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coopercash
2714 Posts |
 Posted - 09/21/2007 : 11:12:11 AM
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Many of you will have already read my "regular" posting titled "HEDGE FUND 101". Now it's time to get into the specifics of what is available from the Fund who has engaged me
to develop Broker relationships on a nationwide basis.
First of all, the Fund has $1-billion in vested capital to put to work through the course of 2008. My function is to source viable opportunities, pre-screen for suitability and present to the Fund Group for their consideration.
I am therefore inviting YOU to advise me of opportunities that if accepted and funded will enable you to receive anywhere from 0.50% to 1.50% of provided financing!
Deal size: Minimum $5-million up to $250-million. (more by exception).
Lending territory: USA is the primary footprint. Secondary footprint includes Central America (Costa Rica, Belize, Panama and Mexico), Western Caribbean (Dominican Republic, Turks & Caicos, Bahamas, British and American Virgin Islands, and by exception Jamaica. Secondary footprint deals must have a minimum loan size of $15-million.
Opportunities in other foreign countries considered on a case by case basis with a minimum loan of $25-million supported by adequate Bank Guarantees or secured by assets within the USA.
Types of deal: Commercial, mixed used and residential real estate developments and prefer new projects from ground up...ALL ENTITELEMENTS, PERMITS AND APPROVALS MUST BE IN PLACE; Purchase financing for: "Flagged" hotels including existing properties that will become "flagged" as a loan condition; Shopping Centers; Major entertainments complexes; Office condos and business parks. Also, the Fund will consider most types of MAINSTREAM energy-related opportunities including coal, anthractite, oil, gas, precious metals and minerals. (Alternative, "prototype" and R & D stage energy deals will not be eligible).
One of the Fund Divisions will also consider taking joint venture/equity participations in companies that are BEYOND the "seed" and early stages of development and require $10-million and up for serious "pedal-to-the-metal" expansion/acquisition capital. These companies MUST be currently profitable, with rapid growth and profits potential and can be in anything from low-tech to high-tech.
INITIAL PRESENTATION OF OPPORTUNITIES: The ONLY document I require in the first instance is a well written EXECUTIVE SUMMARY of not more than 7-pages. This Summary to provide key info regarding the project and it's location, required loan amount, use of funds, how much capital has been (is available) from the Principals to invest in the project, and an Exit Strategy that will detail how the loan is to be repaid. Also required, resumes of the Principals and their competency to develop/manage/sell/operate the project. A short-form Personal Financial Statement may be included (optional).
If that Executive Summary inspires potential interest, the next step will be the client's signature on a FEE AGREEMENT with non-circumvent condition which also includes an Addendum referencing and confirming your fee if the deal is funded.
That will directly lead to a conference call between your client Principal and the Chief Funding Officer. (You participate in that call as well).
That call is VITALLY IMPORTANT in developing the interest of the CFO so your client needs to be "on point" and ready to respond to a diverse set of questions.
The CFO, if still wishing to pursue the oppportunity will then advise "subject to" rates, terms and fees which, if acceptable to the client, will lead to the issue of a Terms Sheet, conditions and Letter of Interest.
Client has 36-hours in which to review, consult with his/her attorney if necessary, and acept the LoI, sign and return along with a negotiated due diligence fee which is HELD BY THE FUNDS ADVISED ATTORNEY.
The nature and extent of due diligence varies deal-by-deal. It might take two weeks and it might take 45 days. At which point the Fund will issue a LoC for signature and return by the client. Will there be a "Commitment Fee"? That decision is again subject to case-by-case and definitely WILL be required on ANY deal located outside of the USA.
Once the LoC is signed and returned a "clear-to-close" condition has been created which will typically result in final funding within 7-days.
WILL THE FUND MANAGER ACCEPT EXISTING APPRAISALS, ENVIRONMENTAL AND GEOLOGIC REPORTS?
Typically, if such reports are not older than 45-days and are provided by recognized professionals with acceptable credentials they will typically be accepted.
WHAT IS THE MAXIMUM AMOUNT OF FUNDING THAT CAN BE PROVIDED? On debt-based financing up to 80% of project cost. When the Fund looks at a debt/equity mix maybe up to 60% debt and up to 20% equity. In some cases, cross-collateralization of clients other assets may reduce the CASH amount required by the client.
So, now you know how to present a deal for Fund consideration and PLEASE do not initially provide me with more than the requested Executive Summary!
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Scrooge McDuck
8715 Posts |
Posted - 10/12/2007 : 2:49:00 PM
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| have you done a lot of b&bs? |
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coopercash
2714 Posts |
Posted - 10/13/2007 : 10:36:14 AM
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Andrew, over the past eight years Rick Newman has handled close to 200 B & B transactions.
Last year I contributed seven deals (five got funded) and so far this year I have secured four deals actually closed and funded and another six failed to make the grade either because the deal was "upside down" or because the clients believed in the 95% LTV "tooth fairy"! |
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clarenceworley
4186 Posts |
Posted - 01/08/2008 : 11:11:51 AM
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| I had a commercial loan inquiry today from a friend and frankly do not know where to begin: a property with a bank anchor tenant, and 6 new luxury condos above it. 3.8 million asking price. What questions should I ask to place a commercial deal? Am I better off simply referring my client to an experienced commercial broker? |
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fred333
20 Posts |
Posted - 01/08/2008 : 11:28:23 AM
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| I would say pass it on to a professional. |
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