Fractional Commercial Real Estate Syndication Project Financing Consulting Support...
The advent of the Internet and other communications infrastructure now make truly massive fractional commercial real estate ownership interest syndicate sales programs possible (click here for our PowerPoint presentation on non-recourse syndication fundings). Rainmaker Marketing Corporation can help you manage the execution of a syndicate financing that can be brought to bear as early as a given development project's pre-construction phase to cover the "non-recourse approval gap". If you are seeking non-recourse joint-venture financing pursuant to the 100% LTV ratio USCIS-sanctioned EB-5 program, click here as most commercial real estate syndication projects are not covered under the EB-5 program.
Simply put, there is a level (somewhere between 0% and 100%) where the majority of commercial banks will, cet. par., provide a new construction mortgage financing loan on a non-recourse basis. Typically, this would mean the Loan-To-Value Ration (LTV Ratio) is generally reduced 20 points (e. g.: 75% LTV being dropped to a 55% LTV) to make this happen. The idea behind the commercial real estate syndication is to raise approximately 25% of the deal in additional cash - this would be in addition to the funds the developer is bringing to the table. In some cases, the fractional commercial real estate syndication would allow the developer to receive a return of capital as early as the commencement of construction (see our white paper on this topic).
The reason you may not have heard of the widespread use of commercial real estate syndications is the low yield most of these syndicate sales programs offer the prospective purchasers; often yields are an anemic 8% or even less. Many of the purchasers are 1031 exchange purchasers who are seeking a favorable tax treatment of their investment. That's good, but why should it hold your earnings opportunities hostage to the 1031 requirement. The reality is that most syndicators and developers are not paying attention to the structure of the transaction. In point of fact, the opportunity to generate a long-term 15%+ average cash-on-cash return for a new construction project syndicate sales program is almost universal from industry to industry and from property group to property group.
Rainmaker Marketing Corporation can help you structure your syndicate transaction and provide the management and sales support you need to make the cut and be successful. The minimum syndicate would appear to be on the order of $7.5 million and there does not appear to be an upper limit when the " market saturation" advertising method is used to create immediate (as in as little as 21 days) interest level necessary to close-out the transaction efficiently and on terms the developer can afford.