How to Obtain Business credit When Banks Aren't Lending

There is no doubt that with the onslaught of bank foreclosures there is plenty of inventory to buy. If you are in the market for bulk REOs or performing and non-performing notes pools now is a good time to invest. However, getting real inventory from a bank that is willing to play ball may prove difficult unless you have already established a relationship with that bank. If you do manage to get a bank to provide you with a portfolio of REOs or notes and to manage to get it at good discount you have a now have the assets to resell for a 5-20% profit maybe more or hold them for cash flow. Congrats

Both investment strategies are can reap handsome returns when you are deal in the tens to hundreds of millions of dollars. The downside to buying bulk REOs and notes is that the cash flow or return on investment will mostly depend on the market. For example, if you are a flipper, your return on investment depends on how fast your end buyer buys or if you buy and hold your return on investment depends on the rental markets and the tenants’ ability to pay on your properties and the borrower ability to pay on the notes.

Now contrary to what you maybe hearing on the news the economy is tanked to due to the record high employment rate. So a lot more people don’t have to cash to buy or just make those payments. Also to lending across the board has come to almost complete stop therefore capital to investment is hard to come by or very expensive to get. There is a way to address these issues. Either the way risk and reward factor is definitely swinging more toward the risk. There may be a solution to this pitfall though.

Why not invest in such a way so that you can profit from multiple streams of income while acquiring the assets you seek at a much better discount? This is quite possible to accomplish this, while investing the same amount on capital. Think about it. Instead of spending $10M or more for the a REO package or note pool, why not buy the bank along with it’s assets. Doing so will allow you to:

· Recoup your investment from day one
· Acquire bank assets for much less than you would if you bought just the assets
· Gives access to nine times more capital then using your own investment capital
· Takeover a massive profit center from the interest and fees the bank generates
· Instantly increase the value of the bank the minute your buy it by a third or more
· Get the inside track to purchase more banks after you buy your first one.

In case you haven’t notice over 80 banks have failed this year so far and more failures are expected to come. Most banks would rather try to sell their financial institution rather than let fail and have the FDIC take it over.

So there are plenty of opportunities out there. I know of one bank that was for sale for $10M with over $100M in assets! Banks are buying selling on a daily basis. As a matter of fact, this is how a lot of banks used their TARP money if you ever wondered where some of that $700B went.

Now you won’t here of a banking centers publicly listing their banks for sale because they don’t want their investors to know that their investments are at risk basically. These deals happen within the very closed circles. That doesn’t mean that you can’t pay this game too. The trick is getting in those circles. Once you are in those circles, you will have access to many more inside deals that can reap you huge returns.


If you would like more information about buying banks please email me at [email protected]