimed mostly at
how to fill the several hours during an outand-
back charter or tour trip between the
customers’ alighting at their destination and
when they re-board for the trip home. The
one exception is that, unlike your charter
passengers, the “interim passengers” would
travel effectively in “tour mode.” In conjunction
with a local realtor (or with your
own personnel substituting for their knowledge),
you would plan the trip in advance,
and then draw upon individuals to fill the
vehicle. Or, as a variation, you could provide
this service to large realty companies –
shuttling around their agents for quick
glimpses of target homes, target homes they
could then use your subsequent charter or
tour vehicles’ otherwise idle time for showing
to potential customers.
In common venues like Atlantic City,
drivers who cannot afford a cheap motel
in which to nap gravitate to places like
Ruffo Ford and Hansen’s to waste their
time, with your $450,000 motorcoach lying
idle, for a few hours eating inexpensive,
mediocre, marginally-nutritious industrial
or junk food – just what your driver needs
to remain alert for his or her return trip.
However, there are hundreds of venues
with large-enough metropolitan areas
where drivers are wasting similar blocks
of time, and where that time could be used
productively while not violating HOS
requirements – much less used at the most
desirable hours for the purpose explored
here: Almost exactly when most realtors
are showing homes to potential buyers.
Since houses are almost never examined
during nighttime hours, this usage of otherwise
downtime is precisely compatible
with the passengers’ and realtors’ preference
for “viewing time” – in between rush
hour, when “the kids” are in school.
While using the otherwise idle time of
a motorcoach for this purpose may appear
novel, I have read about several innovative
realty companies literally buying or renting
used minibus conversions to put
together tours of foreclosed homes for a
minibus full of potential buyers. This is
often done on a relatively haphazard basis,
with mediocre vehicles, and with no input
from any transportation providers. These
providers have schedulers and dispatchers
that could enhance the tour’s efficiency by,
for example, including and sequencing
multiple pick-up points for sub-groups of
riders. The realtors rent the buses yet do
not know the service area as well as local
motorcoach dispatchers and schedulers,
and certainly have no understanding of
how to “bend time and space” to expand
concepts like “coverage” – concepts they
do not know even exist.
Frankly, a motorcoach company’s dispatchers
and schedulers need not even be
involved. Apart from radio crystal discrepancies
(replaced as a problem today largely
by dispatching by cell-phone and/or mobile
data terminals), a local dispatcher in the
region of the destination can assist a fellow
service provider from another sub-region in
performing this service. Or better yet, a taxi
or paratransit dispatcher who knows the service
area on a demand basis can be engaged
to orient the vehicle – particularly since the
destinations will be pre-determined and
most of the expertise will involve scheduling
(i.e., trips arranged in advance, rather
than dispatching).
Taking this innovation even further into
the world of profit, your company might
employ someone with a realtor’s license to
serve as the tour guide – and actually go
into the real estate business as a sideline.
With the means of exposing large segments
of the market to multiple housing units,
much less at extremely little cost (i.e., in the
“down time” of your already-amortized
fleet), a motorcoach operator would have
an enormous competitive advantage over
a conventional real estate company. In fact,
you could even hire a driver or two with a
realtor’s license – and eliminate the additional
“tour guide.” While it would be dangerous
for the driver to engage in descriptive
sales activities while driving,
information (written brochures or videos)
about the properties could be prepared by
the bank or realty company in advance, and
the passengers could read or watch them
“on the way.”
Then, at each house, your driver could
present and walk the passengers through
them, relying upon the same written summary
of features just reviewed by the passengers.
Incidentally, you might be surprised
by the number of individuals from
other professions who have at one time or
another obtained realtors’ licenses, only to
fail in the extremely-competitive market
of our current bust – a bust that will likely
extend for a long time, if not indefinitely.
If any of this sounds too complex or adventurous,
consider the possibility of a joint
business venture with an existing realty
company – perhaps offering a small one
the opportunity to leap-frog its larger,
regional or national competitors by exploiting
your low-cost vision.
