Submit your deal - any deal - here for "underwriting", let's see how we can collaborate, review, comment, harass (kidding), and give input on your next up and coming development deal.

Scott

Bump

Scott, your post could not be more timely. I could use some advice/analysis on this deal I am having difficulty assessing. I will explain the scenario first and then give you some numbers to consider...

Basically through good fortune and luck our family owns a plot of very attractive land in the path of urban development. Currently we run our business in a warehouse on the land. Our land first jumped in value when a professional sports stadium was build two blocks away about 10 years ago. Next year another professional soccer stadium being built on the other side of us will open. The cherry on top is last month a road redevelopment plan with green belts and walkways with a landmark bridge was announced in front of our property. All of a sudden multiple developers have been approaching us about the land...

For many different reasons, rather than cashing out completely, we started listening to developers interested in partnering with us to construct on the land. What I am having difficulty determining is how much sweat equity a developer should be entitled to. Basically our land is going to be contributed towards the equity in the deal. Our land comes out to about 50% of the equity being footed. Although we are contributing 60% of the equity, the experienced developer we are most interested In partnering with is proposing we receive only 18% of the cash flow once the property is built and stabilized. Looking over other development deals I would have expect cash flow proportion to be more in line with the equity split up front, pari-passu. I understand that there is a premium the sponsor is entitled to and therefore they deserve an oversized chunk of the pie, but I thought given the amount of our equity contribution, our cash flow split should be at least 35-40% for us. Is it common to give experienced developers such a premium for their sweat equity? They are already getting a development fee. The sponsor argues that they get credit for bringing the millions of financing their reputations allows them to secure to get the project done. They calculated that our equity contribution represented 12% out of the total project build out cost (3 million/25 million) and were giving us a bonus and granting 18% of the cash flow to us. Per the conservative proforma, at 18% of the cash flow, that should give us about 10-11% return by year 3.

TOTAL PROJECT/CONSTRUCTION COST $25,000,000

LAND COST $ 3,000,000 (CONTRIBUTED BY US)

TOTAL EQUITY (INCLUDING LAND) $ 5,000,000

CONSTRUCTION LOAN $ 14,000,000

MEZZANINE LOAN $ 6,000,000

The developer is getting a fee for the project. In the Total Construction budget, there is a line item of $1,000,000 for the development costs.

I am not sure what other details are needed to answer my question but I am feeling like these developers might be trying to take advantage of the fact that we aren’t that experienced in real estate deals. I am hoping to try and determine whether there is some expected norms in a real estate development deal that i can use to gauge this deal.

Thanks in advance!

@Ashvin Dewan

Thanks for your post.

A few questions to get oriented:

1. Where is this project located (just need the city)?

2. What type of project is it (industrial, commercial, multi-family, etc)

3. Is the developer small and local, or big and national?

4. Who established the land value at $3.0M? If you did, based on an appraisal or what valuation method?

5. Has the developer given you a proforma? 

If you are going to JV your land, you absolutely need to see the model, in fact, if you have it, or when you get it, make it generic, but maybe think about posting it here.

I am not trying to have you disclose proprietary info about you or your family. You cannot make an informed decision without underwriting the deal itself. The work to make sure their assumptions are correct goes beyond what we can do here on this post.

The proforma is the most important tool that we have to assess any project. When we propose land JV's we always show the total proforma underwriting.

Generically, you putting up 2/3 of the equity and getting 18% of the back end sounds low.

The items to underwrite in the model are:

Rents

Op Expenses

Soft costs and development impact fees

Const. costs

Timing (entitlements, construction, lease up, etc)

Rates and terms on debt (your land will set behind the lenders encumbrance)

Developer fee deferral if any

Developer fee true equity

Development cap rate or NOI/Cost

Assumed exit cap rate

Let's stop there, there are a million more questions to be asked.

~ Scott

Scott, I am looking at a 1.3M value add project. The project is Norfolk, VA Currently the property consists of two gorgeous houses with a pool and is 3 acres within walking distance of the Chesapeake bay. The owner got it approved for a 24 unit condo conversion, but would rather sell, then go through the year long process to build these units. Fact: luxury condos sell for 120k in Norfolk if built right and correct ammenties Fact: There are two bases, five shipyards and 7 major boroughs with in 30 miles of this land. Fact: I would have to demolish the current buildings and then start the project. Fact: most condos take about a year to build in the area What would be my next step if I got funding? How do I prepare for a contractor? Where do I go to find out how much it costs to build condos in the area? What am I not thinking about thank you, Johnny

Scott, here are the answers to your questions in bold

Originally posted by @Scott Choppin :

@Ashvin Dewan

Thanks for your post.

