The most normal funding structure for property development projects in a grouping of equity contribution and debt finance. Some types of equity are needed from the developer as a deposit to the lender for financing the deal. It is not normal for developers to fund their projects completely from their own cash stores. Indeed, for reducing risk, developers generally find out equity participation from resources other than their own cash reserves or other benefits. A large variety of strategies subsist to attract equity sources to spend and participate in the real estate development project. Knowing how and where to get secure equity contribution can be the difference between financing and not succeeding to finance a capable real estate development project in today’s market.
There are different key elements that are essential for project funding, such as proper location, appropriate design, strategic development plan, possible financial pro forma, possible market study, successful marketing or sales plan, tactical deployment strategy, complete operations strategy, expertise of the expansion team, and others.
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