Investor Relations
Forward looking statement disclaimer:
The content below may include predictions, estimates or other information that should be considered forward-looking. While these forward-looking statements may be based upon expectations and predictions about future events they are subject to risk and uncertainties. Actual results or performance may be materially different from the results predicted due to but not limited to changes in economic conditions, changes in regulations, changes in housing demand, increase cost in labor, land or raw materials and level of competition.
Housing development requires large investments of funds especially when multiple projects are in operation. Each investment opportunity can be structured many different ways; below are just some examples.
Sample Sub-division development project structure:
- Form a new corporation for a sub-division development project together.
- GBD will scout and run pro-formas on land development proposed projects. (Sample Pro-forma)
- Projects that show return on investments worth doing the investor would secure all funding either leveraged or unleveraged for the development.
- GBD would project manage the development of creating a completed land development sub-division.
- A shared percentage of profits are split between GBD developer and investor as lots are sold.
Land use:
Water Management 18% x 50 acres = 9 acres
Roads 12% x 50 acres = 6 acres
Land for lots 70% x 50 acres = 35 acres
Building lots ((35 acres x 43,560 sq. ft.) / (45’ x 110’ lots)= 308 lots
Cost to develop: (no wetlands credits needed in example)
Permit Application $400 x 50 acres= $20,000
Impact fees $7,500 x 308 lots = $2,310,000
Engineering & SFWM $2,800 x 308 lots = $862,400
Construction Cost $160K x 50 acres= $8,000,000
Land Purchase $30K x 50 acres= $1,500,000
Sub-total $12,692,400
Return on Investment:
Retail building lots $65K x 308 lots = $20,020,000 Income
Investment Gain $20,020,000 - $12,692,400= $7,327,600
ROI 57.73%
Using Leveraged funds:
20% down for a $12,692,400 investment is $2,538,480
80% loan for development cost at 6% interest only is $50,769.60 x 12 = $609,235 year in service debit.
Investment gains drop from $7,327,600 to $6,718,365
Summary:
Land acre purchase and building lots sales can vary in cost greatly depending on location. If proposed project is expected to take longer than one year, outlaying cost could lessen by developing in phases. Completed building lots could be sold to multiple builders to speed the developing process.
Sample Sub-division development project structure:
- Form a new corporation for a sub-division development project together.
- GBD will scout and run pro-formas on land development proposed projects. (Sample Pro-forma)
- Projects that show return on investments worth doing the investor would secure all funding either leveraged or unleveraged for the development.
- GBD would project manage the development of creating a completed land development sub-division.
- A shared percentage of profits are split between GBD developer and investor as lots are sold.
Land use:
Water Management 18% x 50 acres = 9 acres
Roads 12% x 50 acres = 6 acres
Land for lots 70% x 50 acres = 35 acres
Building lots ((35 acres x 43,560 sq. ft.) / (45’ x 110’ lots)= 308 lots
Cost to develop: (no wetlands credits needed in example)
Permit Application $400 x 50 acres= $20,000
Impact fees $7,500 x 308 lots = $2,310,000
Engineering & SFWM $2,800 x 308 lots = $862,400
Construction Cost $160K x 50 acres= $8,000,000
Land Purchase $30K x 50 acres= $1,500,000
Sub-total $12,692,400
Return on Investment:
Retail building lots $65K x 308 lots = $20,020,000 Income
Investment Gain $20,020,000 - $12,692,400= $7,327,600
ROI 57.73%
Using Leveraged funds:
20% down for a $12,692,400 investment is $2,538,480
80% loan for development cost at 6% interest only is $50,769.60 x 12 = $609,235 year in service debit.
Investment gains drop from $7,327,600 to $6,718,365
Summary:
Land acre purchase and building lots sales can vary in cost greatly depending on location. If proposed project is expected to take longer than one year, outlaying cost could lessen by developing in phases. Completed building lots could be sold to multiple builders to speed the developing process.