RAINMAKER MARKETING CORPORATION 281.537.1200

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Fractional Real Estate Financing - The Flight To Quality Continues...

The advent of fractional real estate financing for commercial real estate development projects may exceed $10 billion this year, fractional real estate financing, construction, development, lending, loans, funding, non-recourse, construction making fractional real estate financing more than a cottage industry by any measure.  What has been missing from the market is the necessary expertise that would allow for the syndication of commercial real estate development projects outside of the condominium or single-family housing speculative investment envelope.

Enter Rainmaker Marketing Corporation - the company that has that expertise.

For more than 15 years Rainmaker Marketing Corporation has served the commercial real estate development and finance industries as the lead development finance consultant charged with creating the backbone due diligence reports and managing the due diligence third-party reporting process.  Rainmaker will provide the same level of reporting detail review and production for the syndication program as Rainmaker's duty to purchasers.

Rainmaker has a definitive programmatic solution that seeks to combine painstaking due diligence together with real property based financial investment leverage for the benefit of the developer/sponsor and the individual investors.  The outflow of this approach is to provide a gross return of between 150% to 350%.  The timing and risks associated with a given project and given project phase of investment drive the holding period assumptions.  Pre-construction phase investments seek a holding period not to exceed three (3) years and a gross cash-on-cash return of 150% to 250%, while a construction phase project real property financing would entail the same holding period, but a slightly reduced payout formulae (on average) because the risks have been in fact reduced.  Finally, the post-construction phase real property investment envisions a 7 to 10 year holding period with a gross return of 250% to 350% being the expectation (making a long-term real property investment a 25% to 35% per annum cash-on-cash return. 

The syndication marketplace is now evolving beyond the syndication of single-family housing speculations and condominium housing speculations to include the broadest range of business investment opportunities in real property income-producing assets.  Once the potential impact of statutory entitlements are added to the mix you have the opportunity to dramatically increase investor yields without necessarily having to face a dilution of opportunity to make it work.

There are many issues that need to be clearly understood by investors seeking to participate in these real property funding syndicates including:

An understanding of the risks of investing in a project at the pre-construction phase.  The expectation would be that, out of 10 financings, two (2) will be homeruns, four (4) will not quite do as well as expectations suggest and four (4) will be relative flops that present a partial loss of investment; and

An understanding of the risks of investing in a project at the construction phase.  The expectation would be that, out of 10 financings, four (4) will be homeruns, four (4) will not quite do as well as expectations suggest and two (2) will be relative flops that present a partial loss of investment; and

An understanding of the risks of investing in a project at commencement of post-construction phase operating activities where the expectation would be for 75% of investments to be met with material success.

Rainmaker Marketing Corporation is here to help you understand.  Call and register for our go-live day syndications.

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.

©Copyright 2011, Rainmaker Marketing Corporation, Inc.  All rights reserved.