How this Could Work
A motorcoach company has an out-and
back trip to a theater – perhaps a Wednesday
afternoon Broadway show in New York
City, a relatively short trip from Los Angeles
to Disneyland, with a long period of
downtime, a trip to northern California’s
The more hours per day
you use your vehicle, the
more money you will
make.
Consider the possibility
of a joint business venture
with an existing realty
company.
42 • National Bus Trader / March, 2012
Safety and Liability
by Ned Einstein
“Wine Country” (in the thick of the nation’s
worst housing crisis, and foreclosure Hell),
a trip to a museum (how much time would
a tourist spend at, say, South Dakota’s Corn
Palace?), or even a field trip for school children.
The outbound and return trips will
likely be little more than three hours each,
or perhaps a bit more with a rest stop on each
leg – leaving another eight hours for mixed
driving and non-driving on-duty time while
complying with the required HOS span of
15 hours.
However, driving around for 10 minutes
at a time between houses at which the viewers
will spend perhaps 20 to 30 minutes, the
driver would be driving only a third or a
fourth of the four to six hours this interim
period would consume, and thus remain in
compliance with the HOS 10-hour driving
limit. If you want to squeeze 10 hours of driving
into a 15-hour span, you will not find
many opportunities to do so better than with
the Foreclosure Bus sandwiching a tour of
low-cost housing in between the outbound
and return trip segments of a tour or charter
trip.
This scenario is also extremely efficient
and effective from the realtor’s or bank’s
side – keep in mind banks are usually
“stuck” with these properties, yet often
engage real estate companies to help
“unload” them. Regardless, the company’s
potential buyers would get to ride not in
some realtor-owned rattletrap or even a
decent “conversion” with a spring suspension
system, but in a luxury motorcoach,
equipped with a restroom, plenty of interior
package space, thickly-padded reclining
seats with individual lighting and air conditioning
units, a fold-down tray for taking
notes (on paper or computer), with electric
sockets and Wi-Fi connections, and often,
multiple video monitors – not to mention
the range of customized amenities from the
luxury motorcoach conversion sector that
might be added.
Otherwise, using the microphone and
PA system already on board, swiveling the
tour guide seat around or securing the realtor
into a rear-facing wheelchair in the front,
and with the use of the PA and video monitor,
the agent could explain and display
on-screen the merits and costs of each property
as it is being approached. Potential
buyers could be given “spec sheets” or
prospectuses. When they arrive at each
house, every buyer would be informed and
ready. On the way to the next house, those
interested in the previous one could actually
put in a bid for it, or complete the initial
paperwork to buy it. In summary, in
perhaps a five-hour span, a load of 57 passengers
– all potential bargain hunters –
could inspect perhaps eight to 10 houses in
a small area, or perhaps five or six spread
out 15 minutes apart from one another. The
realtor or bank could even arrange for
refreshments at a few of the homes – or provide
them on the coach.
Far more people are looking for bargain
homes than almost anything else of substance
during mid-day normal hours, when
rental agents generally “show them around”
– albeit inefficiently, because they can only
show a few, and mostly because they can
show those same homes to 57 potential buyers.
In other words, this approach is 57 times
more efficient than the traditional alternative
(notwithstanding the cost of a driver
and fewer miles per gallon). Even better, a
clever realtor or bank whose staff has already
screened potential buyers, and pre-screened
plausible houses for sale, can create a frenzy
of competition on board after seeing many
properties. Sales made literally on-board
could even resemble the types of sales of
buses and coaches that our trade shows are
famous for.
Finally, think about planning “lead time.”
It would be strikingly similar on both the
housing and transportation sides. While
tours occur regularly, charters are often
arranged several weeks, or occasionally, a
few months, in advance. Once one is booked,
this time could then be used by the housing
partner (i.e., bank or realty agency) to line
up to down-time housing tour, and to assemble
a coach-full of customers.
