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Friday, July 23, 2010
The Legendary "100 Million REO Portfolio Package" Is Real - And Ready for Cherry-Picking By REO Investors
As a result, I am looking for investors seeking access to a portfolio of REO investment properties in this $100 million price range with highrly customized specifications on the exact location and property type desired.
You (the investor) name your price range, the property condition, the specific area codes, any property specifications, and we'll provide you with a resource to cherry-pick these properties at REALISTIC mega-discounts off the current broker price opinion for the bulk purchase. Through my "priority access" association with this group, I can provide to the investor prices and terms that are not available to the general public via the relationship with www.CommercialREOS.com
Prospective REO investors and investor groups will be required to sign a "Letter of Intent" indicating your price point, location, condition, etc., and the type of product you want to buy and how much of it to take down PER MONTH which basically acts a starting point to initiate the process. Along with the LOI, a current "hard proof of funds" statement from your bank is also required. Due to the nature of the business, both these documents are required before moving forward.
We also have REO opportunities for the smaller investor or investor group in the $10 million range, albeit with a lesser discount. This is a real deal opportunity for the REALISTIC investor group that's looking to capitalize on some amazing discounts in today's national foreclosure market.
What is "realistic"? We are currently working with investors in California who are buying a typical $100 million portfolio at .58 cents on the dollar and also with smaller groups selling them $10 million REO portfolios at .68 cents on the dollar. That's the marketplace folks, and anyone who thinks they can do better will just have to keep looking, because it's just not out there - except in urban legend land.
If you're a serious sophisticated investor or a member of an investment group looking to take down a $100 million custom REO portfolio and the above discounted values are attractive to you, please contact me at 702-336-5554 or email ron@commercialREOs.com for more details.
Wednesday, July 14, 2010
Here's probably a more realistic explanation: they loaned too much money to developers, builders, and buyers and when the market tanked, so did they - just like countless others.
Greed causes the downfall of many. And it seems blame is very commonplace when things go wrong.
Tuesday, July 13, 2010
Do newspapers, TV, and the media in general report what's REALLY going on in the news, specifically commercial real estate? It's hard to believe what you read some times when the authors of these newsworthy pieces are clearly misssing out on key signals and indicators that portend exactly the opposite of what they're saying.
Take today's story in the Las Vegas Review Journal, "Commercial real estate prices reaching one third 2007 levels". Here's a few talking points from the article:
- "I think we're pretty close to the bottom because once a bank gets a property back, you can't go any lower than that"
- "The most common trend in the industrial market continues to be the lasting expectation among buyers and tenants for reduced sales prices and lease rates"
- "Both residential and commercial transactions are slowly starting to pick up compared with the last couple of years"
- "The ones that take the jump now are poised to make the most profit when things turn around."
- "There continues to be strong demand for quality properties."
- "We're getting a lot of activity, which is going in the right direction"
Remember these comments were taken directly from a major media outlet, not from an agent's website or someone's real estate blog. Let's analyze each point a bit further:
"I think we're pretty close to the bottom because once a bank gets a property back, you can't go any lower than that" - Oh we can, and we will. If you think the commercial market is bad now, wait until the end of the year when the banks move from their current "denial" state into "acceptance" of the problem and start taking massive action to unload properties.
"The most common trend in the industrial market continues to be the lasting expectation among buyers and tenants for reduced sales prices and lease rates" - The most common trend is ALL of real estate is that the prices will continue to fall until job growth prospects get better. The focus should be on job creation - until that happens, the real estate market will continue to fall. And I don't see it happening (for real at least, although you can probably find examples of news articles massaging the facts to make it seem so in the short term.
"Both residential and commercial transactions are slowly starting to pick up compared with the last couple of years" - the key words here are "the last couple of years", which were lousy. Comparing something negative to something even more negative makes your negatively seem less negative.
"The ones that take the jump now are poised to make the most profit when things turn around." - this statement is the single-most exact reason people hate real estate agents. And for obvioius reasons. When Starbucks tells you their coffee is great, watch out.
"There continues to be strong demand for quality properties." - Strong demand? I don't see it. Maybe in other markets, but since this article was written for a Las Vegas paper, I'm assuming they're referencing the Las Vegas market, where the exact opposite seems to be the case. Just look around you if you're a local.We're getting a lot of activity, which is going in the right direction" - Trust me, the only activity people are seeing are investors looking for an unrealistic "steal", then looking to steal the steal. There's certainly a lot of activity there.
Here's the tough love folks: if you're looking to invest in commercial real estate, take my advice and WAIT. WAIT WAIT WAIT. It's going to get worse short-term. There will be great opportunities for profits in the future and we're currently paving the ground with that at www.CommercialREOs.com, but only when the time is right. It's not now. Turn off the TV and stop reading the newspapers with all those stories written by those with agendas.
Thursday, June 10, 2010
I want to share with you an email I just received that drives home exactly that. (I took out any references to the sender, or the company name that sent out this doozy):
There has never been a better time for business owners to purchase the commercial property their businesses occupy. It's a fact, and I'll tell you why.
The 20-year fixed interest rate on commercial loans projects continues to be historically low -- the effective rate for May is 5.52%. And that's fixed for 20 years! On top of that, the continued elimination of most up-front fees makes a commercial loan an unbeatable alternative to conventional financing . . . and a no-brainer for any business owner who recognizes the wealth-creating power of commercial property ownership.
The Experts in commercial property financing (that's us) make the purchasing process easy and simple because it's ALL we do. If you're the least bit interested in owning your commercial property, call me today
Is this guy doing ANY market research? Probably not - he just wants a deal. The fact is all RELIABLE DATA and market forecasting point to exactly the opposite - there's a perfect storm brewing in commercial real estate and if you think the residential foreclosure market got hit hard, just you wait.
