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Top Adding - Commercial Real Estate: Raising Equity
Those researching the subject of commercial real estate investment are likely to encounter the term “OPM” on a regular basis. OPM is an acronym for “Other People’s Money.” I’ve covered this topic in genera
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
l in an earlier article, but today I want to focus on raising “equity” for your commercial purchase transactions.
To review, the reason many people are reluctant to invest in commercial real estate is that
To review, the reason many people are reluctant to invest in commercial real estate is that
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
the property values are often so high that it takes a great deal of money to complete a transaction, even using75% to 80% loan to value commercial loan. Few individuals have the financial resources needed t
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
o buy suitable properties for cash, let alone the $1,000,000 or so you would need to purchase even a moderately priced $4,000,000 building. This is where the concept of using other people’s money comes into
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
play. The idea is to pool the funds of like-minded investors to purchase a property and then duplicate the process to build a portfolio.
The difficulties facing most investors are finding the other people
The difficulties facing most investors are finding the other people
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
with the money and proactively structuring the transaction. Everyone needs to be clear on their role in the transaction, how profits (or losses) are distributed, how results are reported, and how the proje
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ct ends successfully. The process is not as difficult as it may seem at first and it even has a name: “Syndication.” Potentially, even commercial real estate syndicators with little or no credit history h
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ave access to hundreds of thousands of dollars, all as close as the people they already know. One word of advice here, though: Start making a serious effort to clean up your credit if you are challenged in
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
this manner. You may have to guarantee some loans and you don’t want your credit history to be a stumbling block.
Before you start telling everyone you know that you are raising money for a commercial rea
Before you start telling everyone you know that you are raising money for a commercial rea
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
l estate investment, there are some things you need to know and that you’ll likely have to research:
First, you need to understand investment entities, such as Limited Liability Companies. You need to know
First, you need to understand investment entities, such as Limited Liability Companies. You need to know
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
how they are formed, operated, taxed, and unwound because they will be your primary investment vehicle. They also establish who is responsible for what actions through the life of the investment.
Second, y
Second, y
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ou need to learn about and understand a document called a “Private Placement Memorandum.” It has other names like “Investment Circular,” “Investment Disclosure,” etc. This is the document that discloses al
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
l of the potential risks inherent in your proposed investment. You need to be extremely thorough in discussing those risks because should something go wrong with the investment and you don’t cover it here,
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
you could be subject to a lawsuit. One key aspect of this part of the process is having a good attorney working for you with experience in these types of transactions.
Third, you need to have good analysis
Third, you need to have good analysis
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
and presentation skills. You should know the ins and outs of spreadsheets (or know someone who does) so that you can dissect a transaction completely and put together a good case for making the investment
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
to your potential investor partners.
Fourth, you need to find the investors. Start with busy, successful people whom you know, who have more money than time: Your doctor, dentist, psychologist, veterinari
Fourth, you need to find the investors. Start with busy, successful people whom you know, who have more money than time: Your doctor, dentist, psychologist, veterinari
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
an, accountant (who is really good for knowing OTHER busy, successful people with more money than time), attorney, dry cleaner, golf pro, etc. You’d also be surprised how many people you know who have I.R.A
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
.’s or 401k plans full of under-performing money who are looking for a good investment vehicle. You can advertise for investors, but be VERY careful before doing this. You MUST talk to your attorney about
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
local securities laws and how they affect what you say and to whom you say it. You want calls from investors, not regulatory agencies!
The process of raising commercial real estate investment equity isn’t
The process of raising commercial real estate investment equity isn’t
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
rocket science, but it does involve some study and the help of some knowledgeable professionals. Take your time to do it right and you’ll be making more money (your own, this time) than you thought possible
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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