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| $ | $/sf | |
|---|---|---|
| Resale (ARV) | ||
| Acquisition (lot + demo) | ||
| Build (hard) | ||
| Contingency (10% of hard) | ||
| Soft costs | ||
| Interest | ||
| Loan points | ||
| Holding costs | ||
| Selling | ||
| All-in | ||
| Pre-tax profit | ||
| ROI on equity, pre-tax hurdle 20% | ||
| Annualized (simple, not IRR) | ||
| Equity multiple | ||
| Equity needed (cash to close plus carry)equity share of cost basis (cbf - loan) + interest + points + holding | ||
| Loan to ARV lenders cap 70-80% (Lima One 75%, Kiavi 80%, 2026 six-lender roundup) | ||
| Lot-to-home ratiothe FREF name for gate 7 (lot / ARV) | ||
| Net after tax (owner estimate) | ||
| Break-even ARV | |
| Price cushion to zero profit good latitude at 30% (Building Small p.64) | |
| ARV that still repays the loan and the cushion before the bank is short | |
| ARV needed for the hurdle front-door check, Geltner p.771 Exhibit 28-4 | |
| Cost overrun room too marginal if under 10% (Building Small p.64)on top of the 10% contingency already budgeted | |
| Months of delay to zero profit |
| Break-even (lot + demo) | |
| ROI hurdle (lot + demo) | |
| 70% rule (lot + demo) | |
| Lot <= 15% ARV (lot + demo) | |
| Reserve-intact (lot + demo) | |
| You're bidding (lot + demo) |
| Lot + demo + soft budget (break-even) | |
| Lot + demo + soft budget (ROI hurdle) | |
| Your soft costs (Deal tab) | |
| Target lot (break-even, after demo and soft) | |
| Target lot (ROI hurdle, after demo and soft) |
| Max build $/sq ft (break-even) | |
| Max build $/sq ft (ROI hurdle) | |
| Your build $/sq ft |
| Total capital | |
| Equity needed | |
| Gap |
| Profit on cost developer target 20% (Geltner p.795, Building Small p.64) | |
| Profit on value 16.7% = 20% on cost | |
| ROI on equity hurdle 20% |