Summary
Comprehensive Loan Sizing with Funding Tables
- The video introduces advanced tools like “Lead Developer” and “Lead Developer Plus” that utilize funding tables for precise loan sizing.
- Funding tables allow allocation of percentages for various line items, critical for development project funding.
Understanding Construction Loans
- Explains how construction loans typically replace land acquisition loans to consolidate debts under a single bank.
- Details how banks assess the “Total Development Cost (TDC)” and their criteria for loan approvals.
Key Differences in Loan Evaluation
- Banks exclude several costs like stamp duty, interest, and legal expenses from TDC, which often surprises developers.
- Offers a breakdown of how banks calculate funding limits based on “hard costs” like demolition or gas connections versus excluded “soft costs.”
Operating Shortfall
- Defines the “Operating Shortfall” as the gap in payments during the leasing period.
- Highlights strategies to manage shortfall by balancing equity and debt percentages.
Dynamic Tools for Calculation
- Describes features such as iterative calculation that automatically update funding data based on user input.
- Discusses equity and debt scenarios to adapt funding options dynamically.
Insights Based on Numbers
Banks may fund 70% of TDC but only consider a fraction of the stated costs (e.g., excluding stamp duty or soft costs).
Developers may need to cover up to 35% of total costs through equity.