BiggerPockets

the "quick" answer is a good deal meets your goals and objectives for return on investment. Everyone has a different idea or willingness to accept risk so to say there is one answer to your question is tough.

The long answer involves evaluating the site location, demographics, area jobs, college area, etc. I'm sure that you understand you can't build the Taj Mahl in the hood but you do need to define the type of project you want to develop and where you want to build it and if they will come once it is built.

The company I work for is very conservative and sometimes I get frustrated when we pass on a project that I know would have made money. Of course, it's easy for me to feel this way because it's not my money and they have been doing this since the early eighties and are very successful so it's hard to question their objectives.

A bigger project may mean a different investment arena. Many A properties are held in larger portfolios by either institutions or high wealth individuals. Think about your exit strategy, and who would be your targeted seller. Learn what cap rate similar properties in the same market are selling for. From our experience, we have had to justify the desirability of the market, quality of our product and sufficient cash flow to justify sales price. All of which are basically similar to smaller developments.