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No Reason to Beat a Dead Horse
By Joel S. Pate
In 1987, I met David Weekly from David Weekly Homes in Houston. As many of you remember, the middle to late 80s were not particularly good years for Texas and Houston in particular. At that time, oil prices bottomed out, the market for homes collapsed, savings and loans were collapsing, (that was before major lenders like Countrywide existed) and interest rates were at record highs, etc., etc., etc.
David made a statement that I have never forgotten: "If you are in a market downturn, it is probably worse than you think it is and it will last longer than you think it will. So, regardless of how much you think you need to cut, you need to cut more." Actually he said, "double it."
Several months ago I mentioned this statement in this column and many of you questioned me. I believe that by the time the market starts to improve, it will be a lot worse than you can even imagine. Actually I believe, as the old saying goes, "there will be blood in the street."
When I was a builder, I would have shuddered at that statement. But that is what I was. Now, I am a business owner, an investor, and an entrepreneur that attempts to make money when the market goes up and when the market comes down. I have broadened my thinking.
The questions you should be asking yourself are not:
• When is it going to get back to the way it was?
• When is the market going to settle down?
• When? When? When?!
The correct questions are more like:
• Where is the opportunity to make money in a down market?
• Should I be looking for a different geographic market to tap into?
• Who is in the worse shape in this market?
• Who has the biggest problem?
Years ago I heard a man make the following statements:
"The bigger the problems you solve, the more money you will make."
"Find the guy with the biggest problem and figure out how to solve it. He will pay you."
"Only what you have can help you. So, stop thinking about all the things you don't have and count what you do have and figure out who needs it."
Are you only capable of being a loan originator that loans money when prices are going up? We all have to realize that now, more than when the market is good, your customers need you and will pay you even more now than they did before.
Your job is to figure out how to help them and find more that you can help. Don't beat a dead horse. Instead, find one to ride, and then find another one, and then another one.
It is a waste of time to try to get the dead horse to take you further than he can. He's dead.
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Dedicated to coaching YOU to CP Loan Success!
Joel S. Pate
Joel S. Pate, a dedicated entrepreneur, has spent more than two decades in the building, mortgage, and real estate industries and has been involved in over $100 Million in construction loans and over $1.3 Billion of residential lending.
As the CP LOAN EXPERT columnist, Mr. Pate provides straightforward, unbiased advice about every aspect of Construction Permanent Lending. If you ever wanted to unravel the mystery surrounding new construction lending, then you should tune in.
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