Big Title

For most small title companies, researching liens on properties can be daunting because of the sheer number of municipalities in Florida.

Each county, city, town and other taxing authority in the state has its own way of responding to lien-search requests. Some use e-mail, others use courier services and still more use antiquated fax machines. A growing number of cash-starved municipalities are starting to charge for verifying property liens.

And it's not enough to have friends at the county level. There are 20 municipalities within Broward County alone, for example.

But Brooke Mitchell, 29, has found a way though this thicket of government weeds by getting to know bureaucrats personally, making big investments in technology and promising fast turnaround times for title-firm customers.

The young entrepreneur's Fort Myers-based company, Property Debt Research, posted 58% growth in revenues in 2009 to $3.51 million.

As prices of homes have fallen dramatically across the state, the volume of sales and title searches have risen correspondingly. For example, the number of existing single-family home sales rose 31% in Florida in 2009 compared with 2008 because the median sales price fell 24% in that same time period, according to the Florida Association of Realtors.

In addition, when lenders foreclose on a property, they frequently request a lien search when they take action. When the property is later sold, the contract calls for a second lien search, giving Property Debt Research two opportunities. “Even if the foreclosures wane, there will be transactions,” Mitchell says. Her company charges $85 for a lien search.

Mitchell grew up around real estate. Her father is a builder and she worked for Stock Construction and Toll Brothers when she and her husband, Jason Mitchell, moved to Naples in 2005.

Working with a business broker, Brooke and Jason Mitchell acquired Property Debt Research armed with $70,000 in working capital just over three years ago. “My parents thought I was crazy,” she laughs. “For me, it was a personal challenge.”

“The company was a little diamond in the rough,” says Jason Mitchell, 33, who leaves the management of the company to Brooke because he's a financial adviser with Comerica Bank in Naples. Together, the couple has focused on the business and delayed having a family and taking vacations. “We've had to put a lot of that stuff on hold,” Jason Mitchell says. “We've made sacrifices.”

Even as the recession slowed the real estate market, the couple figured that Florida's appeal would last through the downturn. As prices fell, they've been proved right. “It's a desirable area,” Mitchell says. “People want to move here.”

To streamline the process of title searches, the Mitchells invested thousands of dollars in a computer system that will eventually help the firm go paperless. They've come a long way since the business ran on fax machines and paper, reducing the potential for errors. “You're never going to lose a file,” Mitchell says. “We've completely overhauled our system.”

Most of the firm's 100-plus customers order lien searches by email, they can track the status of their request online and can communicate with the staff electronically. The move to electronic tracking allows Mitchell to analyze the workflow and measure employee performance, too.

The challenge to drive efficiency continues to be that as many as a third of municipalities still use fax machines and half the cities use couriers. “Some of them are very easy and others are hard,” Mitchell says.

Customers include title agencies, real estate agents and investors. With a $1 million insurance policy, Property Debt Research takes on the liability for the accuracy of each lien search. “The key is finding great managers,” Mitchell says.

The company has no immediate plans to branch out further than Florida. Mitchell is focused on existing and prospective clients here to grow the business, not expanding beyond its borders. If you do, she says, “you risk losing it all if you don't do it right.”

Click here to see Property Debt Research's performance over the past three years.

— Jean Gruss