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Home builders in the Minneapolis-St. Paul area seeking financing for new projects were given a boost last spring when the Builders Association of the Twin Cities brought together small and midsize builders with banks, financial institutions and other interested investors during the HBA’s first Builder Finance and Development Conference.
“It’s very clear that this is a new world,” said the HBA’s executive director, David Siegel. “As builders and remodelers, we have to start thinking creatively about how we are going to get financing.”
An analyst from Marvin Windows and Doors, the program’s sponsor, began the conference by discussing financing trends and the state of the industry, which was followed by a panel discussion featuring lenders and builders on best practices.
Panelists told attendees what investors need to know before they make their decisions and what information home builders and remodelers should present to banks and lenders in order to ensure that they present themselves in the best possible financial light.
Following the discussion, builders and developers met with bankers, investors and other lenders in the tabletop area of the conference to discuss their projects and what capital might be available.
Siegel said the conference succeeded in helping “builders and bankers establish better relationships with each other.”
“The only problem was that some builders had expectations that if they came to the event, money for spec homes or models would be flowing,” he said. “It’s just not that easy anymore. The game has changed.”
“I think that in the last seven or eight months, there has been a little more money finding its way into the system,” Siegel said, while adding that the funding has fallen short of the need. Builders will have to convince lenders that they have ironclad reasons for success if they want to acquire any of the available funding, he said.
Siegel, who worked at a restaurant trade association before becoming an executive officer, modeled the Minneapolis conference after the Dealmakers Corral, an event that brings investors together with leading restaurateurs and those interested in opening restaurant franchises.
The financial institutions paid for the tabletop space and builders were charged a fee to attend. The HBA not only provided its members with a needed service, it also raised about $5,000. Siegel said the HBA will hold its second builder finance conference in April.
NAHB Finance Forum at 2012 International Builders' Show
NAHB will be conducting a similar event at the 2012 International Builders’ Show in Orlando — the NAHB Finance Forum — that will enable builders and developers looking for credit for residential construction projects to connect with a broad array of lenders.
For more about the forum and to register, visit www.buildersshow.com.