Professional · Atlanta, GA · Member since 2015 · 3 posts · 0 votes
I have background in student housing, fix and flips, whole selling, and rentals. I'd like to move toward more office type investing. I have subject property (8.5 acres) and would like to develop. I'm having trouble with the actual underwriting. How would I know what numbers I should include to do this? I'd like to ensure I accurately account for all cost and good projections. Any suggestions or advice?
Developer · Member since 2020 · 4k+ posts · 4k+ votes
3y
Let's cut to the decision process. I will use Atlanta or near it since that is listed for you. 8.5 acre office development. I don't do this so my estimate for discussion purposes could be $10mm off. Let's say it is only $8mm with the land and you have to put in 25% or $2mm. Do you have that much money?
Keep in mind if you are developing you will need to cover construction interest. Say at any given time 1/2 your cost or $4mm at 7%. Rent up phase is 1 year, so say another year of interest expense. So, $280,000 and then another $280,000. Just construction period and rent up period interest expense. So, you need that also, along with your $2mm.
No bank or individual will loan this type of funding on this type of project with no experience.
Need to start on a smaller project and learn to run the numbers. Treat this as a fix/flip budget to start with. Then ask for our help on what are you missing. Right now, you're coming to the table starting at zero input or effort on your part. At this level, a different level of players and expectations. They expect you to know all of the answers already. Plus, your weak points and your exit strategy. You also have to have a track record or a General Contractor or partner on board at your level of experience.
Developer · Boulder, CO · Member since 2018 · 530 posts · 365 votes
3y
@Shaquez Wilkerson
Hi Shawuez,
I can send an input worksheet. If you return a populated copy of it back to me, I will send a full analysis of your project to you that will give you the data and performance figures you are looking for.
Let me know if you would like me to send the input sheet.