A few questions to get oriented:

1. Where is this project located (just need the city)? Washington DC

2. What type of project is it (industrial, commercial, multi-family, etc) Multi-family

3. Is the developer small and local, or big and national? I would say medium size. This is their first project out of Michigan. Have developed previous multi-family and hospitality projects

4. Who established the land value at $3.0M? If you did, based on an appraisal or what valuation method? Based on over 20 offers we have received. That is pretty in line with the offers we have seen. 

5. Has the developer given you a proforma?  Yes. Pretty conservative numbers in the model based on surrounding properties

If you are going to JV your land, you absolutely need to see the model, in fact, if you have it, or when you get it, make it generic, but maybe think about posting it here.

I am not trying to have you disclose proprietary info about you or your family. You cannot make an informed decision without underwriting the deal itself. The work to make sure their assumptions are correct goes beyond what we can do here on this post.

The proforma is the most important tool that we have to assess any project. When we propose land JV's we always show the total proforma underwriting.

Generically, you putting up 2/3 of the equity and getting 18% of the back end sounds low. I can't show too many specifics here on the forum, but basically, by year 4 of operations projecting about 17% return at the split proposed of 18% of cashflow. The developers will be clearly taking home a lot more of the cash. I do believe they are entitled to it since they are unlocking the land's potential, but my biggest concern was how little the proportion of the split is. This land can generate so much cash I was thinking 35% split of the cash flow to us, and 65% to them was a little more equitable. That would put our return to around 34% for us. 

The items to underwrite in the model are:

Rents

Op Expenses

Soft costs and development impact fees

Const. costs

Timing (entitlements, construction, lease up, etc)

Rates and terms on debt (your land will set behind the lenders encumbrance)

Developer fee deferral if any

Developer fee true equity

Development cap rate or NOI/Cost

Assumed exit cap rate

Let's stop there, there are a million more questions to be asked.

~ Scott

Thanks Scott for all your feedback!

@Ashvin Dewan

Thanks for the response and feedback. Look forward to following up from our call today.

~ Scott

@Johnny Quilenderino

Thanks for your question about the condo project. 

First, a couple of points of feedback. You are calling this "value add" but from your description, you would tear the houses down, so this is a development project. Value add would be if you rehabbed the houses and rented them or resold them, value add assumes upgrade to existing structures. Second, if you are tearing the houses down, then the 24 unit condo approval the developer obtained is a "condo approval" not a "condo conversion". Condo conversion would mean converting existing apartment units into for-sale condo units, again, with tearing the houses down this is a development project.

Questions:

1. Purchase price is 1.3MM for the land plus the condo approvals? Reason for asking, if luxury condos sell for 120k, then the 1.3M purchase price is 54k per door just for land, which is nearly 50% of your cost basis. This sounds very high. We like to underwrite land on for-sale homes and condos somewhere between 20% and 25% of revenue. So if you sold units at 120k, 20% would be 24k. Remember, you have to pay for land, const. costs, soft costs, interest carry on your loan, permit and development impact fees, your profit, and fit that all into 120k per door on the unit sale (BTW, 120k per unit walking distance from Chesapeake Bay sounds cheap, but I'm not familiar with the market).

2. Has the developer done any construction drawings beyond the condo approval?

3. Has the developer completed all the legal and technical parts of the subdivision for city of Norfolk or state of Virginia subdivision requirements?

4. Will the architect who did the design for the project approvals stay on board to do the CD's, and what is their charge for that design?

5. Have you run any numbers on the deal? I always run numbers very first thing, to see if the deal even works at all in the beginning. You'll have to ask around for hard costs and fees, but most land brokers in your area should have some guidance on this for sites that they've sold recently. You can also call local small and midsize GC's for their budget guidance on hard costs.

