Where You’ll Find Distressed Opportunities in 2020

Photo by Shutterstock.

Late in 2018, Daniel Lebensohn, co-founder at BH3, started a debt opportunity fund to purchase non-performing loans. “We are specifically targeting non-performing loans from banks and what we call tourist lenders or folks that have come into the space that are bridge lenders,” Lebensohn says. “They took over a huge chunk of the business that conventional lenders shied away from due to the new regulations that emerged after the recession.”

These capital providers are handling more sensitize, higher-risk transactions. That makes it more likely that their loans will run into problems, according to Lebensohn. “That’s not to say some banks heavily into construction lending won’t have their share of distress,” he says. “But a lot of these tourist lenders pivoted from equity to debt. Everyone and their grandmother is in the lending space today.”