Profits and Fares
In thinking about the money-making
opportunities such activity could bring to
your motorcoach company, think first about
what this opportunity could bring to the
banking and realty industries. If one trip like
this sold a single house, the seller could
afford to pay normal rates for the motorcoach’s
use as an afterthought. Yet I suspect
a well-designed trip coordinated with an
organized and prepared bank or realty company
would sell a lot more than one home
per trip – especially since every passenger
on board is looking to buy one, and an occasional
company engaged in purchasing foreclosures
for “repair-and-resale” purposes
may be looking to buy as many good deals
as he or she has time to inspect. For a bank
unloading a $50,000 headache, or even a
$20,000 headache, how much do you think
this coach trip would be worth? Use your
imagination. If this approach works as I
expect it to, I think the fares charged could
be considerable, and in fact, could even
evolve into commission or percentage
arrangement exponentially more lucrative
than a realtor simply paying a couple hundred
dollars for a few hours renting the vehicle.
Keep in mind: This is not an approach
that any realty company could or would
likely do by itself.
Otherwise, if this approach is so lucrative,
the realtors would be buying their own
motorcoaches. They are not – and largely
because they would not know what to do
with them apart from the single type of trip
outlined here. In simple terms, with the comfort,
safety and versatility features of a
motorcoach, our industry has no competition
for this type of trip. Further, the larger
private operators who generally deploy the
newest and most luxurious vehicles would
not only have an advantage at the vehicle
level, but because of their size, would likely
have a considerable advantage at both the
scheduling/dispatching levels and the business-
making levels.
All such a company would need to do
is share its vision with the right banks and
realty companies. Better yet, no long-term
commitment would need to be made, and
no investment incurred (other than the marketing
time spent developing this aspect of
the business). What rational bank or realty
company would not be willing to at least
try this approach? What large motorcoach
operator could not afford to hire one marketing
employee with a real estate or banking
background? Otherwise, once a charter
and/or tour operator began doing this
regularly, and given its market (usually
regional or subregional), it would develop
a small network of partners for which it
would rely on for passengers. In other
words, a motorcoach company would effectively
create its own network – a network
that would supply not only the destinations,
but the passengers.
Taking the Initiative
As noted, some innovative realtors have
already done things like this on a small
scale, using marginal rolling stock, and
obtaining no help in scheduling, dispatching
and other transportation functions from
professionals with a lot to offer – including
features like accessibility, much less
restrooms. As the elderly residents of our
country grow continually poorer and
poorer, the number of disabled home buyers,
including a plethora of Hoveround and
Jazzy scooter-users, is likely to explode.
Apart from the network suggested here,
this audience would have few opportuni-
National Bus Trader / March, 2012 • 43
Safety and Liability
If one trip like this sold a
single house, the seller
could afford to pay
normal rates for the
motorcoach’s use as an
afterthought.
ties to examine a spectrum of potential foreclosures
that it could afford to buy.
Yet in a country where new ideas are as
rare as truffles, and virtually no one ever
takes any initiative, the spoils of this
approach will go to the aggressive motorcoach
companies with the right mix of trips
(some of which might be altered to make
room for this opportunity) and who are willing
to contact and meet with both realtors,
mortgage brokers, banks and the other
“players” in this arena.
Another advantage, again, is that this
arrangement need only begin on a tiny
scale – a single tour or charter. Those realtors
and banks that can attract groups, and
(especially in the case of banks) which may
control thousands of properties they will
otherwise lose money on, are natural partners
– and they have the “hard half” of the
problem already taken care of – they have
the properties, they know their value, and
they have an infinite number of potential
buyers if they can manage to collect them,
and devise a way to display their wares to
them other than on-line. (Homes are one
item that is definitely hard to sell on-line,
although browsing to examine them is
becoming almost commonplace.)
The beauty of the arrangement is that,
with the motorcoaches at their disposal, collecting
these potential buyers, including
snatching them up and dropping them off
at multiple pick-up and drop-off points, is
much easier. Thus not only is the trip a magnet,
but the potential buyers would not even
have to travel far to catch the transportation
that might transport them to eight to 10
homes in a single late-morning to mid-afternoon
slot of dead-time – which at the lower
end of the economic spectrum could involve
a “brown-bagged” lunch as well as a quick
stop at a large and efficient fast-food joint.
Although, more adventurous coach owners
could also make some money by selling
meals on board, including meals that could
be “nuked” in a handful of microwave units
that might not even require the removal of
a single seat.
