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In this economy, where many individuals and businesses bought at the peak and are now under water on their loans, is it now Socially Acceptable to walk away from those loans? Are we to the point where a “strategic default” – as this has come to be known – is simply idle water cooler banter amongst investors.

Today Bloomberg announced that Morgan Stanley is doing just that for the second time in 2009. And the Wall Street Journal has had a series of articles on single family home owners and the epidemic of strategic defaults in home loans

More on Morgan Stanley …

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In Commercial Real Estate Price negotiations, a natural response is to try and “meet in the middle”, once an opening price has been established. If I say 10 and you say 20, both sides expect a middle position response, in this case 15, as a “reasonable compromise” to begin to lower the price.

Let me show you a technique I call ”Move the Middle” that will naturally cause your negotiating counterpart to split the difference in your favor and move them in your direction …  toward the number you need.

It begins with a traditional “meet half-way” or “meet in the middle” basis for bargaining. I add a little twist I call “Move the Middle”, that benefits you in any negotiation. This is a simple negotiation technique that provides consistent profitable results for you in any transaction. It has enormous value and it is a tactic you can use again and again when bargaining.

Here’s the technique:

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 In a more normal market … where there is a reasonable volume of Property for sale and a reasonable number of Buyers … we recommend you build your Lead Generation System around active Brokers and Commercial Agents. In normal times the vast majority of Properties change hands through the Commercial Broker & Agent networks. 

If you read the popular press a lot … you might even start believing the mantra that entrepreneurs need to secure millions in start up capital just to get their business off the ground. NOT TRUE …

I have started 4 successful businesses with less than $2000 in each … my last business only cost $19,000 and most of that was programming costs. Build your business in this fashion and some people will call it “Bootstrapping”. I call it becoming a fearless entrepreneur.

Here’s an article about Bootstrapping from a very successful entrepreneur, Clate Mask from Infusionsoft. It contains his ten lessons learned that I TOTALLY agree with … a great read indeed for folks looking to become an entrepreneur without selling your soul to the Venture Sharks.

Here’s the article

There it was in the Wall Street Journal last week. The headline in the Real Estate Section blared,

“Apartment Vacancy Rate Hits 22-Year High !” and I murmured to myself … here we go again.

It just reminded me why newspapermen are NOT Real Estate Investors … they are just out to sell papers and a sensational headline will always beat out a rational article.

But wait … there’s more …

If you read the last line of paragraph three you found that, “Of the 79 Markets tracked by REIS, 45 showed an increase in Vacancies.” That sounds really BAD now doesn’t it? We should panic … right? Hmmmm … Remember now, this is coming from a newspaper and there is most certainly more to this story. Hold on just a minute …

As an Investor, what I find MOST interesting in this article is this.

• In the face of the worst economic downturn since the great Depression.
• In the face of the worst residential housing market in anyone’s living memory
• In the face of hundreds of thousands of foreclosed / vacant / rental single family homes competing with apartments for renters
• In the face of ALL of this …

43% of the markets tracked by REIS showed STABLE OR DECREASING VACANCIES !!

That’s right 34 of those same 79 Markets preserved or decreased their vacancy rates. That statistic is truly amazing given the national economic circumstances. And that’s not all … In the next to the last paragraph we learn that suburban Maryland and Washington, D.C. even saw a 0.3% rent increase in the second quarter. WOW.

What is the Press Missing here?

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Globe Street reported this quote from Jack Crews of Jones Lang LaSalle regarding the Dallas / Ft. Worth Commercial Real Estate Markets

 ”We have kind of a Mexican standoff. Sellers aren’t over the shock of the market and are still asking too much, while buyers, who are greedy for rock-bottom prices, simply aren’t willing to step up and pay. (and) Without debt, there are no transactions to step forward.”

As long as this remains true … it will be hard to envision deal volumes picking up in the near future.

Today Globe Street reported on a “Meet the Experts” panel discussion in Century City California … and what they had to say augurs well for smaller commercial investors in the months ahead.

All the experts lamented the puny deal volumes this year and none of them seem to have a clear prediction of when deal flow will pick up however …

When asked, “How would you invest $3M in this Market?” Here is what they said … Read the rest of this entry »

I couldn’t resist that headline for one simple reason … I just saw this actual headline at Globe Street…

“Experts: Cleansing Period Ahead, Bottom Near”

And if that is not the definition of a bidet … I am not sure what is!!

I will give you a link to what turns out to be a pretty important article in a second … here is the gist of what they have to say:

In the next 24 months, this convocation of experts expects a radical increase in deal volume as Lenders cleanse their books of bad Assets. The Bottom of this market seems to be very close and the cleansing is projected to begin very early in 2010.

Here’s the full article – and remember, when your bottom comes in sight … give it a quick cleanse.

Four more banks failed Friday bringing the 2009 total to 77 so far in 2009.

Here’s an interactive map of bank failures by state

Here’s the entire list of failed banks

The recent lifting of  State Specific foreclosure moratoriums this month has opened the floodgates again. This is the third month in the last five to set the record for foreclosures.

This month there were more than 360,000 properties with foreclosure filings — including default notices, scheduled auctions and bank repossessions — an increase of 7% from June 2009 and 32% from July 2008, according to RealtyTrac, an online marketer of foreclosed homes.

This is the Double Dip we have been anticipating … release the moratoria and open the floodgates.

AND don’t forget the “Double Double Dip” …

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