The Man Who Mentored a Billionaire

As a boy my interests were in sports, music and movies.   I had this rotating dream of being like Dan Fouts of the San Diego Chargers, Chris Cornell of Soundgarden and Harrison Ford from the Indiana Jones films.  How wonderful to be as wealthy and famous as these guys!  But did I ever play football?  Very little.  What about learning the guitar and taking voice lessons?  Of course not.  As for acting?  I never enrolled in a single drama class.  These weren’t real goals of mine, they were whims.  Like most people I just dreamt of being great.

Consequently, I spent all of my childhood and most of my adult years thinking that success came naturally to people.   These gifted individuals didn’t have to earn their success or have someone show them how to get it.  A cosmic force had granted them special talents that I didn’t deserve.   I was left to toil away in mediocrity with the rest of the common folk.

But that all changed in 1994 while working as a photojournalist for KMGH in Denver, Colorado.  For the first time in my professional life I set a goal.  It was to become the National Press Photographer Association Regional Photographer of the Year.  I’m not exactly sure what prompted me to set this goal, but I was determined to reach it.  I started spending hours at the TV station before and after my shift watching other photojournalists’ reels.  I immersed myself in the craft.  I convinced some of the best in the business to mentor me, guys like Dan Dwyer, Roel Robles, Tim Jensen, Gilbert Zermeno and Erik Lee.  Within one year I had my trophy.

As I reflect on this accomplishment and the many others I’ve had since then, I can’t help but wonder why it took me so long to discover that success is not pre-ordained and certainly not a do-it-yourself proposition? History is ripe with stories of great men and women who attribute their success to a mentor, or series of mentors.   They didn’t do it on their own; they had a lot of guidance.

Benjamin Graham mentored one of wealthiest investors of all time.  Born in 1894, Graham lived through and actually prospered following the Great Depression.  His book, The Intelligent Investor, was published in 1949 and inspired a generation of value investors.  Mr. Graham’s most successful protégé was so inspired by the book that he moved to New York from his modest, Midwestern hometown at the age of 20 to attend Columbia University.  Graham taught classes there at the time, in addition to managing his very successful investment firm, the Graham-Newman Corporation.

Graham’s star pupil was named Warren Buffett.  Buffett would later write in a revised edition of the Intelligent Investor, “I knew Ben as my teacher, my employer, and my friend.  In each was an absolutely open-ended, no-scores kept generosity of ideas, time and spirit.  If clarity of thinking was required, there was no better place to go.  And if encouragement or counsel was needed, Ben was there.”

So there you have it.  If arguably the most successful business owner and investor of all time had a mentor then shouldn’t you and I?  The truth is we are all born unsuccessful.  As Earl Nightingale points out in The Strangest Secret, “success is the progressive realization of a worthy goal or ideal.”  We don’t become successful until we set out on the journey to make our goal a reality.  For me it was to win an award, for Warren Buffett it was to become a millionaire by age 35.

The journey can be very cold and lonely without help.  So set your goal and then immediately begin to surround yourself with people who can help you achieve it.

You Have the Right to Remain Broke – Reading Your Housing ‘Miranda’ Rights

“You have the right to remain broke.  If you stop making your mortgage payment anything you say can and will be used against you by your lender to make you feel guilty, irresponsible, immoral, shameful and stupid.  You have the right to an attorney that may charge you outrageous fees to negotiate a loan modification with your lender, but you’re better off just walking away from your house.  If you cannot afford an attorney we don’t care because you are a deadbeat.  We will foreclose on you anyway.  Do you understand these rights?”

I love sayings.  One of my favorites came from Lyndon B. Johnson, the 36^th President of the United States.  He was once asked why he didn’t fire J. Edgar Hoover, at the time the very powerful director of the FBI.  Johnson’s reply, “I’d rather have him on the inside of the tent pissing out then on the outside of the tent pissing in.”  My Dad has some classic sayings too.  Many of them would be inappropriate for this post.  But, one is worth repeating and it goes like this, “never throw good money after bad.”

