Default Risk Rejections Are The Number 1 Acquisition Killer
The problem with acquisitions is the invisible barrier that is default risk underwriting. Default risk takes so many forms and any one of them can be that one factor that leads to a default that creates investment losses (and future investment fraud complaint). The preferred method of dealing with default risk is to just reject an acquisition because of insufficient evidence of default risk controls, prevention and/or mitigation. You move on to the next deal and swallow your investment of time, resources and capital because your business model structure allows you to do so in the name of protecting investors. Obviously, many cases become future evidence that your business model amounts to “throwing out the baby with the bath water”.
Changing the Default Risk Calculus
Analytics, combined with advances in AI, risk segregation and state-of-the-art fiscal controls all interact to change this fundamental dynamic that leads to poor earnings performance and increased operating costs for the fund. The Rainmaker Analytics iCREDIT System provides an end-to-end solution for CRE transactions (existing and new construction) that provides opportunities to really change the fund’s business model. Just some of the potential benefits of the iCREDIT approach worthy of mention include:
- Increase acquisition opportunity approvals;
- Decreased underwriting cycle time and cost;
- Elimination of common default risk issues;
- Elimination of fraud, embezzlement and financial reporting transparency risk issues;
- Elimination of many of the common sources of future investment fraud complaints;
- Regulatory compliance support;
- Increased operating margins;
- Lower E&O insurance premium costs;
- Prevention and mitigation of market risk exposure;
- Elimination of administrative foreclosure risk.
Take Charge or Take a Beating
It’s time to take charge of your fund’s future course or face the prospect of taking a beating that you don’t have to take. Every lost opportunity, every non-performing asset, every fraud complaint and every angry phone call from investors eats away at your profits and sanity. You can put your fund on the road to stopping this with one phone call. We will take the time to demonstrate to you all of the material reps and warranties we make are fully and independently sustainable. It doesn’t work any other way.