Those over-leveraged commercial loans contained in the so called “securitized offerings” are defaulting at a higher rate according to the 12-1-2010 Wall Street Journal. This market clearing is good news and presents profit opportunities.

Many solid properties have been laboring under unsustainable debt loads and the sooner the default the better.  The losses resulting from the credit binge are real and will not disappear.  When the losses are recognized, the property can then return to the market with a price commensurate with current value and that is clearing of the markets.

Clearing of the markets can also be understood as the process in which yesterday’s bad investment bets get called and liquidated.  Painful for the bettor but a necessity for proper market functioning.  For current investors it means that investments can be acquired at attractive prices…there are profits to be had.

This “deleveraging” is ongoing and may represent one of the best investment opportunities in a generation.

Investors can profit by searching out Limited Partnerships, Opportunity Funds, Non Traded Real Estate Investment Trusts and other securitized investment offerings.

Things to evaluate:

• Are the properties acquired after the real estate crash?
• Is the Advisor or Registered Rep experienced and knowledgeable in real investment securities?
•  Is the sponsoring company a true real estate company?
• Are cash flow projections based upon current market rents not boom era inflated rents?
• Are distributions made from actual earnings?
• Does the offering rely upon, or use, high debt leverage?
• Are the risks properly disclosed... and do you understand them?

Many indicators suggest the bottom is past and the time to invest is now.  While that may be true, that does not mean that all offerings are sound. Find and use an experienced, fully licensed, investment advisor, and read the material. And yes, that does mean the thick Private Placement Memorandum or Prospectus.

It’s your money – protect it and grow it.