Opportunity Structure
- Grand Partners, LLC is partnering with both Equity Investors and Private Lenders who are registered accredited investors.
- The structure an Investor chooses, depends on the project, not all projects have equity positions available, and the Investor’s appetite for risk vs the returns desired.
Option A
On any project, an Investor may choose to participate as a Private Lender with the following structure. Grand Partners, LLC forms a single purpose LLC and purchases a property as a value add investment. The Private Lender lends the single purpose LLC money which is combined with other private money into a single loan, documented with a note secured by the property, with a leverage of no more than 65% Loan-to-value (LTV). Grand Partners, LLC will then pay interest at rates well above the typical institutional lender’s rates. The ultimate return paid, depends on the project, term, associated risks and whether the interest is paid monthly, or at the end of the project. Importantly, each principal and joint venture partner principal will personally guaranty unsecured loans.
Option B
On certain projects, an Investor may choose to participate as an Equity Investor with the following structure. Grand Partners, LLC and some number of Equity Investors, form a single purpose LLC and purchase a property as a value add investment. Grand Partners, LLC is the Managing Member that executes the project plan and creates the upside value. The Equity Investors are passive “Non-Managing” Members, who solely participate in the upside profits.
Profit distribution typically follows this “waterfall” example:
First) Net Proceeds are factored subtracting the various costs as well as the development and management fees
Second) Preferred Returns are paid in the 6% to 10% range, first to Non-managing Members, then to Managing Members
Third) All Remaining Profits would be split between Managing Members and Non-managing Members according to the schedule and each Member’s ownership percentage.