Urban sustainable land development financial business model – The model is not a several hundred or multi thousand dollar software package. There are several such products out there, but unless you are in the business on a daily basis, the cost can be prohibitive – not to mention the steep learning curve that often comes with more sophisticated products. The LDM is not a subsitute for these products, but even the most experienced practitioners will find this model useful.
The model is straightforward, fast-working and inexpensive. And completely refundable if you are not satisfied with the product. Look again at what you can do with the model.
You probably have and are familiar with the necessary software. The model requires Excel to run and is delivered over the internet at the time of purchase. The file size is about 4MB and loads in a matter of seconds. Urban sustainable land development financial business model
The LDM was designed by a real estate appraiser and land developer and is the result of an effort to create an appraisal and valuation tool that:
1). Estimates the profitability of ‘single and multi-phase’ land subdivisions in one step;
2). Extends analysis beyond ‘gross profit’ to ‘profit before tax’, resulting in an interest cost calculation based on the cumulative effect of the absorption rate, project duration, lender loan requirements, builder deposits, length of the initial construction period, seller financing, interest rate fluctuations during the project period, phasing decisions, land purchase option alternatives, and residual land;
3). Allows for quick and easy ‘what-if’ analysis on all land development components – above and below the gross profit level.
4). May be used to estimate land value based on a predetermined set of profit criteria.
How is the model structured?
Analysis of up to three phases in one step;
Project duration up to ten years;
Excel functionality (save-as, print, passwords);
Development components entered on single input page;
Output pages generated simultaneously with input;
Links provide easy access to and from all model pages;
Profitability measures visible on input page;
Visible and hidden worksheets (password protected);
Includes take off page for pre-model entry.
What can I do with the model?
Analyze single and multi-phase subdivisions;
What-if analysis on all development components;
Analyze effect of absorption on profitability;
Analyze the effect of builder deposits on interest cost;
Evaluate and estimate option value;
Make phasing decisions;
Estimate profit by year, phase, and project;
Estimate land value based on target profit ratio;
Estimate interest cost by year, phase, and project;
Generate, save, and print profit tables;
Generate, save, and print cash flow tables;
Generate, save, and print lot sale schedules;
Analyze effect of seller financing on profit;
Analyze effect of seller financing on equity-in;
Insert historical project information to model;
Extract rates and ratios from the market;
Recognize timeline concept of development process;
Evaluate the effect of interest rate trends;
Demonstrate concept of leverage;
Demonstrate concept of time value of money;
Save project scenarios under unique filenames;
Analyze profit before tax;
Analyze individual owner profit after tax;
Estimate return on equity;
Create profit tables under multiple scenarios;
Conduct cost/benefit analysis;
AND more ….
The model allows for one-step analysis of subdivisions with one, two, and three phases; or analysis of an unlimited number of phases one phase at a time.
Given the model’s capacity for simple ‘what-if’ analysis over the full spectrum of land development components, combined with its user-friendly excel functionality, any number of related project scenarios and associated model results can be easily produced, compared, and saved under distinct filenames in a matter of minutes.
The model may be used by real estate appraisers, real estate agents, lenders, developers, other professionals or anyone having an interest in the subdivision process. Urban sustainable land development financial business model