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Unlocking the Potential of Commercial CRE Debt Sales

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Why Selling Commercial Debt is the New Way to Maximize Profits for Debt Investors


Debt investors have struggled to make money from their portfolios due to the current legal and political environment. The lack of access to buying or selling delinquent accounts has hindered profitability. However, a new and attractive option is emerging – nonperforming commercial account sales. Originators, who are set up to handle consumer accounts, may not have the infrastructure or knowledge to set up sales for their nonperforming small-balance commercial accounts. This is where commercial account sales become a lucrative opportunity for originators.


Less Regulatory Oversight for Commercial Collections


Commercial collections do not suffer from the regulatory oversight that consumer accounts do, and the legal pushback against the gray-area collections methods has been less effective. Even though effective and long-term collection efforts still follow FDCPA and TCPA guidelines, fraudulent collection activities should be avoided and discouraged. Commercial debt sales are in a more open regulatory environment, making it a great option for originators to explore.


Increase in Demand and Prices


With consumer sales on a downward spiral, the market for fresh paper is wide open, making it a great opportunity for buyers and collectors. Commercial paper, in particular, has high demand, which increases prices. Even low-grade, heavily worked older paper has a higher demand, making it a valuable investment for buyers.


Steps to Sell Commercial Accounts


To maximize profits from commercial accounts, originators must follow specific steps. Firstly, set standards for buyers, and ensure that they follow FDCPA as a guideline. Avoid buyers with regulatory issues and with histories of complaints in the consumer realm. Commercial-only buyers may be the best option in this scenario.

Secondly, get organized and provide buyers with more than spreadsheet data. Copies of documentation, availability of original documentation, and collection activity and legal efforts are necessary information.

Thirdly, scrub the debt, not only for bankrupt and deceased debtors but also for the inability of originators to go through the proper legal procedures to obtain deficiency judgments in foreclosed real estate. Lastly, know the market, and consult with brokers, sellers, and buyers as to what prices commercial notes are selling. Be aware that a paradigm shift of value may be necessary.


Maximizing Profitability through Commercial Account Sales


With the consumer market in upheaval, originators need to realize that maximizing profits may need to come from other avenues. Commercial debt sales are an excellent way for originators to shore up their books and increase revenue from accounts that produce little profit. At Fitzgerald Advisors, our experienced team of professionals is here to help you find the most profitable solution for your commercial account sales. We understand that everyone has different needs and goals, so our advisors are equipped with the latest market data and insights to ensure they can tailor a solution specifically designed for you.

In conclusion:

Commercial account sales are a lucrative opportunity for originators to explore all avenues of profitability in the current political and legal environment, primarily opposed to buying and selling consumer debt. If you’re interested in exploring your options, fill out our online form, and we will contact you shortly. Don’t hesitate to contact us; we will help you maximize your revenue potential through commercial account sales.

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