World nations and economies are brought to a standstill by the Covid-19 pandemic. Recovery will surely take time, although some nations are looking to restart their economic engines. Small and medium-sized builders find it challenging to stay afloat where the playing field for developers in real estate is surely not level. Governments and private financial institutions seem not in full support of this segment of the developers’ ecosystem. They are more focused on large scale developers.
Being a property developer has never been an easy task, especially for private developers. There are small-scale and large-scale developers. For them, it’s a long-term, entrepreneurial undertaking. A developer needs to make sure that the newly designed and designated real estate will have enough value (and meet sufficient demand) to compensate for the time, labour and other resources devoted to the project. Their main headache has always been funding.
Borrowing money for development if you’re an established property developer is relatively easy. Still, the interest rate for property developers is high, and many small-time property developers soon get in over their heads. Consequently, borrowing money for their development can be difficult. Financing has been tight in the real estate market due to lack of liquidity, thus, casting doubts on the future of real estate prices. Such impact also adversely affected the development/redevelopment market where capital funding is diminishing rapidly, i.e., the banks and financial institutions are not willing to give out loans to these developers even if they have collateral. This has mainly affected small-scale developers.
In some cases, they are restricted through community zoning laws. Developers might have to get permission from city planners to change the designated zones to their needs. However, in a complex modern society, real estate development requires knowledge of financing, legal restraints, property taxes, business and market forecasting, and project supervision.
As mentioned earlier, LorcFinancing offers to real estate developers and/or landowners who want to raise funds for their projects an opportunity to raise liquidity through the crypto ecosystem at a relatively lower rate by collateralising their real estate assets and/or projects. This is subject to clearance from the voting process via Land Governance Tokens (LGOV).
Once clearance is obtained for LorcFinancing and its corresponding LandNFT being issued, the participating real estate developer will have to provide land collateral at an over-collateralisation ratio of two times (2x) over the aggregate financing amount. The asset collateral will be pledged to a local special purpose vehicle that is affiliated with LandOrc. The over-collateralisation ratio of 2x is to ensure sufficient liquidity cover in the event of a force-sale situation. Funds will only be released after the completion of all these processes.
LandOrc would enable real estate developers to gain access to a global capital marketplace as well as a borderless crypto ecosystem, allowing them to secure financing at a comparatively lower interest than their domestic markets and without costly fees, slow processes and restrictive conditions that are typical of mainstream financing options like banking loan.
These real estate developers, who face problems financing their projects, can now approach LandOrc for alternate financing. Existing real estate assets back LorcFinancing as collateral. It works like this. A real estate developer needs funding for his project. He has got land to use as collateral. They can approach LorcFinancing, collateralise the land for a relatively lower borrowing rate and start working on their projects. This is subject to clearance from the voting process via Land Governance tokens (“LGOV”). LorcFinancing offers an opportunity to raise liquidity through the crypto ecosystem and lend it to these small and medium-scale developers, holding their collateral. LandOrc is ready to rescue these developers.
They are having their private sale now with three months vesting. You can buy your LORC tokens through https://landorc.io/private-sale.html
Sources:
https://landorc.io/private-sale.html
www.theedgemarkets.com/article/cover-story-overcoming-tough-times
