Oregon Builder Buckles Under Cheap Foreclosure for Sale

by Peter Vernon on States

In 2005, Oregon home builder Buena Vista Custom Homes Inc. was recognized by Builder Magazine as the fastest-growing home building company in the U.S. Its founder Roger Pollock was featured on the magazine’s September issue.

This June, the corporate registration of Buena Vista has been canceled by the Oregon Secretary of State after it failed to file its annual report even two months after the deadline. Later, its license as a contractor has also been suspended.

The home builder was battered by its failure to sell its new homes, as low-priced foreclosure for sale attracted the majority of home buyers.

In the last months of 2007 and the first months of 2008, Buena Vista held two big auctions at the Oregon Convention Center to wipe out its 240 unsold homes and raise cash. It was able to sell 177 houses, including14 lots, and raised $75 million in cash.

After the auctions, Pollock was optimistic. He said Buena Vista was in the best position to fight competition from foreclosure homes.
But he was proven wrong.

In the first months of this year, Buena Vista was clobbered with foreclosures and lawsuits due to failure to pay its construction loans. It was even sued for faulty construction at a condo complex it developed in Southeast Portland. Its Happy Valley development project caused a $10.7 million judgment against Pollock and Buena Vista. Its partially-developed home lots in the southwest portion of Portland have been lost to foreclosure.

Pollock started Buena Vista in 2002 as his second home building enterprise as soon as his non-compete agreement with the buyer of his first homebuilding venture expired. His first venture, RMP Properties D.R. Horton Homes Inc., was sold in 1998.

Buena Vista targeted move-up buyers and married professionals looking for new and large houses in the suburbs.

The company targeted the right market because it became wildly successful, achieving $17.6 million in revenues in 2003, its first full year of building homes. By 2006, the home builder achieved almost $150 million in revenues.

In 2005, Buena Vista was honored as the fastest-growing company in Oregon by Portland Business Journal based on its stunning revenue growth rate of 12,899 percent from 2002 to 2004.

When the housing market started to collapse in 2007, Buena Vista’s fortunes reversed. Its 2007 revenues fell by 42 percent and it had to lay off more than half of its workers.