{"id":222,"date":"2010-03-11T14:51:46","date_gmt":"2010-03-11T21:51:46","guid":{"rendered":"http:\/\/privatemoneysource.com\/blog\/?p=222"},"modified":"2010-03-11T14:51:46","modified_gmt":"2010-03-11T21:51:46","slug":"an-interview-with-grover-w-sparkman","status":"publish","type":"post","link":"https:\/\/privatemoneysource.com\/blog\/?p=222","title":{"rendered":"An interview with Grover W. Sparkman"},"content":{"rendered":"

S. Clay Sparkman<\/em><\/p>\n

Grover W. Sparkman is the President of Fairfield Financial Services, a company that he founded with his wife, Louise Sparkman, and a business partner in 1964.\u00a0 He has been involved in just about every imaginable aspect of private money lending and paper brokering for nearly half a century.\u00a0 He also works as a licensed Realtor in Oregon and Washington, and previously worked for many years as a licensed appraiser (back when you still had to type appraisals).\u00a0 As my mentor, he taught me how to be a private money professional.\u00a0 And as my father, he taught me simply<\/em> how to be.<\/p>\n

<\/em><\/p>\n

Clay:\u00a0 You started out as a Realtor and in fact you are still a Realtor.\u00a0 When and how did you first get involved in trust deed investing?<\/em><\/p>\n

Grover:\u00a0 I had been working as a Real Estate salesman for Mayfair Realty, but since getting my Real Estate Broker\u2019s License, I had always wanted to open an office of my own.\u00a0 When an old time Real Estate broker named Henry English died in 1964, a partner and I, Milt Dalby, purchased the Real Estate business in Southeast Portland from the Henry English Estate.\u00a0 In those days there were not many banks loaning money on real estate \u2026<\/p>\n

Clay:\u00a0 That sounds like today.\u00a0 Have we gone full circle do you suppose?<\/em><\/p>\n

Grover:\u00a0 Good point.\u00a0 Perhaps we have.\u00a0 At that time, the solution for sellers was to sell property on private land sales contracts \u2026<\/p>\n

Clay:\u00a0 So maybe that is part of the answer.\u00a0 Maybe we\u2019ll see more of that once again.<\/em><\/p>\n

<\/em><\/p>\n

Grover:\u00a0 Indeed, we might.\u00a0\u00a0\u00a0 The attitude then was one of, \u201cwhy wait for the banks, let\u2019s get going.\u201d\u00a0 Henry English had set up a collection department to collect the monthly payments on the contracts.\u00a0 One day I received a call from an attorney saying one of the owners of a contract had died and he wondered if we could sell the contract to raise money to close the estate and pay the expenses.\u00a0 He also explained that the 4 children that were heirs did not want to split the $400.00 per month coming in on the Contract; they all wanted the money immediately.<\/p>\n

I started asking questions and discovered a new business–selling real estate contracts.\u00a0 Back then we were called paper brokers.\u00a0 Those were the days before computers and printing calculators, and I had to learn how to calculate interest yields on the unpaid balance on the contracts.\u00a0 There were a set factor tables called the Elwood Tables that would give us the time value of the money and rate of yield so we could figure out what an investor could pay for a contract to get the interest he or she was looking for.\u00a0 Interest rates being paid by the banks and savings and loans were very low and there were few safe places for investors to put their money to get a good monthly return.<\/p>\n

Clay:\u00a0 How has the private money business changed since you your early days in the business?<\/em><\/p>\n

Grover: \u00a0The government began to get more involved with the residential mortgage business through programs like the Veteran\u2019s loan program, HUD\u2019s FHA programs, and private insurance programs protecting the banks against foreclosures.\u00a0 This coupled with a growing economy caused more banks and Savings and Loan Companies to make more real estate secured loans, and in turn this caused private land sales contracts to dry up.<\/p>\n

We still had the investors looking for a good return on relatively safe loans, so I started looking for ways I could meet their need and discovered Trust Deed financing of Real Estate loans.\u00a0\u00a0 Working with builders, people wanting to buy rental properties and business buildings, and developers creating subdivisions–I found people wanting to borrow, that could use their real estate as collateral for the loan, giving the lender a reason to support the borrower\u2019s business plan and in turn receive a good return on their money.\u00a0 If things didn\u2019t work out, the property could be foreclosed and sold to recover the investment.<\/p>\n

Clay:\u00a0 Share with us, if you would, an experience as a private money broker\/investor that you particularly enjoyed.<\/em><\/p>\n

Grover:\u00a0 Over the years many of my clients became personal friends and referred me to their family and friends.\u00a0 I watched many of them become Snow Birds going to Arizona or California for the winter and coming back to Oregon in the spring.\u00a0 There were a couple of investors that got involved in the Peace Corps and people to people programs and traveled around the world.<\/p>\n

