2009 Dynamic Dozen, No. 6: Midwest Metro Foreclosures Inc.

The foreclosure business didn't hold immediate appeal for Charlie Nelson.

Having been both an employee and employer, he was in the market to buy a business, but handling home foreclosures for banks wasn't what he had in mind.

That changed, however, when he discovered Midwest Metro Foreclosures Inc. and met founder Bryan Cates.

"I initially said, 'I don't know. It's kind of out of the box,'" Nelson said. "The more we talked about it, the more we felt we were led to this."

In August, Nelson bought Midwest Metro from Cates for an undisclosed amount in a deal handled by Chuck Woolley and Julie Broadbent of Kingsley Group Business Brokers. Cates retains minority ownership and remains on board as a consultant at Midwest Metro Foreclosures, which had revenues of just more than $3 million in 2008.

Midwest Metro secures and maintains properties that have been repossessed by lenders after borrowers default on loans. The company works with major banks, such as Bank of America, Chase, Citibank and Wells Fargo, and operates in Missouri, Arkansas, Oklahoma and parts of Illinois and Kansas.

Based on what the lender wants done, Midwest Metro comes in immediately after the bank takes over a foreclosed home to preserve property through steps such as lock changes, winterizing and minor repairs, or to prepare a property to be shown in what's referred to as REO - real-estate owned - work.

Midwest Metro founder Cates wasn't looking to become a business owner when he began the company in 2001. The 1999 Drury University graduate had been a vocational specialist at Burrell Behavioral Health, and while he enjoyed that work, he eventually wanted something that paid better, especially as a newlywed.

A friend told Cates about foreclosure work and offered him a few jobs. Cates, a 2008 Springfield Business Journal 40 Under 40 honoree, liked the work and contacted mortgage companies himself about getting more jobs.

"We just did a good job on orders ... and then we got half of Oklahoma," Cates said.

Business was steady but modest that first year with 110 orders and gross sales of about $15,000.

But Midwest Metro's reputation quickly spread and a rise in foreclosure activity fueled even more growth. In 2008, the company had 22,000 orders from all clients, Nelson said. He anticipates between 25,000 and 26,000 orders this year.

After seven years and 14- to 16-hour days piling up on him, Cates hit a plateau, leading to the sale to Nelson.

"I had just gotten to the point where I felt we needed to move on and bring in someone who ... could come in and take it to the next level and see what is fresh and new," he said. "It was important we found someone like Charlie who would care and honor those relationships. ... We needed someone with integrity."

Nelson wants to expand Midwest Metro's REO work in Missouri, which would double work orders in the state, and perhaps expand into other states the next few years.

"I want to grow, but I want to grow the right way," Nelson said. "To grow just to grow doesn't make sense for anybody."

Midwest Metro has added staff - it has 10 employees and works with about 50 field representatives - and upgraded systems to better handle its workload. The company is one of only three beta test sites in the country for new mortgage field services software that improves efficiency, Nelson said.

"We've got a great staff in place that understands what we're doing and does it really well," he added.