You can do a very simple proforma as follows:

Revenue from sales

Less 

Broker fees for condo sales, closing costs for unit sales, warranty costs for units sales

Land, closing costs for land, broker fees for land

Soft costs, architecture, civil eng, MEP/S engineering, soils report, Phase 1 if needed, developer insurance, prop. taxes during const., marketing, subdivision costs, HOA formation and reserves

Hard costs - GC contract costs, overhead, profit, insurance

Development impact fees, permit fees, school fees, park fees, etc.

Loan costs for const. loan, interest carry, loan fees, appraisal costs, lender legal, funds control

Developer fee

Equals (what's left) - developer profit, normally shared between equity investor and developer. 

6. Why is the developer selling? What's wrong with the project that they want to sell? Maybe nothing is wrong, but you ALWAYS want to ask yourself this question. What issues does the developer avoid if he sells to you? Permit issuance constraints/lottery, soft market, lack of const. loans or equity, condo defect liability (maybe more of a CA thing), or whatever else. You don't want to be the greater fool.

Get back with these answers and we can go to the next step.

~ Scott

Scott,

My answers are in bold. I still have the "meat and potatoes" questions #5 to answer. I will be calling GC's and insurance agents tonight.

1. Purchase price is 1.3MM for the land plus the condo approvals? Reason for asking, if luxury condos sell for 120k, then the 1.3M purchase price is 54k per door just for land, which is nearly 50% of your cost basis. This sounds very high. We like to underwrite land on for-sale homes and condos somewhere between 20% and 25% of revenue. So if you sold units at 120k, 20% would be 24k. Remember, you have to pay for land, const. costs, soft costs, interest carry on your loan, permit and development impact fees, your profit, and fit that all into 120k per door on the unit sale (BTW, 120k per unit walking distance from Chesapeake Bay sounds cheap, but I'm not familiar with the market). Purchase price is for the land and condo approvals. I would still have to get a GC into to demo the 7 units on the property. You were right, luxury condos go for a median price of 220k and higher depending on amenities. I am not a condo person, but I am a commercial buyer.

2. Has the developer done any construction drawings beyond the condo approval? Yes, proof of concept (POC), and architectural drawings were done due to the airport close by, and flight/height restrictions all approved in 2008.

3. Has the developer completed all the legal and technical parts of the subdivision for city of Norfolk or state of Virginia subdivision requirements? Subdivision is approved in 2008 by the City of Norfolk development board.

4. Will the architect who did the design for the project approvals stay on board to do the CD's, and what is their charge for that design? The architect will stay onboard, but did not give his fee  for the design.

5. Have you run any numbers on the deal? I always run numbers very first thing, to see if the deal even works at all in the beginning. You'll have to ask around for hard costs and fees, but most land brokers in your area should have some guidance on this for sites that they've sold recently. You can also call local small and midsize GC's for their budget guidance on hard costs.

Still working on this answer. I do have a local broker that is running the numbers.

You can do a very simple proforma as follows:

Revenue from sales

Less

Broker fees for condo sales, closing costs for unit sales, warranty costs for units sales

Land, closing costs for land, broker fees for land

Soft costs, architecture, civil eng, MEP/S engineering, soils report, Phase 1 if needed, developer insurance, prop. taxes during const., marketing, subdivision costs, HOA formation and reserves

Hard costs - GC contract costs, overhead, profit, insurance

Development impact fees, permit fees, school fees, park fees, etc.

Loan costs for const. loan, interest carry, loan fees, appraisal costs, lender legal, funds control

Developer fee

Equals (what's left) - developer profit, normally shared between equity investor and developer.

6. Why is the developer selling? What's wrong with the project that they want to sell? Maybe nothing is wrong, but you ALWAYS want to ask yourself this question. What issues does the developer avoid if he sells to you? Permit issuance constraints/lottery, soft market, lack of const. loans or equity, condo defect liability (maybe more of a CA thing), or whatever else. You don't want to be the greater fool.

The developer had it rezoned in 2008 (then the crash hit), he did not pursue the land conversion, and just built two duplexes and a triplex within walking distance of the beach. He knows it is a good sell, but does not have the equity for a year long project. Once I figure out most of question 5, I will know if I am able to possibly execute the buy and hold until the units come online.  

@Johnny Quilenderino

Ok, thanks for the answers. 

