BUYER,  BROKER,  INVESTOR. SIMPLE BEGINNINGS...

Who is Darlene Mitchell you ask?  The first and most obvious answer is the co-author of this column.  But, much more importantly, what information does this person have to share that would be of interest to you as a reader.  If you are a real estate investor, a loan originator, a Realtor, a note buyer, or a note broker you might be very interested in some of the information that I have gathered in over forty years of experience in the real estate and mortgage business.  I have been a real estate agent, a real estate investor, a general contractor, a house flipper, a note creator, a note buyer, a note broker, and I have dabbled in a variety of other mortgage and real estate based enterprises including writing pamphlets and e-books.

While researching several interesting topics for this week's column I suddenly realized that unless you have met me socially, or through the business you know nothing about me.  So, I thought a short introduction was probably in order. 

I started out as a real estate investor in 1965 when I bought my first house.  I did some yard clean up, painted a couple of rooms, moved a door to improve traffic flow, and before I knew it I was renovating houses on a regular basis. Today, these folks are known as house flippers.  Soon I was buying houses and selling them on low down seller financed contracts.  I am proud to say that out of hundreds of those transactions I have only foreclosed on two properties and both of those occurred in the last five years and both were raw land.  I have never evicted anyone from their home and hope that never happens. Somewhere in that time period I decided to become a real estate agent so I got my license and sold real estate for several years, before deciding what interested me the most was dealing with notes and mortgages.

I don't think that you have to have started out as a real estate investor or creator of your own real estate notes to be successful as a note investor or broker, but I think there are key elements that you learn when starting this way that have served me well over these many years.  First, by creating your own notes you find out quickly what works and what doesn't work as a saleable product or as a long term investment.  Most important the real estate contract must provide strong protection to the seller (or investor) and at the same time be fair and equitable to the buyer.  I feel that it is extremely important to understand the mechanics of real estate transactions before you can become an EFFECTIVE note investor, or note broker.         

Today, I am one of the three managing partners of American Contract Buyers.  American Contract Buyers is an off shoot of The Ruffe Trust.  The Ruffe Trust was a private investment trust specializing in seller financed income streams, focusing primarily in real estate investment in the Pacific Northwest throughout the 1970's, 80's, and 90's.  The Ruffe Trust was the brain child of my uncle, Norman O. Ruffe.  The Ruffe Trust purchased many of my seller financed transactions over the years and it was through my affiliation with my uncle and his Trust that I became more involved in the paper portion of the business.  My uncle Norman passed away in December of 2000, but before he died he taught me the "secret" of calculating the numbers behind the notes.  Prior to this I looked at the value of the property, the interest rate and the credit of the potential buyer and that was how I created my cash flows.  But, Norman taught me several skills that are essential in the note business and both of those are centered on the "numbers" of the note, 1). the time value of money and 2). how to evaluate any note by looking at the potential yield; in other words skillful use of the financial calculator.

Now, 45 years after purchasing that first house in Ladd Addition, a historic area of Southeast Portland, Oregon I am still involved in real estate and the note business and I love every minute of it and I would never have wanted to do anything else.  And, that is a good thing..doing, what you love.

Until next time, happy investing. 

Darlene      

Hello and welcome to my first ever blog entry. This is a new medium for me, but at the insistence of many of my close colleagues, friend's, family and business associates I hope to overcome my reluctant writer syndrome and hopefully in the process inform, educate and maybe even occasionally entertain you. 

For those of you that do not know me, let me introduce myself. My name is Damen Mitchell I am the President and Chief Operating Officer here at American Contract Buyers. American Contract Buyers is real estate investment firm specializing in the purchase of various debt instruments (i.e. promissory notes, mortgages, deeds of trust, land contracts etc...) I am often asked how I got into this business and honestly I got into this business the old fashioned way-through nepotism.

As a teen and young adult, I was often enlisted to work on and eventually came to oversee the construction and remodel of endless real estate and rehab projects my family was always involved in. In my early twenties I became a general contractor, received my all phase landscape contractor's license and became a certified arborist. It has always been my belief that if you are going to doing something, that it should be done whole heartedly. So, I dove in and learned as much as I could about every aspect of the construction business. After several years of renovating and flipping properties with my family,  I decided to obtain my loan officers license and originated loans for one of the nation's largest brokerage firms where I specialized primarily in Alta A residential loans and commercial property loans.

During this same time period I began purchasing properties, mostly single family homes and small multi-unit properties with the intention of renting them, building equity base and "passive" income. I say "passive" with a somewhat tongue in cheek grimace, because anyone that has owned multiple rental properties knows "passive" is a matter of perspective and rentals properties must be managed or you run the risk of watching your equity evaporate.

Although, I only worked in the prime lending market for a few years the knowledge I gained would later prove to be invaluable as I began upgrading and selling many of the properties I had acquired. I suppose this would be a good time to point out that most of the properties I have purchased over the years, have been purchased with seller financing.

There were a few rules I used when buying real estate (which I will go into greater detail in future postings). First and foremost you must "make" it on the buy, Secondly, I would never under any circumstances buy a house that I would not live in, and finally it has to pencil. So when the real estate market became "hot" and everyone and their brother was buying real estate (hoping to double their money), I took the opportunity to sell. I sold a great deal of my rental inventory and was able to really make my money "work" for me investing in well structured, good performing notes and mortgages. Now this is true passive income, with great yields and a heck of lot more stable than the stock market and IRA's.

Until next time and wishing you all a Merry Christmas and a Happy New Year,

Damen