Beacon Service Profile: Construction Loan Consulting / Document & Cost Review (DCR)
Beacon Consulting Group, Inc. provides valuable consulting services to banks, developers, real estate investment trusts and other parties involved in the financing of construction projects. This article focuses on one specific service: Document & Cost Review (DCR). Financial institutions and other entities who finance (or directly invest in) construction projects must mitigate their risks by doing a thorough up-front feasibility review before approving a construction loan or investment, using a trusted and experienced consulting partner, such as Beacon Consulting Group. Beacon’s DCR consulting services normally start with a review and analysis of the following information: The developer’s cost estimates, project and site plans, and other documents that can be evaluated in advance of a bank issuing a loan or an investor committing funds.
Beacon Consulting Group, Inc. provides valuable consulting services to banks, developers, real estate investment trusts and other parties involved in the financing of construction projects. This article focuses on one specific service: Document & Cost Review (DCR). Financial institutions and other entities who finance (or directly invest in) construction projects must mitigate their risks by doing a thorough up-front feasibility review before approving a construction loan or investment, using a trusted and experienced consulting partner, such as Beacon Consulting Group. Beacon’s DCR consulting services normally start with a review and analysis of the following information: The developer’s cost estimates, project and site plans, and other documents that can be evaluated in advance of a bank issuing a loan or an investor committing funds.
The following list some of the types of documents and information that Beacon’s team may review when performing a Document & Cost Review (DCR) consulting assignment:
- Project workscope documents
- Site plan
- Construction plans
- Construction & materials specifications
- Construction permit documents
- General Contractor (GC) agreement
- Detailed construction budget and schedule
- Agreements with Sub-contractors & main materials suppliers
Beacon’s extensive background consulting on a wide range of construction projects enables our team to identify potential issues (during the DCR process) such as:
- Underestimation (or overestimation) of overall project costs or subcontractor costs
- Missing, inadequate or unclear documents
- Issues with project plans, scheduling, permits or subcontractor agreements
- Conformity between contract documents and building loan agreement
Beacon’s consulting team has many years of experience advising financial institutions, developers, and other project stakeholders by providing Document & Cost Review (DCR) services, as well as related follow-on services, such as Construction Monitoring & Funds Control
In regard to construction loan monitoring, along with an up-front review, we also provide monitoring of the construction loan on a monthly basis and advise the bank on the draws that should be made. Related/ongoing services include:
- Review and comment on the schedule of values for the project
- Perform a monthly review of the project in relation to payment disbursements
- Review of payment applications, vendor/sub-contractor payments, and backup
- Manage periodic progress payments
- Review and comment on the project schedule
- Review and comment on project costs and potential overruns
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