By the way Brant, we need a proposal.

On Saturday, Dr. Forgey tasked us with recruiting guest speakers for each process in the development spectrum; my lot fell with the lender. This actually worked well with my list of phone calls that I needed to make this week, as the majority of them were to perspective lenders on the project. So my tactic was to first, ask for money for our project, and depending on the rapport built during said conversation, present them the opportunity to speak to our class.

And so the week began. I started Monday by making a few preliminary calls to perspective lenders, going through my list of lenders found on the Fort Worth South website. The same story from the week before; no appetite. However, my scenario, thanks to Dr. Forgey, had changed a bit. This time I was asking for TI loans.

One of the new names I was able to ferret out from some lender contacts I have was one Brandy Headington from first National Bank. She told me that she would have one of her managers contact me to let me know if anything was available for that type of project...still waiting for the phone to ring. So, from that point, I decided to go straight to the horses' mouth with the proposal. I found the information for the owners (Prescott Interests) and floated our ideas to Richard. After 3 unsuccessful attempts to get off the phone with me, he finally agreed to look at the elaborate proposal that I and my architect were putting together and put it in front of the investment committee for approval. (By the way Brant, we need to start putting together an elaborate proposal).

The reasons Richard gave for "not being interested" were as follows

1. Time: he feels the development/lease-up process will take too much time, therefore creating a large opportunity cost to him and his committee.
2. Not comfortable with the cost: he sees this as a project that could fizzle out mid-stream, forcing him to pony up the costs to finish the job, just to sell the property at a loss (by the way, they have already written off the property as a loss)
3. No partner needed: I threw out the idea of JV, and he said: "We are developers ourselves. Why the hell would we take on a partner. Plus, if we thought this property could go res [residential], we would have done it ourselves."

So, in our proposal we will be sure to include:

1. Quotes from contractors on how short the construction process will be. In the meantime, we will agree to a "first right of refusal" spot if any prospective buyers/tenants come along.
2. Show that no cost will be due from them in the "rent differential" equation. In fact, there will be less cost to them under our scenario than current, as our master lease will cover expenses.
3. Stress the time to travel to this site (43 miles) and the hassle we will relieve if we are able to take on this project and manage the outcome.

Our presentation will include much more than this, but it is good to know what the objections of the other side will be before you make your argument.