Tony Seruga Shares His 6 Ways To Strategically Close A Real Estate Deal

Tony Seruga, from Prospector Capital Partners, has recently shared his 6 strategic alternatives for real estate professionals. These can be used in order to capture other fees and incentives in what can only be described as a tumultuous market. This information is designed to give real estate professionals a competitive edge, something that Seruga has worked very hard in trying to achieve across the lifetime of his career.

"My six steps are effectively a step by step blueprint to make sure real estate professionals can close the best deal," says Tony Seruga. "They are easy to follow and to apply and I have a wealth of information ready to elaborate on each of the six different strategies."

In the first strategy, he describes negotiating an extension with the existing lender. The majority of real estate professionals and intermediaries are able to capture around 1% of the unpaid principal balance, the UPB, on the majority of negotiated loan extensions.

In the second strategy he describes negotiating a discounted payoff - DPO - with a current lender. This can be achieved through new equity to fund or bridge debt. Thirdly, the assets should be sold. By using a motivated REIT, the trade can easily be crossed. The REIT does need to have a strong balance sheet.

"The fourth strategy is that assets should always be sold with carry back," adds Seruga. "Have the sponsor or the lender selling the asset carry back a note. Capture a point for setting it up and a servicing spread each month. Take a hope note as well."

Seruga also discusses methods of bringing in new equity partners, with which any shortfalls or the DPO can be funded. Finally, he suggests the property can be bankrupted. In this case, the courts can restructure the deal.

The real estate market is evolving rapidly. Traditional lenders are overwhelmed by red tape and complex loan requirements and hence can no longer offer flexible solutions. Prospector Capital Partners recognizes the importance of finding creative solutions to non-conforming opportunities in an expedited manner. Essentially, what Seruga wants to do is present various strategies to make sure real estate professionals get the most out of their efforts.