Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 16, 1991 TAG: 9102160101
SECTION: EXTRA PAGE: E-1 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Long
But while recession makes most of us fret about hiring freezes and salary freezes and our food freezers going bare, a handful of area business people sleep like fat house cats on a rainy Monday, knowing that, for people who tell us they're broke, and yet they've got Kentucky Fried Chicken them, bad times mean good times.
These are some of the lucky few.
Mack Stinson has an eclectic blend of skills. He's part carmechanic, part locksmith and part private investigator.
Business associates refer to him as their "outside adjustor."
Enemies call him a thief.
He's the general manager of Campbell Avenue's Summs Skip & Collection Service - and, to the general public, that means he's a repo man.
His job is to repossess items, mostly cars, for creditors whose customers have fallen behind on payments. Typically he's called in for the toughest cases: A payment is past due by at least three months, and other collection efforts have been exhausted.
The early morning hours between 2 and 5 a.m. are when Stinson likes to work - while most people are asleep. Preferably, he doesn't even speak to the customer; he says it's safer that way.
Although sometimes he's forced to hot-wire a car or hand-craft a key for the ignition, usually he's able to pick it up with an "illusion wrecker," a tow truck that looks like a regular pick-up 2 1 RECESSION Recession and allows him to be back on the road in less than a minute's time.
There are glitches, of course.
He's been shot at several times, once in Eastern Kentucky as he was taking a truck from a coal company. "They shot all the windows out as I was driving away," the husky 31-year-old says.
He managed to get out of that one unharmed - by dropping to the truck floor with his hand still clenched to the steering wheel and his foot on the gas.
There are sob stories, too. Once when working out of his company's Bluefield office, he was called to repossess a car in Panther Ridge,W.Va. But he felt so sorry for the family, he says, he paid the $2,500 loan off himself and let them keep the car.
"They were out of work, living 25 miles out in the middle of nowhere with no phone," Stinson recalls. "This was their only communication with the rest of the world, and their kids were holding onto my legs and crying."
To his surprise a few months later, the family paid him back in one lump sum.
The overwhelming majority of repossessions are the result of people being lured into overextending themselves with credit, he says.
In fact, a recession isn't the only time when the repo business booms; the collection industry also thrives when economic times flourish because many buyers have a false sense of financial security.
"Right now, the banks are bending over backwards to work with people - they're taking half payments, whatever they can get. They know they're not gonna get any money by re-selling the car because the market's so bad," Stinson says.
Still, 90 days is all they can wait and that's good news for the repo man.
Lately Stinson's noted an unusual increase in the number of repossessed BMWs, Mercedes Benzs and motor homes. "It's harder to get money from a wealthy person than it is from a poor person. They don't care what their credit looks like because they have money," he says.
Then why don't they just pay cash for their extra cars and motor homes? "They'd rather use the banks' money than their own and let the banks take the loss" when the market's down.
If the recession continues, Stinson predicts his business will increase even more. And if people get relaxed about spending again, well, that will probably help business, too.
"People tell me, `All dogs have their day' . . . along with some other stuff you wouldn't be able to print," he says.
"But they have to understand, we're doing a job, and no one twisted their arm into signing that contract . . . There are people who tell us they're broke, and yet they've got Kentucky Fried Chicken on the table and a new Nintendo game going.
"Most of this is just mismanagement of money, pure and simple."
John Mullins is still patting himself on the back for a decision he made two years ago.
A construction contractor most of his life, the 47-year-old was sitting in the woods hunting deer and daydreaming when the idea struck.
A few months later he opened the Vinton Pawn Shop, and he hasn't looked back. In fact, with a steadily increasing clientele that has picked up dramatically in the past few months, he's expanded his building twice.
"The first thing people cut from is their jewelry, VCRs, guns and electrical appliances," Mullins says. "When you're hard up, these are things you can live without on a daily basis."
After all, he adds dryly, you can't walk into a bank, put your 12-gauge shotgun on the counter and expect them to loan you $40 for your light bill, can you?
Mullins has an entire back room full of goods pawned in January, his best month ever - Nintendo games, shotguns, tools that belong to laid-off construction workers. Customers have two months to redeem their goods by paying off the loan, with interest, plus handling and storage fees. Interest on a knife pawned for $25, for example, would figure to $2.50 per month interest, plus a $2 fee.
If the borrower doesn't return in two months, the knife is put on display for sale - along with all the televisions, guitars, weed-eaters, jewelry and the like.
"A lot of people buy their wedding and engagement rings here," Mullins says. "And then when the marriage turns sour, this is the first place they come to get rid of it."
With a permit to carry a concealed weapon and an eye for shady characters, Mullins says he works closely with Vinton police; all pawn brokers have to turn in daily reports so the police can check for stolen goods.
"You deal strictly in cash, so there are risks involved," he says. And though it takes $100,000 to $150,000 to get a business like this going, Mullins says the profits make it worth the trouble and expense.
What happens when the economy gets brighter? "I don't know; I guess it's good then, too. In two years, this business has never been bad to me."
Radford's Ken Farmer says there are two universal truisms about the auction business:
In good times, there will be auctions. In bad times, there must be auctions.
The auction business depends on the three Ds - death, divorce and debt.
"Right now, we're not seeing an increase in deaths, but we're certainly seeing more financial problems, and that can lead to more divorces, too," says Farmer, who's been auctioning area properties, estates and antiques for nine years.
While the auction business is booming best for the big-city auction houses that got a piece of the savings-and-loan liquidation business, Farmer says he's noted an increase in area business as well, with the past two months being the busiest January and February he's seen.
When times are tough, more people attempt to sell their valuables for cash, he says. And more people will choose to sell their homes via auction, particularly when the real estate market is down.
"I think some people are wanting to speed up getting into the market because they think it'll get worse, and an auction is a quick way to do that," says Farmer.
But because the recession hasn't hit Southwest Virginia with the punch it has in the Northeast, Farmer believes much of his recent business is due to timing: "We've had a lot of high-quality estate sales lately, and there will always be a certain amount of cash out there for high-quality items.
"When you're selling something that's old and unique and it has no price history, an auction is the best way to determine the fair market value."
An antique collector by hobby, the 40-year-old Farmer first got interested in auctioneering when he joined a bluegrass band and ended up with emcee duties.
"I love to get in front of people and run my mouth, and the auction business is a perfect lead-in for that," he says.
And while he concedes the business is still fighting the image it got during the Great Depression - when auctioneers prospered while the rest of the country lived in cardboard huts and tied newspapers to their feet for shoes - Farmer insists the profession is gaining repute.
"The business had a black eye for a long time," he says. "But finally, instead of just putting makeup over it, it's getting respectable."
Could the black eye return if the country encounters another depression? Farmer doesn't know for sure.
But the recession-proof auctioneer can say this: "Our business would go through the roof."
by CNB