Implementation Tips For Commercial Developers: Multiple Lending Sources

Business Scenario

Developer purchases land to develop commercial structure.
Developer would like to keep land development and construction all under one project.
There are multiple phases as shown below.
1. Acquisition Phase: Analyzing suitable property locations or building purpose (i.e. retail, office).
2. Design Phase: Working with architects and consultants to complete design.
3. Construction Phase: Building the structure with a construction management firm or general contractor.
4. Management Phase: Managing and maintaining the property.
There are multiple lenders involved in the first three phases.
The first three phases referenced above (ex. Acquisition, Design, and Construction) can be managed by Sage Construction Management and the instructions provided below outline the project management/job cost structure for these three phases.

1. Implementation Plan: Contact Management

Make sure all firms involved on the project including lenders are added in the Contact Management module.

Example Firms:

Lending Source A (e.g. Bank of America)
Lending Source B (e.g. Wells Fargo or Investment Group)
Legal Firm
Architect
Consultants
Construction Management Firm and/or GC

2. Implementation Plan: Project

There would be one project established in Sage Construction Management for the last three phases mentioned above.

Example Project:

Project # HBTownCtr
Project Title: Huntington Beach Town Center

3. Implementation Plan: Project Directory

The following companies should be added to the Project Directory.

Your Firm
Lending Source A (e.g. Bank of America)
Lending Source B (e.g. Wells Fargo or Investment Group)
Legal Firm
Architect
Consultants
Construction Management Firm and/or GC

4. Implementation Plan: Example Job Cost Codes

The Job Cost Code structure provided below is to convey a method for tracking costs and funding sources for the acquisition, design and construction phases. This structure can be modified to fit one's own technique. The Internal Division and Internal Division Description fields are optional. However, they are recommended since Sage Construction Management has report options to summarize project financials by these codes in addition to the Job Cost Code field.

5. Implementation Plan: Prime Contract #001 For Internal Cost Tracking Purposes Only

This is essentially a fake contract just to track actual costs and compare them with estimated cost budgets.

Issued By: Contractor

Issued To: Contractor (Same as Issued By)

Job Cost Codes Referenced in Original Budgets: # 1-26 above

Job Cost Code Budgets:

Cost Budgets = Anticipated or Estimated Cost Budgets
Contract Amount = 0
Labor and Equipment Hour Budgets = 0

6. Implementation Plan: Prime Contract #002 For Invoicing Funding Source A

Issued By: Lender or Funding Source A

Issued To: Contractor

Job Cost Code Referenced in Original Budgets: # 27 Only

Job Cost Code Budget:

Cost Budgets = 0
Contract Amount = Loan Amount from Source A (ex. Bank of America)
Labor and Equipment Hour Budgets = 0

7. Implementation Plan: Prime Contract #003 For Invoicing Funding Source B

Issued By: Lender or Funding Source B

Issued To: Contractor

Job Cost Code Referenced in Original Budgets: # 28 Only

Job Cost Code Budgets:

Cost Budgets = 0
Contract Amount = Loan Amount from Source B (ex. Wells Fargo)
Labor and Equipment Hour Budgets = 0

8. Implementation Plan: Expense and Invoice Tracking

All procurement and timecard transactions would reference Prime Contract 001.

Project # HBTownCtr : Huntington Beach Town Center
- Prime Contract # 001 : To Tracking Costs
  - PO or Subcontract # 001 : Environmental Consultant
  - PO or Subcontract # 002 : Lawyer
  - PO or Subcontract # 003 : Architect
  - PO or Subcontract # 004 : Consultant 1
  - PO or Subcontract # 005 : Consultant 2
  - PO or Subcontract # 006 : Construction Management Firm
  - PO or Subcontract # 007 : General Contractor
- Prime Contract # 002 : To Invoice Funding Source A (ex. Bank of America)
  - Prime Contract Invoice # 001: Bank Draw 1
  - Prime Contract Invoice # 002: Bank Draw 2
  - Prime Contract Invoice # 003: Bank Draw 3
- Prime Contract # 003 : To Invoice Funding Source B (ex. Wells Fargo or Investment Group)
  - Prime Contract Invoice # 001: Bank Draw 1
  - Prime Contract Invoice # 002: Bank Draw 2
  - Prime Contract Invoice # 003: Bank Draw 3

Order #	Job Cost Code	Description	Quantity	Units	Internal Division	Internal Division Description
1	00101	Land Acquisition	1	LS	001	Land Acquisition

2	00201	Environmental Studies	1	LS	002	Pre-Design Soft Costs
3	00202	Legal	1	LS	002	Pre-Design Soft Costs

4	00301	Architectural	1	LS	003	Architectural

5	00401	Consulting - Civil	1	LS	004	Consulting
6	00402	Consulting - Structural	1	LS
7	00403	Consulting - Mechanical	1	LS
8	00404	Consulting - Electrical	1	LS
9	00405	Consulting - Other	1	LS

10	00501	Construction Management Services	1	LS	005	Construction Management Services

11	01000	General Requirements	1	LS	006	GC Construction Services
12	02000	Site Construction	1	LS
13	03000	Concrete	1	LS
14	04000	Masonry	1	LS
15	05000	Metals	1	LS
16	06000	Wood and Plastics	1	LS
17	07000	Thermal and Moisture Protection	1	LS
18	08000	Doors and Windows	1	LS
19	09000	Finishes	1	LS
20	10000	Specialties	1	LS
21	11000	Equipment	1	LS
22	12000	Furnishings	1	LS
23	13000	Special Construction	1	LS
24	14000	Conveying Systems	1	LS
25	15000	Mechanical	1	LS
26	16000	Electrical	1	LS

27	FDS-A	Funding Source A	1	LS	FDS	Funding Sources
28	FDS-B	Funding Source B	1	LS	FDS	Funding Sources