Dennis Norman Musings

By: Dennis Norman

In the first post of this series I gave you 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 .

Marc started in the antique and architectural salvage business in the 1970′s.  As part of that business he began doing personal property appraisals which brought him in touch with estate attorneys and insurance adjusters.  By the time he started in the real estate business full-time he was already somewhat connected with people in the cash/investment real estate business. 

Marc’s first full-time pursuit of the real estate business was “bird-dogging” foreclosures.  He would make contact with people facing foreclosure and offer them alternatives, such as selling their home to him on a quick, cash basis, prior to the foreclosure sometimes even offering the homeowner the chance to lease the home back.  For those homeowners whose financial problems were short-term he would also offer them an opportunity to buy their home back when they were back on their feet again financially.  During the same time he was also using his contacts from his prior antique business to pursue purchasing homes out of estates as well.

Now for the E-View^TM ….

Q-With the market being so depressed and prices down all over the country many investors think there are real bargains out there. However some economists are saying we have not hit bottom yet and real estate prices may drop another 10%-20% over the next year or so. What are your thoughts on this? Are there good deals out there? If so, what are they? I assume it would not be in houses to buy to resell but most likely houses to buy and hold as rental…selling later after the market gets better?

A-”There IS money on houses to resell but they must be bought with the end user in mind as the customer NOT the speculator. Unfortunately, when all is said and done, the task of getting rid of the backlog in foreclosed properties, which all agree as a necessity to a rebound or even bottoming of realestate prices, is being dramatically delayed by the refusal of the banks or government to make financing available to legitimate rehabbers. MOST of the real backlog is on properties that are not in close condition to being viable as an investment for realre-habbers to do for OWNER occupants. Just who do the government and banks EXPECT will fix THOSE buildings? If this does not change I can see a scenario from the 1930’s repeated where Roosevelt presided over the burning of excess homes to get rid of the backlog.. in our modern time maybe tearing down those homes would be the same scene. In working class neighborhoods the effects are already devastating these areas and only the interest in renting homes is supplying a floor for those areas. My advice to amateur investors ,IF they have access to capital, is to either center on long term rentalproperty in some of these areas, or pick on the best neighborhoods and try and “steal” what you do buy, recognizing that prices may not come back much even in the better areas for a long long time and some of the others.. maybe not until rental prices can sustain a large move upwards. Most important is to position oneself to move quickly when the financing scenario changes, which sooner or later it will. Finally recognizing that the way things worked the last ten years will almost certainly NOT come back since those loan products which helped fuel it will almost surely are off the table for a log time if not permanently”

Q-What would your advice to the novice, or even somewhat seasoned, “part-time” investor be now? Should they be on the sidelines and stay out of this market? If a part-time investor wants to invest now, regardless of your answer to the previous question, what do you think would be the best approach for them? Are they better off establishing a relationship with someone such as you that is in the business and buy from you then go at it on their own? If so, why?

A-”My thought is that if the individual investor wants to get in this market they MUST get it through their heads that the old days of easy, easy money are over.. that the “greater fool theory” will very likely not work for a long time and that it is imperative that they OPERATE as though that knowledge guides their moves. Since it is VERY difficult for the typical investor to keep track of the changes and trends these days, I cannot see how they could feel comfortable doing this without SOME guidance from those of us for whom it is a full time job. There ARE opportunities that will arise even in the short run but the old days of GUESSING what those are and being rescued from a bad choice by a rising market..are over—done.”

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 

Watch for part 3 of the E-View ^TM which will be posted over the next few days.