JV with a developer with approved land for 44 units
I am talking to a developer who has an approved development apartment project for 44 units. Land cost is around 1.6 million. He already spent time and money for approvals. However, he only has 1 million to close and he is looking for someone to fund the remaining 600k. This is in South eastern connecticut with 3 blocks to train station. Construction cost is around 5 million. He tells me that he has a lender who promised financing for upto 5.5 million (to cover holding cost), but the land has to be brought clear of any lien. If I pursue this deal, I will become an equity partner and he completes the development/construction. I am trying to understand the pros and cons of this... What are the potential questions I should ask to protect my interest in the deal? He seems well known in the town who has done a lot of development.