Creative Construction Financing Student Housing

[Marc Sanders]

Numbers work well for building a duplex on a site within 10 minute walk of a medical/dental school and 5 minute walk to two other private colleges. Do not have the 20% - 25% needed for conventional financing. Looking for ideas on how to get project funded. In a perfect world, my end game is owning the building without partners. Here's what I'm thinking so far: Private Source (most likely someone only interested in an ROI and doesn't want to be in the real estate business) agrees to fund the project, at the same time, giving me an option to purchase the building back at a specified point in the future (3-4 years) at a specified price (calculated by adding an annual 2% growth to the cost of construction). Private Source has exclusive rights to proceeds/disbursements up to 8% of initial cost of construction is reached each year (after which proceeds are split with me 50/50) and all right offs until I execute the option to purchase. In theory, all the Private Funding Source would have to do is deposit checks until I purchased the building four years down the road. I will utilize the income stream for the valuation used to purchase the property. In a perfect world, Private Source's annual return is at least 10% (8% from rent proceeds and 2% annual increase on the cost of construction). No boundaries... All thoughts or Ideas are welcomed!