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home . about . conventional finance . securitization . private equity . joint venture . alternative funding . history of instruments . contact us PROPHECY FINANCIAL LLC REAL ESTATE PROJECT FUNDING CONSULTANTS |
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alternative investment funding
Capitalize your company Based on our past experiences involving the investment practices and techniques of multi million dollar institutions, pension funds, trust funds and high net worth individuals, we have implemented a process whereby commercial and residential developers are able to finance their own real estate projects in a similar manner. Using the same principals and investment strategies which generate substantial returns by leveraging collateral to facilitate the risk mitigated private acquisition and matched sale of bank issued investment grade financial instruments in order to create the funding necessary to complete the construction of viable projects, we are able to offer developers an alternative solution to conventional financing that is both safe for the participants and strong enough to generate the required project funds in a timely manner. The only requirements of the owner/developer involved in this type of transaction are adequate liquidity, the ownership of tangible and professionally assayed or appraised business assets that may be securitized to create a credit facility, or the ownership of bank issued cash backed investment grade financial instruments. There are three ways to implement the funding process. I will explain the available options as simply as possible and as follows: (1) The first option consists of securitizing professionally assayed and/or appraised assets to create the necessary liquidity. Basically, what this means is that it is possible to utilize the business assets that a company or individual owns outright or contain substantial equity by having a major bank issue a commercial line of credit based on a percentage of the value of the assets. The line of credit would then be mirrored as collateral to facilitate the risk mitigated private acquisition and matched sale of bank issued investment grade financial instruments in order to create the returns necessary to fund the project. The returns generated are deposited into a separate account that the owner will open, in their name, to receive them which can be used directly to fund the owners’ project. When the desired amount of project funding has been accumulated in the owners account, the owner can then choose to discontinue activities. At this point, the assets that have been pledged can be disengaged. Fees and professional charges are deducted as a percentage and in proportion to the returns that are paid into the owners account. The Line of Credit amount is required to be a minimum of One Hundred Million USD. (2) The second option consists of the same procedure as above, but does not involve the securitization of assets. The owner must simply be capable of providing proof of a deposit account in a major International or US bank (AA rated or better) in the owners name, or owners company name, which is able to be verified on a bank to bank level similar to the above scenario. The account would then be mirrored as collateral to facilitate the risk mitigated private acquisition and matched sale of bank issued investment grade financial instruments in order to create the returns necessary to fund the project. The returns generated are deposited into a separate account that the owner will open to receive them which can be used directly to fund the owners’ project. When the desired amount of project funding has been accumulated in the owners account, the owner can then choose to discontinue activities. At this point, the funds that have been pledged can be disengaged. The principal amount of cash funds under deposit is required to be a minimum of Twenty Five Million USD. (3) The third option consists of the same procedure as above, but involves the clients ability to prove ownership of existing cash backed investment grade financial instruments (Certificates of Deposit, Letters of Credit, Medium Term Notes, Treasury Bonds, Securities, etc). The instruments are acceptable if they have at least one year left on their term and are issued by a major International or US bank. Fees and professional charges are deducted as a percentage and in proportion to the returns that are paid into the owners account. The face value of any cash backed financial instrument is required to be a minimum of Fifty Million USD.
Our alternative funding program The initial principal amount or asset will never be exposed to risk as, in the case of cash funds under deposit, and at the clients direction, a bank implemented non depletion mechanism can be installed on their account from which the clients bank can issue a commercial credit facility or an acceptable instrument in the clients name (as beneficiary), or in the case of an asset in safekeeping, an SKR. We do not allow the funds or asset to leave the clients account or sole and absolute control for any reason or at any time. Our clients safety and comfort during the transaction is paramount. We do not require any type of joint accounts, lawyers escrow accounts, or trust accounts as this would not be conducive to the open and transparent business relationships we wish to create with our clients. There are no up front fees, no application fees, no due diligence fees and no BS. Only when our clients make money, do we make money. Our income is solely based on our clients’ success. We will require a small percentage of the returns made on the transaction, proportional to the total dollar amount of the project, which will be specifically addressed in a written agreement which can be fully reviewed by the client before any participation commitment has been made. Alternative project funding is certainly a viable, feasible and risk mitigated option to generate funding for commercial and residential development projects. We strive to supply our clients with the leverage and knowledge necessary to ensure a successful and profitable endeavor. Please keep in mind that our primary goal is to provide our clients with solid, professional business and financial advice, now and in the future.
Here's some initial advice for our potential clients: 1) Do not spend the funds you have set aside for equity in your project when you don't have to 2) Leverage the set aside funds, risk free, to create capital for your company to fund the project 3) Do not incur the recourse and liability of debt or equity financing when it is not necessary
If you're still not sure about our alternative investment strategies and techniques, answer these questions: a) When you invest in the best stocks or bonds on the market is your principal at risk for loss? b) When you invest in equity and derivatives futures or margins is your principal at risk for loss? c) When you invest in a managed hedge fund is your principal at risk for loss? d) When you invest in real estate as a joint venture or sole owner is your principal at risk for loss? e) When you gamble in Vegas, is your principal at risk for loss? (OK, I'm being a little extreme)
If all the answers are yes (which they are), why do you take the risk? Because we are all taught to believe that "if there is no risk, there is no reward" and "the greater the risk, the greater the reward" (that's if you don't loose the principal along the way). When we need capital for our businesses and projects, we are taught that we need to borrow it. First from our bank and if they can't do it, from a partner or through a joint venture with some type of managed fund and as a last resort, through a hard money lender. We are taught to incur debt and liability. With debt and liability comes recourse which penetrates deep into our personal assets that took so long to accumulate and were earned at great costs. This is conventional methodology. Contrary to this indoctrinated belief system is the golden rule among almost all successful high net worth individuals and families which is "never under any circumstances, touch the principal". So remind me, why do you accept increased risk and not follow this rule? It sounds like plain and simple common sense. Your next question should be, "if the golden rule is to never touch the principal, how do they create capital and increase their business wealth with acceptable risk?".
The answer is leverage. We provide our clients with the knowledge to use it. Stop thinking conventionally, its too risky. Open your mind and climb out of the box.
Contact us by email with any questions at prophecyfinancial@gmail.com
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All rights reserved, 2007-2009 Prophecy Financial LLC, Sandy Hook, Connecticut, USA This document is for
informational purposes only and is not a solicitation for the purchase or sale
of any securities, nor a solicitation of investment funds or placement. This
document does not represent the policies of any bank or financial institution,
is not intended as a confirmation of any transaction, and does not consist of
any legal, securities or tax related advice.
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