CCRC Consultants - Continued...

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The senior housing industry offers the entry-fee housing developer with a unique opportunity - the sale of fee-simple interests and entry-fee estate interests for the same living unit.  That's right, you can sell the same living unit twice.  This creates the opportunity for the developer to divide the project into two (2) distinct development phases and retire all the construction debt in the first phase, thus providing the second phase construction lender with a much higher level of collateral support (and commercial banks are never satisfied with the collateral pool) than can otherwise be contrived.

Take a moment and consider this impact: you develop the first phase and pay off all debt.  You develop the second phase and allow the debt to start to pile up, while you pocket entry fees.  The project is completed and has a resulting debt/equity ratio that is much stronger.  This makes the resulting sale of the project a huge capital gain for the savvy retirement housing developer.  This means the payback period for the developer/sponsor is moved closer to the front-end of the development spectrum, thus dramatically increasing the developer's internal rate of return on the developer's capital investment.

This gives the sponsor options that, heretofore; were not possible to consider.  Now add in the commercial real estate syndication of fractionalized real property interests and things get really interesting.  If the syndication is in fact successful and closes at the minimum sales level (always $5,000,000) then it will continue to be listed and offered until it is sold out.  The sell-out results in the developer being able to retire all of the construction debt (including mezzanine loans, bridge loans and hard money loans, if needs be) and eliminating the investor's exposure to bankruptcy risk and foreclosure risk.  

When was the last time you saw a higher-yielding investment that insulated the owners from bankruptcy risk and foreclosure risk?  Talk to an expert at Rainmaker and see what can be done for your project opportunity.

About Rainmaker...

Rainmaker Marketing Corporation is the brainchild of Clint Lovell, a seasoned business finance consultant with more than 20 years experience.  Rainmaker is a B2B consulting firm that was incorporated in 1994 for the purposes of providing market feasibility studies to businesses seeking capital financing in the commercial and institutional markets.  Today, Rainmaker Marketing Corporation provides a comprehensive array of due diligence documentation services for most major industry groups.  Rainmaker Marketing Corporation also provides syndication management services for fractional commercial real estate syndicates that can provide mezzanine gap funding for income-producing commercial property developments as early as the pre-construction phase.  Rainmaker Marketing Corporation serves clients throughout North America and the Caribbean Basin.

Rainmaker Marketing Corporation, Inc.

15519 Dawnbrook Drive, Houston, Texas 77068

281.537.1200  

consultants@rainmakermarketing.com