My partner and I are in the process of planning for a Condo Conversion project in the Hamilton or surrounding area. We`ve just completed detailed financials based on a scenario of a 30 unit apartment building and are currently writing our business plan. Based on the completed financials, we know how much funds we need to raise and are in the process of figuring out how we will obtain these funds. We`ve short-listed potential money investors but are also looking to see what other available sources there are.
I came across Mezzanine Loans yesterday and it seems that this may be a viable avenue to look into. From my understanding so far, these types of loans are utilized by developers to acquire property and/or secure construction financing for development projects. So I`m wondering if anyone has any further knowledge with Mezzanine Loans or better yet any experience with these types of loans.
Also, we`re wondering how much of a return we should offer to potential JV silent partners if we were to use this avenue to obtain financing for our project. Based on a 30 unit we need to raise 1 mil and a 20 unit 800K. We are thinking of structuring the return based on the invested capital amount. For example: X% on 500K and above, X% between 200-500K, X% between 100-200K, etc... What would be a reasonable rate of return to offer based on such a structure?
Any feedback would be greatly appreciated!
Thanks so much!
Joe
I came across Mezzanine Loans yesterday and it seems that this may be a viable avenue to look into. From my understanding so far, these types of loans are utilized by developers to acquire property and/or secure construction financing for development projects. So I`m wondering if anyone has any further knowledge with Mezzanine Loans or better yet any experience with these types of loans.
Also, we`re wondering how much of a return we should offer to potential JV silent partners if we were to use this avenue to obtain financing for our project. Based on a 30 unit we need to raise 1 mil and a 20 unit 800K. We are thinking of structuring the return based on the invested capital amount. For example: X% on 500K and above, X% between 200-500K, X% between 100-200K, etc... What would be a reasonable rate of return to offer based on such a structure?
Any feedback would be greatly appreciated!
Thanks so much!
Joe