How Do Developers Bridge the Gap Between Predevelopment and Construction Financing?
EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes
How Do Developers Bridge the Gap Between Predevelopment and Construction Financing?
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votesIf you do not have access to the additional $35,000 needed to complement the $40,000 you have already invested, how do you expect to secure financing for a 20 unit ground up development? One of the first things a lender will evaluate is liquidity, and a lack of liquidity will be an immediate concern regardless of the merits of the project.
Rather than focusing solely on raising the remaining predevelopment capital, I would be thinking more strategically about the capital stack. You likely need a development partner who can contribute not only the remaining predevelopment equity, but also help satisfy the lender's required equity contribution and provide the financial strength lenders expect to see. Just as importantly, you may need a loan guarantor with the liquidity and net worth required by the bank.
37 Replies
- 3moHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
OP what did your lender say? They should handle your Construction and pre financing.
With you putting down $XXXXIf you have “bought outright” the land in Dallas then they can use that as your downpayment potentially. Just guessing for Dallas and the size that would be $1,000,000 or higher. At 25% that would cover a $4mm loan. 20 unit boutique condo are you talking in the $12mm range? If so you need to cover interest cost during construction period also.
You need experience and a success background though. Do you have that? Commercial and Industrial you have to start small and develop a track record.Make sure you have the financial backing before you go down the road. Otherwise pull out and take the loss.
- 3moHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
OP. Say it is a $12mm deal. At 25% down you need to bring $3mm to the table.
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
Thank you for the feedback. I appreciate you taking the time to respond.
To clarify, I did not purchase the land outright. The property is currently financed and I am carrying a first-position land loan on it.
The challenge is not securing financing for the entire development at this stage. The project is currently in predevelopment, and I am working with my architect, civil engineer, structural engineer, and MEP engineer to complete the remaining plans, permitting, condominium mapping, and HOA documentation.
The remaining funding gap is approximately $30,000-$35,000 to complete those items and move the project into a permit-ready position. Once completed, the project will be in a much stronger position to pursue the next phase of financing for horizontal improvements and ultimately construction financing.
As for development experience, this is my first ground-up development project. Because of that, I have intentionally assembled a professional team and have been taking a phased approach to reduce risk and ensure the project is properly planned before moving into construction.
I completely agree that having the proper financing strategy in place is critical, which is why I made this post. I am interested in learning how other developers have successfully bridged this specific predevelopment stage before moving into horizontal and vertical construction financing.
I appreciate any additional thoughts you may have.
- 3moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
If you do not have access to the additional $35,000 needed to complement the $40,000 you have already invested, how do you expect to secure financing for a 20 unit ground up development? One of the first things a lender will evaluate is liquidity, and a lack of liquidity will be an immediate concern regardless of the merits of the project.
Rather than focusing solely on raising the remaining predevelopment capital, I would be thinking more strategically about the capital stack. You likely need a development partner who can contribute not only the remaining predevelopment equity, but also help satisfy the lender's required equity contribution and provide the financial strength lenders expect to see. Just as importantly, you may need a loan guarantor with the liquidity and net worth required by the bank.
- Real Estate Consultant · Member since 2025 · 133 posts · 84 votes3mo
Out of curiosity, has the difficulty been finding capital itself, or finding investors comfortable funding the predevelopment phase specifically?
Those seem like two very different challenges.
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
Hello Stuart,
Those are fair points, and I agree that liquidity, guarantees, and the overall capital stack are critical considerations for any ground-up development.
My current focus is on completing the remaining predevelopment work because the project is not yet at the stage where I would be seeking full construction financing. The remaining funding gap is approximately $35,000 to complete the engineering, permitting, condominium mapping, and HOA documentation needed to move the project into a permit-ready position.
I agree that additional equity, strategic partners, guarantors, or other capital sources may ultimately play a role as the project advances. In fact, part of the reason I made this post was to learn how other developers successfully navigated the transition between predevelopment and larger-scale project financing.
From your experience, have you seen developers bridge this stage through private investors, development partners, predevelopment lenders, or some other structure?
I appreciate your insight and would be interested in hearing how you’ve seen similar projects successfully move through this phase.
