Scotsman Guide - June 2010 Commercial Edition

By Stephan Kachani Vice president, sales and marketing Lone Oak Fund

Building Bridges in the REO Realm
Private bridge lenders could help some clients land prime deals

Banks find thEmsElvEs with an unprecedented number of foreclosures, real estate owned properties (REOs) and delinquent loans on their hands. These banks seek buyers who can pay cash or who have a line of credit to get these properties off their books quickly.

As a result, there is huge opportunity presenting itself to real estate investors with liquidity to buy in a downward market. For borrowers looking to cash out their free-and-clear properties, or properties with minimal debt, now is the time to join the game. Private bridge lenders can be a huge resource for these borrowers and provide the competitive advantage brokers need to thrive.

The current climate is ripe for those with liquidity to buy property and benefit financially. In the past, these opportunities were exclusively limited to the wealthy. Now, these same opportunities are open to the mainstream markets.

Banks are looking to dump their dis-
tressed assets in return for quick payoffs
and sometimes sell them at 25 percent to
50 percent less than their previous worth.
And new players — debt-and-equity
funds, hedge funds, wealthy individuals
and other businesses involved in the fi-
nancial markets — are forming to focus
on acquiring these distressed assets.

Today’s distressed real estate market presents new opportunities that benefit not only those with capital but also those with capital ingenuity. Deals no longer simply go to the highest bidder. In this hotbed of activity, success will rely on strategic relationships and the ability to move swiftly. Brokers should help clients know the rules of the game and align with the right partners to beat the competition. •

Stephan Kachani is vice president, sales and marketing, at Lone Oak Fund, a private mortgage fund larger than many banks. It makes short-term loans typically ranging from $250,000 to $10 million on commercial and residential properties throughout California. Kachani brings a unique perspective to his role at Lone Oak with extensive experience in residential and commercial financial lending as a broker and a lender. Contact him at (310) 826-2888, ext. 28, or stephan@ loneoakfund.com.

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