Commercial property underwater

[Jay P.]

I am a minority partner in commercial property that is underwater. I and my partner bought this property before the meltdown. To make it simple paid $2 mil probably worth $1 mil or less. My partner run the property barley staying afloat. Loans is SBA 7a with personal guarantee. My name is not on the loan. We have tried to work with bank to see what they can do to help us. Not going anywhere. Any suggestions?? I have read on forums about some companies helping with lowering principle Has anyone had experience with them are they actually worth looking into. Another issue I do not know the answer to. If property does go under. I being minority partner not on the loan will I be affected by bankruptcy??

[Jack Miller]

Jay, your not alone. A few things, value is only important when you sell or buy. So if its a good property I would not worry to much over the value. However, there are lots of examples of people getting lenders to recast the loans to fair value in Chapter 11 and out of it. Of course its always best to work a deal with your lender out of BK. But BK, can be an excellent tool. I have a lot of experiences in this area.. Sounds like the property is break even and it maybe worth keeping for the long run, do not give up so fast. If your not on the loan, your probably safe if it goes into default. But you need to check the agreements and documention, as the devil is always there. let me know If I can help in anyway