Ep 49: Non-Performing Loans, Auctions, and The Distressed Niche with Jordan Cailliarec
As we often say, there are riches in niches, and as the world of commercial real estate grows increasingly competitive, it is more important than ever to find your corner of the market. It is vital to use creative solutions to make real estate a lucrative investment if you’re not a large institutional player. Today's guest, Jordan Cailliarec, has done just that. Entering the job market around the time of the 2008 crash, Jordan was forced to find innovative solutions to make money through real estate. Armed with a legal background and a passion for the seemingly impossible, Jordan has made it work. In this episode, he walks us through nonperforming loans (NPLs) and how he got started with them. After large institutional organizations would bulk-buy NPLs, they would write-off a certain percentage. Jordan would acquire these previously written-off loans through a middle-market group.
He shares with us how being a small player in the space offered him an advantage because he could be flexible and use a variety of tactics to make the deal lucrative. Jordan also sheds light on transitioning from these NPLs to the auction space and what he’s encountered there. He talks about the benefits of working in a market he knows like the back of his hand, why he chose to move to auctions, and some strategies he has made use of. Along with this, we also discuss why he’s excited to get back into NPLs, the importance of knowing your competitive advantage, and the upside of the distressed niche generally. This was a great show, and we learned so much. Be sure to tune in today!
Key Points From This Episode:
Jordan’s background, the areas of real estate he’s worked in, and what he’s doing now.
Learn more about the non-performing loans Jordan acquired from 2008 to 2010.
How Jordan, as a smaller entity was less restricted in dealing with NPLs than larger players.
The intricate way that Jordan and his team underwrote these loans and criteria they used.
Find out what prompted Jordan to move to auctions and finding partners for these deals.
John’s experience of auctions on Long Island and why he chose to steer clear of it.
The benefits of working in a market that you know and putting effort into finding deals.
So many investors focus on superficial renovations rather than actually fixing the building.
The commercial real estate market is flooded and investors underestimate the hard work.
Some of the disadvantages of loan modification and how it makes it difficult for buyers.
John and Jordan share some of their war stories about the distressed world
How Jordan and his team handle auctions and dealing with the banks.
Learn more about TROs and the legal benefits of having one.
The power of creativity and finding ways to work in seemingly impossible niches.
“It’s a very insular, closed-off space. And if you don’t have those relationships, it’s very, very hard to be competitive.” — Jordan Cailliarec [0:20:17]
“People always do all the dumb deals. I don’t know why people do the smart deals.” — Jordan Cailliarec [0:25:21]
“Everyone walks away miserable except for us.”— Jordan Cailliarec [0:42:19]
“If you’re creative enough about it, there’s always a way.”— Jordan Cailliarec [0:46:56]
Links Mentioned in Today’s Episode:
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