Executive on top priorities in current market
The value of education and constant communication with clients has always been clear in the mortgage industry – but it’s come into even sharper focus in recent years amid an increasingly complex market and uncertain economic outlook.
That ever-shifting landscape means would-be borrowers and investors need to stay constantly apprised of where things stand and what conditions they can expect upon entering the market, and for RCN Capital vice president of sales Chris Dorin (pictured top), it’s also seen a renewed emphasis on making sure clients have the latest information on the current economic climate.
Keeping clients up to date with the latest economic reports and updates is especially important, Dorin told Mortgage Professional America, because running their own businesses is such a time-consuming enterprise.
“We’re really trying to help that person who’s on the street – they’re involved in their businesses, they’ve got their head in the weeds, they come up and talk to us,” he said. “We give them an update on what’s happening in the market so they can better understand and maybe position themselves.”
RCN has recently shifted toward more strategy calls with investors and borrowers to make sure they understand and see the latest developments in the market, according to Dorin.
“They understand what the expectations are going to be,” he said. “We got kind of surprised in 2023 when rates did start to go up and we still had investors calling us well into the change of the market going, ‘Hey, what happened to the 3% mortgage?’
“We realized that even these seasoned investors, maybe they’re not listening to the news all the time. They’ve got their own stuff going on [and] they’re people who were on the go a lot. So [we take] that extra time to really help them get educated on what we see in the market, where we see the opportunities and where we also might see some difficulties in the market.”
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— Mortgage Professional America Magazine (@MPAMagazineUS) March 8, 2024
Regional differences coming to the fore in 2024 market
Those calls with borrowers and investors have also served the purpose of underscoring the fact that trends and economic outlooks vary across the country, with regional differences very clear. “Different things are going to impact different markets,” Dorin said.
Skyrocketing insurance premiums in markets including Florida, California, Texas, and Louisiana, for instance, have squeezed budgets and impacted many DSCR loans.
“The cash-flowing property is going to struggle a little bit,” said Dorin. “We’ve seen that on the larger multifamily buildings, where you’ve seen some significant increases to cost of insurance that suddenly don’t allow the property to cashflow at the rate that you thought it would – and now you’ve got to adapt your strategy and figure something else out.
“So just helping people get educated is such a big component of it. And we feel that when we provide that level of service it’s to not only have a more comfortable, confident customer, but you’re building that relationship up to solidify for future repeat business.”
Challenges and opportunities in equal measure
Setting expectations with team members and clients has been another key focus for RCN Capital at the beginning of the year, Dorin said – for instance, emphasizing that while lack of inventory may mean this isn’t the best year to be fixing and flipping properties, there’s still “plenty of opportunity” for ground-up projects.
“Maybe people are going to go more to picking up and renting, or trying to build out a portfolio more looking for opportunities – potentially even in the apartment space and commercial space because there’s probably going to be some commercial properties that are coming online at a discount,” he said.
“For the savvy operators who are looking at those more commercial assets, they’re going to have an opportunity to maybe pick up some stuff on the cheap. But again: you’ve got to understand your market, and you’ve got to know what the expenses and cash flows of that property are going to be.”
A period of flux in the office sector means some investors are becoming attuned to the prospect of converting office to apartment space, he added, even if that process is sometimes easier said than done.
“That’s not an easy conversion. The layouts of those building are not set up really for housing opportunities just as far as the utilities go and things like that,” Dorin said. “Bathrooms are not set up the same way in an office that you would have in an apartment building.
“So retrofitting some of those buildings could be difficult, but for people who maybe get good price points on those things, they’re going to have some opportunities too.”
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