Profiting in Real Estate Now!
Great article from the Ark. Business Journal on an investor in Benton County, who started with the ANB debt and has done well since. I thought this quote was spot on:
Ferguson wonders when lenders will begin realizing the book value of assets recovered from borrowers is inflated relative to market conditions. Hoping the adjusted value of a property will double to recover a 50 percent loss can be a futile waiting game, he said.
“How much you have in it is irrelevant,” he said. “The bigger question is how much can you get out of it? Banks need to come to grips with that and be dispassionate about it.“
He’s right, we have to reset the floor on the value of these assets in order to move property again. Now, maybe the banks are coming out alright by holding for awhile, but I can’t see pasture that’s been lotted but is still pasture moving anytime soon at anywhere close to the original pricing.
Obviously, it takes money to make money on the scale in the article, and a bank might be willing to deal with someone who can take a large block off their hands where they don’t want to negotiate on a single house, but still, it’s worth working at it. Especially with the local banks – the national banks you’ll have little luck finding someone who will deal with you on an individual property, or even finding someone who knows anything about the individual ones. If someone has a trick to get to the right person at Citi or BOA I’d love to hear it.
[…] Cuban’s right that there will be a time when capital regains its scarcity, and in real estate that time is rapidly coming. Remember my post from yesterday? […]