Mark Latimer of Baypointe Asset Management Inc.

By Christina Suter on Apr 02, 2016 at 01:07 PM in Real Estate Issues

Mark Latimer of Baypointe Asset Management Inc.

Mark Latimer is the president of Baypointe Asset Management Incorporated, a real estate broker licensed by the Department of Real Estate, in the State of California. Mark has over 30 years of experience in senior positions as Chairman, President, and Senior Vice President starting, developing, and managing very high growth entrepreneurial companies and large corporate divisions including Freddie Mac and CalFed Inc.

Mark got into the real estate business when everyone else was getting out after the 2008 collapse. He began investing in the La Jolla and Venice beach area and was building and doing well with a reliable system with investors who had money, but he knew he needed an advisor. He found one and after two years he and his advisor met over lunch for a meeting and his advisor said he needed to invest 5 million dollars into Mark’s notes work for his professional business balance sheet and for personal reasons. Their conversation happened at noon and at 10pm that same day his advisor passed away and Mark lost a friend and a business partner and from a business point of view he was set back and had to rebuild. He learned to perform better and to perform better than everyone else and to find his niche. Within the last year his fund has exploded and he’s hoping to get above the 60 million dollar level. His best advice is to build a professional team around you and keep producing, even when no one is listening. He admits that it’s not an easy field, but to have a backup plan in terms of access to more money, or an attorney who can advise you, and have an exit strategy. Don’t wait until something happens because you’ll lose negotiating power.

I discussed with Mark that the Fed had raised the interest rate in the middle of December 2015, the first time since 2006, and they raised it a quarter of a point. I wanted his take on that.

"If you’re in my space, it’s private money lending and there’s always going to be more opportunities and a quarter of a point isn’t going to adjust much in my world. Where it’s going to make a difference is the mortgage backed securities, mortgage rates will go up a little bit, bond market, credit cards, and students loans will all be impacted and if you have all of those you will be impacted. On $100,000 a ¼ of a point over a year is about $250/yr so it’ll be a minimal amount each month per $100,000 so it’s not a killer, but if it goes up a ¼ of a point every quarter for 15 months then before you know it the fed fund’s rate is at 15% and the prime rate increases, home equity loans increase, etc. For the people who have to pay off of that rate it may be a trend upward, but then you have the investment community who gets nothing and they might like that. It is worth studying and it does have an impact so it’s worth watching the actual dollar increase you’ll pay and the percentage increase it’s causing. It’s not going to stop there, it’s going to be a trend upward until there’s a recession."

I shared with him that the expectation is that there will be 3 more raises in 2016. I asked him if he sees a recession in front of us and what his thoughts are terms of how soon or how far.

"I used to think late 2018-2019 but now I am thinking maybe 2017, but I don’t see it yet. I see some strength in the economy in the basic home building business and in the construction of large office buildings in all the major cities around the country. Construction brings a lot of work to a lot of people and it’s a huge kick to the economy. So even though internationally it’s slowed down, domestically we’re doing ok. There’s three things that predict the economy, reduction of the Fed fund, reduction of the marginal taxes and easing of the regulatory world. I don’t see a recession immediately in the United States, 1 quarter of a point isn’t going to cause a recession; it’s just an indicator of a trend, so you just have to watch the trend. It’s an election year and politicians try to position everything so it’ll be a good election for the incumbents but I’m watching to see if it’s going to come sooner."

Lastly I asked Mark what the short list of the indicators he watches when he watches the trends are.

"There are two organizations that drive the economy now, the Federal Reserve and the White House and congress, so I look for changes from them that impact an entire economy. I also look at factors such as the labor force, unemployment rate, wage pressure, the international growth in China, Brazil, and a few European countries."

"As an investor, you’re either investing as an active player and you’re money’s tied up for a long time or maybe it’s a flip and your money is tied up for 6-9 months. So in our fund we underwrite to sustain a tough market. From an investor pov how long do you want to keep your money tied up is the question. Think of the last recession and what you did right or wrong depending on if you lost or made money."

Mark is available at 909.456.8955 or by email: [email protected]