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If Nancy Reagan Gave Real Estate Advice
June 17, 2010
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| Many funds have been sharpening their knives for distressed deals, but they need to “just say no,†warned Red River Asset Management's Bruce Stern, above with Herrick's Gary Eisenberg and Real Diligence's David Tesler. He notes these funds are under the gun as investors say, “use it or lose it†and are paying stupid prices because of compulsion. There are three major mistakes investors are making: buying too early, underwriting the past, and not having multiple exit strategies. On top of standard due diligence, it's critical that you value the note and real estate, David adds, and do your homework on the loan, seller, and property. And don't forget legal problems—you need to avoid trapping yourself by paying attention to warning signs, reviewing documents and communications so a borrower doesn't “leg up†on you, verify a default has occurred, and do proper searches, Gary says. |
