	RAINMAKER MARKETING CORPORATION 281.537.1200

Non-Recourse Conduit Loans - Continued...

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Using a tenants-in-common fractional ownership syndication the developer can create enough equity (if the resulting syndication sales program is viewed by the investing-public as being particularly attractive and worthy of their patronage) to allow the developer to obviate some of the front-end fees typically charged by conduit lenders, reduce their total fees (negotiated) and/or reduce the interest rate of the resulting loan.
The developer may also use a condominium investment plan for a portion of the project where the result is an increase in financial investment leverage. For example, if a given condominium investment plan requires 10% of the project space plan, but provides more than 10% of the total capitalization of the resulting projects is said to create positive financial investment leverage for the benefits of the other construction risk pool participants. On the other hand, if the required space plan for the condominium investment plan requires 10% of the project space plan, but provides less than 10% of the total capitalization of the project, the plan is said to create negative financial investment leverage (and in most cases, the resulting transaction economics cannot be made to work for the developer). Condominium plans can create additional equity capitalization that can play a role in reducing the construction phase loan origination amount.

Due to changes in the institutional market (i.e.: the FannieMae/FreddieMac "meltdown" caused by our very own Congress), developers seeking take-out financing from a conduit should think twice, as this avenue can no longer be considered viable. A lack of accountability and viability means that financial scams are going to become more and more prevalent as schemers seek to take advantage of desperate entrepreneurs seeking to save their pet projects.

What's a course of action that might make sense?

Consider the following:

	Put more of your money in the deal; or
	Put more cash in the deal by selling a portion of your of your project to investors using a "stated yield" real estate syndication approach; or
	Put more cash in the deal by using a tax-advantaged investment product; or
	Put more cash in by raising more equity and take the dilution hit; or
	Put more cash in the deal by using a hard money loan to bridge you to a point where the take-out can be arranged.

Five more answers to the age-old problems that all entrepreneurs face. Get the facts and the assistance you need. Talk to a Rainmaker consultant today.

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.