Yesterday as I was waiting in my satellite office for the ‘other Brown’ to show up for a planning session, I laid my book down, taking advantage of the rare opportunity to sit quietly and think, sans any communications devices invented after 1951. I pondered more deeply what a previous morning conversation had reenforced for me.
Since my firm deals with builders and lenders in several states, I’m often privileged to hear what local market experts have to say. Much of the time it falls under the heading of, ‘What the hell?!’, but sometimes you find builders/lenders who’ve really drilled down into their corner of the real estate world. They ignore everything but empirically documented facts. Then with careful, objective analysis, they search for any opportunities hiding behind all the LameStream media’s ongoing fertilizer convention.
The phone call.
One of the builders I especially like and trust, had just hung up with a local lender he both trusted and respected. I’ll cut to the chase here. The lender knows what my firm’s been doing in his state. (For the time being, the lender, builder, and state must remain anonymous, by their request.) We’ve been tearin’ it up. They wanna go off the grid so to speak, setting aside a few boatloads of capital to lend to our clients, (not exclusively) without the constraints of Fannie and Freddie.
The builder? He’s no small fish, but his net worth doesn’t require three commas yet. 🙂 His product has been sellin’ itself during this correction. It still is. His biggest problem today? He can’t find enough land — or when he does, a bigger fish plays hardball and shoves him out the door. Most recently he walked away after being under contract. Now that’s hardball.
Also, this builder told me the recent builder surveys in the region as a whole, showed their confidence as an industry had risen almost 20%. Go figure. The lender is willing to revert to classic Old School lending by opting out of the secondary market and keeping these loans. What a concept. This will enable them to loan on a virtually Read more