Have a Deal but Not the Cash?

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A real estate investment can make sense on paper and still come to a stop because of one problem.  The amount of cash required to complete the transaction.  

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Even when the primary lender is financing most of the project, investors may still need significant cash for the down payment or equity contribution, closing costs, lender fees, required reserves, construction or renovation expenses, and other costs that aren't covered by the primary loan.

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But our concern isn't simply whether you have enough cash to close. We also want to know whether you have enough capital remaining to sustain the investment while the work is being completed.  

 

That's where Breclaw's Investment Assistance comes into play. It can help remedy the cash shortfall while preserving more of your available capital for the project itself allowing you maintain the reserves needed to make loan payments, handle unexpected expenses, and keep construction moving.  

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Construction takes time. Loan payments still have to be made. Unexpected expenses happen. Draws may not always arrive exactly when they're needed. We don't want to help you get to the closing table only to see the project stall halfway through because there wasn't enough capital in reserve to keep it moving.

 

The goal isn't simply to help you close. It's to help put you in a stronger financial position to complete the project after you close.

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When can Gap Funding help?

• You own a property free and clear but don't have enough capital to complete the renovation.

• You're planning a new construction project and want to preserve more of your available capital.

• You've found a property to purchase and renovate, but the primary financing still leaves a gap between the capital available and the cash required.

 

The common problem is the same,  the investment makes sense, but the financing structure leaves the investor short of the cash needed to close, maintain adequate reserves, or complete the project.

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A Good Investment Shouldn't Automatically Die Because of a Cash Gap! 

 

How Does Gap Funding Work?

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Most real estate projects start with a primary loan. That lender determines how much it is willing to finance based on the property, project, borrower, construction budget, and its own lending guidelines.

 

The difference between what the primary lender provides and the total capital required for the project normally has to come from the investor.

 

That's the gap.

 

Breclaw's Investment Assistance is designed to provide additional capital alongside the primary financing to help qualified investors fill some or potentially all of that gap.

 

But, the objective isn't simply to reduce the amount of cash you bring to closing. We look at the entire capital structure to determine whether the project has enough money to get through construction, maintain required reserves, make loan payments, handle unexpected expenses, and reach the intended exit.

 

The amount of Investment Assistance available will depend on the individual project and financing structure. Not every deal will qualify, and not every cash gap should be filled.

 

The property, project economics, primary financing, investor's contribution, available reserves, and exit strategy all have to make sense.  

 

The goal is to solve the cash gap without creating a bigger problem after closing.

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Where Can Investment Assistance Be Used?

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Breclaw's Investment Assistance can be structured around several types of real estate investment projects where the primary financing leaves a capital gap.

 

• Purchase & Renovation

  • You've found an investment property and have primary financing for the acquisition and renovation, but the amount of cash required to close would leave you with less capital than you'd like for reserves, carrying costs, or unexpected project expenses.  

  • Investment Assistance may help reduce that cash requirement and preserve more of your capital for the project.

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• New Construction 

  • New construction can require a substantial investor contribution before the project ever gets off the ground. Land, closing costs, lender requirements, reserves, and construction-related expenses can create a significant capital requirement even when the project has strong economics.  

  • Investment Assistance may provide additional capital to help complete the financing structure while maintaining sufficient reserves to carry the project through construction.

 

• Renovating a Property You Already Own

  • ​Sometimes the opportunity is already sitting in your portfolio.

  • You may own a property free and clear or have substantial equity but lack the available cash needed to renovate, reposition, or complete the project.

  • Investment Assistance can potentially combine with primary financing to help unlock the property's potential without requiring you to fund the entire capital requirement yourself.

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​Have a Cash Gap? Let's Look at the Entire Project.

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A shortage of available cash doesn't necessarily mean the investment doesn't work. Sometimes the primary financing simply doesn't provide enough capital to close the transaction, maintain adequate reserves, and carry the project through completion.  That's where a different capital structure may help.

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At Breclaw Capital, we'll look at the property, primary financing, construction budget, available capital, reserves, and exit strategy to determine whether Investment Assistance can responsibly help fill the gap.

 

The goal isn't to put you into a project you can't afford. It's to help make sure a good investment has the capital it needs to succeed.

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Let's See If Investment Assistance Fits Your Project

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