Respectfully,
Benjamin Lartey
Founder & Managing Member
EVOQUE Development LLC - EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
Hello Georgii,
That’s a great question. In my case, I would say the bigger challenge has been finding investors who are comfortable funding the predevelopment phase specifically.
The project itself has generally been well received, but many investors and lenders prefer to see completed engineering, approvals, entitlements, and permits before committing capital. The challenge is that approximately $35,000 is still needed to complete the remaining civil, structural, MEP, permitting, condominium mapping, and HOA documentation required to move the project into a permit-ready position.
I have personally invested over $40,000 into the project to date, acquired the land, assembled the consultant team, and advanced the project through a significant portion of the predevelopment process. It seems there is often a gap where investors want to see approvals completed before investing, while obtaining those approvals requires additional capital.
I’m curious from your experience—have you found that projects at this stage are typically funded through private investors, strategic partners, predevelopment lenders, or some other structure?
I appreciate your insight and look forward to hearing your thoughts.
Respectfully,
Benjamin Lartey
Founder & Managing Member
EVOQUE Development LLC - Real Estate Consultant · Member since 2025 · 133 posts · 84 votes3mo
One thought:
Have you quantified the value increase created by the final $35k?
Today you have a project in predevelopment. After engineering, permits, condo mapping, and HOA documentation are complete, you have a permit-ready asset.
Investors may be viewing this as funding expenses, while in reality they may be funding a significant reduction in development risk.
I'm curious whether you've modeled that value step-up and how you're presenting it to potential investors.
- 3moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Benjamin Lartey There's a few red flags that stand out to me.
First, when I hear that all civil, architectural, structural, and even condominium declaration documents can be completed for $75,000 on a 20-unit project, it often suggests the project ultimately cannot be built economically because construction costs are upside down relative to value. I have found there's often a correlation between low predevelopment costs and lack of viable vertical development solutions. This is particularly the case with multi-family projects which are ordinarily reliant on local commercial building codes.
Second, even if the project is buildable, I would want an experienced developer involved as a second set of eyes during the predevelopment phase. There are often multiple ways to approach a project, and design professionals do not always select the most practical or cost effective solutions. An experienced developer can provide valuable input on construction methods, building design, unit mix, floor plans, and features that are actually supported by the local market. Those decisions can have a significant impact on both construction costs and long-term project performance.
I also believe you may be overestimating the value that completing the permitting process will add when it comes to attracting the type of partner you ultimately need. The sophisticated development partner you will eventually need makes investment decisions based on the quality of the site, economics, market fundamentals, and execution team. In my experience, obtaining by right permits rarely moves the needle enough to materially improve partnership terms, especially in a market where the permitting process appears to be relatively straightforward and inexpensive.
- 3moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Stuart Udis:
@Benjamin Lartey There's a few red flags that stand out to me.
First, when I hear that all civil, architectural, structural, and even condominium declaration documents can be completed for $75,000 on a 20-unit project, it often suggests the project ultimately cannot be built economically because construction costs are upside down relative to value. I have found there's often a correlation between low predevelopment costs and lack of viable vertical development solutions. This is particularly the case with multi-family projects which are ordinarily reliant on local commercial building codes.
Second, even if the project is buildable, I would want an experienced developer involved as a second set of eyes during the predevelopment phase. There are often multiple ways to approach a project, and design professionals do not always select the most practical or cost effective solutions. An experienced developer can provide valuable input on construction methods, building design, unit mix, floor plans, and features that are actually supported by the local market. Those decisions can have a significant impact on both construction costs and long-term project performance.
I also believe you may be overestimating the value that completing the permitting process will add when it comes to attracting the type of partner you ultimately need. The sophisticated development partner you will eventually need makes investment decisions based on the quality of the site, economics, market fundamentals, and execution team. In my experience, obtaining by right permits rarely moves the needle enough to materially improve partnership terms, especially in a market where the permitting process appears to be relatively straightforward and inexpensive.
this is where the 3 C's are critical for the project.. Capacity Credit Character. bank will want all 3.. Character just means great track record behind you.. Capacity is experience building it out or ability to build it out. . .
Credit is ability to obtain the vertical and debt service. IE liquidity and financial strength.
