Real Estate Project Funding
We examine qualified projects for our own portfolio and those of qualified funding
programs active in the location of the project. All funding solutions require an
experienced development team, a shovel ready or fully approved project, verified
developer equity, liquidity, and detailed project information including our Project
Submission Form, Executive Summary. Business Plan, Financial projections thru the
funding and repayment periods, and concise strategies for construction, marketing,
advertising, management, and exit for the lender. So if your project makes sense
in today's economy, is fully documented, tell us your plans, requirements, and time
frames, and we can discuss specific funding solutions utilizing our mortgage funds
and those of specific, verified lenders seeking your project type, size, and location.
Depending on the exact lender program we will use, including our in-house funding
solutions, you may need an appraisal dated within the last six months, showing the
current market value of the site, a future value or 'To Be when Built" value may
also be necessary. Larger fundings sometimes require third party feasibility studies,
and each lender may have other requirements based on your project, its components,
and your plans. Detailed developer resumes are always needed, verification of the
funds you have invested to date, and draw schedules showing your required funding
amounts as the project is built, monthly thru the full construction and loan repayment,
will be developed in the funding process, approved by the lender and developer together,
and will become your construction draw schedule.
Our sources include direct funding by our firm, verified banking relationships in
the US, Europe, Asia, Panama, and the UK. The programs available are straight debt,
joint venture, combination programs, and in some cases, sale/leaseback projects.
You can typically include the land acquisition or payoff of existing debt, and all
hard and soft costs to bring the project to a stabilized position, where the sales
and income from the project is capable of servicing the debt in full, and continuing
the development. We can also arrange permanent funding for the income producing
elements of your project once fully stabilized.
Every project, every developer is unique, and our funding solutions are designed
with the right lender, the right program, the right solution, structured to your
project and requirements. More program information is available in the columns to
the right.
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Debt Programs
Lenders today, have already foreclosed on all of the real estate projects they can
carry on their balance sheets, and still meet reserve requirements imposed by the
governing bodies in their location, like the Federal Reserve in the USA. That does
not mean that funding is impossible, but it does mean that they are more selective,
more careful, and great projects with all of the pieces in place are going to be
funded. The lenders we work with often receive 50-100 projects per month, and while
they have millions of dollars to invest, they can fund less than 10% of the projects
they examine, so only the best of the best will receive straight debt offers to
fund.
You will find out very quickly, that the banks funding international projects know
as much as you do about your location, your region, as you do. They know what costs,
fees and sale prices are realistic, and your project documentation needs to be in
line with the other projects they have funded, are examining, or own and you need to
demonstrate that your project is carefully planned, conceived, and that you have
the confidence to have invested your own funds prior to contacting them. If you
have zero equity, the lender is not going to interested and your only option will
be a joint venture. Liquidity or cash on hand is definitely going to be required,
and varies widely from lender to lender. We all see the scams and schemes, and so
do the lenders. Once the lender has proven their ability to fund, proven their history
of funding, and issued an approval, be prepared to pay a fee of some form in direct
verification costs or an escrow for the same, to move from application to the closing
table. Fees are always an issue, but at the proper time, with the right proven source,
they are a reality. If your local bank in your hometown requires an appraisal,
a title exam. credit reports, property inspection, background check, and many other
verifications to fund a condo down the street, it is not realistic to expect them
to fund a condo project, in another country, at zero costs. Developers that insist
on paying absolutely nothing until funding will never get to the closing table,
and any program stating that is a scam, pure and simple.
That being said, we only work with verified lenders, matched to your ability to
engage and move forward. We have bridge funds available to assist when needed, and
will submit your project to funding solutions that match your ability to meet the
requirements. Our lenders can often
use a combination approach, when they are interested in a project with the requirements
they seek to fund. These requirements are all based on new liquidity, and will never
include equity invested prior to funding.
Our project investigation and interviews with the developer will result in a candid
discussion of the lender requirements, your ability to match yourself, your project,
and your ability to engage a funding source initially. We will then submit the project
to our lenders and upon positive feedback, openly discuss the lender, their history,
projects funded, abilities, costs, etc., and keep doing so until we find the right
program, with the right terms and conditions, the right costs, to make your project
a reality. We are paid at funding, period, we either perform, or we do not get paid.
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Joint Ventures
In today's climate, many developers are pursuing a joint venture funding with a
lender, and many lenders are only offering joint venture. Typically the project
is placed into a Trust or special purpose holding corporation, the project is funded
for 100% of the development costs, with the developer and lender participating
in profits. JV programs are available with the developer holding from 50% to 90%
depending on the size, time frame, and overall costs of the project. Equity invested
prior to the funding is often a determining factor, and will reduce the equity
requirement to the lender. Programs vary widely and lenders may be anywhere from
strictly hands off, receiving monthly or quarterly reports, to lenders involved
in most aspects of the project day to day.
Joint venture funding is going to require in most cases, your ability to prove your
staying power to the new funding partner. A lender funding your project will require
you to demonstrate financial reserves or ability to complete the project in the
event costs increase or sales decrease from the projections you provide.s As the old
saying goes, "the best laid plans can go astray" is true, so if they enter into
a funding agreement with you, they will certainly require you to demonstrate the
liquid assets to maintain your position post funding if the numbers change. This
guarantee can be as simple as providing your financial statement showing your ability,
and as complex as a required escrow or deposit to insure the completion of construction
and sell out of the project.
Joint ventures take many forms and will usually represent a significant reduction
in interest expense and mortgage payments, and in some cases, no mortgage or interest
will be involved. Our firm provides direct joint venture funding via our private
investment trust, and we work with several lenders as well in Asia and Europe seeking
qualified projects for co investing and ownership.
For large infrastructure and commercial projects, where there is a corporate or
governmental guarantee in place with required credit rating, our joint venture sources
will include large institutional investors that essentially buy the project, then
lease it back to the developer for the funding period.
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