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Real Estate 101

Jason Weissman featured by CNN Money

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Jason S. Weissman
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Archive for the 'Distressed Debt' category

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Fixing or Helping Your Credit Score: What to Do

Follow these guidelines to fix or help your current credit score.

What To Do

• Order your credit report and search for errors. You can get free reports from annualcreditreport.com. Dispute mistakes! Please keep in mind there are an alarming amounts of mistakes on Credit Reports because of the amount of credit people have and have applied for.

• Pay your bills on time. Your payment track record accounts for about 40% of your FICO score.

• Be patient. Negative information like late payments will generally drop off your credit report between five to seven years

• Maintain a healthy mix of credit. A blend of revolving; such as credit cards and installment loans can help boost your score. This is even more important over the past few years with some of the new regulations.

• Apply for your own credit cards. Have 3 open lines of active credit at all times.

What Not to Do

• Don’t max out your available credit. Keep credit-card balances low relative to your credit limit. This is even more important under newer regulations (again – which ones?). My personal suggestion is to never have a 30% credit balance or more borrowed on a credit limit. Example: $10,000- limit on a credit card, never go above a $3000- balance on that credit card, etc.

• Don’t dawdle when shopping for the best rate on a loan. Confine loan shopping to a few weeks so that credit inquiries won’t weigh on your score. Please do not have 10 Banks pull your credit in 10 days.

• Don’t open up a bunch of credit-card accounts you don’t need, thinking the higher lever of available credit will boost your score. Your FICO score will generally drop a few points with each new account.

• Don’t close old credit-card accounts in an attempt to improve your score. You’ll lower your total available credit, which could damage your score.
Ask me how to increase your score in 90 to 120 days?

Take out two new lines of credit (Yes, believe it or not I said take out two new credit cards) and use one for gas and one for groceries. I would suggest getting major Credit Cards (Visa, Mastercard, Amex, etc.) Use them, pay it off, use them, pay it off, use them, pay it off, etc. Never adding any additional monthly debt, paying all of the charges off every single month. This method will add 20 to 40 points to your Credit Scores in months.

Sources: Fair Isaac, WSJ Research

Questions? Comments? Use the form in the sidebar or call me!
bc@SmarterBorrowing.com 617.771.5021

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry. Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021

Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.

Posted at 02/26/2010 02:18 PM by Guest Blogger

Categories: Credit, Guest Bloggers, Distressed Debt

Weekly Thoughts by Jason S. Weissman for the Week of February 22, 2010

Jason S. Weissman

Founder and Principal

Boston Realty Advisors

February is almost over and 2010 seems to be starting off very well. Over the last couple of weeks it seems that we have only discussed the “distressed” component of the real estate business. I have a couple of thoughts on some relevant distressed stories, but I’ll also identify some bright spots in the industry later in this post. But for now:

More Distress, and a show of the times..

In Nantucket this week, TD Bank North held a foreclosure auction for the Point Breeze. They repurchased the asset, via a credit bid of $22M. The existing debt for the development was $40M. See the story in the Nantucket Mirror. http://www.ack.net/pointbreeze022510.html

Last Friday, the New York post reported that One Madison Park is headed for foreclosure.
Click here for article

I identify these two totally unrelated assets, as each is quite high profile in their own right. A trophy Nantucket Island site, and a premier luxury condo project on Madison Park in NY. We will see many core assets in Triple A locations continuing to be foreclosed upon and pricing will continue to recalibrate. This leads me to my next points. The pricing recalibration process is very uncomfortable and painful for owners/borrowers and their respective property lenders. However, once the recalibration process occurs, whether through a foreclosure sale or otherwise (the lender selling the note, etc.) the market can begin to ‘work’ on the asset. In the case of Nantucket, TD Bank North will write down the $22M credit bid ($18M loss) and potentially look for a developer to either purchase all cash or provide new debt on the asset to a better capitalized developer in hopes that this process will bring the asset back to market and get the ‘work’ started.

The ‘work’ affect on the macro market is the following: builders begin to work again, vendors such as brokers, architects, attorney’s, interior designers, etc., can ‘work’ on the sale of the assets to end users. This will allow end users will be able to purchase the assets at the ‘market value.’ My scenario above would be an ideal situation, but unfortunately the process mentioned above is simply taking time, “a cog in the wheel,” as they say. But, we do see solid examples of recalibrated pricing, making the market move again, and getting the industry “working again.”

The Brighter Side:

Bayside Expo Center is "under contract" to UMASS Boston

You may remember that the Bayside Expo Center was lost to foreclosure last spring by Corcoran Jennison Company. The loan was $22M, and LNR repurchased it back by means of a credit bid for $11M. The site is now under contract for $18.7M or 85% of the loan value.

Click here for full story

John F. Kennedy Presidential Library and Museum

We think this is a spectacular site. Given the macroeconomic environment, UMASS is the best buyer. For the City of Boston, it is a shame that this site cannot be redeveloped into a more neighborhood inclusive use, such as housing, public space and neighborhood retail. The waterfront views and proximity to the Harbor Walk and the JFK Library (where I run daily) all make this an incredible place, and I’m not sure that many Bostonian’s know how great it is. Take a look at the JFK Library Website and definitely take a visit --- http://www.jfklibrary.org/ I have said to many people before, Boston could really be a world class, waterfront city---like a Sydney Australia, if our Waterfronts were developed properly. But this is just a thought and a dream for now. For today, it’s a good thing that this asset is trading at 85% of the loan balance. Maybe UMASS Boston will add public spaces (parks and/or museum) and a commercial component to their redevelopment of the site.

