Deveopment Loans & J/V

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Ertnog

20 Posts

Posted - 06/10/2008 : 2:54:47 PM

Are there any real lenders that are doing good quality development loans? Please, only direct lenders (respectfully) respond. No front end fee deals as well. Thanks for your understanding.

coopercash

2679 Posts

Posted - 06/11/2008 : 04:16:19 AM

Charles: while I respect your quest for a "Developer-friendly" direct lender who will not be applying any fees for project analysis, discovery and due diligence I can only wish you the best of luck... that profile simply does not exist!

If you have a quality project involving an accomplished developer and the Exit Strategy can be fully supported with independent produced data inclusive of evidence of pre-sales/pre-leasing interest then projects are being currently approved and funded.

My investor group comprises three who have continuing appetites for these types of opportunity. In general terms your client will be expected to have anywhere from 20% - 30%+ of their own "skin" in the game. There is an exception... there is a Program that can provide up to 100% funding of approved developments but the developer has to have excellent liquidity and a strong balance sheet in addition to a willingness to HIRE Union Labor across all Trades.

Now to those "pesky" fees and costs! The project is initially reviewed. If the investor believes that BASED ON APPLICANT PROVIDED INFORMATION, the project can be funded then an LOI will be issued with a preliminary Term Sheet. At that point the applicant will pay for all costs associated with the underwriting research process inclusive of travel to site by investor representatives.

Those fees could be as little as $10K and they could be as much as $75K. I want to make it VERY clear that these costs are NOT refundable to the client if there are any negative discoveries that cannot be successfully mitigated = loan cannot be funded.

I would be willing to take a look at one of your projects for which purpose ALL that I require initially is a concise Executive Summary of not more than 10-15 pages.

joe313

578 Posts

Posted - 06/11/2008 : 07:08:59 AM

Charles,

I'm a hard money lender and I lend on development deals. Our borrowers always have to cover our due diligence costs up front, then our fees are paid at loan closing. If that will work for you, feel free to contact me.

ddmortgage

266 Posts

Posted - 06/11/2008 : 07:15:41 AM

I think coopercash said it right!

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