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11-17-2022, 04:33 PM #1
- Join Date
- Oct 2022
- Posts
- 23
How to Convert $37M into $450M For A Development Project
How to Convert $37M into $450M For A Development Project
Current Project: $450M development. Client put in $1M, his partner has $36M. They still need ~$415M. The client’s plan was to put ALL their money into the land, phase 1.
Then find financing for the 2nd & 3rd phase.
Mistake #1: Putting all their money into the land first.
You don’t ever want to spend your CASH. Definitely not ALL of it.
That’s your LIFE LINE.
You want to hedge it.
What does that mean?
You hedge ur money against ur assets 2 convert into more CASH.
Since this group doesn’t have the assets to do this, that’s where my lender becomes incredibly useful.
He takes the $37M & converts it into $150M plus, buy hedging against his assets.
This way the client can do what they want to do and still have $120M on a draw-down left over to get everything else going.
Now - they don’t have to go shopping around giving out crazy equity for cash, for no reason
B/C they were just going to put it ALL into the land anyway.
In that scenario they just GAVE away the house.
They'll hardly end up with anything, when it’s all said and done.
INSTEAD
They become joint venture partners.
My lender hedges the money they have.
Now they have $150M+ to start, immediately!
Next, my lender can hedge THE REST of the money inside the drawdown to complete the rest of the $400M-$500M build out.
What lender do you know does this FOR ANY borrowers? 🤯
Def not your hedgfunds, investment banks, institutional and traditional lenders- forgetabout it
This is why the private sector is INSANELY valuable for groups doing any kind of development, acquisition, M/A, expansion, invention, commodity deal, cannabis, gov’t contract, etc.
They can hedge money against their own assets to create MORE money ANYTIME they need to for any of their clients.
This will SAVE This Client…
• A TON of Time
• A Ton of $$$
•*& Ton More equity
Then, they tailor-make the terms & conditions for entire project Exactly how they need it so that...
1) The client's money is protected
2) The project is protected
3) They have lender w/ decades of experience, assets, equity & cash behind them to WEATHER any storm coming
4) & The experience to help in any part of the project, if need be
5) The Project is Incredible successful because it has the perfect blueprint for success and the right capital to make it happen
You can start making returns a LOT faster for you or your investors if you have a PPM/Fund.
Versus mos & mos of trying to raise more capital to find a lender(s) to fund the rest of the project to EVEN start.
When you do like I shared above ur investors will want to keep rolling with you on your next project & your next & your...You get the point
You’ll have people begging to join you
OR don't raise any more CAP & keep rolling the earnings into the next project
How’s that song go…“thissss is hooww we doooo it, this is how we do it! ;-)
This is how everyone wins.
Smaller project? No problem. Same process. Same results.
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👋🏼 Hi, I’m Kristina. I represent private lenders & risk mitigation experts who offer tailor-made capital so you can be massively successful.
Have a question? Post below or DM me happy to see how I can help.
www.prosperityfi.com
#capital #privatelenders #privateequity
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