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Senior
housing developers continue to seek assisted living bridge loans and
mezzanine loans because the developers frequently underestimate the
amount of equity capital required to close escrow on a construction
loan (especially one where HUD is insuring the assisted living prime
construction financing per a Section
232 application). This has led many assisted living
developers to seek bridge loans (which are in fact really mezzanine
loans).
What's
the difference?
A bridge
loan is typically a short-term loan issued for a commercial
income-producing property that is already in operation and is a
temporary measure while the buyer acquires financing on more
favorable terms.
A mezzanine
loan is used to replace equity in a new construction
program. Mezzanine loans a very pricey and can rarely be made
to work because servicing these loans frequently requires more
working capital - something the developer does not have.
Rainmaker
Marketing Corporation (and
through our affiliate) offers an alternative equity financing
scenario that:
-
may
allow the developer to obtain a construction mortgage financing
loan on a non-recourse basis without having to go through the
interminable HUD application process; and
-
may
allow the developer to withdraw the developer's seed capital
investment prior to completion of construction; and
-
may
allow the developer to forgo the bridge loan (or mezzanine loan
as the case may be) altogether while significantly increasing
the developer's financial investment leverage.
This
is possible because most developers have forgotten the fundamentals
of commercial real estate development financing and the utility
value of fractional tenants-in-common real estate syndications; a
method that can produce at-risk equity contributions as early as the
pre-construction phase.
You
can't get that kind of equity with a condominium plan...
You
can't get that kind of equity from a tax credit...
You
can't get that kind of equity from a mezzanine or bridge loan...
Time
to wake up because the opportunity in senior housing is not going to
moderate any time soon. While it is certain that some markets
have reached saturation, there are plenty of markets where there is
strong demand for new construction and you need to be poised to take
advantage of it.
Enter
your relationship with Rainmaker Marketing Corporation...
Rainmaker
specializes in senior housing facility due diligence and development
financing (for all asset classes including assisted living).
Rainmaker Marketing Corporation utilizes a structured finance
approach that creates higher levels of financial investment leverage
than can otherwise be obtained for the benefit of the investors and
the developer.
Continued
on following page...
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