Things to confirm:

1. Approvals from 2008, are they still active or "in place"? In most jurisdictions, entitlements, other than recorded subdivision maps, expire if permits were not pulled to build the approved project. Now to confuse the issue, sounds like the developer built 7 units out of the 24, so another question, did the 7 units become the "approval" and the 24 units is expired? Sounds to me, like the developer ditched the 24 units, built 7 apartments just to save the deal, now wants to sell the 24 unit project. You as the new developer must prove to yourself that the 24 units in fact is real and can be built without undue cost, time, and political risk.

I would ask to set up a meeting with the city planning department, have your broker and architect go with you, ask as many questions as you can about:

A. Is 24 unit approval expired, or in place? Was there a subdivision or condo map approved and recorded? Are all the subdivision map conditions met? Is there a subdivision bond in place?

B. What is the process to get building permits for the 24 units?

C. What's that planning approval and permit process timing look like, how long to get all the permits you need to build 24 units?

Fine having the broker run the numbers, but why don't you just set up a basic spreadsheet based on outline from my previous post and run the numbers yourself? Reason for this as follows: You control the input and make sure it's real, you can also explore scenarios to see if the deal work, i.e. 220k sales price doesn't work, what if we sold at 230k, would that work (make sure to check market will support you explored changed variables)? No deal I've put together ever stays static from the first underwriting, you are always updated, tweaking, exploring scenarios, until you are satisfied that the deal generally works, or is dead. Then once you are working on the deal, you'll continue to update the numbers to make sure you are tracking.

Good you are getting GC costs, but make sure you get all your soft costs, insurance, architect, CE, MEP/S, soils, environmental (Phase 1) if needed, condo map completion, dept. of real estate condo map sales process costs, etc.

My observation at this point is that my ability to guide you through the process via BP posts will be very limited. Our company does provide real estate development consulting services, send me a DM if we can be of further help.

Thanks! Happy Thanksgiving!

~ Scott Choppin

Great info and advice from @Scott Choppin  

Hi @Scott Choppin ,

I have an opportunity to partner on a deal with my FIL on a property near Long Beach.  

He wants to acquire his neighbor's property which is a 17,000 sq. ft. lot with an existing 1,650 sq. ft. house and add two more houses, subdivide the lot into three parcels, and sell the houses off individually.  The one existing house needs a cosmetic rehab as it currently has a late 70's decor, but I believe it is well-maintained.

The estimated numbers look something like this:

Property acquisition:  $700k

Construction cost:  $750k ($350k for each new house, plus $50k cosmetic rehab on the existing house)

Sales price:  $1.8M ($600k per house)

So the profit would be $350k. Unlevered ROI = 24%

Obviously, these are just rough back-of-the-napkin numbers, but does this look like a deal you would consider?

Neither of us has new construction experience, but my FIL has extensive rehab experience and is used to dealing with contractors.  He has many connections in this area.  My background is more in the buy and hold realm and I would be a mostly passive partner if I joined the deal.

I'm trying to run the numbers and decide if this deal makes sense to pursue further or not, but it's hard to know what I don't know.

Any thoughts or advice you could provide would be appreciated!

I have one I'll toss in. Much smaller than the others that have been posted here though!

Nashville TN

• 50x150 lot
• Two homes - stacked front to back - popular here
• 75,000 land cost
• Two 1600 SF homes - 3 bed 2.5 bath @ 105/SF build cost - 336k build cost
• 320,000 sell price per house
• 6% realtor fees
• 14k interest - 4k survey - 1k legal fee - 36k builder fee
• 0% down construction loan if at or below 80% LTV
• Total cost of loan = 447k, Appraisal (estimate) = 640k, So total cost is right at 70% of appraised value
• Out of pocket spent on soft costs = 20k
• ~141,000 profit
• 10 month timeline

@Brent Seehusen I don't think you're taking into account the 5-6% you will probably pay a realtor to sell the homes. Also if you are funding with a bank you will have to take interest into account.

How big are the houses you plan to build?

@Roberto Gutierrez  Thanks.  Yeah, I'm going to start modeling out carrying costs and other expenses that we might not be accounting for to get a better picture.  We haven't designed the houses yet, but I'm estimating 1,600-1,800 sq ft.

I guess what I'm having the hardest time estimating is the assorted fees involved.  

@Brent Seehusen

Happy to help. Some questions to refine my response. 

1. Is it in the city of Long Beach? Important to know what jurisdiction, that guides the subdivision process.

2. How big (s.f.) are the new units?

3. Do you const. costs include the permit and impact fees, such as school fees?

Also, send me a DM with your contact info. 

