Know Basic Property Financing Techniques

"Leverage in land development doesn’t always have to come from borrowed funds. Several methods are available for reducing risk but developing the same a Sale and leasebacks Land and equity investors Sweat equity...."

 Low-cost construction loans can reduce interest costs by hundreds or thousands of dollars per unit.„In syndicated rental projects; typically one-third of the equity is advanced for construction, further reducing interest carry costs.

Project Financing Mechanisms

1.1. Market-rate loans

Market-rate loans are offered by banks, Saving Institutions and Mortgage Companies to Homebuyers and Investors in rental property. Insurance companies and public pension funds also make direct real estate loans, but the transactions are typically too small. There is no set "market rate" of interest for housing loans - rather, a range of rates which are found in the market.

1.2. Below-market-rate loans

A below-market-rate loan can be defined as any loan with an interest rate that is clearly lower than prevailing market rates, taking into account the market factors just described and the particular benefits and risks of the transaction in question.

1.2.1.        Common sources:

1.2.2.        Direct low-interest loans from government agencies

1.2.3.        Lending using federal sources

1.2.4.        The proceeds of selling tax-exempt bonds

1.2.5.        Credit-enhanced investments

1.2.6.        Housing finance agency reserves

1.2.7.        Community Reinvestment Act (CRA) motivated

1.3. „Project-based loans

Project-based grants are used for the acquisition, construction or renovation of affordable housing. These are distinguished from other types of grants that might, for example, be used to pay rent subsidies, capitalize a loan pool or underwrite the operating expenses of a nonprofit housing organization.

1.4. Deferred payment loans

In the affordable housing industry, "deferred payment second mortgage loan" typically means that all payments of principal and interest are deferred until resale of the property or conversion to another use. Such loans are also called "soft seconds". They typically generate no return on investment, are not amortized (repaid monthly).

1.5. Owner equity and equity proceeds

Owner equity can be defined as cash or something else of value provided by the owner to a real estate transaction that involves acquisition, construction or refinancing. For example, a homebuyer's down payment is equity. An investor's cash paid into a deal is equity. The market value of land or buildings provided to a deal is equity. With rehabilitation of a property for an existing owner, the owner's equity is usually valued as the difference between the market value of the property and debt on the property.

1.6. Lease purchase loans

In a typical program, a local government agency or nonprofit group arranges financing for a group of homes - whether homes to be built, rehabbed or simply bought in the open market. The program sponsor sells the homes to low- income families who do not currently qualify for conventional financing - usually by failing to meet down payment requirements. A slight surcharge on the monthly payment builds up a reserve account for the down payment.

Architecture Beauty

Architecture Beauty

Beauty, one may define the beauty of X to Y as the amount of happiness gained by Y from the patterns, which Y perceives in X, and this is not unsatisfactory.

The closer the interrelation of the parts of a complex, and the livelier their interaction the greater the Aesthetic significance of that complex. Thus, it seems reasonable that the beauty of X to Y is the happiness associated with that portion of X, which is perceived by Y.

“As Architects/Designers, we endeavor to create beautiful forms and spaces that inspire humans within. It is often said that “beauty is in the eye of the beholder”; nevertheless, there are a collection of architectural spaces that never fail to stir occupants deeply. Like many designers, architects must follow rules and consciously bend them. Architects should not feel limited by such findings, but rather they should feel freed to learn why occupants respond the way they do” — Maria Lorena Lehman.

Experience of beauty is fundamental to what makes us all human. We may find beauty in different things at different times; however, the joy found in surrounding architectural space and form is universal. As spatial compositions continue to evolve, so too will our understanding of the meaning behind beauty.

Aesthetic, in architecture, is often linked with order and balance. Rhythm, for instance, is frequently desired within architectural compositions. Architecture is more than the manipulation of space to follow certain rules of beauty

Employ Good Consultants

In Property Development Market, Employing Good and Reliable Consultants avoids long-run regrets.

This aspect cannot be over emphasized – many a project has failed because of poor Design(s) or supervision and/or control during the construction process.

There are many problems that can and do occur on construction sites and it is crucial that good & Experienced professional consultants are employed. 

Its proven that Risks & Problems are Low or Reduced and tackled effectively when Qualified experienced professionals are involved unlike juggling the ball with less or unqualified consultants in any property Development.