Development Financing
Lending against the cash flow generated by a property is the most traditional form of real estate finance.
In its simplest form, it involves a loan to a borrower which is repaid from the rental income of the borrower’s property.
The first step of the to determine the financial structure, a mixture of debt and equity, can be used to finance the project. Then, identify and value the economic benefits of the project and determine if the benefits outweigh the costs.
At Relync, we help source funding for developments and also offer advisory on the best source of funding and funding options available for the project that include the following A developer can choose to finance a new project using two alternatives:
Debt Finance
The project is financed on the balance sheet it generates
Alternative 1
Debt financing occurs when a developer raises money for working capital by acquiring loan facilities from individuals or commercial institutions. In return for lending the money, the individuals or institutions become creditors and receive periodic offsets of principal and interest until the loan facility is repaid
We recommend this form of funding for income generating properties due to its debt relief and management attributes to the developer. We help our clients source the best financial deals available on the market
Equity Financing
Equity financing is the process of raising capital through the sale of shares of the project. It works like a joint venture
Alternative 2
Real estate developers usually raise money because of both short-term and long term need of funds throughout the project development cycle from project inception to completion. By selling sell part of the project ownership in their entities in return for cash, the developer and the funder in other words enter into a joint venture and the proceeds are shared according to the agreement
At relync diaspora, we have a good working relation with a number of equity funding options that include;
Project Funders
These provide partial project capital or project capital in totality and leave the project implementation to the developer as they carry out supervisory duties.
Development Partners
Unlike the first option, In circumstances where our client possess the land but doesn’t poses the necessary knowledge and expertise to execute the development, we help source inventors that develop the site and share the proceeds from the venture with the land owner, we have executed a number of such projects in Muyenga Kampala