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Project Outline |
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Phase |
Procedures |
Identification |
The property to be developed is identified, and is in contract for purchase. Capital needs, initial design, and tentative time lines are established. |
Debit Assignment |
The entities contributing capital, and underwriting the bank debits, are identified. |
LLC formed |
A Limited Liability Company is formed. Equity is raised to cover all future expenses of developing the property. The property is transferred to the LLC. The LLC will define all members and their contributions, well as obligations to others to perform developing the property. A manager, usually the developer, will be appointed to oversee the project. Quarterly reports will be prepared for the duration of the project. |
Escrow Funded |
The LLC will fund all escrow expenses as laid out in the original property contract. Additionally, the LLC’s managers will hire all architects, engineers, and other professionals necessary to obtain building permits. |
Entitlements |
The managers of the LLC will oversee all aspects of obtaining building permits. All fees will paid by LLC. |
Lending |
Before permits are ready, it is necessary to finalize all bank and lender relationships and put the paperwork in order. This is generally handled by the LLC manager. |
Construction |
Upon issuance of building permits, construction commences. The LLC will be appraised of the project’s progression. During construction the LLC management will arrange for the sale, or long term financing of the project. |
Completion |
Upon closing of the project, funds will be distributed per the LLC operating agreement. |