If you are ‘upside down’ on your mortgage, in other words you owe more than your home is worth; it’s time to walk away.  Experts call this a strategic default.  I call it a wise business decision.  If you are inclined to believe that your home is an investment (it’s really not, but that is a topic for another day) then this should be a simple choice.  But, as Brent T. White, an associate law professor at the University of Arizona, recently pointed out in a recent Wall Street Journal article titled, ‘It’s Okay to Walk Away’, “a failure to grasp the true economics of the situation is holding back many Americans whose home values have dropped far below the amount they owe and who would be better off renting.”

Let’s do the math…if you owe $50,000 more than your home is worth it will be 8 years before the balance on your mortgage and value are the same again (that’s using the historical 6% average annual appreciation rate.)  Unfortunately, you may be in a market where values are still going down so it could take even longer for you to catch up.

And then, of course, there is your FICO credit score to worry about, or as Dave Ramsey, the popular financial planner from Fox Business News calls it, your debt score.  Only in America do we reward those who stay in debt with a high score…it’s like some sort of twisted video game for adults.  How negatively does a short sale or foreclosure affect your credit score?  No one knows for sure.  Experts will tell you it’s usually around 80-120 points.  So what would you rather hold on to, the cash you have on hand and will continue to earn or a sparkling credit score (that most likely go you into this situation in the first place?)

By now you are probably saying, “Sure, you advocate this but you would never do it yourself!”  Actually, I did.  In April of this year I did a short sale on my own home.  I was more than $30,000 upside down.  But, that wasn’t the real reason behind my decision to walk away.  My monthly costs were almost $3,500.  I could rent a similar home for in the area for half the price and after my house sold that is exactly what I did.  After 11 years of homeownership I’m a tenant again and saving $1,200 per month on housing costs.

Bob Hunt wrote about this recently in his article for Realty Times called, ‘Is it Morally Wrong to Default on a Mortgage?’  In it he states, “Mortgages are secured notes. They are not like borrowing from your grandmother. If you willingly default to her, shame on you. She has no recourse. But, if you default to the bank, they can take your property. That is the deal they made. The property may not be worth what they lent you, but whose fault is that? They are big boys and girls. They made a business decision, and in today’s market, they lost.”

This brings me to final point.  It is financial suicide to spend every penny you earn and every penny you have ever saved to make your mortgage payment.  Even if you can afford your payment it still makes no economic sense to stay put if you owe $50,000 or more than your home is worth.  Your moral obligation is to secure a financial future for your family, not to “throw good money after bad,” as my Dad once said.

Bandit Signs: Ugly, Unprofessional and Illegal

Fresh out of my very first real estate investment seminar in 2001 I went directly into the local print shop and had 50 ‘We Buy Houses’ signs made up.  Al Lowery, the instructor, promised that these signs would generate hundreds of calls from desperate, motivated homeowners.  Early one morning I put every one of these signs in the ground at some of the busiest intersections in the city.  Because I’m a good student I also had a ‘We Buy Houses’ sticker put on the back of my SUV and placed a ‘We Buy Houses’ ad in the local newspaper.  I learned in this seminar that with my “sophisticated” marketing campaign in motion all I would need to do was sit back and wait for the calls to pour in.

Within a day I got a call from a very motivated homeowner.  She told me she was behind but had significant equity in her home and would like to sell fast.  My palms started sweating and my mouth began to water.  Could it really be this easy?  She insisted that we meet in person at my office.  I told her that I couldn’t help her without seeing the home first.  I also asked her for the address so I could start doing my research.

Without wasting any more time she dropped the bomb on me.  She was not a very motivated homeowner with significant equity in her home that would like to sell fast.  She was, in fact, a code compliance officer with the city of Chandler, Arizona.  She informed me that each and every one of the signs I had in the ground was a code violation and that if I didn’t remove them within 24 hours I would be fined $1,000 per occurrence.  Ouch!  Needless to say, the next day I went out and picked them all up, although this was a little difficult to do because I had my tail stuck between my legs.

Much later on I learned that the secret with the bandit signs is to put them up after 5p on Friday and take them down before 8a on Monday morning.  This is because the code compliance officers don’t work on weekends.  The real estate gurus instruct aspiring real estate investors to put these signs out because they can be very effective.  I would argue that selling drugs or robbing banks can be effective too, but it’s not legal and certainly not something to be proud of.  Do you really want to promote your business next to the guy hocking carpet cleaning, bankruptcies for $200, affordable health insurance, personal training, yoga, diet supplements or dog grooming?

