Senior Apartment Financing; Construction & Permanent Mortgage Financing - Equity Syndication Services

Whether the need is for senior apartments financing, entry-fee independent living facility financing or other forms of senior housing, Rainmaker Marketing Corporation provides a senior housing developers with a comprehensive funding solution for a variety of housing development  financing programs (including senior apartments financing).

Pre-construction phase financing and construction phase financing for senior apartments (typically referred to in the senior housing industry as "independent living facilities" or "ILFs") often entails the creation of a capital funding proposal that incorporates statutory entitlements (investment incentives) in a two-stage funding approach to the project for the benefit of the developer's account.

To understand this better, let's work with a fictitious example:

• A developer of senior housing is seeking construction phase financing for a $10,000,000 independent living rental development project.  The developer does NOT have as yet a construction loan commitment.

• Because there is no pre-existing bankable construction loan commitment, the syndication is considered a pre-construction phase syndication.

• The syndicate must raise at least $2,500,000 even though the developer believes he can get a construction loan for up to $8,000,000 of the $10,000,000 total project development budget.

• The syndication is then undertaken for an initial 90-day marketing period.  For the sake of argument, we will assume that the syndication results in $2,500,000 in financing being raised via fractional real estate ownership interests being sold to individual investors for $25,000.00 per unit.

• Because the syndication program hit the minimum sales threshold, the developer is required to close with Rainmaker.  The majority of the financing is placed in escrow and once the developer has the construction loan, it is then released.

• Because the syndication program was successful a "follow-on" syndication is automatically triggered.  This "new" syndication is for an amount equal to the total development cost plus the minimum profit threshold agreed upon by the developer and Rainmaker at the outset.  The new syndication continues over the course of the development of the project as long as there is no consecutive 90 day period where there are no syndicate sales (if this happens, the syndicate is wound up based on the sales "in hand"), thus giving the developer the opportunity to have the proposed project be funded with all equity contributions.  If a total sell-out is achieved, then the new syndicate members have no bankruptcy risk or foreclosure risk to contend with until additional assets are acquired (then the risks are based upon the capitalization structure of the resulting business deal).

To find out more about our funding program alternatives, contact a Rainmaker Marketing Corporation consultant today.  The first consultation is free.