Commercial Real Estate High Yield Investment Programs

A new kind of commercial real estate high yield investment program is now available to the investing public.  In the past, the mere concept of having created a high yield investment program (commonly referred to as "HYIP") via the commercial real estate asset financing activity approach was silly.  After all, how can a project compete against returns of 100% per month in a standard HYIP?  The answer is simple; 99% of the HYIP opportunities Rainmaker Marketing Corporation has reviewed for clients have turned out to be scams.  The tail wagging the dog.  As it turns out, it appears that most HYIP scams are based upon the principles of leveraged financing developed by the commercial real estate development finance industry during the latter half of the 20th century.  Confidence scammers have taken these principles and twisted them for their own ends and have swindled billions of dollars over the past 15 years as more and more people come to believe that, even though they know in their hearts it isn't possible, the greed reflex takes over.

Now the opportunity exists for the investing public to turn this scam back around and hopefully kill it once and for all because:

• a new approach is now available for the investing public where financial transparency easily rivals that of publicly-traded companies in the United States.  It starts with the financial reports.  Publicly-held companies provide a financial report every quarter.  The syndication platform supporting the commercial real estate high yield investment program requires reports on a bi-weekly basis.  These reports must be audit-ready at all times.

• the syndication approach offers commercial real estate developers and/or sponsors/promoters the opportunity to access capital at multiple levels, thus creating more rollover opportunities for investors.  More rollover means more profit-taking opportunities.

• syndications come in three (3) kinds: Pre-Construction, Construction and Post-Construction Phase Syndications.  Pre-Construction Phase Syndications are, more often than not, more risky than Construction Phase Syndications.  Construction Phase Syndications are, more often than not, more risky than Post-Construction Phase Syndications, but not as risky as Pre-Construction Phase Syndications.  Post-Construction Phase Syndications are the least risky and are expected to require a longer holding period (7 to 10 years versus the 3-year holding period for Pre-Construction and Construction Phase Syndications).  You know what you are getting yourself into with each level of investing.

• risks are commensurate with rewards.  The expectation for earnings is:

  • Pre-Construction Phase Syndications.  A gross yield of 150% to 300% to the syndicate investors for a 3-year holding period.  Most of these syndicates are programmed to receive the majority of the syndicate's share of the economic gain at the end of the holding period.

  • Construction Phase Syndications.  A gross yield of 150% to 250% to the syndicate investors for a 3-year holding period.  Most of these syndicates are programmed to receive the majority of the syndicate's share of the economic gain at the end of the holding period.

  • Post-Construction Phase Syndications.  A gross yield of at least 250% to the syndicate investors over a 7 to 10 year period.

• The expectation for distributable income sharing requirements is set forth in the table below.