Tilden Moschetti: Find a boil down the syndication of a real
estate development project in the eight steps, what would
those eight steps be? Let's go through them.
My name is Tilden Moschetti. I am a real estate syndication
attorney with the Muscatine syndication Law Group. I'm also
a real estate syndicator and developer myself, I thought it
would be interesting to break down to distill in to eight
difference and an eight step model of what a real estate
development syndication project would look like what they look
like from a very high level. Now, each of these probably has
another 50 different steps. But I thought it would give a unique
view of, of what the landscape looks like. So that if you are
looking to do a real estate, syndication development project
yourself, it might give you an idea of whether or not it's
something that intrigues you, or it's something that you want to
run from, I think it probably will intrigue you enough that
you'll want to keep working on it. But who knows. So let's go
through what those eight steps would be. So number one, is find
the suitable property and created business plan. Now,
obviously, if you're going to develop something, you gotta
have something to develop on. And you got to know kind of what
you're developing, right. So for the the piece on the business
plan, I like to rely on the fit, of course, the founder
investment theory, what it is actually, that you're going to
be building should also have a compelling vision behind it, a
reason for why an investor would want to invest into this, if you
were going to invest in this completely blocked thing that
nobody would be very interested at all, you're gonna have a
really hard time finding an investor who's going to help you
out do that. If, however, you're building this fancy resort, or
you're this beautiful luxury apartments with a with fountains
and a lake or if you're building, you know, the retail
center that features some some new novel technology or
something like that, that's compelling, that's got a story
to it, and people investors are going to want to invest. And
then you obviously need to find that property where you can do
that. And then you need to make sure all the numbers line up. So
the business plan needs to be complete with exactly how you're
going to do it. In terms of costs, you got to have pretty
early on what those costs roughly are going to look like
what the hearts cost side the soft costs. So what that looks
like, that way you can start building in a story for your
investors. That's not just an emotional compelling story, but
also has a rational, this is what we're going to do component
to it. Number two is start assembling your team, you can
not do development alone, you're going to be out there swinging a
hammer yourself, I don't think so, if development is a big team
effort. So you've got to start putting those team together,
this team is also going to be important for your investors to
know who they are, because you're using their resumes in
addition to yours as reasons for them to invest, the more great a
people that you've got, the more interested in investors going to
be to be involved with. So that is also a major part of it as
well. It's great to give, give a helping hand to the people who,
who you know, is does great work, but they don't have a
resume to speak for itself. That's great, but you gotta have
some heavy hitters in there as well. And mostly though, you
need to make sure that it's competent, that it's a team that
have players that absolutely can deliver, you've got investors
money here, you've got to deliver for them. Number three,
now, you got to find investors, you should have been looking all
along, you should always be looking for investors every day
of the week, every week of the year, you should be looking for
investors growing your investor network. But this is the step
now where you're really finding investors and starting to let
them know that you've got this project coming along and are
they interested, you got to get those soft commits, you got to
make sure that the business plan can go forward and then their
money is part of it. Step number four is arrange for financing.
So you're going to most likely be using not only investor money
and you're not going to be paying all cash. Most likely
most developers use US bank loans or hard money loans or
some sort of other form of money in order To complete the
project, so you need to start building those relationships
with those financers. Whether they're hard money lenders, or
traditional bank lenders, wherever it's coming from start
building those relationships, so that you can get that financing
in place, start building that model of what it will look like,
from their point of view, how, what's that interest rate? What
are the terms? What is that going to look like? Number five,
my favorite piece is putting the syndication together. So that
piece of it, this step really is putting those necessary
documents together, getting that private placement memorandum
done, the operating agreement for your entity, the
subscription agreement for your investors, getting it ready for
filing with the SEC, as soon as you make a sale of the
investment to a investor. Getting all those pieces
together, this is an exciting time, because now you've got
really something to show for. Not only that, not only is it
the legal documents, but putting the marketing documents
together. And once those are done, it's getting investors in.
So this is all part of that still putting that syndication
together. It's not just the framework of the documents and
the marketing material, but it's also getting the commence from
your investors getting them to sign getting that pool of money.
Once that money's there, then you can go on to Step six. And
Step Six takes place at a lot of different points. This is just
getting those necessary approvals. Development takes
approvals from everybody, as you probably know. And so you need
to be doing that all along the way so that your project doesn't
stall just because the fire marshal hasn't signed off on
your deal. And it's now waiting for two years. That's not a good
situation. Number seven, now you see it coming together. Now
you're managing the construction, you can watch it
going up in front of your eyes. And it's a magical and it's all
happening. This is another very exciting part of the development
project. Because here it is, all the meanwhile you're
communicating with your investors, and you're getting
them excited. Why are you getting them excited, because
you want them to invest in your next development project. So the
more excited they are, the more they feel like they're connected
to the project better. Step number eight, marketing and
sales, and I'm talking about marketing and sales for the
future sale of the project. Now I'm assuming in this video that
it's just being a it's a build to sell. If it's a build to
rent, then that's another story, then you're still marketing,
getting that marketing ready for getting tenants in. If it's
marketing to sale, you're getting that that what the
landscape looks like in order to be able to sell this development
that you put together. Once it's there, then you're you're now
putting it out to market and you're getting it all done and
and you pay off all of your investors and it's a grand day
and you've completed your first real estate development
syndication from opening to closing. And that is the basic
process. So let's go over those key eight steps one more time,
just so that they're there. Number one, identify a suitable
property create a business plan. Number two, assemble a team.
Number three, find investors. Number four, arrange for
financing. Number five, put together the syndication. Number
six obtain necessary approvals. Number seven, manage the
construction, and number eight marketing and sales of the
underlying asset itself. My name is Tilden Moschetti. I hope you
found that helpful and a little bit enlightening looking at the
development process and syndication together from a high
level about how it all comes together. If we can help you
with your real estate syndication development or a
real estate syndication or any kind of syndication or private
equity fund, you're putting together give us a call. We'd be
happy to talk with you