Development Feasibility Study

[Mina Kam]

Hi all,

Do any of you have advice (or useful resources?) on how to conduct a financial feasibility assesment for a small development project? We are new to the game and want to get this right. 

[Jay Hinrichs]

@Vivienne Chen  totally jurisdictional.. there is no way to do these things asking on the internet..

I have developed or do develop in many different states and they are so different .

so here is what I personally do.

get a ball park idea of what I want to do   ( your case a townhouse project.)

see what townhouses are selling for then work backwards.

I will then find a good civil engeneering firm that usually has land use and land planning all in house ( turnkey if you will)

I then hire them to do a feasibility study for me.. usually 3 to 10k.. if I like it I go forward if I don't I move on.. 

I only do this once I am in contract on the dirt.. having a rough idea of what things costs of course.. but you need to drill down to specifics and just using % calcs does not cut it.. 

Like here in Portland my time line might be 2 to 3 years and 50 to 100k in soft cost for a small development.

In Charleston SC  time line 6 to 7 months and 25k for the same thing.  

on the vertical side of things..  building permits in Charleston all in are about 5k in  Portland 35 to 60k per door.. 

in PDX we get framers for 5 bucks a foot in Charleston its 10.. but lumber is cheaper because its local pine not fir .

so just go talk to a good civil engineering company they will probably give you an hour for free. then talk to the planning department and building department for free for you app fees etc.