IMHO if you need to find a partner for 35k you have no hope to get this done on your own and you will need to start searching for a money partner and a Capacity partner ( GC) that the bank can vette.. along with ( if your using a local commercial bank like most developers use) deposit relationships and those for a project like this need to be deep into 6 figures if not 7 figures.
- 3moHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
OP. From this date forward you will lose every dollar you invest. This project will take about 3 years to build. Then another 2 years to rent up or sale to occupancy level to break even.
You don’t own the land outright and have a loan against it. You need to address that first. But without funds you can’t pay for it. The banks will want that paid up front for collateral and won’t take second position.
During the time period above interest, insurance, property tax and P/I after construction will eat your finances. Just the interest on average will be say $400,000 per year till breakeven. Property taxes in Texas will be around $200,000 per year or more.
As mentioned by @???? Above. Engineer and design teams don’t design to make a profit. You need an experienced developer to guide the process. With 20 units just the driveway, sidewalks and storm sewers can suck up most of the profit if not designed efficiently.
Recommend you find the largest local Commercial Real estate firm. Layout where you are at with the project. Ask their advice and if they have any GC and investors they could introduce you to.
Your objective is to just get your cash back out at Best. Even 1/2 would be good.
Start small and Make Your Big Mistakes Early.
Clean up. Regroup. Come back and let’s put a strategy together to start small and build experience and equity over the next 10 years. The deeper you go in this project the harder it will be to cleanup and regroup. - Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes3mo
Is this inside city limits of Terrell or Kaufman?
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
I appreciate the feedback and understand where you’re coming from.
A few points of clarification regarding this particular project.
One advantage of this development is that it is a highly repetitive product rather than a traditional multifamily project with numerous unit types and building variations. The community consists of the same floor plan repeated throughout the development, which has allowed me to keep architectural, structural, and engineering costs more efficient while still utilizing licensed professionals for each discipline.
Cost efficiency has been a major focus from the beginning. Throughout the design process, I have been working closely with the architect, engineers, and consultants to evaluate practical and economical solutions rather than simply designing the most expensive version of the project.
I also agree that market support and execution matter significantly. That is why I am currently focused on completing the civil engineering, OSSF, architectural, structural, and permitting process so I can obtain greater certainty around development costs, site feasibility, and execution before moving into the next phase.
Regarding permits, I do not view them as a magic solution that suddenly creates investor interest. My view is that they reduce development risk, improve cost certainty, and help demonstrate that the project can actually be executed. Those items may not guarantee a partnership, but they can improve the quality of conversations with potential investors, lenders, and strategic partners.
I do appreciate you taking the time to share your perspective and give me something to think about as I continue moving the project forward.
Thanks,
Ben Lartey
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes3mo
Quote from @Benjamin Lartey:
I appreciate the feedback and understand where you’re coming from.
A few points of clarification regarding this particular project.
One advantage of this development is that it is a highly repetitive product rather than a traditional multifamily project with numerous unit types and building variations. The community consists of the same floor plan repeated throughout the development, which has allowed me to keep architectural, structural, and engineering costs more efficient while still utilizing licensed professionals for each discipline.
Cost efficiency has been a major focus from the beginning. Throughout the design process, I have been working closely with the architect, engineers, and consultants to evaluate practical and economical solutions rather than simply designing the most expensive version of the project.
I also agree that market support and execution matter significantly. That is why I am currently focused on completing the civil engineering, OSSF, architectural, structural, and permitting process so I can obtain greater certainty around development costs, site feasibility, and execution before moving into the next phase.
Regarding permits, I do not view them as a magic solution that suddenly creates investor interest. My view is that they reduce development risk, improve cost certainty, and help demonstrate that the project can actually be executed. Those items may not guarantee a partnership, but they can improve the quality of conversations with potential investors, lenders, and strategic partners.
I do appreciate you taking the time to share your perspective and give me something to think about as I continue moving the project forward.
Thanks,
Ben Lartey
OSSF inside the city?
- 3moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Benjamin Lartey You've had very experience developers weigh in and from different angles, all have suggested involving a more seasoned development team at the predevelopment stage but you seem set in your ways. The fact you believe a building permit demonstrates the project can actually be executed shows how much you have to learn. You would truly benefit from involving a seasoned team as soon as possible.
