Funding a Project w/ a Municipal Bond?

[Peter Ricca]

Hi all -- I was at a networking event and I met a guy that is a broker for Muni Bond real estate project funding. 

Curious if anyone has done this or has any knowledge on it? Apparently it' not well known, but effective. 

The way he explained it, you get a municipality to issue a bond to fund your commercial deal (either building or improving apartment complexes for example). You supposedly get tax advantages and lower than market interest rates. He puts the deal together and lines up private equity that will immediately purchase the bond after it closes. 

The cons I could think of were: 

- Slow/no "pre-apporval" so you'd have to have the deal tied up long enough to get the funding and close it

- Seems like there are heavy fee structures built in

Anyone every do this or have any experience? 

- Peter