Thanks!!

Hi @Scott Choppin ,

I have been playing around with the idea of doing a smaller development type situation in my city of MissouIa, MT. There is a piece of land that I could pick up for around $150k-$175k and could be zoned to build duplexes. The land is just more 2.5 acres. 

The credit union that I have spoken to said that they would be willing to fund the purchase of the land and the building costs. We didn't talk super specific terms because I was still unsure of how I would be looking to proceed forward, or if I would at all. I'm sure I would have to put some skin in the game and would be able to have a couple hundred thousand available if needed. 

My goal would be to build duplexes with each side around 1000 sf and a single car garage. I am estimating building costs around $100/sf, but wasn't sure if that should include permits, or costs to bring sewer, water, electric, etc from the main road, building a road, and that sort of stuff. Lot sizes would probably need to be around 8000sf. 

I am trying to determine how many duplexes I would be able to build on the land, the total cost to build it, what my ROI would be if I were to sell them at the end of the day or rent them out. Sales price of something like that around here would easily be $325k+. There are similar new build duplexes listed at over $400k currently, but I think they are priced too high and won't sell. Each side of a duplex would be able to rent for between $1100 and $1300 a month.

Where am I going wrong and what else should I be looking for?

Originally posted by @Roberto Gutierrez :

I have one I'll toss in. Much smaller than the others that have been posted here though!

Nashville TN

• 50x150 lot
• Two homes - stacked front to back - popular here
• 75,000 land cost
• Two 1600 SF homes - 3 bed 2.5 bath @ 105/SF build cost - 336k build cost
• 320,000 sell price per house
• 6% realtor fees
• 14k interest - 4k survey - 1k legal fee - 36k builder fee
• 0% down construction loan if at or below 80% LTV
• Total cost of loan = 447k, Appraisal (estimate) = 640k, So total cost is right at 70% of appraised value
• Out of pocket spent on soft costs = 20k
• ~141,000 profit
• 10 month timeline

 home run.. I would do this all day. if your in a stable resale market.

Originally posted by @Scott Choppin :

@Johnny Quilenderino

Ok, thanks for the answers. 

Things to confirm:

1. Approvals from 2008, are they still active or "in place"? In most jurisdictions, entitlements, other than recorded subdivision maps, expire if permits were not pulled to build the approved project. Now to confuse the issue, sounds like the developer built 7 units out of the 24, so another question, did the 7 units become the "approval" and the 24 units is expired? Sounds to me, like the developer ditched the 24 units, built 7 apartments just to save the deal, now wants to sell the 24 unit project. You as the new developer must prove to yourself that the 24 units in fact is real and can be built without undue cost, time, and political risk.

I would ask to set up a meeting with the city planning department, have your broker and architect go with you, ask as many questions as you can about:

A. Is 24 unit approval expired, or in place? Was there a subdivision or condo map approved and recorded? Are all the subdivision map conditions met? Is there a subdivision bond in place?

B. What is the process to get building permits for the 24 units?

C. What's that planning approval and permit process timing look like, how long to get all the permits you need to build 24 units?

Fine having the broker run the numbers, but why don't you just set up a basic spreadsheet based on outline from my previous post and run the numbers yourself? Reason for this as follows: You control the input and make sure it's real, you can also explore scenarios to see if the deal work, i.e. 220k sales price doesn't work, what if we sold at 230k, would that work (make sure to check market will support you explored changed variables)? No deal I've put together ever stays static from the first underwriting, you are always updated, tweaking, exploring scenarios, until you are satisfied that the deal generally works, or is dead. Then once you are working on the deal, you'll continue to update the numbers to make sure you are tracking.

Good you are getting GC costs, but make sure you get all your soft costs, insurance, architect, CE, MEP/S, soils, environmental (Phase 1) if needed, condo map completion, dept. of real estate condo map sales process costs, etc.

My observation at this point is that my ability to guide you through the process via BP posts will be very limited. Our company does provide real estate development consulting services, send me a DM if we can be of further help.

Thanks! Happy Thanksgiving!

~ Scott Choppin

 not sure if you mentioned but some times getting off the ground on a condo project can be tough at those price points when lenders want a certain % of the units sold before they will do govmit backed loans.. ????  just thinking out loud as something to also consider.. Very nice of you to go into so much detail for these folks..

