Name: PAJARILLO, PHREXILYN D

Student Number:
School: LYCEUM - Alabang

Homework:

1. Enumerate the Conventional Sources of Financing?

The following are the Conventional Sources of Financing:

1. Insurance companies
From an equity aspect, these firms play a significant role as sources of funding
for real estate. Their lending is usually done through local correspondents. This
usually entails long-term commercial and industrial financing.

2. Commercial Banks
Commercial banks provide funding for a wide range of loans. While commercial banks
may occasionally finance long-term residential acquisitions, their principal real estate
activity is focused on short-term loans, notably construction loans of six months to three
years and, to a lesser extent, home-improvement loans. Through their trust
departments, mortgage banking operations, and real estate investment trusts, several of
the top commercial banks are actively involved in real estate finance.

3. Pension Funds
One of the options for financing real estate is through pension funds. These funds were
invested in equities and bonds, but their rapid rise has necessitated new investment
avenues. This increase, along with the attractive returns available from real estate
investments, has resulted in significant engagement in real estate finance.

4. . Real Estate Investment Trusts (REITS)

REITs are divided into three categories. An equity trust invests its funds in obtaining real
estate ownership. The majority of their revenue comes from the property's renting.
A mortgage Trust Invests in acquiring short term or long term mortgages.Their earnings
come from the interest earned on their investment portfolio A combination trust
combines the features of both the equity trust and the mortgage trust. . Rentals, interest,
and loan placement fees are how they make money

5. Individual Investors
Throughout the Philippines, there are a number of significant investors that are
continually lending money to real estate developers. Individuals with accessible
finances, groups of investors looking to purchase a mortgage, and huge investment
firms looking to diversify their portfolios are among these investors. They work with
mortgage brokers as well as direct clients. Many of these investors also want to engage
in real estate as part of an equity holding. T. It is thus possible to raise equity capital
through syndication instead of relying
solely on mortgage funds.

2. Enumerate the Unconventional finance sources?

The following are Unconventional finance sources:

1. Hedge funds
A hedge fund is an investment vehicle that caters to high-net-worth individuals,
institutional investors, and other accredited investors. The term “hedge” is used
because these funds historically focused on hedging risk by simultaneously buying and
shorting assets in a long-short equity strategy.

2. Peer to peer lenders.

Peer-to-peer (P2P) lending enables individuals to obtain loans directly from other
individuals, cutting out the financial institution as the middleman. This can be done on
formal or informal agreement.

3. Convertible debt instruments.

These are asset-backed loans that require the real estate business owner to give up
some future ownership in the real estate, such as future rentals, in order for the lender
to convert the debt to equity in the firm. The advantage is that it is less risky for the
lender because it is based on an ongoing investment like refurbishment.

4. Venture-Capital-Backed Company Loans

Although confined to a small group of qualified enterprises and typically geographically
concentrated in select locations, this bank-based loan source offers considerable
benefits to qualifying companies. This approach permits enterprises that have
previously received funding from venture capital firms that have built ties with certain
banks to obtain bank financing based on the bank's reliance on the previous venture
capital firms' due diligence.

5. Mezzanine finance sources

Mezzanine finance sources include private investors, mutual funds, pension funds,
insurance companies and banks.

6. Equity finance sources

Equity funds are wholly generated and owned by one and to which there is no
attachment.

3. Enumerate Corporate & Project Funding Techniques?

The following are Corporate & Project Funding Techniques:

For Project based financing

A. Equity financing techniques for project based developments
i. Forward funding
ii. Financing through joint ventures.
iii. Partnerships
iv. Lease and lease back
B. Debt financing techniques for project based developments
i. Mezzanine financing technique
ii. Bridge and Gap financing technique
iii. Forward sale
iv. Bank project finance techniques
v. Interest only loans.
vi. Private mortgages

For Corporate financing :

A. Equity financing techniques for corporate finance
i. Ongoing partnership agreements
ii. Disposal of company assets
iii. New capital issues such as rights or offers
B. Debt financing techniques for corporate finance
i. Financing through multimillion financing facilities
 ii. Convertible loans
iii. Commercial paper
iv. Deep discount bonds

For DEVELOPMENT AND INVESTMENT FINANCE

A. Funding methods for finance for development

i. Mortgage financing
-Blanket mortgage
-Bridge Mortgage
-Open ended Mortgage
ii. Partnerships and joint ventures.
iii. Financing through short-to-long term bank loans

And Other common financing techniques:

A. Seller Financing
B. Ground Leases
C. Land Contracts
D. Acquisition financing
E. Refinancing