Article on Washington Post

| Posted by david on October 1, 2010 |

This article published today by Steven Pearlstein seems to support our stance on this so so-called “banking crisis.” Read Steven’s article and then read our blog below!

http://wapo.st/avvdpU

First Come, First Serve for Note Investments

| Posted by david on June 3, 2010 |

The last thing I want as an investor in real estate notes is to sit back and watch a perfect opportunity fly out my window. It’s important to be cautious with your purchases of commercial notes – complete your research and due diligence, know your budget parameters, know your preferences, talk to your note broker… But how long is too long to sit on a deal? How many other investors are out there searching for the same assets, with the same cash flows, in the same locations? Well, in fact, the volume is simply staggering. I’ve seen some notes with preferable discounts and profitability slip through the grasps of some of our note buyers because they failed to prioritize the purchase. These investments will not lie down and wait for your checkbook – they’ll be snatched up by the next savvy investor to come along looking for a foot in the door of this market.

This brings us to my next point – the dollar amount of your offer (you, being the buyer). Forget the low-balling. If a bank has a commercial note they’re willing to sell at a 15-20% discount, don’t offer 30 cents on the dollar – they won’t even return your phone call. Banks view these offers as dead ends. They’re not looking for negotiation battles; instead, they want these notes off their books quickly and quietly, and they recognize the number of investors in the market. Making foolishly low offers is, therefore, almost as bad as making no offers at all.

We are virtual Special Asset Managers for banks

| Posted by david on May 26, 2010 |

Every time we sit down with a bank and describe what it is we do, the special asset manager is there.  After all, they have been charged with disposing of their bank’s REO, distressed notes for sale, and sometimes even their performing notes (if they have to get rid of entire relationships or have asset class limitations they need to meet).  What we find many times is that the special asset managers are threatened by our presence.  After all, if they could get rid of the assets at acceptable prices and within an acceptable time frame, we probably wouldn’t be meeting with the bank.

Some special asset managers are smarter than that.  Let me explain…special asset managers realize that they, or their team, cannot possibly duplicate our experience with Search Engine Optimization (SEO), Social Media and Email marketing.  Furthermore, they don’t have our manpower, database of buyers and brokers, or singularity of focus to be able to concentrate solely on non performing note marketing.  So, they are smart to engage our services for the marketing, and use their time to make the final decisions, negotiate with the note buyers that we bring them, execute deeds in lieu when necessary, and generally make the assets more marketable.

Our role will not only be to assist the banks and special asset managers with their notes through this current banking crisis, but also help the banks to dispose of all their troubled assets, even including the REO, C & I loans, etc. in the future.

Should Landlords be flexible with their tenants?

| Posted by david on May 23, 2010 |

If you’ve have not been in a coma for the last few years, you would notice that our country is in a recession – thanks to the housing and commercial real estate bubbles.  Foreclosures and short sales are still prevalent and commercial values continue to drop.  The office and retail sectors are unfortunately the leaders in the decline in the commercial industry.  We all know that real estate is a local issue but on the whole, the market has declined.

Landlords who have tenants in the retail space should be worried and should work with each tenant individually to make sure they are happy in their current lease and should tend to their every need.  For example, landlords should look at each tenant evaluate their business to see what the landlord can do – in anything – to help with the growth of said company.  With the availability of commercial space in many markets, tenants are always looking to get a better deal somewhere else.  Landlords need to repay their commercial notes each month and most cannot afford to lose any tenants.  With that being said, should landlords give their tenants some flexibility in their monthly payments if the landlord knows the business may be struggling?  Should they not?  If the landlord believes in the business model of their tenants and the tenants are struggling, should the landlord reduce their monthly payments for a year or two until the business gets back on track?  Would the tenant look favorably on their landlord?  Most likely.  The last thing an investor wants to do is have their property foreclosed upon by the bank because there are no more tenants to pay the monthly mortgage.  Banks are worried and landlords are worried.  Both will continue to worry for years to come.   If landlords can’t pay their mortgages, banks will have an abundant number of commercial notes for sale that investors will jump all over.  However, with the market growing with commercial note buyers, banks are starting to get close to fare market value for their commercial notes they are desperately trying to sell.

Commercial Values Drop

| Posted by david on May 19, 2010 |

Moody’s reported today that commercial real estate values dropped in March of 2010 – focusing on the office and retail sectors.  More specifically: “Retail property prices in the top 10 metropolitan areas fell 19 percent in the first quarter from the last three months of 2009 and office prices dropped by 7.2 percent.” (http://bit.ly/d4Ou4O)  As I’ve been saying for the past few months, we should still consider this commercial market on the decline.  Banks are getting more pressure from the FDIC to lower their concentrations and sell their commercial notes to investors.  Banks are wising up and realizing that with the demand for notes, they don’t have to discount the note as much and thus take a big capital hit.

According to this report, the apartment sector grew though.  This can be expected as the foreclosure rate remains high and people can no longer afford to own so they must now rent.  I expect more articles like this in the future.  I don’t see a recovery until late 2011 or possibly 2012.  Investors seeking commercial notes for sale will have no shortage as banks will have to get rid of their inventory if their concentration levels are not approved by the FDIC.  Scary times out there.  Hopefully, I’m wrong and the recovery happens sooner rather than later.