When obtaining financing for land development, site improvements, and vertical construction costs, what out-of-pocket expenses do Epcon Communities franchisees typically incur?

When obtaining financing for land development, site improvements and vertical construction costs, franchisees typically incur some out-of-pocket expenses relating to obtaining the financing. (See Note 2).

These loans are typically funded through a broker relationship using private institutional or "family office" funds, require an upfront equity contribution by you ranging from 5% to 10% of the total cost of acquisition of the land and development of the project site, and require interestonly payments during the initial development of your site and construction of each Unit, followed by principal repayment installments due at the time of closing on each Unit. These loans also typically require substantially higher interest rates due to the lower upfront equity requirements of the loan.

When obtaining financing for land development, site improvements and vertical construction costs, franchisees typically incur some out-of-pocket expenses relating to obtaining the financing. (See Note 2).

Franchisees who obtain financing for land development and site improvements, as well as financing for vertical construction costs, typically obtain two loans for their project, though often both are through the same bank. The first covers the costs for land development and site improvements and the second covers vertical construction costs for each Unit in the project.

Vertical construction revolver loans are typically funded by a local or regional financial institution and require upfront fees based on the total amount of funding the borrower is requesting to have available for vertical construction.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 22–32)