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Commercial Real Estate Construction Loans - Continued...
Continued
from page 1... The
answer seems to be a continuing series of opportunities for the benefit of the
developer's own account and the investing-public. In essence, developers
are promoters of real estate income investments. The resulting property is
a product like any other and is custom designed to achieve certain financial
goals that are supported by the investing-public. The question is,
"how do we put the parties together?" You
have to give the lender a reason to do the loan without recourse... Rainmaker
Marketing Corporation's
approach is to focus on the due diligence process and the project development
process as a means to an end - the commencement of syndication marketing; the
one element that puts money into the transaction by attracting the
investing-public to a defined commercial real estate development financing
opportunity. These funds can make the difference between a project that
goes forward and one that must be abandoned. The most common approach is to cull out those proposals where it does not seem likely the
project will not have completed construction and reached its stabilized
operating state within a three (3) year window. Those projects that do
make the cut, must then complete the due diligence documentation process because
it is that exact process that determines the likelihood of management being
successful in their proposed project development program. The very
completion of the documentation requirements sets the stage for the project to
be successful because the project must now be developed, constructed, marketed
and operated within the envelope created by these due diligence documents.
In essence, the real job of the due diligence process is to grossly limit the
activities the developer can undertake to those activities that are supported by
the documents. This can have a powerful effect on both the development
schedule and the budget. | |
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Do
You Know The Secret?
When it comes to commercial real
estate development finance, it doesn't matter whether you need to raise
$5 million or $50 million, the out-of-pocket costs, advance fees and
project due diligence costs will always require the same relative
investment dollars the promoters have to fund. Do you know what
that amount is? Do you know the Secret? |
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