REAL ESTATE JOINT-VENTURE PROCEDURES

Joint-Ventures
We work with land-owners with clean titles and deed plans:
1. Land owners provide land with clean title deeds
2. Land owners pays a retainer fee of USD 10,000 to BYG to:

a. Carry out due diligence on the land and title deed

b. Commission an established Real Estate firm to carry out a best-use study for the land
and a market feasibility study

c. Working with our Architect to develop a concept design and budget cost for
development

d. If the Client approves the design, then we will commission a land valuation
3. We set up a Joint-Venture Company with shares allocated pro-rata between the land value (+
premium) and development costs. The landowner will transfer the land to the JV Company as a
contribution towards its shares in the JV Company. A joint venture agreement is signed
between the landowner and BYG-Mashin.
4. BYG-Mashin Construction takes over as developers and raises funds, and charges the land as
required.
5. BYG-Mashin Construction completes the construction and releases property according to the JV
agreement.

6. The JV Company is closed.

Development Financing
If the land owner simply requires financing to develop the land:

1. We only fund projects that have feasibility study and/or market study, with current intelligence
on the market segment in which the Project is located. The research must include market study
with target buyers on the appropriate sector (residential, commercial, etc).
2. Minimum financing is USD 3 Million, and not exceeding 70% of the total project value. The 30%
can include the value of the land.
3. Engagement Fee of USD 10,000 is applicable for projects that are “fund-ready” i.e. it meets all
the funding requirements. This is a one-off payment.
If your project is not “fund-ready”, then a monthly retainer fee of USD 10,000 will be required.

4. Financing will be in the form of Loan and will require a bank guarantee from an acceptable
commercial bank. The bank’s financial performance has to be reviewed by our financing
partners.

5. Typical financing terms are:

USD 5 to 100 million
Loan period of 2 to 10 years
Interest Rate LIBOR + 350 basis points (currently IR of about 4 to 6%)

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Local Bank Guarantee fee of about 2% per annum

BYG one-off success fee between 2 to 5% of funds raised

Application process
1. Applicant fills in a Project Brief indicating all the documentation available

2. If the Brief is accepted, Application signs a mandate letter with BYG, and pays the
engagement fee.

3. BYG (on behalf of the funder) issues a Term Sheet to the applicant

4. If the applicant approves or wants to proceed with the offer, the applicant signs
a Memorandum of Understanding (MoU) with the Financier and also provides
a preliminary letter of intent to issue a commercial bank guarantee (if required)

5. Funder and Applicant negotiate and signs a contract

6. For some funds, Client Main Contractor must be from the funding country

Funding Sources
Our funding sources are from: Africa, Middle East, Europe, and the United States of
America.

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