If you want to be considered a professional real estate investor and business owner you must serve your community, not litter it with ugly signs on every corner.  Find a successful investor in your area and offer to help them.  Become a member of the community, either through your church, your child’s school, networking events or all of the above.  Many of my most profitable deals came because of a personal connection I made. Remember this advice the next time you’re instructed to sit around and wait for the phone to ring like I did, “a little extra sleep, a little more slumber, a little folding of the hands to rest – and poverty will pounce on you like a bandit; scarcity will attack you like an armed robber.”  – Proverbs 6:10

Flushing out the Flakey Cash Home Buyer

“They say money talks.  All mine ever says is goodbye.” – Red Skelton

My father-in-law is an excellent negotiator.  He expects a deal wherever goods and services are exchanged.  This includes Best Buy, although I’m told they don’t negotiate prices.  From his Ford Expedition to the tux I wore at my wedding he will always ask for, and usually get an excellent deal.

Many of the cash buyers entering the Phoenix real estate market remind me of my father-in-law:  skillful, tough and flush with cash from years of careful saving and planning.  I actually enjoy negotiating with these buyers.  I appreciate their financial prowess.  So-called industry experts label these all-cash buyers as speculators.  They warn of more bubbles bursting and market implosions.  The reality is these are sophisticated investors that recognize two things:

1. Real estate is a hedge against inflation, which could be imminent because of the government’s involvement in the banking industry.
2. The cash-on-cash return from rental income earned on a median priced single-family residence exceeds the stock market.

But not all cash home buyers are created equal.  Just this week I received two cash offers from out-of-state investors.  Even though both offer prices were very reasonable and their agents were pros, early on my hunch was that these buyers were not very serious or sophisticated.  How?  Both asked for a 30-day closing.  This could mean that they don’t have the cash on hand or they really aren’t sure about the home and need plenty of time to back out.

So how do you find out if they are for real?  Counter, counter, counter.  In this case we countered the purchase price ($2,000 more), closing date (from 30 days to 16) and current proof of funds (printed from an online source with today’s date.)  If the buyer really wants the home they will pay a little more, close a little early and will have access to online banking.  If they don’t they’ll take the time to get it.

However, in this case neither buyer was serious.  One agent sent me the counter back rejected and the other called to say “no deal.”  At least we didn’t have to wait 30 days to find out.

Dress for the Business You Want, Not the Business You Have

I worked in TV news for 15 years before I got into real estate.  I was commonly referred to as the “cameraman”, but I liked the title “photojournalist” much better.  Because I was behind the scenes the dress code wasn’t nearly as strict as it was for the on-air “talent”.  Many of my colleagues chose to dress down every day, probably because it was cooler and certainly more comfortable.

One day a tape editor came in to the station wearing his pajamas.  Can you think of many jobs that pay more than $8 an hour and allow you to wear a worn out T-shirt, sweat pants and flip flops?  Lori Allred, his manager and a good friend of mine, admonished him on the spot.  To this day I remember her telling him “dress for the job you want, not the job you have.”  So what does any of this have to do with business and real estate?  If you are an investor this translates to dressing for the business you want, not the business you have.

Now I’m not talking about your wardrobe.  That should be a given.  What I’m referring to here is your business.  Are you treating it more like a hobby?  Because let’s face it, hobbies are expensive.  I’m embarrassed to admit that from 2001-2006 I ran my business like a hobby.  Sure, it didn’t appear that way from the outside.  I had a beautiful office with dark cherry furniture, a receptionist, office manager and sales staff.  I even had my logo printed on water bottles.

However, if you asked me to produce a profit and loss statement or balance sheet my eyes would glaze over.  I used QuickBooks but I didn’t use it properly.   To me it was really nothing more than an expensive check register.  I didn’t understand basic accounting principles at the time so in my mind everything was either income or an expense.  The only reason I was able to raise capital and prosper during these years was because the market was red hot.  Everyone wanted to join the party.

To succeed today your financials must dress to impress.  I have found that there is no better software tool out there to help you do this than QuickBooks (by the way, the folks at Intuit don’t pay me anything for this endorsement.)  Mastering this software will take time.  Since May I’ve invested about 12 hours to this, including an 8 hour class on QuickBooks at the Nouveau Riche College, 3 hours with my accountant and 1 hour with another investor’s bookkeeper.

