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| | Multifamily
Housing Capital Funding Plans - Continued...
Continued
from page 1...
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FHA/HUD. The Department
of Housing & Urban Development (HUD) is a major player in
multifamily housing (as you would expect). HUD offers a
multifamily housing program that focuses on providing non-recourse
construction and permanent lending requirements. If the other
entitlements can't get you to the top, then HUD may be an
alternative.
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Have you
given consideration to a fractional real estate ownership syndication
approach to providing equity financing for your project? These are
syndications of fractional ownership units for projects having a
development budget of at least $2.5 million (there is no upper limit -
just what the market will absorb) and the financing may be available as
early as the project's pre-construction phase. Equity security
dilution can become a thing of the past, while you maintain the
financial investment leverage you need to make your seed capital
investment work again and again and again.
Rainmaker is the
key to the lock. Start with an initial consultation (it's free)
and learn what might be available for your project's financing
needs. Rainmaker provides services coast to
coast and offshore for developers and owner/operators alike.
Before you rush out to the
bank with your multifamily housing capital funding plan proposal in
hand, take a moment and have a review done by someone who is not
connected with the transaction. This is just one of the basic
rules that apply to the creation process. Other rules include (and
perhaps now would be a good time to bookmark this page):
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Is the technical language forthright
or used out of context? This is a terrible sin when you write
in a term that carries a different connotation in the capital
finance world than what you are using.
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Do you show a five-year forecast
period? Most capital funding plans provide a 5-year forecast
period to show the developed property at its fully stabilized
operating capacity.
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Will an educated layman understand
the capital funding plan in its entirety? We are just as
guilty as the next guy in writing out detailed technical
explanations because it serves one's ego or vanity. Check your
ego at the door. Have a college kid read your capital funding
plan from cover to cover. If the college kid "gets
it," then chances are you're on the right track.
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Does the order of elements make
sense? The plan should have a nice flow from one area into the
next.
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Do you have a quick reference page up
front? A quick reference page with the key financial issues
makes it a lot easier on people who are in a hurry and want to
understand the plan elements.
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Is it longer than 30 pages? If
so, you are probably putting too much into this summary document.
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Is the contact information set forth
in the plan? We're talking basics here. First page, last
page or both.
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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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