All Forum Posts by: Nadia Jones

Also posted in Getting Started Forum, but figured multifamily category may also generate some responses...so posting here as well. Thanks in advance for sharing your expertise!

I'm currently evaluating whether to go with a Fund Model instead of a traditional JV for an upcoming multifamily project, I will be working as a developer looking to do work with a more experienced developer on a larger scale multi-family opportunity. While I have a general understanding of what it takes to set up a fund, I'd love to tap into the collective wisdom here. For those of you who've chosen the fund route. The questions I'm most interested in having answered:

- What resources or frameworks were most helpful in structuring and launching your CRE fund?

- Question for investors: What can a developer, with less experience w/large scale deals, do to bring value to a more experienced developer?

Also would love answer to the following:

- Are there any specific challenges or advantages you experienced compared to a JV structure?
- Any lessons learned or best practices you’d recommend for someone leaning toward this approach?

I’m all ears for any guidance, recommended reads, or war stories from those who’ve been down this path. Really looking forward to hearing your insights!

0 Votes

Quote from @Doug Smith:

A terms sheet will tell a pro whether you know what you're talking about and give them a structure of the deal you propose, but it won't establish credibility with respect to your financial ability to pull off the deal. As lenders, well issue a prequal/preapproval letter if we've analyzed your income, assets (bank and brokerage statements to establish that you have the liquidity to afford the down payment, closing costs, and reserves), review credit of the guarantors, review the relevant experience to ensure that we're not throwing our money away on newbies that are wandering around in the dark, and have put together a reasonable plan of attack for the project. Over my time (over 30 years), if your lender will make a call to the seller/seller's rep to explain the level of due diligence we've done on the buyer usually goes a long way. Do you have the Capacity/Ability to close, do you have the Character/Credit to close (including relevant experience), and do you have the liquidity to properly provide enough collateral (are you injecting enough into the deal). If you can convince them a bona fide lender is on board, that's 90% of the battle.

Great to know, thank you!

0 Votes

For newer CRE developers working to establish credibility for larger scale deals, I'm curious about the role of financial documentation in building trust with brokers and sellers. Specifically:

1. How do brokers evaluate the credibility of a buyer who provides a loan term sheet versus a loan commitment letter from a lender?
2. Do either of these documents meaningfully address concerns about a buyer's ability to close a deal?
3. Are there particular elements (e.g., lender reputation, conditions in the letter, proof of equity) that you look for to validate the buyer’s financial readiness?

What would push the needle for you as a broker to confidently move forward with a buyer in the process of acquiring a building? Are there any other critical factors that signal a buyer is serious and capable of closing?

0 Votes

All Forum Posts by: Nadia Jones

Nadia Jones has started 2 posts and replied 3 times.

Post: CRE Fund vs JV: Seeking General Information and Guidance for Setting Up

Post: Do Term Sheets or Commitment Letters Show Financial Credibility to Brokers/Agents?

Post: Do Term Sheets or Commitment Letters Show Financial Credibility to Brokers/Agents?