All Forum Posts by: Marty Johnston

BP PML's / Private Equity Groups

I've decided perhaps I'd open this up outside our Private Equity Firm Database to the interested investors here on BiggerPockets. I have a Restaurant/Tourism investment opportunity in Baton Rouge, LA in a Prime location. For disclosure purposes, I have not included the branding here. For interested investors, of course a full package can be disclosed. Here are some details on the project.

The sponsors are seeking an Equity Investor for $2M at 20%. or $4M for 40% and $6M in VC Debt. While I have a very detailed package including a Roll-out Schedule, Bio on all Executive Operators, Market Analysis, Conservative Projections etc, Here is a general description of the project. I can include the Business Plan, Executive Summary, and a doc with a link to one of the Character animations for the project to this e-mail.

The Project is a Restaurant concept. (More than just a Restaurant)

The sponsors are in need of an seeking funding for $10MM to launch the first of Louisiana exhibit restaurant, a Louisiana Cuisine that also promotes a fun family environment, tourism, and Children education. They currently have a Letter of Interest from another group who can bring in $6M in VC and $2M 20% Equity. We are seeking another $2M for 20% equity in the business. If a $4M Equity investment for 40% and $6M VC Debt investment is of more interest, we would absolutely entertain this as well. Approx $500K of Sponsor capital has been invested to date.

The Funds will be used as operating capital and to invest in this initial location as follows: land cost of $1.5 million, building cost of $1.26 million, FF&E of $580,000, operating expenses of $720,000, marketing expenses of $100,000, pre-opening costs of $150,000, pre-opening costs of $250,000, and other pre-opening expenses as legal, etc. $850,000 (detailed use of proceeds see Accountants' Assumptions / Use of Funding Proceeds).

Forecasts indicate that the first restaurant/HQ will generate sales revenues of up to $4.78 million and each other restaurant is capable of producing revenues of $3.39 million per year. Upon successful launch of the first location, the sponsors intend to pursue an aggressive roll-out strategy targeting specific favorable Southeast U.S. markets. Additional restaurants beyond this first location will require additional funding, so additional investment opportunities are there (26 additional restaurants).

Strengths: The Executive Leadership team for this project is unprecedented in terms of experience and success in this space and their industries. There is a full breakdown of the Team on pg 29 of the Business Plan which I will forward in an interested investor with the full package. This strong leadership team is a core strength of this project, as they all know success in not only conducting this Restaurant's operations, but also founding restaurants like this one, and launching some of the large conglomerate stores such as Dunkin' Doughnuts - and successfully doing so. Other Executive leaders come from Backgrounds at Disney, 5-star chefs from World-renown restaurants, third generation developers and leaders in the industry.

The project is more than just a restaurant, as they will also have a merchandise Store along with restaurant selling t-shirts, memorabilia , mugs, toys, fun educational material for children, etc. A breakdown of this is also detailed in the BP and ES. While $10MM may seem like a small investment, there is the large roll-out of the 26 additional Zat's Restaurant locations for further investment. There is also an immediate investment need for the animation that corresponds directly with/for the Restaurant concept which is seeking an additional investment of $15MM for the animations, which details will also be included in a larger package should you have further interest in this project. Animations have already been created by a Disney operator - Clips of these characters are available for viewing in the package via Youtube.

For any interested parties, please send me an e-mail at [email protected]. Or PM mere here on BP.

Thank you!

Marty J

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Jesse,
Email sent to [email protected] with a loan scenario - time sensitive and would love to speak with you on it!
Thank you.

Best Regards,

Marty

Robert 
I may have a contact for you. He has used borrower's Schedule of Real Estate to leverage against new properties. He may be able to assist depending on a few factors, but I'd be happy to connect you directly. He is both a Direct Lender and also, at times, acts as a broker in certain situations to make deals work.

Let me know if you'd be interested in connecting - just send me an e-mail at [email protected] or PM me here.

Cheers

@Robert Hetsler 

@Dennis Williams, I can echo what @Conor Freeman has stated. No matter the strength in equity position a sponsor may have on a given project, a lender needs to see current liquidity or capable liquidity to bring to the closing table - this can be overlooked when relationships have been built, or in a JV/Equity structure where a lender is comfortable enough with the deal/current equity standpoint that this isn't seen as necessary, it's all subjective. We also work with a couple Family Offices who have different tastes for different deals - some need MUCH more information than others, and are willing to soak up the equity in a deal.

