Private Money Funding – Private Investors Are Pulling Out
Welcome back!
Today the world of finance is in turmoil over not enough money for current projects. Consider the recent article posted on MSNBC, Credit crisis halting commercial construction Investors pull out of $5 billion project to build tallest building in Vegas.
In this article the Clise family in Seattle had to stop their project.
Clise Properties Inc. halted discussions with potential partners in April after it became clear that most investors wouldn’t find reasonable financing to develop the site with the company during a global credit crunch. Interested investors had to put up more than $600 million just to compete for the opportunity.
Again another large project failed in Las Vegas.
Last month, Australian gambling firm Crown Ltd. backed out of a $5 billion project to build Las Vegas’ tallest tower because of financing issues. The company held a 38 percent stake in the joint venture with Texas developer Christopher Milam and private-equity firm York Capital Management and will have to write off about $42 million related to the investment.
Boom Areas Turn Into Bust
In addition, the boom areas of a few years back are turning out to be busts.
Commercial real estate projects in Denver, Phoenix, New York and even Donnelly, Idaho, have run into similar snags, while developers in housing-bust markets like Florida and Southern California have axed smaller projects.
You Are Not Alone
So if you think you’re having a hard time getting the financing you’re looking for you are not alone. The world of both public and private money is playing it very cautious these days. They are taking a lot longer to evaluate any project, and they are really looking closely at the business plans and the areas to be developed.
What does this mean for your current projects?
Any project you are proposing for private money funding needs to really be air tight. Make sure all your i’s are dotted and t’s are crossed. Cover all the marketing plans with extensive research to show there will be a profit. Have a white paper ready to explain how you’ll address any negative issues in your plan. Show that the principals in your plan really have the expertise and past experience to pull off the project. And make sure your projected figures are conservative.
There still is money available for good projects that have the proper back up in documentation. But the era of the “No Doc Loan” is gone. Be prepared with full documentation and you still may be able to get the funding you’re seeking.
In terms of sources for funding our JV Funding Investor Network only requires a minimum of an executive summary and business plan to determine whether any investor is interested. But after that point, you’ll need good documentation when you meet with an investor.
So if you’re still looking for funding, AccessToPrivateMoney can provide the opportunity to meet with an interested investor who may actually fund your project.
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