Real estate investment firm Walton Global Holdings Ltd. and its affiliates collectively known as Walton have launched the first Builder Option Land Development (BOLD) Fund in the US.
Walton will first collect information from homebuilding companies about the sites where they are planning to undertake short-term residential projects. Then, it will reach an understanding with the house building firms about payment terms and conditions as well as breakdown schedule. Finally, it will seek investors for the BOLD Fund. The fund collected will be invested in acquiring the properties standing on the land which the house building firms want. The properties acquired will be sold to the housebuilding firms in phases.
Thus, home building companies will not have to pay for the entire land at once but can break up the project in small parts. Homebuilding firms will be able to choose from a variety of payment options. Thus, the BOLD Fund will reduce the financial burden on home building firms and gives them a range of options for repaying the loans.
The investors in the BOLD Fund will receive annual payments after the houses are developed and sold on the acquired land.
Bill Doherty, CEO of Walton Global Holdings said,
Our new BOLD Fund provides homebuilders with a land acquisition opportunity to work alongside an international real estate investment and asset management company for securing a land pipeline with a minor upfront capital contribution impact, during what we see as the biggest housing demand in recent history.
National Association of Home Builders (NAHB) Housing Market Index (HMI) and NAHB Chairman Greg Ugalde says that low mortgage rates and job growth have resulted in a spurt in demand for single-family lots.