The result?  Since July 7^th, $273,000 raised, 6 properties purchased, 3 closed, 3 currently in escrow and a 70% ROI to my investors.  Not bad.  Could I have done this without a P&L and balance sheet?  Maybe.   But why try?  It’s like Abraham Lincoln once said, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

What it Takes to Succeed in Real Estate, or any other Business

I learned early on in school exactly what it took to get an A, B, C or D in a class, the only exception being College Algebra.  When I entered the corporate world it didn’t take me long to figure out what it took to exceed, meet or not meet expectations on a performance appraisal.  Most of us have this internal barometer.  So how are you doing in your business?  As the CEO of You, Inc. are you moving your company backward or forward?  Are you taking advantage of every resource available to you and making the most of your time?  I know I’m not always.

I was first introduced to the book, Think and Grow Rich, by Bob Proctor, in 2006.  He has been carrying around the same tattered copy of the book since the 1960’s.  At end of my one year mentorship program with Bob he gave me my own leather-bound copy, which I now carry around with me wherever I go.  On a cross country trip to New York recently I reread Chapter 2 on Desire.  In this chapter Napoleon Hill lists his six ways to turn desires into gold:

1. Fix in your mind the exact amount of money you desire.  It is not sufficient merely to say “I want plenty of money.”  Be definite as to the amount.
2. Determine exactly what you intend to give in return for the money you desire.  (There is no such reality as “something for nothing.”)
3. Establish a definite date when you intend to possess the money you desire.
4. Create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action.
5. Write out a clear, concise statement of the amount of money you intend to acquire, name the time limit for its acquisition, state what you intend to give in return for the money, and describe clearly the plan through which you intend to accumulate it.
6. Read your written statement aloud, twice daily, once just before retiring at night, and once after arising in the morning.  As you read – see and feel and believe yourself already in possession of the money.

Complete these steps and you will be part of a small but exclusive group of successful entrepreneurs like Henry Ford, Andrew Carnegie and Charles Schwab.  You may not amass the fortunes these men have but you will no doubt become a success.  Ask yourself this question, have you ever heard anyone you consider successful say “I just wing it.” Do you think Bill Gates got rich that way?  Of course not, he had a plan.

In Lead the Field, Earl Nightingale wrote “success is the progressive realization of a worthy goal.”  Keep in mind this means you become successful the moment you take action to reach your goal, not when you actually achieve it.

Performing an Autopsy on a Dead Real Estate Deal

Last week I played doctor.  This week it’s forensic pathologist.  Admittedly, I’m not very good at either one.  I let a real estate deal flat line and the cause of death remains unclear.    Fortunately, there is a lot that can be learned when you dissect a paper corpse.  The writers of CSI could have never dreamed up an episode this good.  Come to think of it this story is actually more like a dark comedy than a murder mystery.

It started out like any other normal real estate transaction.  Actually, it didn’t.   But isn’t that how you begin any good script?   The subject property is not a short sale or REO, but owned free and clear by my real estate partner and client.  The subject property description:   new carpet, paint, appliances, pool, blinds, ceiling fans, etc.  Is this starting to sound like a police report yet?  The home goes under contract in 6 days to VA qualified buyers, a very nice family currently renting in the area.  The plot up to this point seems fairly predictable.  The nice family buys the home of their dreams and lives happily ever after.  Except that this is not happily ever after, this is Buckeye, Arizona where real estate market values have plummeted by more than 50%.

Of course, the trouble begins with the appraisal.  Every good story needs a villain and in today’s struggling real estate market the lender fits the bill perfectly (deservedly so).  And what made-for-TV villain would operate without a trusty accomplice, in this case the appraisal process?  So the contract price is $135,000.  However, the appraisal comes back at $125,000.  This is not an insurmountable price difference by any means.  Luckily, my client is a dealmaker, not a deal breaker so he lowers his price to $127,000 and the buyer agrees to bring an additional $2,000 to help make up the difference.  Problem solved.

