I would refer you to those geographical areas which have been recognized as solid performers throughout previous cycles. Chasing REO/bank foreclosures can be problematic since many of these deals are investments that, in all likelihood, should not have been built in the first place. Distressed assets are distressed for a reason. Usually, but not always, that reason is a flawed feasibility or a poor location. For sellers, this market can be characterized as living in Antarctica in the middle of winter - unless you have a really compelling story, there's no good reason being out there! That said, any seller in this market should anticipate being re-negotiated at least three times - once upon entering contract, secondly at contingency removal, and lastly at the closing table. Buyer's have leverage and should exert this force by being represented by a seasoned commercial real estate broker who can align themselves with the client's goals.
Mar 12, 2010