Here is an answer to a recent LinkedIn question that I thought would be good to share...

Q: Where do you typically get your commercial real estate information?
I am talking listings, news, comps, etc. The obvious answer is the leading company that charges exhorbitant fees for very good information. Do you, or does your office, pay those fees, or do you use the "fragmented" (using a combination of sites that each offer a little of what I need) search approach that I have been using? How about the MLS? How useless could that really be for commercial real estate information?

A: For finding properties for sale, it is hard to beat Loopnet, CoStar and Cityfeet. For in-depth ideas and cutting edge answers to C/I issues, the best is Commercial Investment Real Estate (The Magazine of the CCIM Institute). You can view it online at www.ciremagazine.com (or go to www.ccim.com, click on "Resources" and then click on "CIRE Magazine". I use to be the chairman of its editorial committee and can promise you that it will provide you with a lot of food for thought. In the current issue you will find articles on Troubled Assets, Re-Useful, The Auction Advantage, Capital Markets Conundrum, Investor Insights, Cost Segregation Solutions, QI (Qualified Intermediary) Questions, Leasing Green, Market Trends, International Outlook, Regional Outlood etc... Hope this answer helped.

Bloomberg Journalist Appreciates My Compliment

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From:	David Kaufman
To:	DAVID M LEVITT, BLOOMBERG/ NEWSROOM:
Subject:	Commercial Property Deal Drought Worst in 18 Years
Date:	09/15/2009 1:3:31

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David,

My compliments on a great article based in realism.

I did the first, last and most auctions for the RTC during their existence. You nailed it when you said… “…the lender in most instances doesn’t have the ability to take the charge to earnings and sell the property.”

David Kaufman, CCIM

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From: DAVID M LEVITT, BLOOMBERG/ NEWSROOM: [mailto:dlevitt@bloomberg.net]

Sent: Tuesday, September 15, 2009 8:50 AM
To: kaufman100@gmail.com
Subject: Re:Commercial Property Deal Drought Worst in 18 Years

Thanks. I'm glad it rang true to you, especially since I wasn't around for the last time. I was trying to see if we've ever quoted you before, but there are too many David Kaufmans in our system. You're not David W. Kaufman of Millersburg Ohio, right? We don't have you under your current or recent associations.

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From: David M. Kaufman

To: David M. Levitt

Sent: Wednesday, September 16, 2009 12:39 Zulu

David,

I was around then and your article rang very true. That’s why I wrote to you. You captured the essence. You nailed it.

If you click on my LinkedIn profile ( www.linkedin.com/in/davidmkaufman ) it will give you my complete background and also, you will find a link to my blog (and website) which has an expansive answer to a similar issue. I’ll paste it below for your convenience.

At one time, I was the national spokesperson for the CCIM designation ( www.ccim.com ). I have been interviewed all over the country by all major news sources at one time or another over the past 20 years. I’ll attached some samples.

I would very much like to give you my commentary when and if you are looking for some.

There are all kinds of misconceptions that I hear and would like to correct. It frustrates me when I hear some news people dragging out all the old saws that really do not apply but are ingrained in peoples’ minds. For example…location, location, location are not the most important things in real estate, it is actually location and timing.

Or how about… “It’s a buyers’ market”. There is no such thing as a buyers’ or sellers’ market. There is just the market and if you set your price to the market guess what, your shopping center, or what have you, sells! Even in these difficult times, any seller can create a so-called sellers’ market by dropping their asking price 50%. The buyers will line up and come out of the woodwork. But, the problem is that the first buyer in line will buy at that 50% price. The price never gets a chance to increase.

That’s why I do auctions of real estate. In the buyers’ minds at auction the price has been cut to zero and the lineup of buyers are ushered into a room where I can get them to compete against each other for my sellers’ property and they race right past that 50% discounted price to the revealed market value. I like to say, “Demand never sleeps.” And you can quote me on that!

One last thought, I looked for you on LinkedIn and did not find you. Unless I just missed you, it is imperative you not only get on it, but use it as the phenomenal source that it is (a network of 43,000,000 business and professional people worldwide). Buy LinkedIn for Dummies, it will blow your mind. Take a hard look at my profile and you will see about what I am talking.

David M. Kaufman, CCIM

Bloomberg/Newsroom Journalist Appreciates My Compliment

FDIC Bank Failures (Selected Best Answer - Linkedin)

Mike O'Mara's Question: FDIC Bank Failures

FDIC Bank Failures

Bank takeovers by the FDIC are up to 77 YTD as of August 15th and the markets are still waiting for the FDIC put into place a viable program to move these toxic assets through the system?

What ‘s your view on this situation and how do you invest in the distressed debt & real estate through the FDIC?

David Kaufman's Answer (Selected Best Answer - Linkedin):

With such good and knowledgeable answers, I probably should not attempt to weigh in on this question, however, I do have a few observations.

