WHO WE LOOK FOR
Urban Mutual will usually invest alongside a professional real estate development company – often called a “sponsor” or “operator” (the Developer) – that is able to source and acquire viable projects and perform the necessary development and construction management once the property has been acquired. UM can provide most (or all) of the entire capital stack required for any single opportunity, with the understanding that it will then share in some of the project’s upside profit benefits (and also share the risk).
Urban Mutual will review each project and circumstance separately, on a deal by deal basis, but typically we want to know that the Developer/Sponsor contributes at least 5-10% of the equity capital for the project – which may be equal to only 1-3% of the entire project cost – so that the sponsor has sufficient “skin in the game” to ensure interests are aligned. Saying this, Urban Mutual can, and often does, fund the entire 100% Equity Stack required to fully fund the project, and we can package a 100% LTV/LTC development funding program on a case by case basis, subject to our underwriting guidelines.
WHO WE LOOK FOR
Urban Mutual primarily seeks suitable Fix & Flip renovation-based builders and developers with whom to partner and joint venture via our Preferred Equity Joint Venture Program.
Our goal is to enable qualified professional developers and investors to expand their business by taking on one to five more development projects if they have the building and infrastructure capacity to do so but lack the necessary funding and equity required.
EQUITY + DEBT PROGRAM KEY
Urban Mutual / Limited Partner
Developer / Operating Partner
Provides the majority or all of the capital (usually 90-100%)
Receives a “preferred return” on the investment (often 9-13%)
Provides a small portion of the capital (usually 0-10%)
Receives the same “preferred return” as Limited Partner on its own invested capital (9-13%)
Receives a share of the net profits (typically 25-50%)
Receives a share of the net profits (typically 50-75%)
Can receive general contractor, project management and agent fees relating to property acquisition, disposition, project management and construction:
Acquisition and Disposition/Property Sale fees (often 3-6% agent commission)
Project Management fees (often 3-10% of the construction budget)