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BENEFITS OF DOCUMENT
DESCRIPTION
This real estate financial model is an advanced, institution-grade tool designed to assess potential returns and estimate land development projects swiftly. It comprises an accessible interface with only three tabs, offering users a detailed Excel spreadsheet for comprehensive analysis.
The model is structured to simulate a single phase of horizontal development, starting with land acquisition at the entitlement month, followed by the start of construction. It incorporates a due diligence phase before purchase, accounting for expenses (equally distributed throughout this period) and culminating in a land deposit at the end of due diligence.
Sales are projected in two stages: pre-sales, offering lots at a discount to the average sale price, and regular sales, where standard pricing applies. It anticipates a deposit payment upon purchase, with the remaining balance received post-closing. Construction costs, both hard and soft, are allocated evenly across the construction timeline.
Users are prompted to input financing details—rate, term, and loan-to-cost ratio—to enable the model to project up to 120 months of unlevered and levered cash flows.
Model Features:
Dashboard-Style Summary Tab: Designed for ease of use, this tab highlights input fields in bold blue, distinguishing them from calculations and labels, and provides a concise overview of all required assumptions.
Dynamic Monthly & Annual Cash Flow Analysis: This functionality calculates essential investment metrics on a monthly basis to evaluate project feasibility and value.
Reverse-Engineering Funding Requirements: The model intelligently calculates the necessary equity or loan funding amounts and their timing.
Equity-First Financing: Initial construction and operational costs are covered by equity, with subsequent expenses financed through loan draws.
IRR Sensitivity Analysis: Users can assess the impact of variations in sale price, land acquisition cost, and construction cost on the internal rate of return (IRR).
Equity Waterfall Model: The option to set a two to four-tiered structure allows for determining capital distribution and return rates for limited and general partners.
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Source: Best Practices in Real Estate Excel: Real Estate - Land Development Model Excel (XLSM) Spreadsheet, Jair Almeida
OVERVIEW
Working as a business controller, I am used to producing reports for management, analyzing performance indicators, and developing comparative analyses in terms of pricing and commercial offers. I'm always looking for creative ways to exceed expectations and deliver top-quality management information in order to identify what drives businesses.
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