RAINMAKER MARKETING CORPORATION 281.537.1200

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EB-5 Sanctioned Private Placement Offerings - Transaction Structures

The typical transaction is structured as a limited partnership.  There are two (2) general partners in the deal.  The developer (or owner/operator of the project, as the case may be) is the operating general partner.  An entity nominated by Rainmaker Marketing Corporation is the financial general partner.  The limited partners are these general partner entities and the foreign nationals who are investing their money pursuant to the EB-5 requirements.  Only the limited partnership structure can be used as the language of the EB-5 program is clear that limited partnership participation counts as active business management.  If you do not want the foreign nationals as active partners in your hair all the time then we have to do this as a private placement offering for a limited partnership.

The typical transaction is a five-year deal.  At the end of the fifth year, the owner/operator refinances the deal and buys out the financial general partner's interest and the limited partner interests.  The foreign nationals receive 110% of their investment basis (meaning an imputed 2.00% per annum interest rate on their money, but that interest payout has to be structured to happen over the 5-year operating period to ensure there are no compliance issues) and they exit the transaction.

The financial general partner receives:

20% of the limited partner ownership interests.

20% of the cash flow after payment to the capital contributing limited partners mandatory distributions are satisfied.

2% per annum management and administration fee (computed on EBITDA).

The financial general partner's interest is valued based upon the income-approach for the property, capitalizing the projected forward 12-month EBITDA cash flows using a capitalization rate equal to 175% of the current NYSE Prime Rate as of the date of valuation, or 8.5%, whichever is higher.  This program approach leaves the vast majority of the upside future profits of the transaction in your hands if you play ball and follow the rules.

For the purposes of the transaction, cash flows are assumed to be all excess cash proceeds generated from operating activities and non-operating activities of the partnership.  Significant other terms and conditions may apply based upon the transaction, current capital market conditions and risk factors that are unique to the transaction in terms of their potential impact in our sole judgment.

All terms and conditions of joint-venture participation programs and opportunities are subject to change or termination with or without prior notice.

 

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.

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