Home  |  About Us  |  Search  | FAQ  | Contact Us
Housing Development
Obtaining Capital
Instant Site Analysis
Competition Surveys
Due Diligence Services
Pro Forma Statements
Syndication Programs
Capital Funding Plans
Senior Housing
Get a Negotiator
Foreclosure Financing
DIP Loans
Priming Lien Loans
Tax Credit Financing
SEO Internet Marketing
EB-5 Private Placements
Past Assignments
Table of Contents		  

Syndications are the real opportunity in a recession that can beat the odds and senior housing is the industry to do it with...

 

  

Housing Feasibility Studies - Non-Recourse Financing Due Diligence...

Most housing feasibility studies are actually market feasibility studies, though the term is also used interchangeably to also describe financial feasibility studies in addition to the market feasibility studies.  

Rainmaker Marketing Corporation's approach is completely focused upon the capital funding cycle and producing non-recourse financing without having to rely upon the time-consuming and inefficient federal loan insurance (FHA/HUD Section 221) program.  Our approach has the goal of non-recourse financing as early as the project pre-construction phase so the developer may receive a refund of the developer's "seed capital" investment.  The reasoning is simple: financing that requires joint and several recourse, a cross-default pledge and/or cross-collateralization pledge effectively prevents the developer from undertaking the classic "bootstrap rollout" by continuously re-leveraging the developer's seed capital.  To make this work, Rainmaker Marketing Corporation manages the due diligence process with the near-term goal of completing a zero coupon fractional commercial real estate syndication, the sufficiency of which allows the developer to negotiate the construction mortgage financing loan with a commercial bank and obtain a waiver of the cross pledges and a waiver of the recourse provisions.

A housing market feasibility study covers just what it says - the market.  Click here and learn more about market feasibility studies.

A financial feasibility study cannot be undertaken (legitimately) without reliance upon the findings of the completed housing market feasibility study because:

the expected revenue stream is defined in the market study; and

the expected operating occupancy of the project is defined in the market study; and

the required property staffing ratios are based upon the market study findings; and

the required property services and amenities are based upon the findings of the market study.

In short, the financial feasibility study really can't get off the ground (other than general "boxcar numbers") until the market study is complete and in-hand.  The ultimate purpose of the financial feasibility study is to define the amount of equity capitalization the proposed project will require in order for the developer to access a non-recourse project development and construction loan.  The equity that can be raised is subject to certain considerations, namely:

The investment's hurdle rate - the rate of return based upon the projected cash flows and the division of these cash flows between the developer (on the one hand) and the syndicate investors (in the aggregate, on the other hand).  The hurdle rate is the discount rate that will be applied to future cash flows to make the present value of those future cash flows equal to the equity contributions.

The hurdle rate may fluctuate based upon the division and timing of the division of the cash flows between the parties.

The division of cash flows may be based upon the equity securities ownership rights, the rights of the holders of fractional real estate syndication ownership interests, or a contractual mechanism outside of these two (2) elementary approaches.

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

© Copyright, 2009 Rainmaker Marketing Corporation, Inc.  All rights reserved.

  

A Few Words on Change...

Clint Lovell, the Managing Principal of Rainmaker, has written a book on the subject of capitalism and the creation of a new economic society that ends our reliance on taxation and retires all of our national debt.  The book is called The Fix and you can order an advance copy now at www.the fixbookstore.com.  Order today and we'll pay your shipping, saving you some real change. 

What's New...

Read our latest whitepaper on capitalization strategies and commercial real estate syndications that provide developers with a new arsenal of capital finance weapons they can deploy in the middle of this recession.  Click here and download the whitepaper free! 

 
Home  |  About Us  |  Search  | FAQ  | Contact Us