Proper preparation of the financial analysis, which can be placed on a spreadsheet, is 70 percent of the work in a successful negotiation. Although comprehensive packaging for the lender is essential, negotiations must be directed to the present value of maximum recovery. The cost of a lender’s asset-management burden can reduce the maximum recovery to less than what a property owner can provide. In addition to closing the lender’s economic risk, adjusting the capital structure of a property allows the owner to maintain ownership and operation or the possibility for sale at a much higher price than if the lender sells it as real estate-owned.

When structuring strategies and implementation, it is vital to understand forbearance, loan restructuring, debt cancellation, short sales, deeds in lieu of foreclosure with release from any personal responsibility, land trusts and bankruptcy. Knowing how such devices and actions can be used independently, sequentially and or concurrently is essential in structuring strategies and their implementation. It also is vital to coordinate relationship strategies with other professionals who implement other aspects of assimilating and analyzing data or processing actions.

Joe Vera is a real estate broker, author and lecturer with 28 years of experience with distressed residential and commercial real estate. He writes a real estate column for a major Spanish–language newspaper in Los Angeles and soon will host a call-in radio show on the topic of real estate. He has represented more than 200 clients with distressed real estate. He also has developed, written and presented courses on foreclosure, bankruptcy, federal tax aspects of debt cancellation and foreclosure in workout strategies and negotiations and funding loans for troubles assets or projects with severe time constraints. For information on his courses (available on CD), seminars and financing-troubles assets, call him at (800) 211-4474 or e-mail jedhouse@yahoo.com.

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