REI INK - Q&A WITH MARK ABRAMOVICH, CHIEF EXECUTIVE MEMBER, MIRS GROUP
Q&A WITH MARK ABRAMOVICH, CHIEF EXECUTIVE MEMBER, MIRS GROUP
A Conversation About the Economy, Lending and the Real Estate Industry
Mark Abramovich is the Chief Executive Member for MIRS Group. Mark is a lender and investor who graduated with honors from Brooklyn Technical High School in 1997, followed by a Bachelor of Industrial Design degree from Pratt Institute in 2001. His focus is on lending and the vitally important deal analysis and deal structure. Mark is also a partner in Idoni Management, a property management company with 300+ doors under management.
REI INK sat down with Mark to get his thoughts on the current state of the economy and the real estate investment and lending industries, specifically.
Mark, to start with, how about a little background. You were born in the USSR and moved to the United States when you were nine years old and settled in New York. Can you give a quick overview of your professional journey?
As you mentioned, I was born in the Republic of Moldova and came to the United States from the USSR in 1988 and stereotypically settled in Brighton Beach, NY. I grew up in Brooklyn and after high school I attended Pratt Institute receiving a degree in Industrial Design in 2001.
I worked as an industrial designer for almost twenty years designing digital dental equipment. When you go to the dentist and they take X-rays, and if they use a sensor connected to a computer, chances are I designed it. I even have seven patents to my name. In 2003, I dipped my toes into real estate and then in 2015 I began getting serious about real estate.
Let’s talk about your real estate investment journey beginning in 2003.
In 2003, a few friends and I bought a trailer in the Poconos, thinking we could make some extra money by renting it out. At that time, I knew nothing about real estate (a combination lock box would have made a huge difference). I sold it seven years later and made a little money, thanks to depreciation more than anything. Then in 2015, I bought a six-unit multifamily property in Connecticut.
My career really took a turn in 2016 when I joined Fortune Builders, which had a massively positive effect on my life. As a result of that, I bought additional multifamily properties and then eventually partnered to form our own property management company, which today manages over 300 doors.
So how did you get started in the lending business?
In 2017, I made my first loan using my own money. I made every mistake possible, but it worked out financially. Due to that initial success, I quit my W-2 job with encouragement from my wife and began lending full-time. And then in April of 2018, I started MIRS Group. Initially, I was still using my own money and “friends and family” money, until I started brokering loans as a “financing liaison.” But, depending on the situation and what is best for the clients, I continue to lend my personal money. The guiding principle was, and is, “Concierge Service at a Wholesale Price.”
I have had this conversation with many lenders and investors recently, but how is the overall economy affecting your business?
Recent events have changed the way that the markets work. Capital needed to be repurposed and was being used differently. During the real estate boom, lenders were nothing more than “order takers” because money was cheap. At the end of 2022 and the beginning of 2023, the loan-to-value and interest rate volatility totally changed the business. At MIRS Group, we absolutely needed to work harder, but also, we began educating borrowers on how loans worked.
I want to emphasize that I am a very big proponent of conducting a thorough analysis on every deal… “ANALYSIS IS VITAL.” And I am the second set of eyes to make sure the deals make sense and the investors have an opportunity for success. In fact, I now teach classes on lending, so people do not get burned in the process.
Your viewpoint on the economy, in general?
I lived through the Great Recession, and I thought I would be ready for 2020. I was not expecting rent moratoriums. So, combining the rent moratoriums with no moratoriums on property taxes, made for a difficult situation. Interest rates are high and the cost of money is high, so people cannot pull money out of their house as in the past, trapping all that equity. Additionally, we simply do not have enough housing, so when supply is zero, demand is infinite. This demand props up the lending industry, but the profit margins are less than before.
But, in general, if I ran my household the same way the government operates, I would be bankrupt.
What about the future of the economy, real estate investing and the lending business?
Simply put, “this too will pass.” Interest rates will eventually drop and demand will not go away. Further, existing properties will always require renovations so this will keep investors and lenders busy.
Any parting thoughts?
I just want to re-emphasize, and I cannot stress this enough, ANALYSIS IS VITAL in this industry. There is so much data available for the real estate investor to use to make smart decisions regarding their acquisition and disposition strategies. Do not make emotional decisions. Look at your lender as a partner in your business and look to them as your second set of eyes to make sure your deal does not “suck.” I came up with my own system of analyzing deals which I make available to anyone to use.
MIRS Group, LLC provides commercial loans nationwide for real estate investment and renovation projects, as well as residential mortgages, and Home Equity Lines of Credit (HELOC) in the state of Florida. They provide loan products and services for Fix and Flips, Buy and Holds, Short Term Bridge, Transactional Funding, Deal Review, Purchase Residential Mortgage, Refinance Residential Mortgage, Home Equity Lines of Credit and Project Guidance. Visit https://www.mirsgroupllc.com.
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