Pete Goff derives his refreshing perspective on real estate development from the hands-on experiences of ten years as a general contractor building upper-line, custom homes and more than a decade as a bank officer structuring and overseeing the financial arrangements provided to developers, et al, by Louisiana’s leading real estate development lender.

Pete’s perspective, simply stated, is that developers, general contractors and financial institutions need to take a more comprehensive approach to real estate development.  “Comprehensive” defines an approach that encompasses all elements relevant to achieving the one mutually beneficial goal shared by a project’s developers, general contractors and the participating financial institution – that is the successful project.

The comprehensive approach begins with organization and presentation of all relevant elements in a form that facilitates the exchange of information and the participants’ work on properly fulfilling their respective due diligence requirements.  These activities increase participant focus on the success of the project and thereby expedite selection of the most appropriate structure for the infrastructure construction project, project financing and project exit strategy.

The comprehensive approach system is designed for:

• confidential openness – “everything on the table up front”, including appropriate classified materials, creates an environment conducive to exchange, cooperation, flexibility,…  
• development framework – a process for determining the basic structure of the development,  the financing required to make that structure work, and the exit strategy capable of repaying the financing…  
• development monitoring – monitoring uses a structured procedure compliant to fiduciary standards that incorporates continual independent inspections for verification of contract performance…
• disbursement accuracy – disbursement tracks independent inspection and verification to assure disbursements are accurate in amounts, items and time of transfer…
• real-time, unambiguous and complete financial information – a straight-forward process for data management and accounting documents the project’s financial activities over a period of time and provides complete financial information in a clear and concise format…
• real-time project assessment – the financial information process generates up-to-date financial statements and analyses that give a clear picture of project status and alert participants when action is required for the project to “stay the course” uninterrupted…
• lender liability considerations – lenders must take steps to limit, or avoid, exposure to liability from loans made with poor loan structure, loans made to projects that have an insufficient income potential for repaying the loan, loans made without properly considering all due diligence requirements, loans made because the institution wanted loan growth, etc.  This means a more comprehensive approach must be adopted...