This was a great post. I underwrite development deals and your post captures the important metrics that developers need to capture in their models. For your projects, are you targeting a certain return on cost?
I've really appreciated all your posts, so thanks for sharing. I'm investigating my first development and your material has been extremely helpful. Is there a particular real estate development software that you'd recommend to a newbie like myself? Obviously, I don't have a massive portfolio of properties to manage! So I'm not sure if I should just use Excel or if there's a particular software that would be appropriately scaled to my position. [Or, if you could just send your Excel template!! :D ]
Great post as always Sean. Making sure all your input data is well organised is key for setting up a good feasibility analysis.
Thank you!
This was a great post. I underwrite development deals and your post captures the important metrics that developers need to capture in their models. For your projects, are you targeting a certain return on cost?
The targeted return on cost varies given the other financial metrics at play. We typically try to stay 250-300 basis points above the financing costs.
For example, when rates were 4%, we were targeting 6.5-7% return on cost, or more.
With rates where they are now (6-7%) it is tough to make deals work at an acceptable return on cost.
Amazing post! Hopefully i can persuade you to share templates of the excel to help us, upcoming developers.
We will do so in our upcoming master class! Stay tuned.
Fantastic post! Thanks for getting into the weeds on your excel rows
Glad it was helpful!
Hi Sean,
I've really appreciated all your posts, so thanks for sharing. I'm investigating my first development and your material has been extremely helpful. Is there a particular real estate development software that you'd recommend to a newbie like myself? Obviously, I don't have a massive portfolio of properties to manage! So I'm not sure if I should just use Excel or if there's a particular software that would be appropriately scaled to my position. [Or, if you could just send your Excel template!! :D ]
Thanks in advance,
Scott