	RAINMAKER MARKETING CORPORATION 281.537.1200

Independent Living Construction Loans & Capital Financing Issues - Continued...

Condominium Investment Sales Plan Syndication. A portion of the project space plan is entitled as a condominium association; not for the benefit of selling housing to dwellers, but to provide a source of at-risk equity capital equal to the total capital expenditures for the last month of the construction period. This transaction has its own life (expected to be 5 to 7 years) and then be retired via a developer buy-back that results in a cash-on-cash return to the unit owners of 10% to 15% per annum (a structure called "stated yield").

Fractional Tenants-In-Common Commercial Real Estate Syndication Plans. The venerable TIC plan is now able to become an important part of your capital raising activities because TIC plan sales proceeds are not subject to the same restrictions (in most cases) as would be the case for a condominium plan. Accordingly, the TIC plan is the developer's big-gun for raising sufficient equity to be able to demand and receive non-recourse financing that doesn't require a cross-collateralization pledge by the developer.

The key elements to making a structured financing pay off and provide independent living facility non-recourse construction loans include:

The principle of creating positive financial investment leverage for the project is of critical importance when sizing the condominium investment plan. Any shortfalls can be made up out of the incremental equity gain the developer realizes much later down the road.

The condominium plan funds are only going to be made available in the last month of the construction period, so the condominium plan should be sized to provide net proceeds that are large enough to cover the final month of construction only.

The TIC plan can be undertaken in interlocked stages, to wit:

	The first minimum sales target is to generate enough sales proceeds to allow the developer to close escrow on a construction loan without regard to the recourse and collateralization issues); then
	The second minimum sales target is to generate enough sales proceeds to allow the developer to close escrow on a non-recourse loan that has no cross-collateralization requirements; then
	The final sales target is to generate enough sales proceeds so as to allow the developer to obtain a non-recourse construction loan and withdraw the developer's capital.

Find out what we can do for your project. Talk to a Rainmaker Marketing Corporation consultant today.

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?

Rainmaker Marketing Corporation can trace its history back all the way to 1989. Incorporated in 1993, Rainmaker Marketing Corporation has evolved over time into a full-service business to business consulting firm. Rainmaker Marketing Corporation’s initial specialization was in issues and documentation needs corresponding to the capital funding cycle for commercial real estate development projects with a primary focus on senior housing and health care related properties. Today, Rainmaker Marketing Corporation serves all types of commercial income-producing property development program financing requests with a combination of feasibility studies, due diligence services, structured finance consulting and a focus on commercial real estate syndication services. Rainmaker Marketing Corporation’s service area includes all of the continental United States, Canada, Mexico and the Caribbean Basin.

281.537.1200

Email: consultants@rainmakermarketing.com

Commercial Real Estate Development Finance, Due Diligence Documentation, Syndication & Project Management Consulting

15519 Dawnbrook Drive, Houston, Texas 77068.