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
@Georgii Grigoriants
I think you hit on something that many people may be overlooking.The $35,000 is not simply being spent on plans and paperwork. The objective is to complete the engineering, permitting, condominium mapping, and HOA documentation necessary to transform the project from a predevelopment concept into a permit-ready asset.
In my view, that stage represents a significant reduction in development risk and should materially improve the project’s value and financeability. Many investors seem to focus on the cost required to reach that stage, but not necessarily the value created by reaching it.
To answer your question directly, I have not yet formally modeled that value step-up because I was planning to do so once the permit-ready package is complete. My current plan is to complete the permitting process, record the condominium documents, obtain a Broker Opinion of Value from a qualified broker, and then pursue an appraisal of the approved condominium project.
At that point, I believe I will have a much clearer picture of the value created through the entitlement and permitting process and be in a stronger position to pursue the next phase of financing for the horizontal improvements and ultimately the vertical construction.
You make a very good point, though. I probably need to do a better job of presenting the value created by reaching permit-ready status rather than simply presenting it as a predevelopment expense.
I appreciate the insight.
Benjamin Lartey
Founder & Managing Member
EVOQUE Development LLC
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
I appreciate the continued dialogue.
To clarify, I am not suggesting that obtaining permits alone guarantees successful execution of the project. I fully understand that development involves many additional factors, including financing, construction execution, project management, market conditions, and overall capital structure.
My point is simply that completing the engineering, permitting, condominium mapping, and HOA documentation represents a significant milestone in the development process. In my view, reaching a permit-ready stage materially reduces development risk compared to a project that is still in the concept phase and should improve the project's overall financeability.
I also agree that surrounding yourself with experienced professionals is important. That is precisely why I have assembled a team that includes an architect, civil engineer, structural engineer, MEP engineer, surveyor, septic consultant, and legal professionals who will be involved as the project progresses.
I certainly do not claim to know everything, and I am always open to learning from those with experience. The purpose of my post was to better understand how other developers have successfully bridged the gap between predevelopment and larger-scale project financing.
I appreciate you taking the time to share your perspective.
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
Hello Eric,
The property is located within the City of Terrell ETJ, but not within the city limits themselves.
Because of that, Kaufman County has jurisdiction over the OSSF permitting process. The project is currently being designed with a shared engineered OSSF system rather than individual septic systems for each unit.
The City of Terrell’s involvement is primarily related to platting, while the county is handling the building and OSSF requirements.
Thanks for the question.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes3mo
Quote from @Benjamin Lartey:
Hello Eric,
The property is located within the City of Terrell ETJ, but not within the city limits themselves.
Because of that, Kaufman County has jurisdiction over the OSSF permitting process. The project is currently being designed with a shared engineered OSSF system rather than individual septic systems for each unit.
The City of Terrell’s involvement is primarily related to platting, while the county is handling the building and OSSF requirements.
Thanks for the question.
I see. Sounds good. What is the county doing with regard to building? TX counties cannot restrict or require permits for building, other than the septic and platting.
i build small apartment complexes outside city limits.
- Member since 2022 · 12 posts · 12 votes3moBeen in your position before. You need a co-gp, it’s likely the only way forward. You’re right it will reduce risk on the property, but this is a big first project and it sounds like you’re going to have an extremely hard time getting financing, even with permits. If you can scrape together the remaining $35k to get through permits and that’s going to increase the land value, I’d probably look at doing that then selling the land. If the permits for what you’re proposing aren’t going to help move the property and recoup, I’d sell now and move on. There’s always a way forward, but you’re going to need someone else to step in or get very wealthy very fast.
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
Hello Jay,
Thank you for taking the time to share your perspective.
I agree that capacity, credit, and character are all important factors, particularly when pursuing larger-scale construction financing.
Where I may not have done a good job explaining my situation is that I am not currently seeking full construction financing for the entire project. My focus at this stage is completing the remaining predevelopment work so the project can move into a permit-ready position.
My approach has been to advance the project in phases. The immediate objective is to complete the engineering, permitting, condominium mapping, and HOA documentation. Once that stage is completed, my expectation is that the project's financeability and available funding options will be materially different than they are today.
I certainly recognize that additional capital, guarantees, experience, and strategic relationships may be necessary as the project progresses into horizontal improvements and vertical construction.