Suddenly the bad guys don’t seem so bad.  My client and I conclude the lender hired a competent, local appraiser that applied some common sense to the process.  He carefully reviewed the subject property and three other comparable homes using similar criteria but the appraisal came in a little low.  It happens.  Of course my client is disappointed about it but the margins on this deal are still very good.  So is it time for the nice family to ride off into the sunset?  Not so fast.  Enter the next evil doer, Mr. Desk Review Appraisal.  This is starting to feel like a Batman and Robin movie…too many villains.  And Mr. Desk Review Appraisal plays the part of the Joker.  Here are a few lines from the script, I mean the review appraisal:

It starts out on page 3 admitting that “no physical inspection of the property has been made.” The madness continues on page 6 with the line, “Reviewer’s recommendation of value is based on this limited data and a complete appraisal should be completed on the subject if significant variances in value or descriptions of the subject physical characteristics are noted in this report.” And here’s the Joker’s punch line, “Reviewer’s recommendation:  $93,000.” This is followed by the parting shot, “Overall, the original appraisal report seems to be accurate and provides a fair estimate of value for the subject property.”

Huh?  Never mind that the desk review appraiser is not licensed in the state of Arizona.  Forget about the fact that the subject property or the comparables he used were never inspected, or that he works 360 miles away in Sherman Oaks, California and has no geographic competence.  The lender used this desk review to trump the original appraisal and will only underwrite the loan based on the $93,000 value in the report, thus killing the deal.

The autopsy results conclude that the lender did not really want to loan this family any money.  A mortgage lender friend of mine pointed out there was probably something in the file the underwriter did not like.  This desk review just gave the lender an excuse to bail out.  Case closed.

Real Estate Recovery Roadblock #3: Banks and their unlikely business partner, Uncle Sam

“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things,” Adam Smith, author of ‘Wealth of Nations’, 1776

Read these recent headlines from major metropolitan newspapers and ask yourself this question…are the banks and the federal government really capable of injecting life into the real estate market?

• Bank of America Posts a Loss and Misses Forecast, the New York Times, 10/16/09
• Have Banks No Shame? The New York Times, 10/10/09
• Panel Says Obama Plan Won’t Slow Foreclosures, the New York Times, 10/9/09
• Arizona’s Stimulus Funds Going Mostly Unused, the Arizona Republic, 7/9/09
• Lenders Avoid Redoing Loans, Fed Concludes, the Boston Globe, 7/7/09
• Paper Avalanche Buries Plan to Stem Foreclosures, the New York Times, 6/28/09
• Lawsuit Alleges Builder, Lender Rigged Appraisals to Inflate Prices, the Arizona Republic, 5/8/09

Now that you’ve had a chance to read these headlines I hope you answered ‘no’ to my question.  Here’s the reason why the banks and federal government are failing:  they make horrible business partners because their objectives are completely different.  The banks care about the bottom line and the government wants to keep people in their homes.  This tug-of-war has unnecessarily extended the housing crisis and delayed a recovery.

An argument can be made that the little recovery we have seen has come in spite of the banks and government partnership, not because of it.  Its like Thomas Jefferson once said, “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”

Real Estate Recovery Roadblock #2: The FHA 90-Day Seasoning Requirement

There are certain seasoning requirements I absolutely love.  For example, if I’m cooking halibut on the grill I must coat it with olive oil and add Emeril’s Essence.  And no rib eye tastes right to me without McCormick’s Montreal Steak seasoning.  For other great recipes see the Food Network website.  But on to business…it’s time to get on my soapbox.

The FHA 90-Day seasoning requirement is more like the Great Wall of China to real estate recovery than a roadblock.  Here’s what it means to you, the investor.  The FHA will not insure the loan for the buyer of your home if you the seller have owned it less than 90 days.  In other words if title of the property has changed hands in the last 90 days because you the investor bought the property through a short sale, at the auction, or from a bank or wholesaler you cannot sell it to an FHA qualified buyer until day 91.  And this absolutely, completely, unequivocally sucks big time.  Especially since real estate people who track this stuff say about 25% of the buyers out there go FHA.

What is equally frustrating is that the VA and USDA have no such requirements.  None…zero, zilch, nada.  But unless you are flipping houses in an area with a high concentration of military personnel good luck finding a VA approved buyer.  And the USDA eligible properties are usually located on the outer edges of the city (if you are wondering where you can go to find if a property you have or want to buy is in one of these areas visit the USDA Property Eligibility site.)

