Hi -
Add a zero or so to the end of your house numbers and you may begin to understand where I was a couple of decades ago.
This is not a new problem. It’s happened before and it will happen again.
You need a plan that will accomodate change and that will allow you to embrace the wide range of opportunities you will encounter.
First, if you’ve tied all these things together with any sort of blanket mortgage, cross collateralization, etc – start the separation process. Each deal needs to stand on its own – and by the way, you might want to take the time to really READ the paperwork (loan commitments,etc) that you have already signed.
Are there any cross-default provisions? Net worth provisions? Anything at all about the bank/lender being able to call the loan early? Under what conditions? What notifications, if any, will you get?
Second, begin to rank your properties. Years ago, a cattle buyer gave me some of the best investment advice I ever got when he told me, “Son, there’s a top and a bottom in every load”. What he meant is that in that grouping of properties of yours, there is a best, a worst, and a whole lot in between. Rank them. Cull them. Make sure the ones you end up with are the ones you WANTED in the first place.
Third, find some additional lenders/partners/etc. Move quickly to reduce some debt. Take on some partners for cash. Sell some properties at cost if you have to do so. Begin developing relationships with small banks and bankers who will value your business today and tomorrow. Learn their business so that you will know what they need from you and what they expect. Many small banks aren’t closely tied to the national economy; they make decisions based on their local expertise, on their experience, and on their instinct. Don’t knock it – it works.
Fourth, understand that the vast majority of investors will never do any of these things. Instead, they will wait until their business is in shambles and then whine because they didn’t see it coming.
Sorry, but it is your job to see tomorrow. Unless you begin to plan ahead, whatever happens to you will be the result of luck and circumstance. Not a very happy thought.
I’ve been in this business longer than some of those reading this have been alive. Simply put, I make more money in bad times than I ever do in good ones.
The reason? Because there are so few players left.
Darwin was right. The real victory goes not to those who are well adapted, but to those who are adaptable.
Think about it.
Eric C