All Forum Posts by: Barry Ruby

@James McGovern

James,

Does your current knowledge include the ability to thoroughly run the numbers on a ground up development? If the answer to this question is “no”, you need a good deal more than getting a set of plans and a cost quote.

Hard cost is one of many factors in a ground up project and is basically useless unless you have the ability to plug it into a comprehensive pro forma analysis.

Feel free to contact me if you’d like to talk about this.

@Daryl Correia

Put a short analysis and recap together as a presentation that describes the opportunity and what you need from an investor and how it benefits the party you are looking for.

Let me know if you need help doing this.

@Chris Flores

Hi Chris, the best way for you to start is to learn the language and metrics of the financial world and how to apply them by conducting pro forma analysis.

Please let me know if you need any help.

@Julieta Sanchez

Julieta, I love your name and I hear and empathize with your situation.

In order for anyone to assist you to find a way to craft a solution, the problem needs to be defined in terms of words, numbers and time.

Please provide as much information as you can and let me know if you need help in doing so.

@Scott Christopher

Scott,

The largest red flag being waved at your potential project is clearly it’s hard cost.

Therefore, before entering the dimension of what I call “the illusion of progress”, and spending time and money with 3rd parties you would be wise to focus on what the value of your deal looks like.

Value drives and determines everything else.

If your product is for sale, you should take the gross sales and deduct commissions, closing costs AND your target profit margin from it and you will have the total budget amount that you have to work with

If your product is for rent, you should determine its Gross Potential Rental income and use that figure to calculate Net Operating Income and divide it by an appropriate cap rate to determine the project’s capitalized value.

Use the same method noted above for the for-sale product to determine the total budget for the rental product.

Once you have your total budget, you will also have a very good idea about the project’s performance and feasibility.

Hard and site costs typically account for about 70% of total project cost.

Knowing your total budget and evaluating it to see if its value can support the range of hard costs you are hearing can and will save you a bunch of time and money.

Best of luck and success and please feel free to contact me if you need any help or clarification on the above.

@Ryan Young

I can help you with this.

Please send me a DM if you are interested in talking.

@Dezmon Jackson

Desmond, congratulations on your resolve and the maturity to have the clarity you expressed.

Please feel free to reach out to me anytime time for an ear to listen to your thoughts and questions.

@Steven E.

Steven,

Appraisal is certainly one way to determine the value of each of the 19 lots.

However, their true value will ultimately be based on the uses that support their respective values.

For example, a home value of $400,000 will most likely support a FINISHED LOT value of $100,000 and a home valued at $800,000 a finished lot value of $200,000.

In any case, the permitted (paper value) of your raw lots will be valued at a price that will allow your buyers to pay you for the paper lot plus the cost to improve it and still make a profit on the sale or rental income of the finished house.

@Cody Flicek

Your first order of business should be to fully understand how a deal works and how to underwrite its performance.

Any transaction begins and ends with its viability and your ability to determine its value.

Feel free to let me know if I can help you.

@Daniel Coleman

Yes asset based loans absolutely exist. They are how most commercial deals get financed. While the lender underwrites and depends heavily on the project and its projected performance, it often requires the personal guarantees of the borrowers.

What are they looking for? Risk aversion. How do they get it? SECURITY SECURITY SECURITY