"a no-brainer for any business owner who recognizes the wealth-creating power of commercial property ownership"?!?!? This must be a joke, right? It used to be "don't wait to buy real estate, buy real estate and wait". Not anymore. You'll be turning cartwheels of joy if you just wait around and get ready to pounce when the timing's right - but that time's certainly not now.
Friday, June 04, 2010
Here's the mission statement for why we're in for a rough stretch of commercial real estate: everyone borrowed too much!
Not painting a pretty picture as well is the long-term impact of colossal government spending and national debt which has yet to be felt. Jobs just cannot be created fast enough to fill the gaping holes in commercial real estate debt-service. In fact, you can make a case for the first time in quite a long time, American's standard of living may have begun to fall - low wages, shrinking insurance benefits, bankrupt pension plans, and how about that 401K for retirement?
Where will the new high-paying employment options to stir recovery be? Here's a few:
- Technology: engineers and scientists still will be highly desired as new high-tech products can increase sales to global markets.
- Healthcare: as the population ages, we'll continue to see demand for medical services, doctors, nurses, therapists, caregivers, etc.
- Education: if there's one area that's in desperate need of qualified individuals it's the teaching industry, especially for education targeting engineers, scientists, and doctors for jobs leading to innovations in their particular field of study.
- Housing: as long as the U.S. population continues to grow (which it will), homebuilders will eventually recover as all these people still need places to live.
- Wealth Management: We'll eventually have to pay the bills for all the borrowing that's been done.
Wednesday, June 02, 2010
- Retailers are closing their weaker stores, and concentrating mainly on only the strongest of large shopping centers
- Apartment renters are doubling up or moving back in with their parents or siblings
- Office tenants want big accommodations in rents and concessions.
- Warehouses are suffering record vacancies.
- Hotels are seeing "below break-even" occupancies, as families are eliminating travel more and more as a means to curtail their spending.
It's not new construction that we'll need in the commercial real estate world. New demand must be the keyword for the commercial real estate world to weather the upcoming storms of commercial foreclosures and commercial reos. Remember that employment growth always follows the growth of the economy, and unfortunately, real estate is typically the last to see any improvement.
Tuesday, June 01, 2010
- Global gateway markets on the East and West coasts—featuring international airports, ports, and major commercial centers.
- Cities and urbanizing infill suburbs with 24-hour attributes—upscale, pedestrian-friendly neighborhoods; convenient office, retail, entertainment, and recreation districts; mass transit alternatives to driving; good schools (public and/or private); and relatively safe streets.
- Brainpower centers—places that offer a dynamic combination of colleges and universities, high-paying industries—high tech, biotech, finance, and health care (medical centers, drug companies)—and government offices.
- Barrier-to-entry markets where geographic constraints—rivers, lakes, oceans, and mountains—limit development and help control overbuilding.
- Midwest manufacturing centers—automaker travail deflates interest to new lows;
- Secondary and tertiary cities—anywhere you can’t fly direct to from the global pathway centers;
- Hot-growth bubble-burst markets, which collapsed under plunging housing prices;
- Fringe areas—the exurbs and places with long car commutes or where getting a quart of milk means taking a 15- minute drive.
Sunday, May 30, 2010
2010 Congressional Oversight Panel Report on Commercial Real Estate Losses and the Risk to Financial Stability
Nobody likes to read government documents and reports. It's probably because they're all long, boring, drawn-out with pages and pages of fluff information that no one cares about. However, in the case of the 2010 Congressional Oversight Panel Report, I started reading the document, and I must say, the information contained is just plain shocking!
You thought it was bad now, their take on the commercial real estate marketing is downright frightening (and if history is any indication, usually correct!). Download the report (it's 190 pages!), but just read the Executive Summary. And make sure you're sitting down. Here's my favorite paragraph:
Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms. Nearly half are at present “underwater” – that is, the borrower owes more than the underlying property is currently worth. Commercial property values have fallen more than 40 percent since the beginning of 2007. Increased vacancy rates, which now range from eight percent for multifamily housing to 18 percent for office buildings, and falling rents, which have declined 40 percent for office space and 33 percent for retail space, have exerted a powerful downward pressure on the value of commercial properties.
The largest commercial real estate loan losses are projected for 2011 and beyond; losses at banks alone could range as high as $200-$300 billion. The stress tests conducted last year for 19 major financial institutions examined their capital reserves only through the end of 2010. Even more significantly, small and mid-sized banks were never subjected to any exercise comparable to the stress tests, despite the fact that small and mid-sized banks are proportionately even more exposed than their larger counterparts to commercial real estate loan losses.
Put on your seat belt and get ready for an interesting 5 years regarding commercial foreclosures and commercial REOs. If you're direct to a lender or direct to an investment group, contact us at www.CommercialREOs.com and at least register on the site so when the time's right, perhaps we can make lemonade out of lemons.
I am currently reading the Emerging Trends Real Estate 2010 report and happened upon this quote to start the Second Chapter of the document:
“The key to success in real estate investing is to follow the capital flows, not the fundamentals. Anticipate what capital wants and be there.”
This is a must-read report for anyone in the commercial real estate world or just anyone looking for knowledge on where the industry has been and where it is going. You can download the report on the homepage at the www.CommercialREOs.com website.
According to the report:
Slowly, capital will flow back into commercial real estate markets during 2010, led by all-cash investors “looking for pop” in quality assets owned by distressed borrowers or sold by lenders out of growing REO portfolios.
... a very interesting read indeed
Saturday, March 27, 2010
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