1. ProForma Software – When conducting ProForma’s is there a software that is preferred to use other than an excel sheet?
Excel is the best tool to use. You can customize the proforma to your liking. I'm not familiar with any online development modeling software.
2. Searching for Prospects – What have you found as the best way to look for prospects in the industry as it pertains to property/land acquisitions?
Brokers. Long-term landowners. Driving for dollars and finding for sale signs. Relationships with other owners and investors.
3. Assembling Land – What is the typical process to assemble land? For example, if you buy a parcel is the developer already in negotiations with the other parcel owners? Trying to understand how risk is limited in the sense of a property owner not wanting to sell that you need to complete a project/assemblage.
That is a loaded question and the best thing to do is work with a good land use attorney and consultant to help you through the process. If I were to assemble multiple parcels, I'd probably contact all owners and share my vision to get some buy in. There is always the risk of a hold out owner.
3. Financing of Property/Assemblage – How is land typically financed for a land development project? Interest only, investors, combined with a construction loan so the interest can be added to the construction loan, etc.
I answered in your other thread.
4. Software/Programs used in Real Estate – What have you found as the most useful software/programs in real estate analysis or is a third party typical involved to conduct feasibility studies or Argus Runs?
There are so many. Local city and county sites are imperative. Sites for land comps, rent comps, zoning, flood maps, etc. Too many to list. You always want a market study as well.
5. When purchasing a property, what is the typical agreement as it pertains to an options period to conduct studies and determine if to proceed forward or not with the purchase?
This is customizable. Typically, land would be tied up with various deposits and timeline hurdles for you to complete the needed due diligence and entitlements. Good attorney would help with this.
6. What documentation is typically needed for planning and zoning? For example you have renderings, feasibility studies and presentation. Is this presented to the city prior to acquiring a property during the due diligence period or is a land use attorney or city planner used?
Speak to an attorney and the local city/county officials.
7. Is property typically assembled in a trust to keep people from knowing who is purchasing parcels during assemblage?
Not really. Most transactions I've seen are in an LLC entity.
8. What is the typical target cap rate/IRR range for a hospitality, retail or apartment complex?
Loaded question. I only look at apartments. I'd like to see a 7.5% YOC and 20%+ IRR. This is different for everyone!
9. What contracts are most used during the acquisition periods? Is it a custom template or commercial contracts standardized by the state real estate board?
I would only use a custom PSA. A lot of the questions you are seeking answers to will be answered by a strong real estate lawyer. I would never use a state real estate board contract...
10. Is each development project covered under a separate LLC or Trust to protect the company? Which is most typical?
Consult with your attorney.
11. What is the typical time period projected to hold a property, until the IRR peaks based on analysis?
Depends. Are you a merchant builder or do you build to hold? The only answer is only you can tell us based on your analysis...you've got to run the numbers and different scenarios. In general, the faster you sell a stabilized project, the higher the IRR should theoretically be.
12. What is a typical structure as it pertains to investor fees and is profit sharing typically negotiated?
No typical structure. In my experience, it varies all over the place...Generally speaking, I would want to see a preferred return + profit sharing on the back end as an investor. Developers typically take a development or builder fee, acquisition fee, and some promoted interest.