Downsides and Double Whammies
This is the challenging part for me, as the
author of this series. For with this type of
bus, I do not see any downsides. (I welcome
readers to e-mail me to identify some.) My
term for this approach is taking two problems
– in this case, unsold homes and underutilized
motorcoach capacity – and putting
them together to solve not a common problem,
but two separate problems of two completely
different parties. We are used to problems
compounding one another. Yet with
the right set of circumstances, and with one
party offering an unusual package of flexibility,
the right problem can solve another
one.
Finally, the real upside that is possible is
that this approach evolves into the most efficient,
and one of the most common, ways to
deal with the foreclosure problem. Further,
as the network for foreclosures and banks,
brokers, government agencies and realtors
organizes its data base to accommodate and
facilitate such an approach, it will be far easier
for a motorcoach operator in almost any
part of the country to put together a coherent
schedule of properties to see, in the
regional area where its coach is going to be
for tour or charter purposes – ideally coordinating
the scheduling with the owners or
sellers of the properties.
To the Victors go the Spoils
Motor carriers out there, start analyzing
your scheduling opportunities, identify
the gaps that could be filled, identify
the geographic areas where your buses will
be free, google the realty agencies and
banks in the areas where your vehicles are
free for a few hours, and make a few lunch
appointments. Starting filling up these useless
gaps in the middle of the day when
your vehicles are collecting dust and your
drivers are not even napping. One note of
caution: There is a lot of money to be made
by the banks and housing industry from
such approaches. Do be careful to feel your
way around out there, and when possible,
try to make some innovative financial
arrangements – like commissions for each
sale, perhaps with a “sliding scale.” Your
commission or percentage goes up as the
number of on-board and follow-up sales
occur.
With the names and phone numbers of
the passengers, you can track them to make
sure that, on a commission basis, that you
do not get left out by banks that do not
inform you that, as a result of your trip, a
deal was made, and you got no commission
for it. Of course, you could simply charge
these companies for the several hours’ use
of your equipment, and make out okay even
there. However, I think more lucrative possibilities
are plausible. Even when you are
paid well, your “partner” in this venture
made out a decimal point better than you
did. Try to stretch the envelope, when and
where you can.
Somehow, I cannot see 57 frantic foreclosure
bargain-hunters seeing six or seven
homes in three hours, or 10 in five hours, not
buying at least one of them. That is money
that the financier of the trip did not have
because it was stuck with all these properties.
Your fares or commissions are a pittance
to such organizations. You will have carved
a new niche for motorcoaches rarely (at least
none that I know of) used for this worthy
purpose.
America is full of problems and few
solutions. The flexibility of our industry
has a lot to offer. We must start looking for
problems that we can both help solve and
make money on. The Foreclosure Bus is a
good starting point, but it is only the tip of
the iceberg. The more flexible and innovative
we get known for becoming, the more
new opportunities will likely continue to
emerge.
Is the solution of desperate needs in
industries almost oblivious of one another’s
existence any more mutually beneficial than
this model? Especially since the housing and
banking sectors stand to gain so much, while
the motorcoach companies need so little
additional revenue to increase their profits
substantially, this is a symbiosis of the highest
order, and would seem to take an enormous
lack of incompetence to not produce
the intended results.
Our industry’s slogan should not be
“Leave the Driving to Us.” It should be, “We
are the Chameleons.” After all, the best of
us are the masters of time and space. What
else is the provision of profitable transportation
even about?
Again, feedback is welcome, as are other
ideas for this series – especially by those
operators who have, at one time or another,
actually done some novel things. Einstein
can be reached at Einstein@transalt.com.
44 • National Bus Trader / March, 2012
Safety and Liability
Another advantage,
again, is that this arrangement
need only begin on
a tiny scale.
Ned Einstein is the president of Transportation
Alternatives (www.transalt.com),
a consulting firm specializing in system
and vehicle design, operations, performance
evaluation and forensic accident
analysis. He may be reached at
einstein@transalt.com.
We must start looking for
problems that we can
both help solve and make
money on.