How to make a million dollars with a capital partner with subdivision entitlements

[Jay Hinrichs]

Loudoun County Virginia

80 acre parcel

Entitlement for 30 1 to 1.5 acre estate lots and 40 acre remainder parcel with large million dollar home.

Purchase price  3.5 mil

EM deposits non refundable  50k up front 50k during

Entitlement cost ( survey, geo , water , artifacts, Soils Engineer , city fees)  350k

Capital partner  ME  provide all the cash up front.  450k to my client who found and prosecuted the plat

Multiple offers from all the biggest builders in that market  IE Toll  Lennar DR and a few regionals.

Closed today with 1.1 million cash profit  PLUS the 40 acres and home value about at least 2 mil free and clear.

My fee is double my money so we made 450k today.

My client made about 650k in cash and the property  free and clear.. 

This is the value of a TRUE capital partner one that knows development willing to take on some risk for high reward.

this is the smallest of 3 I had going with this company.. The other two are much larger with much larger investments from me and profits on one of them in the 8 figures for my clients..

My client is mid 30s just had a baby.. However is a civil engineer and worked for a big developer in NYC so very experienced.

The buyer was one of the companies named above it will hit the market for pre sales in a few months.

This is the 5th Entitlement project I have funded over the last 5 or 6 years in addition I did a 60 lot one in Orlando for a developer there and a 110 lot one in the Atlanta area for a build to rent developer who then sold to Lennar for build to rent .. On those I actually bought the land and they paid for the entitlements and then they paid me off my return on those was not 100% per annum like these but it was north of 30% per annum.. These deals have so much meat on the bone that paying a capital partner is a no brainier.. 

[Jay Hinrichs]

@Don Konipol    Don this relates to your thread we were talking about this morning.

this is the highest risk stuff I do.. but I mitigate it pretty well or at least I think I do..

So happy for this young man and his young family.

One of my bizz partners years ago and mentor.. ( he was President of a fortune 500 company) we belonged to the same country club in Napa.. him in his mansion on the Hill me on my house down in the low lands.. But he told me his job was to make those who worked for him to enable them to move up the ladder and in my business he said my goal should be to help your clients become millionaires and they will drag you along with them. :)