Question 1

How does Texas's 21-day trustee sale notice affect Dallas commercial note acquisition strategy?

Accepted Answer

Texas's 21-day notice requirement is the single most important fact in Dallas commercial note acquisition. From the date the note buyer records a Notice of Default (or serves notice under the deed of trust), the earliest possible trustee sale is 21 days later. In practice, buyers typically allow 30-45 days to enable deed-in-lieu negotiations before the sale date. If the borrower does not deliver deed-in-lieu, the trustee sale proceeds. This compressed timeline means Dallas borrowers cannot stall the way California or New York borrowers can - giving note buyers substantial leverage in workout discussions.

Question 2

What types of Dallas commercial notes are trading at the largest discounts in 2026?

Accepted Answer

Suburban office non-performing notes (buildings below 60% occupancy, no clear re-tenanting path) are trading at the deepest discounts - 55-70% of UPB in severe cases. Construction loan defaults on speculative multifamily projects in outer suburban DFW submarkets (overlapping supply, behind lease-up schedule) are trading at 65-80% of UPB. Retail non-performing notes with anchor vacancies are at 70-85% of UPB. Performing but DSCR-stressed loans (watchlist) trade at 85-92% of UPB for well-located properties.

Question 3

Can individual investors participate in Dallas commercial note sales, or is it institutional only?

Accepted Answer

The Dallas commercial note market is accessible to semi-institutional buyers with $1M+ liquid capital. Many Texas note sales involve individual loans in the $2-10M face value range that are suited for high-net-worth investors or small family offices rather than institutional debt funds. At prices of 70-85 cents on the dollar, a $5M face value note requires $3.5-4.25M in capital. Texas attorneys who specialize in real estate note transactions can guide individual buyers through the purchase, assignment recording, and enforcement process.