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Rainmaker Marketing Corporation
provides senior housing developers with retirement
living project financing options. Most retirement living project
financing is based upon new construction projects. Rainmaker provides the
necessary transaction exposure for senior housing properties that are owned on a
fractional unit plan basis via the tenants-in-common
construction. This is approach is not a securities float - it is a sale of
fractional units through/by Rainmaker Marketing Corporation as a fractional
owner. Rainmaker undertakes the due diligence review for each project and
then purchases it using a fractional ownership agreement.
Here's how it all works...
For the sake of this example, we
will assume you are the developer and sponsor of a company that will own a
senior housing project that just so happens to be your first development
deal. You have computed the total development budget to be
$10,023,890. You wish to obtain enough equity to bridge the gap of an
assumed $7,500,000 construction loan. You intend to convert the
construction loan into a fully-amortized permanent loan on completion of the
construction phase. You own the project site in fee-simple title.
You have spent around $250,000 in cash and have a mortgage on the project site
that requires a monthly payment of $8,000. You have the real estate
related reports, market study, financial study, business plans, entitlements
report, etc.
Rainmaker reviews the package and
checks to make sure it is complete and makes sense (click
here for that list).
Rainmaker posts all of the
package in a secure directory and creates a syndication page for the project and
makes a business deal with you regarding the transaction's financial results of
operating and non-operating events.
Rainmaker submits business
proposal and you send us back a fractional ownership agreement based upon a
tenants-in-common ownership structure that will have up to 431 units
representing $10,000,000 in financing and leaving $23,890 to the
developer/sponsor to fund.
The object is to secure a total
of $2,500,000 in fractional unit sales - 100 units. After the 100 unit
threshold is met, the 331 units are sold off and the $7,500,000 in net proceeds
remains open and sales continue until no further interest is show by the market.
The project closes construction
financing because it has enough equity (the $2,500,000 already in the bag) and
commences construction. It takes the contractor 7 months to finish
building the new senior housing project. The entire time the project is
under construction, the syndication continues. To the degree the market
views the proposed sale plan as having sufficient reward for the business risks
being accepted, the interest in the issue may continue and create the demand for
continued syndication. The market works to create an orderly conclusion to
each syndication based upon the needs of the parties.
Rainmaker is the syndication, due
diligence and development consulting firm to turn to for answers to the
unexpected and solutions for the innovator in all of us.
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