New York, NY – May 16th, 2019 – In what’s been considered a robust condominium market nationwide, real estate developers have been pouring millions of dollars in profits down the drain. Interest rates have been low for some time, yet surprisingly developers are paying as high as 12-15% on construction loans. Many are sitting on untouchable capital that they simply can’t use to finance a project – until now, and averaging 2% interest at that.
Raffuel Surety Group, a NY metro surety bond agency, who specializes in real estate development and construction, this week released a ground-breaking industry article accompanied by a free online calculator illuminating the cost savings realized when electing to use escrow release bonds during the construction of condominium projects.
With development innately carrying high levels of risk, every dollar is meaningful during construction. Highlighting the usage of surety bonds as a financing tool for condo development projects, thereby enabling developers to reduce their interest expenses on a project, Raffuel Surety Group is helping real estate developers everywhere increase their profitability.
“In conjunction with the educational piece our team worked hard to perfect, we have released a cost savings calculator that real estate sponsors and investors can use to simulate financing scenarios using bonds,” said Steve Raffuel, Founder and Owner for the Raffuel Surety Group. “That way, they can have some peace of mind and identify cost savings immediately, helping them raise their profitability.”
Classified as an unsecured credit extension, surety bonds provide developers with options when it comes to the financing of condo projects. Specifically, using escrow release bonds in this instance, developers will now be able to use ‘sidelined’ security deposits collected from unit presales as a source of funding.
As the newly released article states, “Security deposits are converted to cash and substituted with an A-rated insurance backed bond, enabling cash to replace a portion of an outstanding construction loan. The net effect is a blended rate, or reduction in overall cost of debt via bond rates averaging 2%.”
“In essence, borrowing costs are reduced by substituting a portion of the higher cost loan with 2% bonds,” said Raffuel. “Using our freely available calculator, real estate developers and investors can learn about the tangible savings that result from this strategic arrangement.”
To use the Interest Expense Savings Calculator, visit: https://www.raffuelsurety.com/escrow-bonds.
About Raffuel Surety Group:
Headquartered in Princeton, NJ, Raffuel Surety Group is a team of seasoned professionals, spanning decades of experience in the surety industry, risk management, legal, engineering, project finance and investment management fields. The firm’s diverse composition and broad surety market representation excels in the understanding of unique and complex transactions. RSG founded a proprietary international surety brokerage network designed to provide ‘boots on the ground’ representation in major money centers worldwide, sharing its depth of knowledge and resources for the benefit of its members and their clients. Surety is what they do. It’s all that they do.
Company Name: Raffuel Surety Group
Contact Person: Steve Raffuel
Email: Send Email
Address:20 Nassau St; Suite 406
Country: United States