BUYING DEFAULT COMMERCIAL MORTGAGES
Anyone here buying commercial default notes?

We've been buying them for a few years and a group of us have found new technology to not only find the defaults, analyze them online but also get in contact with the top execs, no matter what lender or hedge fund holds the note.  With a 91% response rate on every email inquiry, our close rate has also been extraordinay.  Obviously we buy solely based on price after all other variables, unique to each deal, has been analyzed.  After funding the notes, working with the borrowers is also unique, with no one situation the same, each borrower has their own "end game" in mind and to kindly reel them into a "lets get on the same page" scenario is sometimes difficult but almost always occurs.  Even after some have paid off at a discount, these borrowers have remained friendly.  Keeping in mind that we do this to make money "along with" doing whatever we can to assist the borrower, it normally takes a difficult situation and turns it into an excellent solution for all involved.

If you're looking to buy a commercial property that is in default or foreclosure, it may be best to acquire the note at a discount and take possession that way, it is much cheaper than buying the real estate and doing the foreclosure wipes out all subordinate liens. (excluding property taxes)  

Consider also that when you hold the debt you control the business.  In this scenario if it's a restaurant you can eliminate the borrowers debt to make him a willing participant and take over the company, an office through rental assignments take the rents, if a manufacturing facility the same but in this case there may be equipment liens that the UCC filings do not cover.  

Buying asset backed default debt is lucrative if you do your homework "fully" prior to acquiring.  Please respond if you have any questions, I'll do my best to assist.



[{"id": "ct4ji27", "text": "&gt;  it may be best to acquire the note at a discount and take possession that way  \n\nI'm not sure what you mean? If you can't work out a deal, you'll still have to foreclose to get possession of the property.  \n\n&gt; Consider also that when you hold the debt you control the business. In this scenario if it's a restaurant you can eliminate the borrowers debt to make him a willing participant  \n\nIf you only hold the note but then eliminate the debt, how do you recoup the money you spent buying the note? You just forgave it. No compredo...", "replies": [{"id": "ct4ldhn", "text": "Correct, you would have to foreclose.  If your intent is to take the property, a deed in lieu or foreclosure is the only option.  But consider this.  I bought a gas station note that had a $985,000 upb for $10,000.  Got borrower to sign off, fixed the tanks and reopened the store for a total out of $135,000 with a station valued at \"true value\" of $580,000.  Foreclosing isn't an issue.\n\nIf you want the property itself, without foreclosing on it, the borrower can sign off on a deed in lieu and in return the note holder can eliminate the debt.  This is a perfect scenario when you want to own the property and only paid $10,000 for the note.  Sometimes your approach on a deal isn't to collect the funds, even going into the deal you may already know your not going to get a dime from the borrower.  Your only reason for buying the note is to ultimately own the property, for that reason paying pennies on the dollar for a note makes sense. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "ct8hhl6", "text": "We have bought commercial notes, scratch and dent, securitization kick outs,  our deal size was usually in the $20 - $100m ( one bought a $100 note, for $93, got paid off at par, I'm 3 months - long story) - but we haven't seen a lot large balance notes,  banks seem to be trading a lot of sub $2m notes. \nThe strategies we have had have been the loan to own, releasing PG's, deed-in-lieu ( there is a lot of reasons of why a deed in lieu with a private company is better than the exact same deal with a bank), sometimes their is bk risk, on one deal where we bought a note, we have been in BK court for 4 years. \nThere is a HUGE tranche of CMBS still coming due over the next two years. ", "replies": [], "depth": 1}, {"id": "cu2cm2h", "text": "Where does one find these commercial default notes? Is this the type of opportunity published in a local newspaper, or through a relationship with a lender? Done in person or online? Thanks!", "replies": [], "depth": 1}]