If im out of reach and the property goes through some chaotic situation, the property manager has someone to consult on what to do if im on the other side of the planet.

The guy I had inspect the house once worked for the State of Washington whatever, whatever Dept that tested for toxic substances.

Most every bank on the planet, if you ask them if they can get you a mortgage on an investment property, will tell you yes, absolutely.

And having a toxic situation like this isn’t good for business.

This extend and pretend business is toxic for the capital markets.

There are newer banks opening now or that have in the last few years that have healthy balance sheets with little to no toxic assets.I agree that many of the local and regional banks cannot take the write downs on commercial or they will be insolvent.They might have only funded a few commercial loans that went bad but they were big ones compared to the residential notes they are holding.I disagree that regular sellers won't sell.Core markets have already heated up and have driven cap rates down for A product and A location to just a little above the boom times.The problem is the local to regional banks hold the majority of the commercial distress in tertiary and secondary markets where recovery will be slow and painful over many years.Recovery starts with A assets in major urban city cores and grows outward over time.There are many buyers looking to purchase and to get a standard commercial loan need a performing property with high occupancy.Otherwise they need all cash or a hard money or private partner going in.Restructuring of notes on the pre-foreclosure side with a capital injection is also gaining traction.There are groups that have to deploy capital in a certain time frame who have optimal areas.Once they see they cannot hit the numbers they want in that area they have to adjust the expectations of the investors,return the money,or branch outward to areas that offer greater returns more inline with the investors fund expectations.Regular sellers are selling.Cash buyers want a real low basis.So I am seeing sellers do a wrap or hold a second or other creative means to get a higher price with some down for a buyer.For the buyer it lets them leverage the limited cash they have into a larger deal for upside in the future.Example for a 40 unit with a wrap and all cash investor would demand 13 to 14 going in.

If he want some financing, raise the option price and finance the option price.I would never do a CFD/LC over 10 years on anything unless it was a toxic dump.

I wouldn't ruin my credit for 250 bucks a month.I highly doubt it would take 10 years to reach a payoff you could handle.A residential recovery and workout of toxic loans is at max about 3 years away on a national level with some areas performing and recovering much faster.Why not go to the bank and say rents have gone down and I am struggling.Ask for them to renew the next time at 3 or 4% interest.That will make the gap smaller and go up in rent just a little but not much.Yes insolvency will wipe out any 1099 phantom gain as long as your liabilities exceed your assets.Most local banks all have you sign a personal guarantee.They consider it YOUR WORD as a vice president has told me that you will honor your contract (one of my clients short selling an apartment).The bank said at that time they DID NOT want to short sale and favored instead writing the interest rate down and extending the loan another year at a frozen rate and see what happens.Banks do not want to DUMP everything like people believe.They only cut out properties they see as having no chance of a recovery in the future or a liability if the took back (war zone,environmental issues).In that case they will usually sell the note if it has environmental issues or they don't want to foreclose.I would try the options I have above instead of ruining credit.

California is a great place to invest, but like any other place on the planet you need to get your feet wet and take action if you plan to make any money.My experience has been whenever I listen to other people, to take it with a grain of salt because it just depends on who you talk to and for many rookie investors it seems they'll keep asking until they find someone who tells them what they want to hear.

According to my parents, I'm the cutest, smartest and most charming guy that's ever walked the planet.