[Note: To follow is an excerpt of an interview with Alethea Cox, loan specialist, Kingston Management Services, an FDIC qualified bidder and Michael Anderson, Founder and Co-owner of RealSource, who’s company has a track record of placing thousands of investor/clients in the right properties in the right markets at the right time. To listen to the show archive or download an MP3, go to www.IncomePropertyInvestmentTalk.com/071509.]

Mosca: A number of investors don’t want to get involved in short sales because it is such a time-consuming process. Are you saying via Kingston the process is more efficient, less time consuming?

Anderson: My experience dealing with Kingston Management and watching their operations is that they are highly responsive. That process is probably half of cumbersome working with them if not substantially even less than that. You need to understand again that Kingston Management Services is in the business of liquidating these assets for the FDIC. They have a fiduciary responsibility and that is their job. When you are dealing with the conventional lending institutions on a short sale, their job is really still in the lending business. They need to be concentrating their resources on other things where 100 percent of Kingston Management Services is about liquidating these assets.

Cox: Our philosophy is to pick up the phone, get on the call, and do the negotiation. When you get off that call, you should know what your price is. We’ve already done the bidding and the bartering. There’s not a lot of paperwork. You will do a letter of commitment and with that letter of commitment we start the process of the purchase and sale. We are doing 30-day closes on properties. If it’s not a 30-day close, it’s not because of Kingston Management Services.

Mosca: These opportunities almost seem too incredible. Is there anything that I am missing?

Anderson: Not really. The important thing is that every investor, every buyer has to do their due diligence. There is no waiver for that. If you don’t, you run the risk of making an investment mistake. Today we are in the information age and there is so much transparency, information available at your fingertips. The Virtual Deal Room not only includes the properties themselves but as of today we are going to start loading all of the vendors, the lenders, everybody that can help you get through the process. Remember, you still have to do your due diligence. You still have to make sure that you’re making a suitable investment and transact business in a sound, fundamental, correct manner.

Mosca: Is there is a lot of knowledge that exists within this Virtual Deal Room to help the investor invest well?

Anderson: That’s exactly why that information is there so you can make the best investment decision. For a lot of people, and sometimes for me, it’s important to actually physically go look at the property, but I know what bedrooms look like and so forth. What’s more important is to understand the location, what’s driving the market, and that’s going to create value in the future. That kind of information is in the deal room. When you submit an offer, someone from RealSource’s client advisory group will call you to make sure what you are doing is suitable, and that you are a qualified ready, willing, and able buyer. From there, your offer will be sent to the appropriate loan specialist at Kingston Management Services who will then begin the process of working through the specifics of your transaction. So, the Virtual Deal Room is designed to make sure that we are getting the right property to the right people and those people are capable of actually doing the transaction, which is a very quick process.

Mosca: What are the next steps for investors interested in developing an FDIC Asset strategy?

Cox: The first thing is to go through the deal room and take a look at what types of properties are out there. Really get creative and constructive. Look at what’s offered and available to you. You can do that through the Web site.

Mosca: [caller Randy from Utah]: Do you offer financing in-house or seller financing and do you consider trades of other assets for part of the purchase?

Cox: We do not have an in-house financing option, right now. However, we have been very constructive and creative as to the type of deals we’ve done. The key thing is getting constructive, asking a number of entities, and working through the application process. We work jointly with these entities on your behalf to help reduce the risk from the financial institutions’ standpoint.

Anderson: As part of hosting the deal room, RealSource was charged with the responsibility to provide lending sources for as many of these properties available and we are finding that there are lending sources for just about any kind of transaction, from private capital investment, which we are developing doing venture capital, to local lending institutions such as credit unions and local banks. It’s all about your purchase price and their lending thresholds. These deals are probably going to require a little more down payment than usual but there are lending sources for just about everything in the package.

Mosca [Randy]: What about contributing other assets to the trade?

Cox: We are open at looking at that. We don’t want to get too bogged down trying to do our due diligence on a secondary property. However, if it’s the right relationship and gets the right type of return back to the FDIC, it’s plausible. Part of what makes us successful is that we do a look at options, we are out of the box, we are trying to be creative, and we basically have an objective and if we can get further down that road that's where we want to be.

Mosca: What is your golden nugget?

Cox: The unique value we offer to everyone directly is something that’s not always offered out there readily. Our process eliminates the headache. The key thing is that it’s a good opportunity. Get on the Virtual Deal Room, take a look at the inventory, see if it’s something that fits for you, and get in contact with us.

Anderson: If you consider yourself to be a real estate investor and I am going to use that in the broadest terms, if you own your own home or you’ve owned a home in the past or you like the idea of owning rental property or owning a second home and you’re not buying in this market, you are really not an investor. This is where millions of millions of dollars if not billions of dollars in wallets are changing hands in the real estate business. If you’re not doing it right now, then you’ve missed the mark and you’re probably not paying attention.

Published: August 20, 2009

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Peter L. Mosca is president and founder of BAK Communications, Inc. He has over 22 years of communications and media consulting experience, serving a variety of nonprofit organizations, including the CCIM Institute and the REALTOR Association on all three levels – national, state and local. He is the Spokesperson Trainer for the CCIM's Jay Levine Academy and trains hundreds of residential REALTORS nationwide to be effective industry spokespeople. He is consistently ranked as "excellent" by about 90% of those who attend his presentations. While his principal consulting focuses are public speaking and media relations development and content delivery and management, Peter is also the host of the Voice America Network's weekly radio program, "Income Property Investment Talk," a one-hour program that brings the powerhouses of commercial and residential real estate to property investors every Wednesday at 11 a.m. EST. Peter is married 17 years to his wife Barbara. They have two children: Ashley, 15 and Kelli, 12. Hence, the name BAK Communications, Inc.