One man's Great Recession is another man's business opportunity.
At least this is the case for Ken Cage and Randy Craft (great names for repo men, by the way) of Florida's International Recovery and Remarketing Group, which focuses on high-end repos: think yachts and private jets. You don't send Harry Dean Stanton and Emilio Estevez to hot wire these babies, that's for sure.
According to the bio on his company web site,
Ken has 20+ years in the banking and collections industry with prestigious firms such as JP Morgan and DaimlerChrysler Financial Services and has vast experience in skip tracing and investigation within the finance sector. This experience allows Ken to understand the needs of banking, financial and legal clientele while utilizing his investigation and recovery skills to provide the highest quality service.
And it probably also helps him understand the psyches of the banking, financial and legal deadbeats who are no doubt among those that the IRG Group is repo-ing.
Craft's bio also lets us know that he has done repossessions, of "all types of specialty assets," in "all 50 states, as we as several foreign countries," which would be pretty impressive, if it didn't remind me of those third-tier colleges who claim "students from 39 states and 11 foreign countries. Eighty-two percent of faculty members have earned doctorates." Anyway, it would certainly be fun to see what gets repo'd where, but let's just say they're not located in Florida for the marlin fishing and palm trees alone.
Cage's exploits were profiled in The WSJ last week, which followed him, Craft, and their pilot nab a $350K Cessna that was about to jet off from Orlando to Mexico. (Access to the full article may require a subscription.)
The Cessna's wheels, fortunately (for the repo men, anyway) lifted just as the plane's "owner" pulled into the lot.
Phew!
Some poor schnook getting the used Pontiac he bought at a Buy-Here-Pay-Here lot (the ones with the plastic flags, the ones that hide a Lo-Jack under every hood, the ones for folks who can't get standard car loans) grabbed out of the driveway of his rundown, about to be evicted from bungalow, while his wife looks forlornly on and the baby shrieks...He gets my sympathy.
But for those who borrowed above and beyond the hilt so that they could sport around in multi-million dollar helicopters, "$500,000 recreational vehicles" - say what? - "and even a racehorse", well, I'm an empathetic person and all, but the empathy stops here.
Last year, Cage's company took back property:
...valued at more than $100 million. Business, he says, is up six-fold from 2007.
Business has been booming because the value of the items being repo'd have gone up from small-l luxury stuff worth $30-50K, to capital-L Luxury merchandise worth $200-300K.
While this isn't a shop on every corner industry, Cage's group hasn't cornered the market. There are others throughout the country that provide similar services, and business is strong for them, as well.
Competition is strong, too, and Cage - who not only repos, but also slicks the goods up and remarkets them (if you want a gently used Cessna or yacht, there are some listed in the inventory section on his site) - has had to decrease fees from "between 6% to 10% of the resale price....to as little as two percent."
You make it up not so much in volume as in magnitude, I guess, although you do have to wonder about how strong the aftermarket is, these days.
Most of those that Cage repo'd lost, if not their shirts, then their pricey toys, in the real estate collapse. Thus, while he has gotten the goods in all 50 states, most of his work is in Florida, Arizona, California, and Nevada.
Cage got his start in the business through work in cash management at J.P. Morgan, and collections at Chrysler Finance:
...where he hired repo companies to pick up cars.
Even though he never did the repos himself, he said the work became depressing.
"Here we were, taking minivans with child seats in the back, or going to someone's job to take their car," he says. "I had a tough time with that."
It is, of course, easier in terms of sleeping soundly, to repo from the erstwhile rich.
Apparently, it's easier from the "logistical perspective", as well. Aviation and marine records are kept more formally than any info on the whereabouts of that minivan. Not to mention that - at least until this article appeared:
... most yacht owners keep their keys near the ignition and rarely lock the doors. Plane doors can often be easily picked.
The work is, of course, not without risk.
Sure, there was the Orlando JIT getaway, in which Cage and Craft were high-tailing it out as the Cessna guy was high-tailing it in. But these guys:
...have been hit by cars, threatened with shovels and chased on foot countless times. Recently, Mr. Cage says he was on a yacht assignment in Jacksonville, Fla., when the owner boarded another boat and zoomed after him, Bond-style. He soon gave up the chase, and Mr. Cage kept his craft.
Not for the faint of heart, that's for sure.
Some day, Cage would like to own a boat like the ones he repossesses. He, however, will make sure that he stays the repo-er as opposed to the repo-ee.
When he buys a boat, he says. "' I'd pay all cash.'"
Ah, it's sure nice to see a bright spot in this economy, isn't it?
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