Once-in-lifetime opportunity

rookie

All,
There`s a proposal to us investors to build a $28 million town center.  An older person giving three mid-30s men the opportunity to build this town center.  It has the backing of the city, mayor, and the economic development council.  This will be the city`s downtown.  Here are the details:
Company A (older person) will have 30%
Company B (group of 3-stoogies) will have the 70%
There are three (3) phases to this project
After dicussing the group/LLC formation with the accountant, he recommended one entity will have general partnership to carry (1%) to protect the project in case there`s a law suit; another entity will have the Company A; and the other will be Company B (3-stoogies).
Here are my questions:
1.  Can we use SBA loans for each phase, conventional loan, or hard money loans?  what the advantages and disadvantages?
2.  Is the accountant on the money as far as the strategy for forming 3 different entities?
3.  We`ll be meeting/interviewing the key players (i.e., construction company, architect, real estate attorney/accountant, and property management companies.  What questions should we ask.
The three partners will follow the lead of the older person.  Any assistance will be greatly appreciated.

innovate

This is a very complex project which requires very detailed legal arrangements.  You will need more than an SBA loan for a project at this capacity.  All investors on the table ought to get his/her own attorney for his/her personal investment protection.  A development at this capacity may end up in a litigation, whether it be from a contractor, or an employee.......or misunderstanding of the contract...... you may also need a strategic planner on the table....
innovate11/10/2007 11:46 AM

Loans2go

Hello Rookie
 
This is not as complex as the other make it out if you are using the right consultants.There will be lot sof attys involved, however, the structuring of it can be very simple. My firm, Cascade, handles deals $10 mil up to Billions with vaious different financing structures in place. Please call me and I would be happy to answer your questions and assist you in the finnancing structure.  Wendy, Commercial Consultant, 941-756-4750 [email protected]
 

rookie

Thanks for all your replies.  This is moving rapidly after beind idle for couple years due to the city`s effort in securing financing (bond).  The entities are beind form and finalize.  The platting will be submitted for approval (approx 60 days).  Once the platting and financing are done, groundbreaking will be in Apr/May 2008.
 
Financing:
we`re looking at ALL possibilities for financing.  I have some experience as a loan officer in Hawaii and Vegas during the real estate boom.  The partners` FICO average is 775.  We`ll be looking at the following:
banks:  WAMU, BofA, etc
hard-money loans ONLY if conventional loans are not available
 
Real Estate attorneys:
Is there anything in particular to point out while discussing matters with the attorney
 
CPA firm
The accountant is forming the separate entities.  I asked the accountant how and when the partners should start the compensation for partner, and he advised to have the managing partner decide and put it in the by-laws.
 
Architect:
There are several architect firms that specializes in retail and office construction that we received estimates from.
 
Engineer:
We also received estimates from various firms.
 
General contractor:
Will it be helpful to select a team of architect firm and general contractor that worked together on numerous projects rather than selecting that NEVER worked together but have better pricing?
 
Again, thanks for all your replies.
rookie11/13/2007 9:23 AM

Loans2go

The financing of the JV can be many. The major banks can be beat with more traditional comm lenders and volume brokers. Private investors are also a great source as they have often funded entire deals versus just the equity and very favoraable terms.  I can get you quotes if you give me some more details and how much$$ the partners will be putting into the deal, time frame of construction, equity infusion, etc. We really need to talk directly on this and I can give you more info. [email protected] 941-756-4750