Itzel: u201cWe see a tremendous opportunity to acquire defaulted notes at a significant discount.u201d

COSTA MESA, CA—GlobeSt.com has learned exclusively that TGG Realty, an affiliate of Cornerstone Realty Group Inc., has joined with American Spectrum Realty Group to acquire discounted single-family-trust deed notes. The initial capitalization of the venture is $1 million, and TGG will manage the acquisition and disposition of the notes.

The joint-venture partners expect to expand the investment to several million dollars over the next 12 months. The business plan calls for the completion of the foreclosure process on the loans before either offering the properties for lease to the former borrowers or listing the properties for sale.

According to John Itzel, president of CRG, “We see a slow decline in the foreclosure of single-family loans over the next 24 months. However, with an estimated 4 million home loans still underwater in the US, we see tremendous opportunity to acquire defaulted notes at a significant discount.”

TGG/CRG entered into the partnership with ASRG to bolster the national presence of CRG and to allow ASRG to take advantage of Cornerstone’s management and acquisition team with more than a century of combined experience. “The strategic alignment of Cornerstone with a company such as American Spectrum is a huge benefit to all of our endeavors moving forward,” says CRG’s CEO Rourke Oakland. “Their national presence and proven track record makes them a great partner for the immediate and distant future.”

As GlobeSt.com reported in April, CRG recently launched a website called 1031netex.com.  At the time, Itzel told us, “This is a unique adventure we’re embarking on to allow 1031 exchange people and TIC owners to list their properties on a website, kind of like Zillow. If things work out as we plan, we’ll eventually get to 50,000 to 60,000 registrations. It allows these owners to trade in a secondary market where one didn’t exist before.”

In addition, as GlobeSt.com reported earlier this week, US foreclosure filings decreased 5% in May from the previous month and 26% from May 2013, according to a report from RealtyTrac. Foreclosure activity is now at the lowest monthly level nationwide since December 2006. Still, despite the decrease in overall foreclosure activity nationwide, there are still 21 states that posted monthly increase in overall foreclosure activity last month, and 11 states posted annual increases in foreclosure activity. States with annual increases included Massachusetts, New Jersey, New York and Indiana.