Equity is not always the issue… - Posted by JT-IN
Posted by JT-IN on July 19, 2003 at 18:05:20:
Don’t get me wrong, equity is great when it is there, but those are the ones that all the players go after, right. Thsi will be difficult to explain in a post, because it is sometimes abstract. I look for circumstantial items, such as amounts of mtgs that would allow for equity to be CREATED, as in the case of larger Jr mtgs, etc.
I just did a deal where there was not a lick of equity. In fact it was way over-encumbered. A comm’l bldg with 1.3 mil in mtgs, but only worth about 500K. I can tell you that most folks weren’t working that one… Good thing… Bottom line is that I worked with the owner of the property, and structured a deal that said if I can do THIS… you will do THAT; Deed over the property… and sign a Lease.
Guess what, I did my part of THIS, and he did his part of THAT, and I now bought a building that previously had 1.3 mil in mtgs for $ 187750. Why did that deal happen, b/c it had a certain situation of 3 mtgs, that I could VISUALIZE getting all of the Banks to play along… Now let me tell you that initially, they didn’t want to play… but after about 12 weeks I wore them down… I ended up with all mtgs on the property, the deed and dismissed the lawsuit of foreclosure.
There are many deals that all the rest of the folks are out chasing, that I never even darken the doorstep. Why, maybe the owner couldn’t convey clear title to the property even if you get them to play nice… You see, I check all that stuff before I even go talk to the property owner. I will venture to say that before I go talk to them, I know more about the case than the Atty that has filed the foreclosure, more than the homeowner about their peril, and have a plausible solution worked out in my mind to everyones problems… Then I go talk to Joe Homeowner, and see where that takes us… sometimes not too far, but I basically do things in reverse than most folks working foreclosure leads.
One benefit of this approach is that if they are interested in a solution, they surely know… that I know what the answer is… because I have the answer when I arrive, as opposed to having to check thsi and get back to them, etc… Sound familiar…?
Anyway, I realize that this is somewhat abstract, but it what I spend a fair amount of time doing; Research… I find that it pays very well to KNOW what is going on… and I rarely ever talk to someone who I can’t help in some way, if they are interested in the solution.
Just the way that I view things…