That's the multi-million dollar question! We keep that information very close to the vest and only share that with our Proteges because if it became public knowledge, it would create too much competition and then it wouldn't work as well.
So you buy a property that it’s loan is going to mature, owners current problem will be the new owner problem in next 10 years when the mortgage mature again , correct?
10 years is a LONG time from now! When you improve the NOI and force the appreciation, you can then cash-out refinance or sell years later and reap a huge windfall.
With opportunity #1, wouldn't you just be stepping into the same no cashflow situation, as you would get the same high interest rate the seller would attain in a refinance?
Some simply over leveraged and had flawed exit strategies. Even with today’s interest rates, let’s say we’re able to buy below market rate from a distressed seller. Also, if the seller missed value add opportunities and/or had poor property management, these, not interest rates, are more the reasons they are distressed. These are issues that can be corrected and turn a failing property into a profitable one.
these situations can be taken advantage of through creative financing. You have the freedom with this option to create a way for the seller to still receive monthly recurring income without having to sell the property at a discount, while you as the investor are able to negotiate a more digestible interest-rate compared to where bank debt currently is, long-term fixed rate debt, and of course price point itself (if it’s still even needed). That’s going direct to seller is essential, so that you can build with the relationship upfront which will give more wiggle room in negotiation (simple psychology or the sales principle of “KLT” at play)
Every successful commercial real estate investor has a mentor. Get your mentor here: www.commercialpropertyadvisors.com/protege-program/
Great information as always!
We use Reonomy to find properties with maturing loans.
Do you like it better than Co-Star?
Thank you so much I appreciate
You are so welcome
I appreciate the info but I do have a question.. you say find them off market, how do you do that? Where do you go?
That's the multi-million dollar question! We keep that information very close to the vest and only share that with our Proteges because if it became public knowledge, it would create too much competition and then it wouldn't work as well.
Think about how you would contact people that want to sell their apartments, offices, etc.
How do you find these loans Mr Peterson
Learn more about commercial lending here: th-cam.com/video/TeCMuNso4zw/w-d-xo.html
800k not sure where to invest
So you buy a property that it’s loan is going to mature, owners current problem will be the new owner problem in next 10 years when the mortgage mature again , correct?
10 years is a LONG time from now! When you improve the NOI and force the appreciation, you can then cash-out refinance or sell years later and reap a huge windfall.
800k not sure where to invest
With opportunity #1, wouldn't you just be stepping into the same no cashflow situation, as you would get the same high interest rate the seller would attain in a refinance?
Some simply over leveraged and had flawed exit strategies. Even with today’s interest rates, let’s say we’re able to buy below market rate from a distressed seller. Also, if the seller missed value add opportunities and/or had poor property management, these, not interest rates, are more the reasons they are distressed. These are issues that can be corrected and turn a failing property into a profitable one.
New owner would have the cash for down payment while the existing owner may not
these situations can be taken advantage of through creative financing. You have the freedom with this option to create a way for the seller to still receive monthly recurring income without having to sell the property at a discount, while you as the investor are able to negotiate a more digestible interest-rate compared to where bank debt currently is, long-term fixed rate debt, and of course price point itself (if it’s still even needed). That’s going direct to seller is essential, so that you can build with the relationship upfront which will give more wiggle room in negotiation (simple psychology or the sales principle of “KLT” at play)
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