Are date down endorsements on a construction loan part of the project costs?
Yes, they are part of the project costs.
What are date down endorsements and why are they important?
Date down endorsement show that the title is clear and no mechanics liens have been filed ahead of AVANA’s loan position.
What is EPC and OC?
EPC is Eligible Passive Company and OC is Operating Company.
How is income transferred from an EPC to an OC?
EPC holds the title of the real estate and OC pays leases or rents to the EPC on a monthly.
What evidence would you look for?
The OC operates the business. Evidence of the rental agreement between EPC and OC is from the lease agreement and evidenced monthly by the payment of rent from the OC to the EPC. This is shown in the P&L. The EPC will show rental income and deduct the interest, taxes and depreciation on its financial statement.
What is an ALTA survey?
An American Land Title Association (ALTA) survey contains data specifying boundary lines, location of the main building including improvements, location of ancillary buildings, and the identification of utility and municipality easements.
Why do we need an ALTA survey?
An ALTA Survey is important so that the owner and lender knows the specific limitations/boundary line of the property. It will mitigate the risk of occupying the property beyond its boundaries.
When should you order an Alta survey?
An ALTA survey should be ordered prior to the closing as the title company requires it to ensure a clear title for the lender and the owner. It can be ordered at the same time 3rd party reports are ordered. In the event of construction, the ALTA survey should be ordered before construction starts as well as after completion.
What is the typical range of the cost of an ALTA survey?
An ALTA survey costs between $2,500 and $3,000.
Project cost is defined as the total cost of the project including land, loan fee, hard costs, soft costs, contingency, interest reserve and closing costs.
Hard Costs are all construction building materials that go into constructing the building including site work, actual construction costs which include the foundation, framing, mechanical, electrical, plumbing, drywall, roofing, solar (if applicable), landscaping, etc
Soft costs are typically services provided such as architectural and engineering fees, interior design, permits, city impact fees including architectural fees, interior design, permits, city impact fees, fees for the drawings, civil engineering fees.