Banks need to get loans off their books-both non-performing AND, performing and there is NO better time to approach these deals than at the end of a quarter and especially a year.  Discounted note deals that are started now can STILL close by year end even with the holidays.  Bridge loans can close that quickly and many times, a new appraisal is NOT even needed.

We have one client that had an outstanding loan of $1.7 million.  The property values had fallen and, the place only appraised for a million.  The property cash flowed to support a $600,000 loan and, the bank accepted the pay off.  He lopped off $1.1 MILLION in debt!  BECAUSE THE NOTE HAD BEEN CALLED MONTHS AGO AND, THE LENDER DID NOT WANT TO TAKE PAYMENTS.  HE HAD NOT MADE A PAYMENT IN 6 MONTHS!  We did a private money loan through our fund and, closed it in a few weeks.  Six (6) months from now we will refinance him into a longer term vehicle at conventional rates and, the client is fired up! 

It can work on purchases too.  We have one client that is being offered a group of 6 shopping centers that the bank has foreclosed on.  The outstanding loan is $13 million, the properties recently appraised for $11 million, they cash flow net about $850K and, this borrower can buy them for $7 million if he will close in 30 days.  That is $3 million of free equity-HUGE.  We have the resources to close that loan in a couple of weeks with no appraisal!

Properties don’t have to be distressed to need note discount deals although if you have time and, the note is current, there are conventional options available.  We have seen deals where the bank just wanted the loan off their books to improve their reserve requirements even though the loan was performing. We had to document that the loan was performing but, we have done straight refi’s where the borrower was able to lop hundreds of thousands off of what they owed simply by refinancing it off the banks books.  Right now, banks are looking hard at moving some debt off their books.