Blog Post Assignment #1- Jason Davies

Information Interview
Jason Davies
March 3rd, 2013
 

     For the first blog post assignment, we were given the task of conducting an informational interview with somebody who has some connection with real estate markets. I conducted my interview with Jeff Osborne, partner in the local real estate company known as Osborne & Associates. Osborne & Associates sells homes here in the central valley, mainly in markets ranging from Madera to Selma. They also have a property management division known as Central Valley Capital, Inc. Jeff graduated from San Diego State University with a degree in Political Science and upon completion of college came back to Fresno to pursue his career in real estate.

Q. How did you get started in real estate?

A. My dad worked in real estate when I was growing up. He was a broker and I guess you can say that he was the one that gave me the idea and put it in my mind to go into real estate. I always liked the fact that real estate was the type of career where you could be your own boss. I also knew that it was a place where you could make "chunky money." What I mean is you could make a lot of money it chunks if you were motivated enough to go out and find the best deals. My brother started going out to seminars on real estate and eventually I started flying to places for different types of seminars about foreclosures and financing in real estate markets. After awhile of attending these, I would grab lists of foreclosures back in San Diego and go door knocking and make commissions off of brokering the deals for the buyers and sellers. 

Q. What are your major responsibilities?

A. My main responsibility is really business development. I determine and make internal adjustments that will have an effect on the operations side of the business. I make sure that all the financial reporting that is given to the banks every month is accurate and correct to ensure our financing is in a good place. Part of our new business goals and development is moving more into the rental markets locally and buying homes directly from customers instead of banks and auctions. Real estate markets are always changing and these changes will help us into the future.

Q. What is your typical day like for you once you get into the office?

A. The first half of the day is spent doing research. I look at potential houses and deals on the houses and determine what I'm willing to spend and if the money I'm willing to spend is worth it. For every 10 houses I see, we usually end up getting one so I have to pick numbers that I would be comfortable with for the house. The rest of the day is spent putting out fires within the day-to-day operations and also business development.

Q. What was the best educational preparation you got from school that prepared you for this career?

A. I think the best thing about school was teaching me to focus and get stuff done that was assigned. It was the simple things like deadlines and getting things done on time that had the biggest impact on me. Some people drop out of school and go on to be billionaires so it's hard to say that school always has a big impact on people but for me, sticking to something like school and finishing it was a huge benefit. 

Q. Does your background in Political Science help you at all in the day-to-day operations?

A. The biggest thing that Political Science taught me was to really watch who you got advice from. You have to be able to take in all the advice you receive and balance it out because no one has all the answers. The thing with politics is that people from both sides think they are right about everything but they can both be right in their own regards. There can be investors that tell you your idea will never work and investors that tell you your idea is the best idea ever but it's really up to you on whether or not they are right. You have to remain open-minded and not just hop on the bandwagon if someone tells you not to do something.

Q. What do you think the future outlook of this industry is? Do you think rehabbing properties or rentals are the way of the future? Do you think development of subdivisions will pick back up to where it was?

A. Without a doubt subdivisions will pick back up because the market is on fire right now. There's no inventory like there was anymore. Fresno is an interesting market to be apart of. You don't have huge job growth that will drive the population of this area. This market is kind of based on the banks holding inventory back right now. You aren't going to see as much distressed inventory as we've seen in the last four years so we'll have to find other ways to find this distressed inventory. There is always a rehab market in every city and every town because there are always houses that need to get fixed up and always a need for people to do this type of work so you won't see rehabs go away, it'll just be a lot smaller market. The biggest thing that will change is just where you get the inventory. Banks don't want to be in the market of selling houses. They want to be lending money to people so you'll see a more traditional approach to buying inventory again.

Q. Do you believe that the amount of rental inventory compared to the amount of rehab inventory is inversely connected? When you see more of one do you see less of another or vice versa?

A. There definitely is a unique supply/demand curve for these. It's dependent on a lot of factors. When developments are being built, you see an increase in inventory. However, builders build when the price is right and when the financing from banks with opportunistic interest rates are there. The whole boom was based on loose lending and not necessarily income. Rentals, as I've seen, has been going up. It's a lot tougher now but you will see more lending and people being able to get mortgages, they'll just need good credit. You still see 0% down financing just not as much. The one thing that worries me is that Fresno is such a low-income area compared to some other markets that I have don't have a huge amount of faith in this area looking towards the future. Our primary industry for jobs is agriculture but a lot of them are automating now so that could effect the population. 

Q. What is the most rewarding aspect of your job?

A. Being able to have freedom is definitely a rewarding aspect of my job. Being an entrepreneur gives you a certain sense of freedom but with that also comes a lot of pressure. You always worry about what's going to go wrong because it is my business and it does fall all on me. Another rewarding aspect is just being able to come up with a new strategy and see if it works. Hopefully, these strategies work more times then not but if they don't, I can go back to the drawing board and start over from square one. 

Q. Finally, would you recommend someone coming out of college to get into a career in real estate or in a career similar to yours?

A. It just depends on what part of real estate you want to get into. There are really bad parts but on the flip side you see a lot of success in real estate. If you aren't self-motivated I would say real estate is not for you. If you have the tendency to not make things happen then real estate markets will just eat you up. It's just like any business where it has it's big numbers. You make good money if you are successful but you have to be willing to put in the work and make things happen for yourself. There is always room for people to come in and work hard and do things that make sense. There are types of positions for everybody but it is definitely a relationship-based industry.