By:Dennis Norman
In the first post and second post of this series I gave a little background on Marc Mink,the person responding to my E-View TM and sharing his knowledge and wisdom. As promised,I will give some more background on Marc and then continue with part two of the E-View TM .
Over the years Marc continued to pursue foreclosures and estate deals but also broadened his business to include being a hard-money lender as well as partner in a mortgage company. I was fortunate to have worked with Marc for over a dozen years in the real estate business as well as the mortgage and loan business. Marc is now with Bellington Realty,the largest company in St. Louis in the business of “speculating”(buying and selling homes aka flipping).
Q-There are a record number of REO’s out there….Do you think that is potentially a good source of good deals? If not,why not? What would be a better source for “good”deals
A-”Again,far more important is assessing what your potential BUYER will need and be willing to do. It is vital that an investor keeps totally up to date on what is happening out there in the lending environment for their target audience. Secondly the business model from before must be tossed out the window.. flipping (legitimate) is going to be almost impossible unless you actually bring something to the market and knowledge is what that is. We have always considered insulting the idea that persons with no real knowledge of the market or the way it works could waltz in and make money in a business that some of us have spent 20 years and more learning. Well the piper has called and that party is over. In the long run,properties priced according only to what the market will bear based on end usage instead of speculation will be good for everyone.. just lots of pain in the meantime. We have been living in a giant ponzi scheme in this country as far as real estate has been concerned and the real risk in these investments have been masked by rising prices which hid the poor credit quality of a lot of these investments. The only real shock is that it took so long to happen.. long enough to lure a lot of people to the business that never sat through a real estate recession,and now he price is being paid by all of us. It is not the fact that all of these loans were resold over and over that caused the problem,it was the risk assigned to them that was incorrectly based only on a default rate that was hidden by rising prices nudged upward by these crazy loans made available to people that probably shouldn’t have gotten them.”
Q-What type of new or innovative things are you doing in your business today to help move property,help investors buy from you,etc
A-”We are trying to make sure that the END game sought by them is doable.. i.e. cut off those that have an incorrect idea of what to expect relative to what used to be,and consequently planning for the end game up-front.. including short term financing,long term for the end users etc
Q-Are banks still willing to finance investment property for investors? If so what type of terms are buyers most likely going to be looking at
A-”Almost not at all.. when they do they want 30% down and a brutal appraisal situation
Q-Assuming you think it is best for investors to buy now and rent the property out until the market gets better,and realize that in some markets foreclosures and REO’s make up almost half the homes currently being sold do you have concerns what will happen once the market does appear to get better? My guess is once prices have stabilized and are perhaps slightly rising when this is over many investors will be quick to list the properties they bought and have been renting. It will be their time to get out. This will potentially flood the market with homes again…What are your thoughts/concerns on this
A-”I do not agree with the conclusion. WHY would they all of a sudden list their properties? If you refer to the ones that OWNED them before the downturn.. most of them have already taken the hit and walked away if upside down.. for those that are buying NOW.. why would they run at the first sign of an upturn? Why would the newer investors want to flee and,again,the older ones have already accommodated their situation and if they have not already walked away,are probably in a position to reap the rewards of their management decisions. if they are rented successfully then they are not going to be under pressure to have to or even want to sell. Only those that think things are going back to the way they were in the last ten years will be likely to make bad decisions in this regard and honestly,most of them are now or will soon be washed out anyway and not a factor in the recovery once it starts.”
If you would like to contact Marc directly with questions or to possibly sell him a property or buy an investment property in the St. Louis metro area,you can reach him at Habashee@Aol.com
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