I appreciate you sharing your insight and giving me another perspective to consider.
- Member since 2022 · 12 posts · 12 votes3mo
@Benjamin Lartey if you really want to just cross this hurdle and don't need to deal with a bank, find an investor or friends/family to bridge the gap if you have no personal levers to pull. But I would be very, very wary - if you don't have a legitimite path forward for later phases, you're just digging a deeper hole...I genuinely would not assume that anything regarding funding is going to change just because of permits. This might be true if you've done 20 projects, but right now you're the liability for the lender, not the land (which isn't owned outright, so it's not really relevant to a new lender anyway).
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
@Henry Clark
I appreciate you taking the time to share your perspective.I think part of the disconnect may be that my current focus is not on immediately starting vertical construction. The phase I am working through today is completing the remaining predevelopment work necessary to move the project into a permit-ready position.
My objective at this stage is to complete the engineering, permitting, condominium mapping, and HOA documentation. Once those items are completed, I believe the project will be in a substantially different position from both a valuation and financeability standpoint than it is today.
I certainly recognize that construction financing, carrying costs, liquidity requirements, and execution risk must all be addressed before vertical construction begins. Those are important considerations and I do not take them lightly.
I also agree that development is a team effort, which is why I have assembled an architect, civil engineer, structural engineer, MEP engineer, surveyor, septic consultant, and other professionals to help move the project forward.
While we may have different views on the project’s path forward, I do appreciate you taking the time to provide your thoughts.
Thank you.
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
The project is within the City of Terrell ETJ, so the City’s involvement is primarily related to platting. Kaufman County is handling the OSSF review and related approvals.
I’ve been coordinating with both the City and County throughout the process to make sure the project satisfies the applicable requirements. The development is being structured as a condominium project rather than a traditional subdivision, so there are some additional condominium mapping and documentation requirements involved as well.
Since you’ve developed apartment projects outside city limits in Texas, I’d be interested in hearing your perspective on how lenders typically view projects once they reach a permit-ready stage.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes3mo
Quote from @Benjamin Lartey:
The project is within the City of Terrell ETJ, so the City’s involvement is primarily related to platting. Kaufman County is handling the OSSF review and related approvals.
I’ve been coordinating with both the City and County throughout the process to make sure the project satisfies the applicable requirements. The development is being structured as a condominium project rather than a traditional subdivision, so there are some additional condominium mapping and documentation requirements involved as well.
Since you’ve developed apartment projects outside city limits in Texas, I’d be interested in hearing your perspective on how lenders typically view projects once they reach a permit-ready stage.
I work with local community banks for financing. They give 80% LTV and will do one closing for a loan that converts from construction to perm. The only permit I have to get is the OSSF. The banks want the permanent financing for long term rental to have coverage of at least 1.2. I GC the construction and hire my own crew to do everything. That allows me to build quite affordably. I also recently got my OSSF Installer 1 license to do septic
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
Hi Brian,
I appreciate you sharing your perspective, especially since you’ve been in a similar position before.
I agree that reaching permit-ready status doesn’t automatically solve every financing challenge. My view is simply that it reduces development risk and creates options that don’t exist today.
My current focus is completing the remaining engineering, permitting, condominium mapping, and HOA documentation. Once that's complete, I plan to obtain a Broker Opinion of Value and appraisal to better understand the project's value as an approved condominium development rather than raw land.
The reason I’m staying focused on this phase is that I believe it creates optionality. Whether that ultimately leads to development financing, a strategic partner, a joint venture, a recapitalization, or even a sale at a higher valuation, I believe the project will be in a much stronger position than it is today.
I do appreciate you taking the time to share your experience and perspective.
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
Thanks Eric. That’s helpful to know. It sounds like you’ve developed a strong system and banking relationships over time. I appreciate you sharing how you’re structuring your projects and financing.
- Member since 2022 · 12 posts · 12 votes3moFor sure, rooting for you on making this come together
- Investor · Sterling, VA · Member since 2026 · 89 posts · 48 votes3mo
Congrats on getting the land acquired and moving through the design phase. In my experience, one of the biggest challenges in development is that “predevelopment” is often the riskiest stage because you’re spending money before there’s a fully financeable project.
