Borrowing vs Paying Cash for residential development

[Jeff G.]

Hi all ...

First stab at residential development, and I'm working on a small, 14-lot neighborhood of all SFHs. The design and permitting is complete, and we're awaiting the 4th and prob final contractor to submit their bid for the actual infrastructure construction (roads, storm drains, sewer, utility, etc). It's looking like $800K total. I'm trying to determine whether to pay cash for it, or borrow. I own the land outright, and do have the funds for the construction.

Would you leave the cash in your normal passive investments (mix of bond funds & stock market) and borrow for the construction, or pull the funds out of the investments and pay cash?

In order to keep this simple, let's not make judgments on the current state of the stock market or where it might be headed in the next year or 2 or 5; let's simply assume the commonly touted 7-8% average long-term return will continue ... again just to keep it simple.

Thanks all ...