For a $60MM Zero Net Energy development, a thorough Executive Summary with a thorough projection break down, draw schedule (if applicable), bio's on all principles of related developments, purchase agreement, approved plans and permits by the municipality and engineers etc.

This may seem obvious to some, and I'm assuming that you have this all in place, but I've seen borrowers seeking $50MM for a development and didn't want to give up any financials, an appraisal, a breakdown of where the money was going to be put to use, etc. He had a truly excellent project, but he didn't have a relationship built where lenders simply trusted him with $50MM day after closing... While $60MM may be too small for some groups, it's still a lot of money to walk away with without thorough details.

So to answer your question in how to attract real players? Utilize Relationships.... That word again. While I may sound redundant, it has more impact than you might think. Find someone who has those connections and utilize those relationships, or build one (this can be harder/longer process) but either works. If doing that, than a simple, precise, and clear Business plan with a thorough executive summary will help.

Hope this helps. Cheers.

@Brant Jones, Welcome.
You will have a large variety of options here, and it really all depends on the type of product you are seeking/will qualify for. Are you bankable? If so, I would certainly make them your first stop, as you won't see better rates and terms. The downside, is banks will almost always be closer to 75-90 or even longer times to close. The secondary market will be more asset based, and therefor can cut down closing timeframes - more like 20-30 days on low-doc loans. The difference here will be that rates and fees will be a little higher. It all depends what you're looking for. The above have listed some great options. Feel free to PM for more info!

Best Regards,

Marty

@Lana Sha , We're a nation-wide brokerage and work with 200+ Lenders around the country, so we have a large pool of program options for you. Would love to learn more about the projects your working on to see what we can offer you in terms of financing.

Send me an e-mail at [email protected]. Thanks, Lana! Hope to hear from you.

@Alyscha Johnson,

Typically, there's no trick to presenting your loan offer, most HML's will receive several loan requests a day, so they really just want a series of questions answered to be efficient. Different HML's will add or detract a few needed questions, but they're all pretty similar. Below is a short form loan app - this is what we use to present a loan scenario to any HML, and it USUALLY covers all the bases.

Better one up? - Provide a brief RE Bio perhaps, or a Resume. It can't help, but there's no need to send over a ton of unnecessary info. I would keep it relative to a loan request such as your experience and business plan. They'll be able to let you know within a day or two if it's a loan they can offer you, and what their rough 'rates and terms' will be.

1.Borrowers Name:

2.Borrowers Contact Info (Phone # and email):

3.Company name the borrower is closing in:

4.Address of Property:

5.How many acres of land is the property on?

6.Exact property type (Ex: SFR, 2-unit, 7-unit):

7.Purchase Price:

8.Is the borrower already in a purchase and sales contract?

9.When does the borrower need to close?

10.Current Fair Market Value of property:

11.Rehab Cost:

12.ARV (After Repair Value) of property:

13.Exit Strategy on Loan (Refinance or Sell):

14.How long will the property take to rehab?

15.How much money does borrower have to put into the project (Must have 20% of purchase price plus closing costs)

16.How many Rehab deals has the borrower done in the past 12 months?

17.How many Rehabs ever?

18.If the borrower already owns the property….when did they buy it? And how much did they buy it for?

19.If the borrower already owns the property, have they put any of their own funds into rehabbing it? If so how much?

20.If the borrower already owns the property how much existing debt is on it?

21.Borrowers fico:

22.Does the borrower have any Tax liens, judgments, recent lawsuits or pending lawsuits against them? If so please explain:

23.Has the borrower ever had any mortgage lates? If so when? 

Hope this helps!

Marty J

@Account Closed

Sorry to hear about your poor experiences thus far with past Mortgage Brokers... PM sent.

Marty

@Michael Slusher, 

Looks like you have some good options here! Should you find yourself wanting additional resource options, feel free to reach out. We're a nation-wide Mortgage Lender for all Property types offering loans for Bank-Alternate/low-doc/stated perm loans, HML's for rehabs, Bridge Loans, Ground up Construction, and Transactional Funding for Wholesalers. We work with several portfolio lenders. Seasoning doesn't have to be an issues, as we work with a could lenders who have NO seasoning what-so-ever and some with a 30-day seasoning. There are options.

Questions or inquiries and you can shoot me an e-mail at [email protected] or give me a buzz at 920-285-8900.

Thanks, Michael. Have a great weekend!

Best Regards,

Marty J

www.11capitalfinance.com

www.bankersgivingback.org

@Keith Martin, PM Sent!