Real Estate Development Financial Recovery Plan

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Description and Objectives:

Montaña Verde’s recovery plan is based on the changing market conditions leading to lenders, developers and their projects having multi-faceted problems which may include any or all of the following:

1:   Lack of liquidity and insolvency problems;
2:   Possible foreclosure proceedings;
3:   Inability to comply with construction deadlines;
4:   Unable to meet obligations to deliver units to buyers;
5:   Market/product mismatch leading to inacurate sales,absorption, and pricing projections;
6:   Consumer defaults on payments; and
7:   Lack of consumer confidence and buying power.

The above-mentioned issues, amongst others, have already had a detrimental impact on various regions throughout Mexico. These issues are adversely affecting the developer, financial institutions and associated industries related to it. Our plan forces the stakeholders to complete a reality check of their projects.

Our recovery plan consists of professional assistance to the lenders and/or developers, and their respective development project(s) in order to provide a plan for the completion of their projects.

Objective of the Recovery Plan:

The objective of the recovery plan is to provide solutions in order to bring the development project to a successful completion.

The recovery plan will provide the “client” with a two-part report, where:

PART 1: Market, demographic, and economic analysis

PART 1 will provide a comprehensive overview of the housing stock including:

• Current supply of competitive existing units, competitive units under construction and proposed competitive units;
• Pricing statistics including list prices, selling prices and discounts, if any, of the competition;
• Absorption rates of the available competitive units;
• Sales history of the competitive housing stock being investigated;
• Appreciation or depreciation rates of competitive units;
• Competitive homeowners association fees; and
• Amenities of competitive projects.

Critique and present our observations and provide reasoning why the project is in financial distress and deliver our recommendations of a feasible recovery plan.

PART 2: Possible alternatives

Using the findings ascertained in the analyses in PART 1, we will then obtain sufficient information to provide alternatives to assist in the “recovery” of the distressed project, which
could further be divided into two (2) segments:

A) Re-Focusing the Project – If the “product” is underperforming due to lack of proper market research/business plan and/or poor financial planning/control our services would include:

• Gleaning the information obtained in PART 1 to create a plan to redefine the project, redirect the marketing efforts, or both.

B) Buy-Out / Buy-In – Determine if the project as a whole is marketable or if there is a possibility to acquire additional financing or seek an equity partner where the initial financial
commitments are taken over or partially resolved.

• Re-focus the product and implement the correct procedures, to establish adequate controls;
• Then prepare possible “prospectus” documents to be able to present to prospective Buy-In & Buy-Out partners.

With this valuable information, Montaña Verde believe that the Real Estate Developent Financial Recovery Plan will provide us the tools needed to maximize stakeholders’ recovery.