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Due Diligence Documentation "Exhibit F-8"
Capital Funding Plan Proposal
The following notes
are provided pertaining to this exhibit:
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What: the
Capital Funding Plan Proposal is the document that describes:
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How the
Developer intends to fund the proposed Project's capital funding
requirements; and
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How the
Developer is proposing to divide the profits between the Developer and
the Syndicate participants; and
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How the
Developer intends to undertake the management of the development
program; and
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Who the key
participants, vendors and contractors are and what their relative
experience is with respect to the proposed development program; and
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The reporting
and communication plan of the Developer.
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When: this
proposal is created in tandem with the Project Pro Forma Financial
Presentation (see Exhibit F-5) at the beginning of the pre-construction
phase and is updated, from time to time, over the course of the
pre-construction phase.
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Why: the
Project Capital Funding Plan Proposal is the central "business
deal" document that:
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Provides
Project Schedule updates and disclosures; and
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Provides
information on the Project Development Team (all key consultants and
vendors to the proposed Project); and
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Provides a
detailed description of the Capital Finance Plan elements (i.e.:
entitlements, order of funding, order of retirement and distribution
preferences.); and
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Provides
prospective Syndication purchasers with information as to the governance
and the expected future cash flows the Syndication will receive.
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Where: the
Capital Funding Plan Proposal is typically prepared by the Developer and/or
the Development Manager in consultation with the project consultants and the
Design/Builder.
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How: the
Developer maintains and issues modifications to the Capital Funding Plan
Proposal on an ongoing basis as more and more information is collected or
otherwise made available. This document is in electronic file format.
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What's important: the
capital funding plan is one of the most critical documents in the entire due
diligence presentation because:
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This is the
one document most frequently consulted by lenders and commercial real
estate investors in order to gauge their interest in a particular
project proposal; and
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This is the
document that demonstrates the proposed project's order of funding,
order of retirement and a summary of the key elements of the proposed
project.
For more information, please contact us at 832.659.5009 or via email at info@realestateplays.com.
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