Development Financing

Landowners and Developers Resource Center | Dixon,CA | Development Financing

One of the greatest challenges facing the landowner who is considering development of his or her land is often financial, and that challenge often becomes a major factor if not the primary factor prompting the landowner’s decision to just sell the land outright to a developer or investor. The thought of taking on large indebtedness to “finance” the development of the property is enough in most cases to motivate the landowner to drop the whole idea of development. It is unfortunate when that occurs, especially if the landowner is not aware of types of development “financing” that could enable the landowner to participate in the added value that the development process creates. Normally, private and corporate investors expect to provide the financial resources needed for development of the land, and will welcome joint venture opportunities with landowners simply because that approach reduces the investor’s front-end expenditures for acquisition of the land. It’s a fair exchange: the landowner’s equity in the land helps reduce the investor’s “start-up” cash flow burden, and the investor reciprocates by allocating a share by the project’s profits to the landowner -- in addition to payment of the agreed price for the land.

The “Development Financing” phase of a project is the appropriate setting for financial arrangements for the costs of development, which include design and construction costs, and even arrangements for “product” sales e.g. sale of individual homes, or “project” sales i.e. sale of the entire project to a new developer buyer. Below are some of the tasks with which LDRC can assist at this stage of the development process.

Project and Product Design, Concepts and Analysis
• Joint Venture, Partnership, LLC and Corporation Formation
• Arrangements with Licensed Designers, Architects, Engineers and Contractors
• Arrangements for Development, Construction and Permanent Financing
• Housing/Building Permit Allocation Processing (where required)
• Arrangements for Performance Security (Bonds, Guarantees, etc.
• Planning for Avoidance of Mechanics Liens, Job Interruptions, etc.
• Coordination of Construction Contract Enforcement (where required)
• Managing Contractor vs. Subcontractor Disputes (where required)
• Assistance in Foreclosure, Reinstatements, etc. (where required)
• California Bureau of Real Estate (BRE) approvals (if needed), e.g. subdivision public report filings, exemptions, modifications
• Product/Project Sales i.e. lots with or without homes, or entire project; and Sales, Escrow and Financing Documentation.

We at Landowners and Developers Resource Center are eager to assist owners and developers of land who have not yet managed to find a convenient and affordable source of guidance and support in dealing with the many technical tasks and requirements regularly encountered during the development process. We offer free initial consultations to assure a clear and complete understanding of all aspects of the proposed project, resulting in a written agreement listing the services to be rendered and the cost, conditions and terms of payment for the project. It is our intention always to provide services and value that are greater than expected at a cost that is less than expected.

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