EB-5 Sanctioned Private Placement Offerings - Transaction Structures

The typical transaction is structured as a limited partnership.  There are two (2) general partners in the deal.  The developer (or owner/operator of the project, as the case may be) is the operating general partner.  An entity nominated by Rainmaker Marketing Corporation is the financial general partner.  The limited partners are these general partner entities and the foreign nationals who are investing their money pursuant to the EB-5 requirements.  Only the limited partnership structure can be used as the language of the EB-5 program is clear that limited partnership participation counts as active business management.  If you do not want the foreign nationals as active partners in your hair all the time then we have to do this as a private placement offering for a limited partnership.

The typical transaction is a five-year deal.  At the end of the fifth year, the owner/operator refinances the deal and buys out the financial general partner's interest and the limited partner interests.  The foreign nationals receive 110% of their investment basis (meaning an imputed 2.00% per annum interest rate on their money, but that interest payout has to be structured to happen over the 5-year operating period to ensure there are no compliance issues) and they exit the transaction.

The financial general partner receives:

The financial general partner's interest is valued based upon the income-approach for the property, capitalizing the projected forward 12-month EBITDA cash flows using a capitalization rate equal to 175% of the current NYSE Prime Rate as of the date of valuation, or 8.5%, whichever is higher.  This program approach leaves the vast majority of the upside future profits of the transaction in your hands if you play ball and follow the rules.

For the purposes of the transaction, cash flows are assumed to be all excess cash proceeds generated from operating activities and non-operating activities of the partnership.  Significant other terms and conditions may apply based upon the transaction, current capital market conditions and risk factors that are unique to the transaction in terms of their potential impact in our sole judgment.

All terms and conditions of joint-venture participation programs and opportunities are subject to change or termination with or without prior notice.

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