	Your vision is our mission...

Non-Recourse Construction Loans - Continued...

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The secret lies in the analysis of the proposed transaction parameters to answer the following key questions:

	What is the unleveraged hurdle rate the transaction is expected to generate? This is an important matter, because if the transaction cannot provide a hurdle rate that is higher than the interest rate on the loan, then the transaction will no longer be a supportable transaction and the lender won't lend no matter what the deal provides.
	What is the leveraged equity return hurdle rate? The leveraged rate is what most people focus on, but it is not the only measure. The more important measure (above) is the unleveraged rate.
	What is the total projected equity gain once construction is complete and the project has been stabilized at its maximum economic operating capacity? This is very important because the construction risk syndicate investors (who will be providing at-risk capital contributions of cash for the deal) will be provided for mainly from this gain. Yes, it is shared with the developer, but the larger the share going to the developer, the more likely it will be that the transaction will no longer work.

The commercial real estate fractional ownership syndication program approach is designed to isolate investors to specific investment holding periods that correspond to the two (2) main phases of the transaction:

	the phase of activities and operations that are undertaken prior to the date the project has completed all construction operations and has reached its maximum sustainable operating capacity; and
	the phase of activities and operations that are undertaken after the date the project has completed all substantive construction activities and operations have already reached their maximum sustainable operating capacity.

To make things more clearly understood, the first option relates to the pre-construction phase, construction phase and initial lease-up phase of a given commercial real estate project that is expected to produce an ongoing series of cash flows (housing sales, per se would not qualify - talk to us about the alternative financing structures). The second option relates to the stabilized ongoing operations - the key to the developer's long-term interest in the transaction.

Simply put, the developer is going to - in almost every case - deal off the near-term equity gain to the construction risk investors as their return in the project, while the developer keeps the lion's share of ongoing distributions resulting from the stabilized operating capacity of the project. They get the near-term equity gain and the developer gets the long-term equity gain. This has the added effect of eliminating the classic conflict-of-interest that has hobbled developers of commercial income-producing properties - now this issue is gone.

Call: 281.537.1200

What's New?

Tired of construction loan rejection letters? Rainmaker has come up with a whole new way of funding construction that eliminates the developer's reliance upon construction mortgage financing, while creating financial investment leverage greater than 10:1!

All of the information is in our latest white paper. Click here and download a copy and be prepared to be floored!

Email: consultants@rainmakermarketing.com. Address: 15519 Dawnbrook Drive, Houston, Texas 77068. 281.537.1200. Open M-F 9 to 5 (CST).

About Rainmaker Marketing Corporation...

Rainmaker Marketing Corporation, Inc. is a B2B consulting firm built from the ground up by Clint Lovell on the premise of providing market feasibility studies (hence the name Rainmaker Marketing) to the senior housing development industry for projects seeking FHA/HUD-insured financing. Rainmaker started business in 1993, though its roots extend back to 1988. In the intervening years, the depth of services has been enhanced to provide a complete continuum of due diligence documents and consulting services.

Today, Rainmaker has completed literally hundreds upon hundreds of consulting assignments on projects in the housing, health care, retail, commercial office and hospitality industries throughout North America - including projects in 45 of the 50 states, Canada, Mexico and the Caribbean Basin. The resulting reports and consulting services provided by Rainmaker have resulted in billions of dollars in new development. Our clients have included publicly-traded companies, privately-held companies, government bodies and not-for-profit organizations.

When Should You Be Talking To Rainmaker?

If you will be seeking construction financing from a third-party lender (or investor) with whom you do not already enjoy a previous underwriting relationship, then you need to be talking to Rainmaker. If you have insufficient equity or assets necessary to sustain a construction mortgage financing for a new construction project, then you need to be talking to Rainmaker about the alternatives. If you have doubts, Rainmaker is the firm to turn to when it's time to deal with them.