Commercial Real Estate Construction Financing Syndications - Rules & Requirements

The rules are interpreted in terms of the laws of the State of Texas, with Harris County being the venue for all matters of record.

All decisions regarding the listing of a given transaction, pricing and due diligence requirements shall be made by Rainmaker in its own right.

Every syndication sales agreement shall be in accordance with Rainmaker's requirements, to wit:

1. The ownership shall be via a tenants-in-common sales contract.

2. The sales contract shall reference the use of a lockbox account for the deposit of all sales and other items of income that will be swept each month (or week) by Rainmaker and distributed in accordance with the requirements of the Operating Plan Use/Access Agreement.

3. All syndication sales contracts require the developer/sponsor to pay the routine and extraordinary maintenance, insurance, property taxes and associated costs of maintaining the assets of the syndication.

The burden, cost, risks and outcomes for a given syndication are wholly dependent upon the documentation provided.  In all cases, the due diligence review will be in accordance with market expectations as would be the case if the capital funding was obtained using a private placement offering of securities.

All pre-construction phase syndications must be retired no later than 180 days beyond the completion of construction phase activities as determined by the date the certificate of occupancy is issued.

All construction phase syndications must be retired no later than 180 days beyond the completion of construction phase activities as determined by the date the certificate of occupancy is issued.

All pre-construction phase financings must provide all of the items on the Pre-Construction Phase Fractional Ownership Interest Syndication Due Diligence Checklist.

All construction phase financings must provide all of the items on the Construction Phase Fractional Ownership Interest Syndication Due Diligence Checklist.

All post-construction phase financings must provide all of the items on the Post-Construction Phase Fractional Ownership Interest Syndication Due Diligence Checklist.

Upon receiving notification from a developer (and/or sponsor, as the case may be), Rainmaker will participate in an initial conference call to review the due diligence documentation requirements.

All prospective syndication buyers are subject to providing a full disclosure to Rainmaker and Rainmaker approving their participation in the pending syndicate and Rainmaker shall have the right to refuse any entity or person from participating in a syndicate in Rainmaker's sole judgment.

Rainmaker may not be compelled to provide due diligence documents for the benefit of a listing developer and/or sponsor under any terms other than those Rainmaker provides to clients seeking Rainmaker consulting services.

No prospective buyer is required to retain Rainmaker for the provision of any consulting services and/or due diligence reports as a condition of providing a syndication listing.