2.5 Million in debt forgiven!!

I have said numerous times that any bank, anywhere in the country, will avoid an auction or trustee sale at any cost… and our recent efforts prove just that

So get this… A commercial property with over 3.5 million dollars in debt, we organized a short sale and sold the property for 1 million… and the best part is, the rest was forgiven

How is that possible? Seems too good to be true?… Not so, not only did the bank agree to the sale, but was happy with the results.  The key lies in understanding all other potential outcomes in combination with all other external complications.  Simply stated, its negotiating while juggling all of the finite details

In this case we had to understand the following items:

1. The amount of debt remaining has NOTHING to do with the actual value of the property.

2. The costs of necessary repairs and improvements must be deducted from the purchase price

3. The property was located in California, which placed it amongst thousands of other commercial properties that we not selling and remain vacant after foreclosure.

4. Traditional financing is almost impossible to obtain for commercial acquisitions in California

5.  The bank had no interest in owning the property after an auction

6.  No interest was found from other buyers through an MLS and business broker listings

Given all of these facts, it was easy to approach the bank with a low number.  The buyer we had was the only one interested in the property after months of marketing, and even if there were other interested parties they did not come with financing.  So from the banks perspective they had two choices; 1) take 1 million and move on, or, 2) foreclose, auction, and end up owning a vacant property which the bank now needs to maintain, make necessary repairs, insure, and market in the hopes that someday someone will purchase it for more than 1 million.

The choice was obvious… Pop the champagne, its always a great day when we can save our clients 2.5 million dollars