Why does the FHA have this requirement?  Obviously, because it prevents flipping!  Believe it or not there are a few bad apples out there that have manipulated values and artificially driven up prices in certain areas.  Rather than dealing with the bad guys it was easier for the FHA to create a policy that today not only harms the buyer and seller, it also severely hinders a real estate recovery.  I believe these are called ‘unintended consequences’.  It would be nice if the FHA recognized that while there have been times when investors were poison to the real estate market, at this critical point in time they are the anecdote.

So what is a savvy real estate investor to do?  Buy strictly near military bases and on the outskirts of town?  Well, yes.  Unless you’d rather rack up thousands of dollars in holding costs waiting until you find a conventional or all cash buyer, or even worse, day 91, to start marketing your flip.  Of course, there are other creative ways to get your home sold and save on holding costs, like a short-term lease/option with a well-qualified FHA buyer.  But in this scenario you better have a huge margin factored in up front because it could take up to five months to get a deal like this closed.

Real Estate Recovery Roadblock #1: The Appraisal Process

It would be easy to slam the Home Valuation Code of Conduct (HVCC) in this post.  Yes, the NAR and other real estate organizations blame this so-called voluntary code for road blocking the real estate recovery, and I agree with them.  If you’re not familiar with the code or its origins, read the ‘Washington Report:  Home Valuation Code of Conduct’ from the Realty Times to learn more.  But, I thought it would be helpful to go a little deeper in this post.

Now before you appraisers out there get your pitchforks and torches out remember I said the appraisal process, not the appraiser.  Easy does it…I’m on your side.  You get an earful from the buyer, the buyer’s agent, the listing agent, the seller and the bank.  I don’t envy you one bit.  Kurt Vonnegut’s book, ‘A Man Without a Country’ comes mind.

If you’ve sold a home in the last six months, either your personal residence or an investment property, you’ve undoubtedly had a problem with the appraisal.  And you can bet the problem wasn’t that the appraisal came in too high.

I purchased a home at the courthouse steps on 9/1/09.  I had it painted, put in new carpet, stainless steel appliances and landscaping.  It quickly went under contract for $124,900 with multiple offers, but the appraisal came back at $112,000.00.  Of the comparables the appraiser pulled, two were short sales and one home had one less bedroom and bathroom than mine.

The appraiser assigned to this file told me that short sales and bank-owned homes were part of the market and must be included in her review.  Keep in mind that this was a USDA loan so the HVCC does not apply. When I told her that six new homes built in the same subdivision by the same builder had just closed for $20,000 – $50,000 more than mine she said they could not be included in her appraisal because they were “different”.  Excuse me?

Now I don’t blame her.  She’s been programmed to spew this nonsense by the lenders she works for.  But if a new home is “different” from a move-in ready, traditional sale (i.e. not a banked owned home or short sale), then how can a traditional sale be compared to a distressed property?  The terms of sale and condition are completely different.  Furthermore, using this twisted logic how would values in any real estate market ever go up?

Statistical multiple listing service data in my area proves that traditional sales, on average, are worth 20-40% more than short sale and banked owned properties.  Here is the information directly from Mike Orr’s Cromford Report for the month of September:

• Bank Owned Homes:                        $68.66 per square foot
• Short Sales:                                          $84.41 per square foot
• Traditional Sales:                               $116.73 per square foot

By the way, if you don’t have a subscription to Mike Orr’s Cromford Report, you should get one, even if you don’t live in the Phoenix area.  It has to be the single best resource for any real estate professional and it tracks every market indicator you can think of.

So what needs to change?  For starters, apple to apple comparisons for terms of sale must be made.  If the appraiser can’t do an apple to apple comparison allow them to go further out.  Next, factor in days on market (more value should be added to the property if it goes under contract quickly, and conversely value should be deducted if the home sits for months on end.)  Additionally, consideration must be given to how many offers are received on the subject property.  Finally, the HVCC must be eliminated (see Inman News story from yesterday, ‘NAR:  Appraisal Rules Undercut Tax Credit’).  Another by the way, if you don’t have a subscription to Inman News, you should.  This is a must read for every real estate professional.

The bottom line is market value should be determined what the market is willing to pay, not what the lender is willing to lend.