Clay:\u00a0 And on the flip side, share with us an experience that you didn\u2019t so much enjoy.<\/em><\/p>\n

Grover:\u00a0 On the flip side I found a lot of fraud creeping into the business.\u00a0 People vastly overstating their ability to repay the loan and I found Appraisers that would give grossly inflated value to a property if they were being paid by a borrower or broker.\u00a0 I found investors that were making loans to launder money from illegal activities.\u00a0 There were also the investors that were only looking for loans they felt they would be able to foreclose and get property to resell at a profit.<\/p>\n

Clay:\u00a0 What is one of the funniest\/strangest things that ever happened to you in the business?<\/em><\/p>\n

Grover:\u00a0 We received a proposal from another loan broker with an appraisal and pictures; they wanted a loan on two houses on one large lot.\u00a0 When I went to inspect the property I couldn\u2019t find the houses.\u00a0 There had been a fire about three months before and the houses had been completely demolished and hauled away.\u00a0\u00a0 Another time a restaurant submitted a proposal for a remodeling loan, when I went to inspect the property they didn\u2019t want me to go into the basement where the dining room had been.\u00a0 There had been a flood that had filled the basement with muddy water.<\/p>\n

Clay:\u00a0 Would you dare to conjecture as to where the industry is going during the next few years?<\/em><\/p>\n

Grover:\u00a0 I was born just after the crash of 1929 and have seen several booms and busts in the real estate market.\u00a0 I feel that there will always be a market where borrowers need money for their business plans and investors are looking to get a better than average return on their money on a relatively safe loan.\u00a0 Real estate will always be good security for the loan, so long as both the borrower and the investor use good judgment and ensure that there is a proper plan for paying the loan off and that the values for the security are as accurate as possible.<\/p>\n

Clay:\u00a0 These are hard times for hard money lenders and hard money brokers.\u00a0 Do you have any advice for those who are currently involved in private money investing?<\/em><\/p>\n

Grover:\u00a0 You have to like the business.\u00a0 I like the real estate business because I like helping people solve their problems.\u00a0 On the residential side I was helping people buy a house with the idea that they were going to make it a home and a place to raise a family.\u00a0 On the commercial side of the business I always got a thrill out of watching a building grow into a business that became a part of the community.\u00a0 As a loan broker, I was also helping people solve their problems of getting money to buy, develop and build while at the same time I was able to help investors get a good return on their money.<\/p>\n

Being a broker is very much a people business; we sell one loan at a time, for a borrower with specific needs, to an investor with a desire to earn a better than average yield on the investment.\u00a0 We don\u2019t have anything to sell but our service. \u00a0I feel that it is our obligation to be as transparent and open with our clients–lenders, brokers, and borrowers–as possible.<\/p>\n

Clay:\u00a0 Would you agree with the supposition that (a) banks just aren\u2019t lending and (b) our industry niche is being hurt by that since we are essentially a bridge and there must be a way to get on and off that bridge or people and businesses cannot cross it?<\/em><\/p>\n

Grover:\u00a0 Right now we are going through a cycle where the bigger banks are hurting the economy because they are loaning very little money on real estate.\u00a0 Most of the loans we broker are for specific purposes that are generally short term, such as completing a remodel or putting up a building or developing a subdivision.\u00a0 The exit strategy is to get a long term bank loan after the project is completed or sold.\u00a0 If there is no money coming back into the pipeline, nothing happens and the economy suffers.<\/p>\n

Clay:\u00a0 I\u2019ve noticed that through your many years in the business\u2014in both good times and bad\u2014you never seem to become bitter or discouraged.\u00a0 What is your secret?<\/em><\/p>\n

Grover:\u00a0 Over the years I have seen a lot of changes:\u00a0 computers and calculators and the internet, new rules and regulations, roller-coaster markets, and more frightened or suspicious people–but I remind myself that I love the business and its challenges.\u00a0 I have found that most people are honest and well meaning.\u00a0 My goal is to try to treat other people the way that I want to be treated in a business transaction.\u00a0 Over 40 years ago I came up with our slogan:\u00a0 \u201cThe Right Investment is Equal to a Lifetime of Toil.\u201d\u00a0 I believe that it is still true today.<\/p>\n

— Clay (clay@privatemoneysource.com)<\/p>\n","protected":false},"excerpt":{"rendered":"

S. Clay Sparkman Grover W. Sparkman is the President of Fairfield Financial Services, a company that he founded with his wife, Louise Sparkman, and a business partner in 1964.\u00a0 He has been involved in just about every imaginable aspect of private money lending and paper brokering for nearly half a century.\u00a0 He also works as […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[12],"tags":[40,41,42,43,48,49,50,51,53,54,58,59,60,61],"_links":{"self":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/222"}],"collection":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=222"}],"version-history":[{"count":0,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/222\/revisions"}],"wp:attachment":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}