Looking for Equity in exchange for ownership

[Sam Borgia]

Hello all-

I figured I would check out this site for a larger reach. 

I am a developer in the Northeast with a shovel-ready 130 bed Assisted Living/Memory Care Facility. It is zoned and approved and 3 independent market studies have been conducted and are all positive. Operator, architects, builders, engineers are in place and already under contract. Also, very important, the debt is secured and under contract. 

I am looking for a $3MM equity piece for land acquisition and some minor pre-development. In exchange for this equity, I will relinquish 10% ownership of the business. The building will take 12-16 months to build and stabilized at the 3 year mark.

Please message me with any interest and spread the word! 

Thanks,

Sam

[Don Konipol]

The problem with the OP's analysis (or one of many problems) is that he is regarding a loan the project is taking on as "his equity".  If he actually invested $29 M in a $32M project, then he would be entitled to 90% ownership, plus perhaps an additional "promoter's fee".  However, just because the outside investors invest 10% of the total cost, does not mean they only get 10% ownership - they are also being placed behind, presumably, $29M of debt.  The real issue is what percent of the EQUITY they are providing.  If it's 100%, and the project is sound, with a low - medium risk and high return (which is quite a leap) based on the ew details we have, then they will require 100% of the equity less a small (5-10%)  "promote" for the promoter/syndicator/developer.  

Issues here include

1- Promoter's lack of experience

2- Promoter's lack of a track record

3- Promoter's lack of knowledge of syndication

4- High risk development

5- Not a professional presentation

We used to have a lot o these types on BP (in the "old" days), where a poster would post some incorrect/undoable/false assumption narrative, be corrected by people with experience, and double down by insisting he is correct.  Usually followed by either a snotty comment or sarcastic "thank you".  We don't see that much anymore.