View of the Waterfront and the Financial District from the Boston Harborwalk

Story from the WSJ – Commercial Sales Jump

This story references in the national press the sale of the One Brigham Circle Development to AEW, for a 6.5% cap rate!

Click here for full story

We are definitely seeing a pent up demand for high quality, low risk investment grade product. Watch for some strong sub 7% cap rate retail deals in the Boston Market over the next four to six months.

Posted at 02/25/2010 09:53 AM by Jason S. Weissman

Categories: Boston Real Estate, Commercial Real Estate, Lending, Boston Commercial Real Estate, Distressed Debt, CMBS

Simon Bids $10B for GGP

As the industry has speculated for many months, Simon has made a $10B unsolicited bid to buy General Growth Properties.

http://dealbook.blogs.nytimes.com/2010/02/16/simon-bids-10-billion-for-general-growth-properties/

We do think there will be other bidders, but we predict that Simon be successful in their attempt to acquire GGP.

Posted at 02/16/2010 11:31 AM by Jason S. Weissman

Categories: ICSC, Real Estate Investment, Distressed Debt

Peter Cooper Village

More stories about Styyvesant Town...great article in The New York Observer about the listing broker who sold the property to Tishman.

http://www.observer.com/2010/real-estate/selling-stuy-town

AND, more stories about the Peter Cooper transaction fall out.

http://www.observer.com/term/peter-cooper-village

Posted at 02/05/2010 04:26 PM by Jason S. Weissman

Categories: New York Real Estate, REO, OREO, Distressed Debt

Hanover Mall in Hanover, MA "Sold" Back to Lender

Yesterday the Hanover Mall in Hanover, MA was sold at auction, back to the lender. Walton Street Capital of Chicago purchased the mall for just under $100M in 2003. The special servicer, CW Capital was the high bidder, the credit bid was $36,700,000---close to 65% less than the 2003 acquisition price.

Read the stories:

http://www.patriotledger.com/news/x1431749232/Hanover-Mall-sold-for-36-7M

http://www.boston.com/business/articles/2010/02/05/hanover_mall_auctioned_for_37m/

Posted at 02/05/2010 04:17 PM by Jason S. Weissman

Categories: ICSC, REO, OREO, Distressed Debt

Weekly thoughts by Jason S. Weissman, for the week of February 1, 2010

“I Say, Follow the Debt!”

Over the last two years, since late Q4 2007, our firm has been actively 'selling' our advisory services to mortgagees/lenders (generally the banking industry). If you are around our office any day, you will hear me calling out, “Follow the debt!” What I mean by this is that in most cases---the lenders are in control, as investor's equity has eroded. Based on Boston Realty Advisors' rough estimates, in Massachusetts alone, we are tracking over 4,500 commercial/land/multifamily properties that are 'underwater' or more technically, that have excess leverage, as the debt is worth more than the assets value. We believe this number of negative equity is about $22B. This makes sense---on a quick and dirty basis, most of the studies indicate that the total size of 'negative equity,' or lender losses, across the US throughout 2012/2013 will be about $1 Trillion. That provides the MA market with a 2.2% market share of the "distressed debt pie."

So, getting back to “following the debt”. We have catalogued the most indepth database in the State of targeted distressed properties. We have identified when these properties have been purchased (as if they were purchased after 2005, they are probably under water). With this information, we have either contacted or met with many of the lenders who hold the paper. On a whole, most have been 'tight lipped' as to what they were going to do. Most lenders are working with their borrowers, and using the all too infamous expression, “kicking the can down the road" analogy. However, literally since mid January, we feel the tone changing. Bankers, investment banks are proactively reaching out to us for Broker Pricing Opinions (BPO’s), portfolio analysis and national lenders looking for referrals to local law shops who category kill in the foreclosure space. Furthermore, our Great Rock Auction Brand (www.greatrock.com) and our REO/OREO disposition department should have a very busy Q3/Q4 by the looks of it now. As the proverbial shit has “begun” to hit the fan for residential foreclosures (since Q2 2008) by our definition, the storm of commercial foreclosures will probably hit in 2011. YES, there are school’s of thought that believe that both inflation and the availability of debt will provide a 'pass' for the commercial debt meltdown, we don’t believe that this will happen.

We believe exactly what is happening in the residential market, will occur in commercial, and probably worse. For example we think residential is in about the “3^rd inning” here in MA. You would think the number is higher, but we tracked only $51.3M (courtesy of MLSPIN) in Bank Owned Property Sales in the City of Boston 2009; that’s it. To keep this stat in perspective, according to the tax records, Deutsche Bank has 501 properties in Massachusetts “on their books” OREO, that had a credit bid value of $118M! With Obama’s referendum on “foreclosure bans” coming to a close soon, the flood gates haven’t opened just yet. If what Bank of America is doing in Nevada, (Releasing 6K homes to the Nevada Marketplace) is any show of the times, watch residential home inventories to increase, further delaying recovery on pricing. http://www.lvrj.com/business/bank-of-america-to-release-homes-81453352.html

In summary, my firm Boston Realty Advisors has geared up to service the banking sector with our high end auction platform, REO Disposition Group, Asset Management and Consulting Services. We are pleased that we are gaining significant traction in this space and adding value to our mortgagee clients. We are active in the MA, RI, NY and CT markets.

I am the Founder and Principal of Boston Realty Advisors. Please check in weekly to review my blog entries. I value client/reader feedback!

Sources from this research are from Public Tax Records supplied by The Warren Group and data compiled by MLSPIN.

Posted at 02/01/2010 01:19 PM by Jason S. Weissman

Categories: REO, OREO, Distressed Debt, Boston Real Estate, Auction, Commercial Real Estate, Lending, New York Real Estate