FAQs About 144-A Bond
Q: What about large Multi-Family properties / new construction loans. Say adult active and assisted living facilities, multi story with mixed use commercial office and retail on first floor and underground parking. Scalable projects for size/finishes depending on location/market. My current projects proposed and approved needing 100% financing or a co-investor (10%). Projects proposed are $40 million and $66 million in Orlando and Jacksonville Florida areas.
A: Yes, these would probably qualify. The main qualification is that Projects must be solid with viable exit strategy and Principals must be proven and experienced.
Q: You noted examples of fees in the flyer that were very reasonable, however the 5-8 points on the bond is a great deal more than the fees shown and I must assume are additional, correct?.
A: Yes, that is correct. The fee’s indicated are non-refundable and are due once the bonding company has approved the project. In addition, there are the points which are paid at time of funding.
Q: Who do the points go to?
A: They are paid to the 5th Avenue Acquisitions & Venture Capitalists partner that is working the deal at the bonding company.
Q: Is the bond the funding vehicle or is the bond an instrument that then guarantees a loan from elsewhere, please explain?
A: The bond is the funding vehicle.
Q: I am a Business Consultant and work with clients whom I have a client agreement with and need to be central to the project. How will I get compensated and will I be in the loop with the bonding company?
A: If you have an agreement with the client, it is best that you are then funded by the client. Once approved and the client has committed to having the bond funded, it will be necessary for your client to be working directly with the bonding company, however, you can be on the calls and assist your client in the transaction.