Blog Posts
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This year’s Annual Midwest ICSC Deal-Making Conference in Chicago was “uneventful”. While definitely better attended than last year’s (2009) conference, the retailer turn-out was very light and the booths were dominated by Illinois-based municipalities seeking to attract additional retailers.
Some of the retailers included: Menards, Cash Store, Dollar General, Family Dollar, CVS, Burger King, Big Lots, Meijer, 7-Eleven, AutoZone, Famous Footwear, Dollar Tree, Goodwill, Great Clips, Jimmy Johns, Sally Beauty Supply, SuperValu, Walgreens, and Subway, to name a few.
Notwithstanding the anticipated light turn-out, our team continues to participate in this key networking event because of the importance of maintaining relationships within our industry and to constantly be establishing new ones, both of which are critical to being effective within the retail sector of our industry. Plus, you never know where your next transaction will come from.
Surprisingly enough, we were able to touch base with a national retailer on an impromptu basis at this year’s conference, which generated a new long-term build-to-suit/leaseback arrangement, which paid for the entire event!
We also learned about a new Michigan-based green building certification “SERF” that’s being rolled out specifically for those commercial property owners interested in renovating and bringing their existing facilities up to green standards that wont break the bank. You can find SERF at http://www.serfgreen.org/.
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Rick DeKam of Midwest Realty Group was featured on the cover of the fourth quarter issue of Transactions, a commercial real estate feature produced by MiBiz.
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Seek Advice When You Can’t Pay Your Investment Property Mortgage
For some, the embarrassment of not being able to pay your monthly mortgage payment is so condemning that you would never think to ask for help in solving the underlying problem or to seek advice regarding alternatives you may have in working with your lender to solve this problem. However, there’s almost always a variety of solutions if you approach this matter properly.
The first step to getting back on the right path is understanding why your current income will not service your debt. Did you pay too much for the property? Have your operating expenses increased to a point where your tenant income is not adequately covering the same? Is it a vacancy problem or are your tenants not paying their contracted rents? Have your mortgage terms changed recently?
Outside of freestanding single-tenant net-leased facilities, most income property is subtly, but regularly, changing and being impacted by influences like the market, the economy, age, design, the environment, and other similar factors. As such, you must continually adjust your investment to these influences to maintain optimum net income and property value. Unfortunately, most investors fail to make these adjustments and after time these investments become vulnerable.
The current economic downturn has effected a substantial number of income property investors. I would venture to guess that anyone with a 50% or less equity position in their income property going into 2007 has been severely impacted by the current market contraction and has even found it difficult or even impossible to renew their existing mortgages when they expire.
When you find yourself in this situation, it pays to get qualified advice to avoid making additional mistakes and potentially risking the loss of your property (and potentially thousands of dollars of invested capital) before considering the tax impacts of these losses, which can also be substantial! Depending upon your specific situation, there can be many different solutions if you’re proactive and willing to address these issues before you get too far down a negative path with your lender. This is definitely not a time to bury your head in the sand; rather, developing a proactive and strong relationship with your lender, and keeping in touch with them regularly regarding changes in your property’s financial and physical condition, is an important first step in effectively working through these current market adjustments and surviving foreclosure.
Keeping your head in the game, taking the time to regularly plan and forecast through changing conditions, establishing operating and refreshment reserves, and regularly communicating with your lender, are all sound practices to help you avoid falling victim to market downturns.
foreclosure investment property advice restructuring financing cre
