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70 Imagine for a moment that a house in your neighborhood suddenly becomes vacant because of a foreclosure. It's not a bad house. It's not a bad neighborhood. But you know that someone is rumored to be in the process of buying the property. Do you hope it's an investor or do you hope it's someone who is going to move in and pretty the place up? Unless you're an investor eyeing a sweet deal, the odds are good that you'd rather see an owner-occupant buy and move into that property. Tyler Smith, vice president of Wells Fargo's REO alternative disposition sector, understands that sentiment. As someone whose business is to help make sure that vacant properties are kept in marketable condition until they're sold, Smith has heard the worries that some have whenever there's a vacant property down the road. "One of the biggest complaints we hear is that an investor steps in and there goes the neighborhood," Smith says. "Neighbors want neighbors, not absentee investors." But how do you make a property something that appeals to someone who wants to make it their new home, as opposed to something that appeals only to investors? Wells Fargo's approach has been to step up preservation efforts beyond the entrenched "white box" measures that so many banks and property preservation companies have taken. Time was, work done to a vacant property was of the good-enough variety ‒‒ basic paint, basic patchwork, usually bland and generalized and little more. Wells, however, has taken the position that putting a little more effort into properties actually generates a much healthier return. at's not just dollars. It's also in good will to the neighborhoods where Wells is invested. "We're trying to do the right repairs for the right property," Smith says. "We want to make the home financeable." e number of neighborhoods Wells is invested in, by the way, is significant. e bank services one out of every six mortgages in the United States, meaning that if your neighborhood has at least six houses, there's a good chance one of them is occupied by a Wells Fargo customer. So Smith's statement is not just talk. Wells has a lot at stake when it comes to caring for and preserving vacant properties. Part of what the bank has at stake is the good will of the neighborhoods, because if a neighborhood goes awry from too much absentee investment, Wells will have a front row seat to the problem. Making the right repairs ‒‒ optimizing I N D U S T R Y I N S I G H T / S C O T T M O R G A N BUCKING THE TREND Conventional wisdom says that keeping rehab costs at a minimum is the best was to recoup losses on vacant and abandoned properties. The conventional wisdom may be wrong.

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