Negotiating a Commercial Loan Modification takes EXPERIENCE!
Is your commercial property loan in default?
There is simply no substitute for experience and expertise. If you are a property owner and are in default on your commercial property loan, you have too much at stake to make mistakes. There are no shortages of brokers, attorneys, CPA’s or other well meaning advisors that are willing to give you advice. In nearly every situation it has been our experience the advice being given is simply wrong.
Time is not your friend in these situations and wasting this valuable commodity will inevitably come back to haunt you later. To fully understand how simple the situation is, you need to embrace the following as undeniable truths, and get postured to impact a solution as fast as possible
Running a business requires a tremendous level of expertise. Whether you own real estate as a function of running your “Widgets USA” business or you're an investor and own real estate, there are concerns that affect all. You must have sufficient cash flow necessary to meet the debt service, tax obligations, insurance, property management, deferred maintenance, reserves and any other expenses associated with owning your real estate.
Bottom line is this: If your cash flow is not sufficient to meet these needs, you are in default. Every set of loan documents requires sufficiency to maintain these. Whether or not you report this information (as virtually every set of loan docs require their reporting), or not does not change that dynamic.
So, what should do?
I. Hire an attorney to represent you with the bank? No. Please save yourself a lot of money and grief and understand that attorneys are paid only as long as a problem exists. This is not meant to disparage any attorney, as many of our referrals are from outstanding attorneys. Attorneys present an adversarial role to a lender. The moment you get represented by counsel, the bank will need to match up with you and you have just lost virtually every remedy you could have used otherwise.
II. Represent yourself to the bank?
No. The banks cannot deal with you directly. Let’s consider; if your loan is performing, they cannot or will not modify a performing loan. So, your loan will need to go into default before they know or acknowledge a problem exists. And, as soon as you bring a concern to their attention, they will deluge you with financial reporting requests to insure their files are current and then it will become obvious a monetary default exists.
III. Hire a professional to represent you with the bank?
ONLY if he cannot demonstrate an expertise and experience, OR you are wasting your time. Bankers can sniff out an inexperienced negotiator very quickly. Make no mistake about it, if you've gotten to this point, there is a very real risk that you will lose your property and having someone gaining his “learning curve” at your expense only adds to that risk.
The Solution is to engage GAF to represent you and allow us to help you save your property --- CALL NOW (512) 744-3181
Time is not your friend in these situations and wasting this valuable commodity will inevitably come back to haunt you later. To fully understand how simple the situation is, you need to embrace the following as undeniable truths, and get postured to impact a solution as fast as possible
- The lender (in nearly every case) does NOT want the real estate
- The Borrower (in nearly every case) ALWAYS wants to keep the real estate
- Banks usually can’t modify performing loans and have no incentive to do so
- Bankers are under intense scrutiny from regulators, and have many under-performing “problem” loans. The last thing they want to do is change or modify loans that are currently performing
- Bankers are under intense pressure to keep loans performing
- Borrowers can’t risk discussing information with their bank for fear of triggering a default
- Borrowers try to stay “performing” and use much needed cash flow to do so, to their detriment
- Borrowers try every resort short of filing for BK protection (although many still do) to protect their real estate only to end up spending 10's if not 100’s of thousands of dollars only to lose the asset to a bank that never wanted it to begin with.
Running a business requires a tremendous level of expertise. Whether you own real estate as a function of running your “Widgets USA” business or you're an investor and own real estate, there are concerns that affect all. You must have sufficient cash flow necessary to meet the debt service, tax obligations, insurance, property management, deferred maintenance, reserves and any other expenses associated with owning your real estate.
Bottom line is this: If your cash flow is not sufficient to meet these needs, you are in default. Every set of loan documents requires sufficiency to maintain these. Whether or not you report this information (as virtually every set of loan docs require their reporting), or not does not change that dynamic.
So, what should do?
I. Hire an attorney to represent you with the bank? No. Please save yourself a lot of money and grief and understand that attorneys are paid only as long as a problem exists. This is not meant to disparage any attorney, as many of our referrals are from outstanding attorneys. Attorneys present an adversarial role to a lender. The moment you get represented by counsel, the bank will need to match up with you and you have just lost virtually every remedy you could have used otherwise.
II. Represent yourself to the bank?
No. The banks cannot deal with you directly. Let’s consider; if your loan is performing, they cannot or will not modify a performing loan. So, your loan will need to go into default before they know or acknowledge a problem exists. And, as soon as you bring a concern to their attention, they will deluge you with financial reporting requests to insure their files are current and then it will become obvious a monetary default exists.
III. Hire a professional to represent you with the bank?
ONLY if he cannot demonstrate an expertise and experience, OR you are wasting your time. Bankers can sniff out an inexperienced negotiator very quickly. Make no mistake about it, if you've gotten to this point, there is a very real risk that you will lose your property and having someone gaining his “learning curve” at your expense only adds to that risk.
The Solution is to engage GAF to represent you and allow us to help you save your property --- CALL NOW (512) 744-3181