What JV funders want

Welcome to 2010, the defacto year of Joint Venture (JV) financing. Institutional financing is not available so developers are looking outside the box to fund their projects. The most common form of favorable financing is JV. This financing comes in more shapes, sizes, and terms than colors of the rainbow. There are, however, a few common things that all JV funders look for, regardless of the project, location or dollar amount. The purpose of this article is to share with you what these common denominators are and how you should present your project to get the most favorable terms.
Let's look at this from your potential funder's perspective. What does he want? The answer is simple, but arriving at achieving his goals involves a tremendous amount of scrutiny and due diligence on you, the developer. Quite simply, the JV funder wants a return on his investment. You must speak his language. What he wants is a pro forma that shows what his internal rate of return (IRR) is at two and five years. If you cannot prepare one of these, find someone who can. This document or spreadsheet shows vision and the common goal of making money.
Everything else is secondary, but also very important. You need to prepare a package that consists of the following items:

1. an executive summary of the project that is no more than 5 pages (no funder will read a 120 page business plan before reading an executive summary)
2. the proforma
3. bios and resumes of all of the key players, including your contractors
4. the entire business plan
5. an appraisal if you have one

Logically, the funder has the money. You have to prove that you have the brains, muscle and integrity to be a great and cooperative partner. Your opportunity is not the only one on his desk, but it will certainly be the most presentable. Sloppy presentations make for sloppy projects.Finally, the worst thing you can do is put pressure on the funder to act or fund immediately. Desperation only indicates weakness and poor planning.

Brian Walker

Tuesday, February 23, 2010

All Questions Answered!

There can't be enough said about the old adage "time is money". Nearly all of our funded projects begin with a conference with one of several people within our company. Although we have 23 people within Walker Commercial Funding, your initial conference call will be with one of three. It's very common for me to say, "Mr. Developer, it's important that you do not leave this conference call until you have asked all of your questions and have crystal clarity about what we are offering." An educated, informed client is priceless.

After our introductory call, you will be working with other people within our organization that expect you to be informed. This is just an efficient business model, nothing more, nothing less. Understanding from the beginning is so important, that if we have a conference call scheduled and only 4 out of the 5 can attend, I'll record the call (with everyone's consent) for the benefit of the absent partner.

After your project is received, your point of contact will most likely not be the person that introduced you to the company and the funding solutions. At that point, we ask that you direct all questions, updates, etc. to the "production" member of our team. Again, it's a matter of efficiency. You'll get more accurate information and faster answers.

This is our business model. We like to keep it simple and share it with you before you engage to do business with us. All I can say is two words: it works.
Thanks,
Brian Walker