When the S&L crisis was first heating up, I can remember that Congress voted to shore up the F.S.L.I.C. with 2 or 3 billion to take over, liquidate failed thrifts and their assets while covering the depositors at the same.

You don't hear much about them anymore because they were under in a heartbeat (the F.S.L.I.C. that is). It took my breath away.

During that crisis, I conducted the first, last and most auctions for the Resolution Trust during their brief existence and worked with a lot of good people from this organization.

I recall that after my first auction in Houston (125 houses for Fannie Mae in 1985), I met some wonderful Texans. One of my new friends asked me if I would visit "his" bank with him because he was on the board of directors and was very proud of it.

I did, and after seeing all the beautiful artwork, furniture, conference rooms, etc... I suggested to him that he should call his attorney and ask his attorney if he should resign immediately. While he was flabbergasted at my suggestion, he did call his attorney who told him, "hell, yes, resign!".

He resigned and the Feds took that bank down a year later. Because he resigned when he did, he avoided the legal onslaught that financially swallowed the other members of the board.

Now is not the time to be on the board of directors of a bank!

There are so many commercial loans coming due shortly that are not worth their mortgage balances because of the vacancy rates in the underlying collateral that I fear will lead to a huge number of financial institutions going under.

For many reasons that I won't go into here I don't think that the Private/Public buyout of "toxic" assets has a low chance of succeeding. In my opinion, the only resolution to this huge problem will be the same as it was in S&L Crisis and that is for the government to take over the failed institutions and liquidate their assets including their real estate.

While this may not be the bottom, nobody can ever pick the bottom, so it is probably a good time to start buying. But wade in carefully because it is very dangerous.

Go to the F.D.I.C.'s website, look for their auctions and sales and use LinkedIn to network to the right people.

There will be many a

FDIC Bank Failures (Selected Best Answer - Linkedin)

Mike O'Mara's Question: FDIC Bank Failures

FDIC Bank Failures

Bank takeovers by the FDIC are up to 77 YTD as of August 15th and the markets are still waiting for the FDIC put into place a viable program to move these toxic assets through the system?

What ‘s your view on this situation and how do you invest in the distressed debt & real estate through the FDIC?

David Kaufman's Answer (Selected Best Answer - Linkedin):

With such good and knowledgeable answers, I probably should not attempt to weigh in on this question, however, I do have a few observations.

When the S&L crisis was first heating up, I can remember that Congress voted to shore up the F.S.L.I.C. with 2 or 3 billion to take over, liquidate failed thrifts and their assets while covering the depositors at the same.

You don't hear much about them anymore because they were under in a heartbeat (the F.S.L.I.C. that is). It took my breath away.

During that crisis, I conducted the first, last and most auctions for the Resolution Trust during their brief existence and worked with a lot of good people from this organization.

I recall that after my first auction in Houston (125 houses for Fannie Mae in 1985), I met some wonderful Texans. One of my new friends asked me if I would visit "his" bank with him because he was on the board of directors and was very proud of it.

I did, and after seeing all the beautiful artwork, furniture, conference rooms, etc... I suggested to him that he should call his attorney and ask his attorney if he should resign immediately. While he was flabbergasted at my suggestion, he did call his attorney who told him, "hell, yes, resign!".

He resigned and the Feds took that bank down a year later. Because he resigned when he did, he avoided the legal onslaught that financially swallowed the other members of the board.

Now is not the time to be on the board of directors of a bank!

There are so many commercial loans coming due shortly that are not worth their mortgage balances because of the vacancy rates in the underlying collateral that I fear will lead to a huge number of financial institutions going under.

For many reasons that I won't go into here I don't think that the Private/Public buyout of "toxic" assets has a low chance of succeeding. In my opinion, the only resolution to this huge problem will be the same as it was in S&L Crisis and that is for the government to take over the failed institutions and liquidate their assets including their real estate.

While this may not be the bottom, nobody can ever pick the bottom, so it is probably a good time to start buying. But wade in carefully because it is very dangerous.

Go to the F.D.I.C.'s website, look for their auctions and sales and use LinkedIn to network to the right people.

There will be many a new fortune made out of this huge disaster. Be ready to participate.

IRC Section 1031 Tax Defered Real Estate Exchange

I received an email asking if an exchange of vacant land for an improved income producing producing property qualifies for tax defered treatment under Section 1031. Short answer is yes.

Basically, any real estate held for business use or investment may be exchanged for any other real estate held for business use or investment.

Owner Financing

In these difficult times with a lack of financing in the markets, it pays to be up on owner financing. By lowering the equity requirement, a seller can greatly increase the size of the qualifying possible purchasers and put off the capital gains tax on most of the gain.

Also the opportunity may exist to amortize the underlying loan(s) more quickly than the seller financing created thus building equity after the sale of the property.

Glad to field questions on this subject and stimulate input from others as well.