Blog
All Cash: Why You Should Prepare To Buy Commercial Real Estate That Way (Or Close To It)
November 10, 2009 by Neil · Leave a Comment
More than two-thirds of respondents to a Federal Reserve Board survey of top senior loan officers said that as much as 10% of their commercial real estate loans were in foreclosure. Up to one in every four loans for land purchases are threatened by foreclosure, according to 10.4% of the respondents. The survey of 57 domestic banks also said banks continue to clamp down on a wide range of loans. Demand for commercial real estate loans continues to deteriorate, 46.4% of the bankers said.
Not mentioned: banks’ loan to value ratios are so conservative in the bank’s favor, only a “fire sale” price would make the purchase compelling enough for buyers seeking immediate cash-on-cash returns.
Not helping matters: banks hold toxic mortgages on their books at inflated values, in the absence of government requirements to mark them to market. Banks therefore continue to borrow funds at next to zero in order to prepare for the day foretold in the Book of Revelation when their papered over loss on paper becomes real.
Related posts:
- No News to Multifamily Investor Readers: Banks Are Not Lending. Commercial Real Estate Market at Standstill. Readers here read on 10/19/09 that banks are under...
- Why 2012 Will Be The Year For Commercial Real Estate Trade Volume U.S. banks had a historic $1.3 trillion of commercial...
- Save Commercial Real Estate: Maximize Transparency, Minimize Politicizing, Avenge Toxicity This site has been a vocal proponent of such...
- What’s The Biggest Barrier to U.S. Commercial Real Estate Recovery? A recent survey taken among investors, brokers, and owners...
- Why the U.S. Commercial Real Estate Market Will Collapse, and What Could Save It From NYC real estate attorney Stuart Saft in this...
Related posts brought to you by Yet Another Related Posts Plugin.
