Tommy DobczykOpportunity Zone Advisor, OZ Wizard · Director of Development | Certified Opportunity Zone Advisor

Unlock Investor Profits: Developers Make Money Too! #shorts

30 Jun 2026 · 1 min

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1:27

In this short dialogue, Speaker A and Speaker B discuss how to transparently disclose developer compensation to investors while structuring a $33 million construction debt offering. They outline the current 70/30 split between management fees and developer fees, propose retaining developer fees but sharing management fees and promote. They estimate construction loan interest rates at 8.5‑9.5% and describe creating a contractual debt structure that can guarantee investor returns, positioning the developers’ profit as a justified component of the overall deal.

Chapters

We will have to disclose that you guys as developers are making money as well off of that. But again, when you're able to show that the profits from the actual development are going back to the investors, you can easily explain, well, this is how we get paid. Don't you want us to make money?
So just to case study, so right now we're doing 70/30, what we're doing, we're doing management fees and developer fees. If we were to bring it to you, then we would keep our development fees, but we'd split the management fees and promote.
And you'd actually, and we would just have tied into that. We would also, for example, have, we could actually create the debt structure and create the debt offering for investors to put into. And so I don't know what you guys were imagining paying for debt. I believe you guys were wanting to raise was it $33 million in debt roughly? So let's just play rough numbers. At $33 million in debt, what were you anticipating and paying on an interest rate for that?
Uh, construction would be 8.5 to 9.5% construction permit.
Got it. So the, at what we would end up doing is we would end up being able to debt structure for you on the construction and the debt side of it in a way that because of that, because of the contractual portion of it being a contractual debt structure, we can guarantee those returns to investors instead of back.