Why Real Estate Developers are so lacking in Project Funding?

That is the number one on developers' wishlist – enough funding for their profitable Real Estate Developments. But why are they finding it hard to get funding?

It seems like they are out of favor with the banks. Only the big and mighty will have ample access to millions in loans from their banks. What if you are not big or mighty, yet you are an industrious developer with a lucrative Real Estate Development? You may be out of luck, regardless.

Banks only look at their risks and collaterals, not necessary the attractiveness of the Real Estate Developments, or the track record of the developers. They don't mean anything without enough bankable collaterals and cash.

Many developers will have to look elsewhere for their Real Estate Developments funding.

Unfortunately, not many funds are willing to invest in a greenfield Real Estate Development, as the risks are considered high and uncertain. What if a developer can transform a Real Estate Development into an asset yet providing returns similar to that of a prime asset?

We can only wait and see if Projagg will turn out to be a disruptor.

Can Real Estate Development be classified as an Asset Investment?

Why would Fund Managers rather invest in an asset with a 3% to 4% return with leverage, and wait for capital appreciation over a long holding period, than to take higher risk in Real Estate & Infrastructure Greenfield Development to achieve a higher return?

Capital preservation is definitely one good reason. The reluctance to learn about development risk could possibly be another valid reason. What if “RISK” can be removed, and investing in a Real Estate Development is as safe and easy as acquiring an asset? Wouldn't that Real Estate Development become an Asset-class investment? The only difference now is – the IRR will possibly jump 3 to 5 times as high.

There is one tiny startup that is gearing to help developers all over the world to make it a reality and put a wide smile on Fund Managers' face.

PROJAGG – The Developers best technology tool to secure Real Estate Development Funding

Projagg, the Real Estate Development aggregator, claims to reassure all Investors, Fund Managers, Family Offices, and Government officials, that no fund can be misused, abused or misappropriated, as long as the Real Estate Development is placed on its platform using its 2-Tier Vaultchain Technology and TenderSys Process.

Its 2-Tier Vaultchain will eliminate human intervention and temptation. Apparently, developers will not be able to touch the funds. No employees will be able to cheat, collect bribes or do favors once the TenderSys is deployed. It not only helps the “Funders” to preserve their capital, it will also benefit developers, vendors, and everyone in the ecosystem, as no mischief can occur. In fact, it is likened to be an anti-corruption, anti-bribery platform for the global development ecosystem. Even humanitarian programs can benefit if placed on the Projagg platform.

Looks like all Fund Managers should demand their Real Estate Development funding be placed on Projagg to guard their own interest first.

Huge untapped market

The Oxford Economics estimated the construction market in 6 major countries to be US$6.7 Trillion dollars by 2018, and $9.2 Trillion by 2025, based on 2014 prices. PwC has sponsored a new report - Global Construction 2030 - which forecasts that the volume of construction output will grow by 85% to $15.5 trillion worldwide by 2030, with three countries, China, USA and India, leading the way and accounting for 57% of all global growth.

As the world advances, there will be more infrastructure needed. More homes, buildings, factories and energy plants need to be built, as population congregates in cities. It is inevitable. The question is – how much of these developments will benefit as an asset-class and become more bankable in time to come. Or is this world of development only fit for the big and mighty? Can the private funds challenge the banks?

We can only wait and see if Projagg will turn out to be a disruptor.


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