February was kind of a frustrating month because I didn’t get any bids accepted. But it wasn’t for a lack of trying. I put out 30 bids, some of which were on very high quality / high value assets. At one point I had over $900K in bids out, so I slowed down on the bidding towards the end of the month because I was concerned I might get too many accepted at once. As it turned out I came up blank and then was annoyed that I had slowed down…..
But the 30 bids were only submitted after getting pricing guidance from the asset manager. There were a number of other cases where the seller came back with guidance that was way too high and I didn’t bother to submit bids. An example of a crazy request that caused me to walk away was the seller who said they needed 75% for non-performing assets. There are cases where 75% makes sense, but these were low quality assets that may have been worth 50% at the most. That was an isolated case though. While pricing for non-performing assets has increased over the past year, there are still plenty of deals available.
Overall I expect to get about 20% of bids accepted. For new note investors 10% is fairly common. Because I have already worked with some of these sources and discuss pricing ahead of time my hit rate is a little higher. But notice that its still not very high. At the end of the day this is a numbers game. Last month the chips just happened to fall in a way where I came up blank. Hopefully the variance breaks differently this month.
