I currently have several Capital Resource/Equity Development Companies that allow individual equity investing. All Companies' methods of development are basically the same. The contractors they use are proven, stable, profitable, and accustomed to using ANGEL investors. The process flow goes something like this;
Identify a property with profit potential.
Secure a one year lease with first option to buy, if necessary. The lease/verbal agreement, allows for engineer studies etc.
Determine the logistic, environmental, excavating, construction, engineering, and/or legal cost. These cost are normally the equity investment opportunity.
Develop the footprint and format layouts. Footprint: traffic,surrounding businesses, population, mean income, etc-etc. Layout: an example would be HEB requires 18-20 acres basic.
Identify potential companies that fit the (Fol) footprint of operation and layout.
Secure interest and a commitment from a company (the commitment is the would be interested if you could develop this {a completed layout}to include all design blueprints etc.; meeting their specific requirements.
Submit the layout and blueprints to contractors for bids.
Re-asses profitability.
Secure an agreement of contract )usually 12 to 15 years lease) form the company (HEB-Payless Shoes etc.) A typical lease might be say, $119k, a yr.
Purchase the property
Let the bids when all parameters are met. The parameter guidelines normally are: The bank 10%-Equity investor 20% Contractor 40%, Developer 30%. Of course, the amount of thise 30% is the deciding factor for the developer; they will seldom do a project that nets them less than 50k. A single pad modified existing structure being the exception. Like the StarBucks in Brownwood, Tx.
The normal contract is 16 to 54 months. During this time the investor is receiving 8 to 12% on all funds drawn as the draw occurs, for the entire length of the contract. This interest agreement and your principal are your only written guarantees.
The rate of return from any developer over the last ten years has been as low as 12% and as high as 298%, within a low of 3mo. to a high of 54mos. As soon as the contract shows signs of completion without any surprises normally at 80%, is put on the market and sold to capitol ventures or individual investors. One property I sold was purchased by a Player from the Utah Jazz.
My desire is to provide individual investors the opportunity to get involved and capitalize on this little known method of earning and/or wealth building.