All Forum Posts by: Yishi Zuo

Hi Bill - I think you may have mistaken me I with someone else? I’m looking at a couple of deals at the moment but none seem to match what you are referring to. Anyways - if you are indeed serious, interesting that you are exploring this type of financing!

Hi Bill - I'm exploring project in a different state involving modular homes and just posted about this a few min ago - background  https://www.biggerpockets.com/forums/49/topics/1204251-mezza...

I'd be interested in coming in as a Mezzanine investor (hybrid equity / debt) - ideally with collateral outside of the development asset.

Thanks Dustin! A key remaining part of my question: I'm wondering if there are development lenders who take collateral not from the development asset (land. etc) itself but from other properties that the developer might own (less risky )

My thinking is - if I can get comfortable with the value of the collateral, then I don't have to worry about the success of the actual new build as much.

Hi folks -

I'm new to BP and real estate (but very familiar with finance and comfortable with early-stage risk in general - I come from the tech venture world).

I'm considering making a small hybrid equity investment / loan to a developer building homes. He has acquired the land, gotten the permitting, has construction financing lined up but needs ~20% cash equity / home.

I know very little about his particular real estate market, and I've never built anything myself. Even if I was the senior lender for one of the new developments, in a downside scenario I wouldn't know what to do with the land / the half-finished or finished (but unsale-able for whatever reason) inventory.

Therefore - I don't want to invest / make a loan in the development JV itself - I would rather make a loan at the parent-co level where there is collateral in the form of completed properties that are generating rental cash flow - they do have mortgages on them. (Also, the developer is reasonably experienced + wealthy and has personally guaranteed some of the existing development projects - but wants to move away from that)

I'm also planning to get some equity in the JV / the broader development company (much less equity than if I were to be a pure equity investor of course). because I do think this could scale to 300-400 homes / year

Of note: These homes are modular in nature - so are faster to build and margins are projected to be attractive.

My questions for you all is:

Have any of you lent to development assets with cross-collateral from cashflowing properties like this? What are some things to pay attention to / negotiate?

Do you know of other opportunities like this? What terms do you think would be reasonable in your POV?

Thank you!

-Yishi