Market shift

Irina Prell never shrinks from a challenge.

As a 24-year-old accountant, Prell came to the U.S. from Russia in 1999 barely able to speak English. “I'd never been outside Russia before,” she says.

Today, Prell owns and operates Elysium Construction, a homebuilding and renovation company that managed to survive through the boom and bust of recent years. That included shifting from multimillion-dollar home construction on exclusive Captiva Island to foreclosures in Cape Coral.

“The lesson I learned is there's still ways to make money,” Prell says. But in the same breath she adds: “Nothing comes easy.”

Prell's story started in Moscow, where she became an attorney and accountant specializing in tax law. The daughter of math and engineering professors, her practice led to a chance meeting with hot-air balloonists from Kentucky who were visiting Russia, and they invited her to visit the U.S.
“I came here in 1999 for two weeks vacation,” Prell says.

She never left.

Despite her limited English, Prell landed a job with an accounting firm in Kentucky and started overseeing real estate projects for investors on Captiva, the posh island in Lee County. She'd had no previous experience with construction. “It was really tough,” says Prell. “I had to learn on the job.”
Prell quickly discovered that she loved construction and development, even though she's one of the few women in the business. “I thought that was the love of my life,” she says. “I wasn't an accountant at heart.”

In 2007, just as the real estate economy was facing collapse, Prell got her general contractor's license and struck out on her own. “It was extremely scary,” she says.

But instead of building houses on Captiva, where the market dried up, she shifted her focus to buying homes in foreclosure and renovating them for resale. It was a tough business that required her to be stealthy so that she could bid aggressively. “I was under the radar,” she says.

With no bank financing available, Prell found undisclosed private investors willing to back her venture even during the depths of the downturn. “We were turning 150 homes a year,” she says. The foreclosure business was so good in 2009, she says, that her investors were earning as much as 55% on their investment.

Despite the recovery in real estate, business is tougher today because there are fewer cheap foreclosures, and that's pressuring margins. Return on investment has fallen into the 25% to 30% range for the home-foreclosure business, she says.

Prell forecasts that foreclosure sales will continue to slow as the economy recovers, so she launched homebuilding under the Elysium brand. She says the inventory of new homes is low and demand has picked up. What's more, financing still remains difficult to obtain, limiting new competition.

With backing from private investors, Prell has already built one 2,200-square-foot speculative home with a pool in Cape Coral that will cost $270,000 on your lot. She's building another speculative home that's much larger at 4,150 square feet, but the selling price isn't yet available.

One of the biggest challenges is that buyers from other parts of the country such as the Midwest still expect to find new homes that are cheap. But the market's changed rapidly as the demand increased and supply dwindled.

Another issue is that the real estate downturn wiped out many subcontractors or forced them to leave the area. “We need more trades in this area,” Prell says.

“Now the market is changing,” says Prell, and for her that means new opportunity.