We have a large scale project here in St. Louis where we have our lender lined up, we’re syndicating our downpayment.
We currently have our 506(c) structure in place with 8% Pref and a 6% back end on the principal = 14% for our investors or a 1.98x after 6 years
I spoke with Chris Naugle about it and he suggested if we can move it to a 12% Pref and a 2% back end on the principal = 14% for our investors or a 1.98x after 6 years.
We dove into the proforma and found a way to make it happen. My only concern in doing that is having the 12% pref while we’re under construction which adds a significant expense compared to the 8%.
Should we go for it to raise the capital or should we structure it to where it steps up once its operational?
Mike