Real Estate Development

  1. Stage 4: Project Financing and Capitalization
    1. Understanding the Capital Stack
      1. Senior Debt
        1. Loan Terms and Security
          1. Interest Rates
            1. Amortization
              1. Loan-to-Value Ratios
              2. Recourse vs. Non-Recourse
                1. Personal Guarantees
                2. Mezzanine Debt
                  1. Subordination and Intercreditor Agreements
                    1. Interest Rates and Terms
                      1. Equity Participation
                      2. Preferred Equity
                        1. Return Structures
                          1. Preferred Returns
                            1. Profit Participation
                            2. Control Rights
                            3. Common Equity
                              1. Ownership and Control
                                1. Voting Rights
                                  1. Management Control
                                  2. Return Expectations
                                2. Sources of Capital
                                  1. Debt Financing
                                    1. Commercial Banks
                                      1. Construction Loans
                                        1. Draw Schedules
                                          1. Interest Reserves
                                            1. Completion Guarantees
                                            2. Permanent Loans
                                              1. Take-Out Commitments
                                                1. Rate Locks
                                                2. Relationship Banking
                                                3. Life Insurance Companies
                                                  1. Long-Term Financing
                                                    1. Investment Criteria
                                                      1. Underwriting Standards
                                                      2. CMBS Lenders
                                                        1. Securitization Process
                                                          1. Loan Standards
                                                            1. Servicing Requirements
                                                            2. Government Agencies
                                                              1. HUD Programs
                                                                1. FHA Financing
                                                                  1. SBA Loans
                                                                    1. State and Local Programs
                                                                    2. Alternative Lenders
                                                                      1. Hard Money Lenders
                                                                        1. Private Debt Funds
                                                                      2. Equity Financing
                                                                        1. Private Investors and High-Net-Worth Individuals
                                                                          1. Syndication Structures
                                                                            1. Limited Partnerships
                                                                              1. Limited Liability Companies
                                                                              2. Investor Relations
                                                                              3. Real Estate Investment Trusts (REITs)
                                                                                1. Public vs. Private REITs
                                                                                  1. Investment Criteria
                                                                                    1. Partnership Structures
                                                                                    2. Private Equity Funds
                                                                                      1. Fund Structures
                                                                                        1. Investment Strategies
                                                                                          1. Return Expectations
                                                                                          2. Crowdfunding
                                                                                            1. Online Platforms
                                                                                              1. Regulatory Considerations
                                                                                                1. SEC Regulations
                                                                                                  1. Accredited Investors
                                                                                                  2. Marketing Restrictions
                                                                                                  3. Family Offices
                                                                                                    1. Pension Funds
                                                                                                      1. Sovereign Wealth Funds
                                                                                                    2. Financial Modeling and Analysis
                                                                                                      1. The Development Pro Forma
                                                                                                        1. Sources and Uses of Funds
                                                                                                          1. Land Acquisition
                                                                                                            1. Construction Costs
                                                                                                              1. Financing Costs
                                                                                                                1. Marketing and Leasing
                                                                                                                2. Hard Costs and Soft Costs
                                                                                                                  1. Construction Costs
                                                                                                                    1. Professional Fees
                                                                                                                      1. Permits and Approvals
                                                                                                                      2. Operating Income and Expense Projections
                                                                                                                        1. Rental Income
                                                                                                                          1. Operating Expenses
                                                                                                                            1. Capital Reserves
                                                                                                                            2. Cash Flow Analysis
                                                                                                                              1. Unlevered Cash Flow
                                                                                                                                1. Levered Cash Flow
                                                                                                                                  1. Sensitivity Analysis
                                                                                                                                2. Key Performance Metrics
                                                                                                                                  1. Net Present Value (NPV)
                                                                                                                                    1. Discount Rate Selection
                                                                                                                                      1. Terminal Value
                                                                                                                                      2. Internal Rate of Return (IRR)
                                                                                                                                        1. Project IRR
                                                                                                                                          1. Equity IRR
                                                                                                                                          2. Return on Cost (ROC)
                                                                                                                                            1. Equity Multiple
                                                                                                                                              1. Debt Service Coverage Ratio (DSCR)
                                                                                                                                                1. Loan-to-Value Ratio (LTV)
                                                                                                                                                  1. Loan-to-Cost Ratio (LTC)
                                                                                                                                                  2. Risk Analysis
                                                                                                                                                    1. Scenario Analysis
                                                                                                                                                      1. Monte Carlo Simulation
                                                                                                                                                        1. Break-Even Analysis
                                                                                                                                                      2. Securing Financing
                                                                                                                                                        1. Preparing the Loan Package
                                                                                                                                                          1. Project Summary
                                                                                                                                                            1. Executive Summary
                                                                                                                                                              1. Project Description
                                                                                                                                                              2. Financial Statements
                                                                                                                                                                1. Developer Financial Statements
                                                                                                                                                                  1. Project Pro Forma
                                                                                                                                                                  2. Market Studies
                                                                                                                                                                    1. Third-Party Reports
                                                                                                                                                                      1. Comparable Analysis
                                                                                                                                                                      2. Environmental Reports
                                                                                                                                                                      3. Loan Underwriting and Approval Process
                                                                                                                                                                        1. Lender Due Diligence
                                                                                                                                                                          1. Credit Analysis
                                                                                                                                                                            1. Market Review
                                                                                                                                                                              1. Project Feasibility
                                                                                                                                                                              2. Appraisal and Valuation
                                                                                                                                                                                1. As-Is Value
                                                                                                                                                                                  1. As-Complete Value
                                                                                                                                                                                    1. Income Approach
                                                                                                                                                                                      1. Sales Comparison Approach
                                                                                                                                                                                      2. Loan Committee Process
                                                                                                                                                                                      3. Loan Closing
                                                                                                                                                                                        1. Funding and Disbursement
                                                                                                                                                                                          1. Initial Funding
                                                                                                                                                                                            1. Draw Procedures
                                                                                                                                                                                              1. Inspection Requirements

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                                                                                                                                                                                        4. Stage 3: Entitlements and Government Approvals

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                                                                                                                                                                                        6. Stage 5: Design and Engineering