In this monologue, the speaker outlines a proposed real‑estate development in an Opportunity Zone, detailing a financing structure that starts with $4 million cash up‑front, carried as debt with a private lender, and an $8 million amount that will be converted to equity to provide investors a preferred‑return K‑1 style distribution within a $30 million fund. To make the project shovel‑ready for the Opportunity Zone fund, an additional $18‑22 million is needed, potentially including the acquisition of adjacent lots. The plan is to expand the existing 64‑unit scheme to roughly 150 luxury mixed‑use units, adding retail on the ground floor and high‑end residential units above. The speaker emphasizes that Opportunity Zone designation does not require affordable housing, allowing a full‑luxury approach. Finally, they request a run‑through of the deal numbers and a review of the financials.
Chapters
Are you ready to run this deal? That has to be like affordable loan. We went back and gave it these notes and said that we wanted it to be option C, was that we give $4 million cash up front, carry that, you know, put that on a, on a, on a, on a debt with, with one of our private lenders. The $8 million would be converted to equity. And the reason why we can convert that to equity is so that we can give him a preferred return month, you know, like a, a K-1 disbursement, like an investor, and give them $8 million of a $30 million fund that we're going to start to do this project anyway, right? To get this thing to shovel ready for the Opportunity Zone Fund to come in and buy it, we need to make it shovel ready. The only way to make it shovel ready for them is to invest somewhere between $18 and $22 million to get everything done there that we need to do. And that is even maybe even buying up a couple of those other smaller lots right in there to kind of help us get that development way, because what we'll do is we'll get it ready to become— I think it's currently set up for 64 units. We can probably blow it out, especially if we get a couple other pieces there and probably blow it out to about 150 units, but make them full luxury. The area would allow for multifamily, but I want it to also allow for input. So what we're going to do is we're going to maybe put some retail down on the first floor and then the houses up on top and luxury at the top, top, right? And so build it out to have the 64 units of, of, of nice apartments with the, you know, another 60 units above that. Because now, based on when they started the project, now there's other buildings that have broke the skyline barrier and gone up higher. They've changed some of the zoning rules and we go in and say, hey, like, let us get full luxury in an opportunity zone, right? Just because it's opportunity zone doesn't mean that it has to be like affordable housing. Does not designate affordable housing. So go ahead and run this prompt and bring, bring us up to speed with this deal now and review the numbers.
