"The Transition Year 2007"...something from Jan 2008

I strongly believe that we will look back at 2007 as the year of change. Not only in the direction of real estate but also in the fundamental way lenders can operate. The days of easy credit and high LTV's will at best go into a long hibernation for most capital sources.

As I reviewed 2007, it became clear that after the residential sub-prime meltdown the tightening managed to trickle into commercial lending by July. Spreads increased, Libor increased and the need to find lenders willing to jump in became a long shot. The commercial sector nationally has started to show weakness although there are still pockets of strength.

At Peak Capital Group, LLC our ability to respond quickly and creatively has made us a source of funds for many borrowers and brokers that were left out in the dark. As a portfolio lender with an institutional partner, we are not driven by the need to securitize our loans or search for new capital sources. This gives us a strategic advantage going into this year. As lenders face up to bad debt on their books, they will be forced to sell off their assets at steep discounts.

As an opportunistic lender, we can provide the needed capital for different situations. Our short term financing can serve as the bridge to keep a deal from falling apart and give a seller the time needed to maximize his return. Equally our funds are available for a buyer in need of immediate capital in order to take advantage of a distressed situation. The key is our flexible underwriting allowing nationwide cross collateralization, nationwide lending and quick turnaround times.

Our most complex deal was structured by crossing six commercial properties spanning 3 states. We were able to underwrite the deal and fund it in less than 7 days. The borrower was able to finance 100% of the purchase price needed for two deals and get a good discount from the seller by closing quickly. These type of transactions will become more frequent as the REO market accelerates. Having immediate access to capital will be the "gold" for success in the coming years.