Another Option to Consider For An Almost Impossible Deal
If you’re about to give up on trying to obtain new financing for your borrower because of any or all of the following:
1. The borrower is in default on note payments
2. Income from the property doesn’t cover debt service
3. The borrower’s credit has gone into the toilet
4. The debt secured by the property is as great or greater than the property’s value
The situation still might be salvageable, and you may be able to earn a substantial “success fee”. Let me explain. The above situations are at best difficult, at worst impossible to obtain new financing. Why? Because the risk/reward ratio is out of line for any lender.
We’ve been successful changing the risk/reward ratio by PURCHASING the existing note at a discount to the amount owed. Lenders are often willing to sell the note to us at a discount because it eliminates uncertainty for them; they can often receive their original principal balance and hence not need to “write off” any principal (the discount is forgone interest that has been accumulating but not paid, late fees, legal fees, penalties, etc.); they don’t need to deal with trying a loan modification or having to foreclose; and if the lender is a “community” bank they avoid potential negative publicity.
Below are some of our previous successful note purchases:
· Purchased a $3.3 million bank note secured by 2 auto collision shops in Casa Grande and Maricopa, Arizona. Note was in default as to payments and working capital requirements. Worked out loan modification with borrower.
· Purchased a $1.15 million bank note secured by a golf course, in St John, Indiana. Note payments were current but note had matured and been extended twice and lender no longer wished to hold notes in this sector.
· Purchased a $975,000 bank note secured by empty restaurant facility and empty office building in Houston, Texas. Worked out forbearance with borrower allowing him time to sell the properties.
· Purchased a $455,000 bank note secured by a restaurant / bar facility in Joliet, Illinois. Borrower wanted to sell the property but needed restructured liabilities to effectuate the sale.
Private Mortgage Financing Partners are experts in financing hard to finance deals (hard money, private money) through our mortgage fund, Private Mortgage Investors, LLC. We are also experts in negotiating discounted payoffs and discounted note purchases with banks, as we also own a commercial debt negotiation company.
Learn more details or to discuss a possible commercial mortgage contact us,
Private Mortgage Financing Partners. |
