Wednesday, February 23, 2011

Informational Interview with Ronald Patterson

Ronald Patterson, has been a licensed Real estate broker for 33years. He is also a licensed general contractor, and specializes in redevelopment projects. He was appointed by major Autry to serve on the downtown revitalization committee. And currently serves on the board of directors for the downtown PBID. PBID, the downtown property owners, are working toward the downtown revitalization. Mr. Patterson has been very successful during his real estate career and I was very fortunate to be able to interview him.

Q. What made you decide to get into real estate?

A.   After purchasing my first house, I realized that selling real estate for a living would be a good occupation for my wife. I encouraged her to get her license and I tagged along to help her show houses and sell them. Soon after I realized that I enjoyed the process and decided I should get licensed too.

Q. What was your first job working in the Real Estate industry?

A.   After obtaining my license in 1978 I began working part-time as a salesman for Cal Real Realtors and then moved to Allstate Realtors

Q. What are your Day to Day responsibilities?

A.   I am a full-time investor/developer/contractor. I oversee several ongoing developments while at the same time search for new projects. I am responsible for running a small construction company that works only on our own projects. I work daily with my project managers to ensure completion of the projects. I guide the architects and engineers to design and implement projects based on my future vision and use of the property. I am responsible for acquisition, design, financing, rent up, property management and sales.

 
 

Q. How did you get started investing?

A.   I began buying semi-custom homes that were sitting vacant, not selling and were built by small builders who couldn't afford to sit on them any longer. We moved into the houses, decorated them and I landscaped them so they would show well to prospective buyers. I'd raise the price and live there till we sold the house at a nice profit.

Q. Are you currently working on any major projects? If so, what?

A.   We have three major projects we are working on currently. They are as follows:

      1.  Shaw/33 development in Firebaugh, CA. A 10 lot development consisting on 21 acres subdivided into 10 parcels with 4 buildings totaling 40,000 square feet of warehousing.

      2.  The Valley Animal Center expansion. The expansion will include a dog training and exercise park with doggy swimming pools. A perpetual care cat facility and feral cat housing facility.

      3.  The redevelopment of the Madera Air Force Radar Base. The project consists of the remodel of 28 buildings and subdividing into 29 parcels in an industrial park. Located in the

           Complex will be 3 wineries, a chocolate factory, wedding chapel, banquet hall, amphitheater and much more. Plans are still being developed for additional businesses.

Q. What is the most challenging and rewarding aspects of your job?

A.   The most challenging aspect is to find lenders who can see your vision and actually fund the projects. The most rewarding is the flexibility that redevelopment of existing projects give you. Every project if different although the basics are still the basics on every project, each project is unique and so it allows you to use some creativity that I wouldn't see if I just did cookie cutter type home building.

Q. What skills must an individual develop to be successful in real estate?

A.   You must lose the fear of failing! Everyone fails from time to time. If you fear failing it will stop you from moving forward in life and prevent you from making real money. Other knowledge you must gain is an understanding of current market trends, a thorough understanding of real estate financing and sources, taxation and property management. It also helps to know a lot about marketing and advertising.

 
 

Q. What real estate data base do you use as a broker to search for commercial investment properties?

A.   I use a combination of the MLS (Multiple Listing Service), Loopnet.com, CoStar Group, Ree.com, RealQuest.com, DataQuick and National Council of Exchangers (NCE). Each of them offers a variety of information. It is also important to network with other real estate brokers, exchangers, investors and property managers.

Q. Do you feel commercial real estate was hit as hard as residential during the economic downturn? How has that affected your ability to invest?

A.   It has not hit the commercial market as hard as the residential market but it isn't over yet. Some sources predict waves of commercial foreclosures are still on the horizon. The current market is ripe for investment. I always do better in a down market because many investors become afraid of the market and that means fewer investors in the market competing for more inventory so prices go down which means more opportunity, especially in trouble properties (the type I generally buy).

 
 

Q. How did new loan regulations affect your ability to get financing today?

A.   Financing becomes the biggest hurdle since the banks generally tighten up their lending policies. Private lenders become pickier and more expensive, but with financing the way it is they are a viable alternative. Lending regulations in the commercial arena has not changed much, it's primarily in the residential that you see the changes but still it is more difficult than before.

Q. Was it easier to get financing 5-10 years ago? What has changed?

A.   During the real estate bubble it became increasingly easier to get a loan. Money was flowing into the real estate market because everyone was making tons of money but the deals were leaner. You paid more for the property and had a smaller down payment. When the market crashed, the "illusion" of equity was wiped out. All prices dropped 20% or more so it wiped out the premiums that developers and builders were getting for their products, then came the foreclosures and subsequent liquidation. Due to financing requirements of an appraisal based on historical sales and 60 day liquidation, appraisal evaluations became lower and lower thereby lowering property appraisals and thus making it more difficult to get get adequate financing at reasonable rates and terms.

 I would like to thank Ron Patterson for taking the time out of his very busy schedule to allow me to interview him. Ron is very knowledgeable and experienced when it comes to the real estate industry. I appreciate him passing along experiences that may help any young people become successful in Real Estate.

By Jackie Perkins

1 comment:

  1. Nice work, very thorough interview.

    ReplyDelete