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The role commercial mortgages play in the capital financing of commercial real
estate developments cannot be lightly overlooked, but in point of fact, the
equity gap financing is the most important component in the entirety of the capital
funding plan proposal the developer is commending for adoption. The
biggest mistake developers (and/or sponsors, as the case may be) routinely make
is the assumption that commercial mortgages (and commercial mortgage lenders)
will provide the developer with some form of equity financing, mezzanine
loan financing and/or bridge
loan financing in order for the developer to fully fund the project.
Nothing could be further from the truth...
The cold, hard reality of commercial
real estate development finance is that lenders - especially first-lien
commercial mortgage lenders - are not going to provide gap financing in most
cases. In point of fact, the lender commences underwriting with the
assumption the developer has the necessary at-risk capital contributions to
carry the proposed capital finance plan through to closing.
This means the equity gap is the most important component in the plan; face
it, the equity gap is where the game will be won or lost. After
considerable due diligence and consideration, Rainmaker Marketing Corporation
now provides an alternative to walking away from the deal, or walking away from
the mortgage financing for the construction loan. Rainmaker Marketing
Corporation now provides syndication support for fractional
tenants-in-common ownership plans. Every syndication has a minimum
sales threshold of at least $2,500,000. This tool may be used for the
purposes of raising capital in an orderly market and based upon market
conditions and expectations. Now you have a plug for the gap and you need
only reach out and grab it.
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