Sam

@financeguy725 Gotcha. On the BK side wouldn’t u typically have that as a recourse carve out to make that option less attractive

@StructuredFin1 Sure, as long as they don’t do a fraudulent conveyance or bring a TRO or file bk

HOW NOT TO ASSET MANAGE today, we're starting a new series of things you can do as a creditor to make a bad loan worse here's a simple situation: your debtor is in default (or about to be) and they ask for help you provide help, but get nothing in return HUGE MISTAKE 🧵👇

@financeguy725 If u get the borrowers equity pledge isn’t it just a quick UCC foreclosure and u have the asset

@StructuredFin1 Mixed as in it may or may not succeed in getting you control 😞

@financeguy725 Mixed how so? Just pissing off the borrower?

@StructuredFin1 A lot of lenders do that upfront, it has mixed effectiveness

@DallasAptGP @DadInvest Just get a bank statement loan from a non-QM lender

@DadInvest Now imagine if you are a real estate guy with a W-2 from a company you own and a negative AGI from depreciation losses

I am floored at what my bank is doing with mortgage underwriting. They took 30% off of my verified comp (that they pay me!), marked my wife’s income and our dividend and interest at zero, then took another 15% charge against my income for my wife’s business because there were startup losses two years ago. Then they required the equivalent of 8 years’ worth of post-close cash reserves, something I’ve never heard of before.

@bondbasis If it was a vertical strip, then ya, probably was retained by MS. Levered money wouldn’t want that

@StructuredFin1 Not to delve into the weeds but I believe it was a vertical strip which is harder to transfer but not an expert on sell side securitization rules

One of NYC's most iconic office buildings just hit the market — and junior CMBS bondholders are about to be wiped out. RXR listed the Helmsley Building (230 Park Ave) at $670M. That's priced at the debt basis - roughly $481/sf - and might be overly optimistic. The CMBS deal was originated by Morgan Stanley in 2021 at a $1.2B appraised value. The $240M senior tranche looks fine. The junior tranches don't. Morgan Stanley itself will also take a loss as the originator, thanks to post-GFC risk retention requirements. A century-old New York icon listed at a 44% haircut to last sale, just a few blocks from where Citadel, JP Morgan, and Extell are making billion-dollar office bets. Perfect example of the different between brand new Class A office and older buildings that need significant updates.

@bondbasis Not necessarily. There are carve outs in the risk retention rules for CMBS where the first loss piece can be sold off to a third party as long as some conditions are satisfied. Would need to look at the prospectus to confirm

@StructuredFin1 MS was the originator so they have some exposure via risk retention requirements. It’s might not be a full loss for them but for sure they’ll take at least a partial writedown, although will be completely inconsequential to their overall profitability.

@ChrisRamsey60 I don’t understand this. Are there not due on sale clauses on the other three properties?

How to make seller financing of multiple properties a home run. We purchased a portfolio of 4 properties for 12M. We put 3M as a down payment This is the important part the seller agreed to only hold the mortgage on 3 of the 4 properties. The property we owned free and clear appraised for 4.3M(it was the most valuable of them all) We refinanced and borrowed 3.4M off of it. We are 400k positive as we only put 3M down. I have done this multiple times with all different types of real estate and it’s been a huge win every time.

@HomeLoanBill These are totally normal ratios? lol

Just prequalified another first time home buyer for a payment that is 47% of her take-home pay (for the mortgage peeps, her ratios are 30.5/38.6%). How can I sleep at night knowing I’m setting this poor soul up for financial ruin??? 😏

@robbiehendricks I mean if they are truly materially misrepresenting their past performance publicly while raising funds they are breaking securities laws. You just can’t do that

@LeylaKuni Huh? Detachment is when the tranche is fully wiped out

How to Lose Money in a AAA-rated Security, a Short Tutorial: A $240 million single-asset, single-borrower (SASB) CMBS tied to 600 California Street in San Francisco just liquidated at roughly 58 cents on the dollar (generating losses of 42 cents). -Six junior tranches were wiped out entirely - The second-most senior bonds, originally rated AA- by S&P and AAA by Morningstar, lost more than 40% of principal AAA rating on a single-asset single-borrower security is an abomination, IMO (unless the detachment point is something like 20%) (links here: open.substack.com/pub/accredited…)

@boneGPT Get a non-QM business statement loan, easy as that

my business is doing 15-20k a month and i can't qualify for a mortgage i need to pay myself a higher salary for TWO WHOLE YEARS before i can qualify for one, tripling my tax burden might be smarter to keep renting

@Mr_Neutral_Man Fantastic buying opportunity today

$ALX is exactly this stock for me. Been inside all the buildings they own. Know the local markets well. Company does not break out asset level NOI. One single SS analyst coverage. Recycling ideas work!

@gas_biz @realEstateTrent Just get a non-QM loan lol

@realEstateTrent Get and FHA loan with 3% down and a 600 credit score from a job you can get fired from any day. Approved Biz owner with 20% down and a 740 score with this life riding on it. Denied Make it make sense

Yes, lenders prefer a W2 employee that makes $50k over a 1099 entrepreneur that makes $500k

@moseskagan Just get a NQM/DSCR resi loan, no?

There is a gap in the mkt for financing for investor-owned 2-4 unit buildings in LA. Keep the max LTV to like 60-65%, charge 1% on the way in, ~7% interest, i/o, 5-7 yr terms, step down pre-pay like 3-2-1-1-1. Quick / clean application process. Could put out a lot of $$$.

Securitize citation receivables and we’d have law and order overnight UBS Parking and Bicycle Lane Violation Trust 2024-C8

@millievtodd This will need further explanation

@JonathanChames @DallasAptGP LTV is used for stabilized/ slight value add properties. Loan to cost (LTC) is used for construction because there is not much value there yet to lend on, only the assumption of building value

@DallasAptGP Don't you mean LTV?

Debt books are out for our next Opportunity Zone ground up apartment projects in Dallas Request is 65% LTC which is a 10.35% debt yield Curious to hear what people think the responses will be?

@CaseyMericle Why do this instead of just lowering price? To keep basis higher for tax purposes?

Adding cash to a property that won’t sell at some amount will get it closed Don’t be afraid to pay your way out of trouble