If I were evaluating this as a lender or investor, I’d want to understand a few things:
- What is the projected total development cost?
- What are the expected condo sale prices and projected profit margins?
- Is the site already entitled or are there zoning/approval risks remaining?
- What comparable condo projects have successfully sold in the area?
- How much equity will the sponsor have in the deal after the additional $35k is invested?
I’ve seen developers bridge this stage with friends-and-family capital, private investors, equity partners, or short-term loans, but the easier it is to clearly demonstrate the economics and de-risking milestones, the easier it becomes to attract capital.
Out of curiosity, once the remaining $35k is invested and permits are completed, what do you estimate the project’s value or financeability increases by? That might help potential investors understand the risk/reward profile.
- EVOQUE Development · Dallas - Fortworth, TX · Member since 2024 · 22 posts · 11 votes3mo
Hi Tabish,
Thank you for the thoughtful response. Those are fair questions and very similar to the questions I would expect from an investor evaluating the opportunity.
The remaining approximately $35,000 is intended to complete the engineering, permitting, condominium mapping, and HOA documentation required to move the project into a permit-ready position.
At that point, the project would transition from a raw land/predevelopment opportunity into a substantially de-risked, permit-ready condominium development. My view is that the value increase comes less from the additional dollars invested and more from the reduction in entitlement, engineering, and permitting risk.
As far as quantifying the value increase, I have intentionally not assigned a specific number yet. My plan is to complete the remaining predevelopment work, record the condominium documents, obtain a Broker Opinion of Value from a local broker familiar with condominium projects, and then pursue a formal appraisal.
That process should provide a much more reliable basis for determining the project’s post-entitlement value and financeability rather than relying on assumptions today.
The broader objective is to create a permit-ready asset that is significantly more attractive to both investors and lenders than it is in its current stage.
- Investor · Sterling, VA · Member since 2026 · 89 posts · 48 votes3mo
Quote from @Benjamin Lartey:
Hi Tabish,
Thank you for the thoughtful response. Those are fair questions and very similar to the questions I would expect from an investor evaluating the opportunity.
The remaining approximately $35,000 is intended to complete the engineering, permitting, condominium mapping, and HOA documentation required to move the project into a permit-ready position.
At that point, the project would transition from a raw land/predevelopment opportunity into a substantially de-risked, permit-ready condominium development. My view is that the value increase comes less from the additional dollars invested and more from the reduction in entitlement, engineering, and permitting risk.
As far as quantifying the value increase, I have intentionally not assigned a specific number yet. My plan is to complete the remaining predevelopment work, record the condominium documents, obtain a Broker Opinion of Value from a local broker familiar with condominium projects, and then pursue a formal appraisal.
That process should provide a much more reliable basis for determining the project’s post-entitlement value and financeability rather than relying on assumptions today.
The broader objective is to create a permit-ready asset that is significantly more attractive to both investors and lenders than it is in its current stage.
That makes sense, and I think you’re looking at it the right way.
In many development projects, the value creation isn’t necessarily the additional dollars invested—it’s the risk that’s been removed. A permit-ready project with engineering completed, condo documents recorded, and approvals in place is a very different asset than raw land, even if the physical property hasn’t changed.
I also like that you’re waiting for a BOV and appraisal rather than assigning a value increase upfront. Too many investors try to force a number before the market or a lender has validated it.
From an investor’s perspective, I’d probably be less focused on the exact value today and more focused on the specific milestones that remain between where the project is now and becoming financeable for the next phase.
Sounds like you’re getting closer to crossing that bridge. Wishing you success with the project.That makes sense, and I think you’re looking at it the right way.
In many development projects, the value creation isn’t necessarily the additional dollars invested—it’s the risk that’s been removed. A permit-ready project with engineering completed, condo documents recorded, and approvals in place is a very different asset than raw land, even if the physical property hasn’t changed.
I also like that you’re waiting for a BOV and appraisal rather than assigning a value increase upfront. Too many investors try to force a number before the market or a lender has validated it.
From an investor’s perspective, I’d probably be less focused on the exact value today and more focused on the specific milestones that remain between where the project is now and becoming financeable for the next phase.
Sounds like you’re getting closer to crossing that bridge. Wishing you success with the project.
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