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| | PAB: Private
Activity Bonds - Continued...
Continued
from page 1...
If
your development project has a budget of greater than $7.5 million, then
the private activity bond route may be the most cost-efficient financing
alternative available to you because:
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Private
Activity Bonds represent a "right-of title" funding
approach that means if the project meets the requirements of title,
the odds are you can get the bond financing. You need to
follow all the rules and you need a good investment banker to create
a bond sale syndication and be the syndicate leader because the
approval is not the same as closing on the financing. Once you
have the approval the bonds still have to be sold into the capital
markets and that means you need to carefully document all aspects of
your proposed transaction to optimize your chances of success. |
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Private
Activity Bonds can be done in as little as 90 days. Once you
have preliminary approval, you may be able to garner additional
pre-construction phase investment dollars by using the bonds as a
take-out. Check with RMC on whether this will work for your
purposes before you sail off. |
PAB-based
financing may be the ticket to making your development program.
Private Activity Bond financing is authorized by Congressional action (a
bill must be passed) and arises out of changes made to the federal tax
code (IRS Code) to allow these bonds to be issued on a tax-exempt
basis. In
many cases, the provision of additional PAB authority is attached to a
specific area that is blighted or has suffered a major disaster. Examples of
qualified project types that have been authorized in the past include:
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Senior
housing development projects. |
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Hotel
and motel development projects. |
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Healthcare
development projects. |
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Mixed-use
development projects. |
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Retail
development projects. |
The
next step is to determine if your project qualifies for a PAB. What you are entitled to
potentially utilize is where Rainmaker Marketing Corporation comes into play. It's time to find out. An
entitlement review by RMC costs only $5,000 and the results could be
truly earth-shattering for your bottom line. Your capital funding
plan proposal should take advantage of every possible alternative to the
dreaded equity dilution hit that awaits the uninitiated. | |
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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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