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Mezzanine & Bridge Loans - Alternative Real Estate Development Financing Tools...

Most mezzanine loans and/or bridge loans - in the context of the commercial real estate development financing envelope - are considered to be near-term debt financings that create more problems than the mezzanine loans (or bridge loans, as the case may be) cure for the developer and/or owner/operator of a given commercial real estate development project.  There are many predatory lenders in the field who specialize in spending your at-risk capital contributions on loan application fees and commitment fees for loans that will never close.  This has become so prevalent that Rainmaker Marketing Corporation has created this section on the web server to help you manage the process and weed out at least some of the more egregious examples of predatory lending.

First (and foremost) ask yourself why you are seeking this type of financing.  If the intended use of the mezzanine/bridge loan is to replace equity that you DO NOT have, then you are using the wrong capital funding element.  Most mezzanine loans are based upon the borrower being lent their own money - in other words - a lending decision is only made if the borrower can demonstrate that they already have the equity investment.  If you are seeking to ACQUIRE additional equity financing, then this route will NOT serve your interests.  The lender will take your application fee (usually $15,000 to $25,000) and then turn you down.  It would be better in these cases to utilize a commercial income-producing property ownership syndication and raise capital using a TIC Plan or condominium investment plan because it limits equity dilution.

Before you trot off to the loan window, you should give some thought to the recent developments in Internet-based data access and communications technology that have led to the boom in commercial real estate syndications.  Commercial real estate syndications are the new wave in capital financing and the terms will be a heck of a lot easier to qualify for than one of these products where you will be borrowing your own money.

Continued.

Call: 281.537.1200


What's New?

Tired of construction loan rejection letters?  Rainmaker has come up with a whole new way of funding construction that eliminates the developer's reliance upon construction mortgage financing, while creating financial investment leverage greater than 10:1!

All of the information is in our latest white paper.  Click here and download a copy and be prepared to be floored!

Email: consultants@rainmakermarketing.com.  Address: 15519 Dawnbrook Drive, Houston, Texas 77068.  281.537.1200. Open M-F 9 to 5 (CST).

 

About Rainmaker Marketing Corporation...

Rainmaker Marketing Corporation, Inc. is a B2B consulting firm built from the ground up by Clint Lovell on the premise of providing market feasibility studies (hence the name Rainmaker Marketing) to the senior housing development industry for projects seeking FHA/HUD-insured financing.  Rainmaker started business in 1993, though its roots extend back to 1988.  In the intervening years, the depth of services has been enhanced to provide a complete continuum of due diligence documents and consulting services.

Today, Rainmaker has completed literally hundreds upon hundreds of consulting assignments on projects in the housing, health care, retail, commercial office and hospitality industries throughout North America - including projects in 45 of the 50 states, Canada, Mexico and the Caribbean Basin.  The resulting reports and consulting services provided by Rainmaker have resulted in billions of dollars in new development.  Our clients have included publicly-traded companies, privately-held companies, government bodies and not-for-profit organizations.  

When Should You Be Talking To Rainmaker?

If you will be seeking construction financing from a third-party lender (or investor) with whom you do not already enjoy a previous underwriting relationship, then you need to be talking to Rainmaker.  If you have insufficient equity or assets necessary to sustain a construction mortgage financing for a new construction project, then you need to be talking to Rainmaker about the alternatives.  If you have doubts, Rainmaker is the firm to turn to when it's time to deal with them.

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