GO Zone Bonus Depreciation Tax-Advantaged Syndication Deals - How it's done...

Rainmaker's GO Zone tax-advantaged investment syndication consulting program offers developers and development-stage institutional investors the opportunity to cut to the meat of the real estate development finance matter in the drive for high-yield returns. Rainmaker has a focused approach for structuring these transactions that can drastically reduce the developer's (or development-stage investor's) capital contributions while enhancing the equity component of the capitalization structure - the deal gets stronger while your carry in the deal continues to shrink. The GO Zone gives us the tools the industry has been waiting for and Rainmaker has the engine for you to make it all work for your next institutional-investment sized project.

The keys to unlocking these transaction opportunities lie in some basic principles you need to understand:

The due diligence. You really have to document these deals well and stay on top of the process all the way thru the negotiations phase and getting the syndications closed out on terms everybody can live with. If you haven't done one of these types of structured finance deals before, then you need to consider retaining expert help. They are doing smart deals, not just any deals. TIP: Rainmaker uses a smart and commercially viable alternative structured finance approach that can be adapted to all classes of commercial real estate development projects that is fully supported in comprehensive due diligence reporting.
The tax credits. There is no recapture risk with the GO Zone Bonus Depreciation Expense Allowance. There is no vesting period either, so the year the asset is placed in service, you get to take the full 50% bonus depreciation expense provided you meet the Placed-In-Service deadline. This means the potential for syndication has an extremely bright future in the markets because the major risks are removed from the capture picture. You can expect a warm reception when it comes to having them syndicated. Rainmaker has the plan and structured finance savvy to get you there. TIP: read the GO Zone Act - it's your personal roadmap to millions of profits.
Layering. Layering the credits available in some areas of the GO Zone can result in a project being literally over-subscribed. The excess funds are used to pay down the tax credit investor's basis in the deal or roll it into another transaction or project phase. the real economic homerun in these deals comes when you can layer multiple tax credit programs in to create the extra capital. TIP: Focus on deals in areas that are empowerment zones, renewal zones, or NMTC zones within the GO Zone itself and you will be really in the money.
Equity LP's. The ready acceptable format for completing a private placement offering for your project is going to involve a Equity Limited Partnership type of income-trust structure. This means you get your full developer fee and then your income rights in the partnership. No premiums or near-term income conflict-of-interest arrangements can be accommodated. Tip: Rainmaker is a specialist in equity-LP based structured finance transaction constructs. We'll get you there with a structure you will really like and the investment bankers can really sell.

Here's a working example of what you can do with this type of alternative structured finance program approach that Rainmaker suggests:

Project Type: Senior Housing
Project Direct Development Cost: $117 Million
Project Non-Finance Carrying Costs: $8 Million
Total Project (Non-Finance) Budget: $125 Million
Land Budget: $11 Million
Front-End Costs: $470,400
Syndicated Tax Credits: $45 Million
Pass-Thru Passive Income Offset: $10 Million
Entry Fees: $80 Million
Total Capital Sources: $135 Million

In this example, the development fee of approximately $6 million gross is being retained by the Developer and not being pledged to finance the project. In addition, the developer is the general partner of the equity-LP and retains the full 90% equity earn-out right based solely on performance. If everything goes according to plan, the developer will control a projected income stream valued in excess of $30 million (net present value of 10-year stream) for investing $470,000. What's a few hundred thousand against thirty million worth to you?

We knew you'd be pleased with the extraordinary degree of financial leverage this approach creates. If you want someone to help you try your hand at it as either a developer or development-stage institutional investor, why not contact Rainmaker today to discuss your aspirations? Welcome to the 21st Century world of commercial real estate development finance.

Company Profile

Rainmaker Marketing Corporation is a consulting firm that focuses on providing the due diligence services on a business to business (B2B) basis. Rainmaker Marketing Corporation can trace its roots back to the late '80's and was formerly incorporated in 1994.

Over the years, Rainmaker Marketing Corporation consultants have completed hundreds of assignments across the United States (43 states) and offshore. The completion of RMC's work directly lead to over $1.5 billion in successful project outcomes.

Take a few minutes and learn more about RMC. This website is designed to provide a wealth of planning information pertaining to the capitalization, operations, and organizational program tenets today's savvy entrepreneurial company must embrace for continued growth and success...

Contact Information

Our business hours are from 9:00 a.m. to 5:00 p.m. Monday thru Friday (CST)

Telephone:: 281-537-1200
Postal address:: 15519 Dawnbrook Drive, Houston, Texas 77068
Electronic mail:: General Information & Consulting Queries: clint@rainmakermarketing.com