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by etchalon 2146 days ago
Set that aside.

Imagine instead that he has found undervalued property in an area with low-labor costs and high potential demand.

It’s exactly the type of investment opportunity banks and financiers should be looking for. It’s literally how our housing system gentrifies.

He didn’t ask the banks to buy the properties. He was seeking an LOC with a personal guarantee and the buildings as collateral.
1 comments
aliante 2146 days ago
> high potential demand.

That would require growth. Birmingham is not growing.

> the buildings as collateral.

Except the buildings are not worth much of anything. I may as well offer my shoe as collateral.

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etchalon 2146 days ago
Why would that require growth?

An underserved market exists on its own. If I find 100 customers willing to pay X for a service that no one is offering, I do not need that 100 number to grow. I just need to make that existing base profitable.

Second, garbage buildings as collateral combined with a personal guarantee is the least uncommon thing in real estate investment you’ll find.

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