Hi @Scott Choppin - thanks for chiming in!

1. The city is Bellflower.  There are many large lot sizes in this city, and lots of other people have done something similar to what we are considering.  The main difference is that it is probably less common to subdivide the lot and sell them off individually, although I've seen some examples of this on Zillow.  Most are held as multi-unit detached rentals.

2. The existing house is 1,650 sq ft so the plan would be to build two more of that size, give or take.  That excludes the attached two car garages which we would want to build on the two new houses as well.  Should I include the garages in the square footage when discussing construction?

3. This is where my expertise is lacking.  My FIL is figuring $200 sq ft for construction costs to be conservative, but I believe he is excluding permit and impact fees.  I want to put together a REALISTIC spreadsheet including all fees and soft costs before we make a decision, but I'm not sure how to estimate those things.  Just through basic research online, it looks like construction costs in LA averages $160-$200 sq ft. excluding permit and impact fees.  Would you agree with that?

I agree with Jay, looks like a great deal. BTW, how do you get a 0% loan at or below 80%, that's a sweet deal? Does the 10 month timeline include plan production and plan check? Otherwise, 10 months just to construct/build two houses seems slow. 

Go fast on this one, all the ingredients appear to be there, just need to mix and bake, and deliver profits!

Scott

Originally posted by @Jay Hinrichs :

Originally posted by @Roberto Gutierrez:

I have one I'll toss in. Much smaller than the others that have been posted here though!

Nashville TN

• 50x150 lot
• Two homes - stacked front to back - popular here
• 75,000 land cost
• Two 1600 SF homes - 3 bed 2.5 bath @ 105/SF build cost - 336k build cost
• 320,000 sell price per house
• 6% realtor fees
• 14k interest - 4k survey - 1k legal fee - 36k builder fee
• 0% down construction loan if at or below 80% LTV
• Total cost of loan = 447k, Appraisal (estimate) = 640k, So total cost is right at 70% of appraised value
• Out of pocket spent on soft costs = 20k
• ~141,000 profit
• 10 month timeline

 home run.. I would do this all day. if your in a stable resale market.

Originally posted by @Scott Choppin :

I agree with Jay, looks like a great deal. BTW, how do you get a 0% loan at or below 80%, that's a sweet deal? Does the 10 month timeline include plan production and plan check? Otherwise, 10 months just to construct/build two houses seems slow. 

Go fast on this one, all the ingredients appear to be there, just need to mix and bake, and deliver profits!

Scott

Originally posted by @Jay Hinrichs:

Originally posted by @Roberto Gutierrez:

I have one I'll toss in. Much smaller than the others that have been posted here though!

Nashville TN

• 50x150 lot
• Two homes - stacked front to back - popular here
• 75,000 land cost
• Two 1600 SF homes - 3 bed 2.5 bath @ 105/SF build cost - 336k build cost
• 320,000 sell price per house
• 6% realtor fees
• 14k interest - 4k survey - 1k legal fee - 36k builder fee
• 0% down construction loan if at or below 80% LTV
• Total cost of loan = 447k, Appraisal (estimate) = 640k, So total cost is right at 70% of appraised value
• Out of pocket spent on soft costs = 20k
• ~141,000 profit
• 10 month timeline

 home run.. I would do this all day. if your in a stable resale market.

Scott I know in the old days pre 08 our local banks here in Oregon would give their builder clients 100% financing as long as ARV was 80% or under.. I think for him the 10 months might include land use and permitting.. just guessing of course our build time for this product here in Oregon with all our weather is 5 to 6 months.. its really organizing the cats you know sub trades ... but we have a snow day or an ice day and that just plays havoc with the scheduling.

@Scott Choppin @Jay Hinrichs Thank you both for the replies!

0% down loan - Jay is correct here. As long as total project cost is at or below 80% ARV according to a front end appraisal then I can get in with 0% down. There is a bank that recently expanded to Nashville that is trying to get more loans on their books. It's definitely a product that has a limited timeframe. Most banks here will offer a construction loan with 10% down up to 80% ARV.

Timeline - Yes the 10 months is from plan production to the sale of the homes. Should only take 5-6 months for the construction itself. Then I budget 1-3 months for the sale. I round up to 10 months when talking to partners/investors just to be safe.

@Jay Hinrichs @Roberto Gutierrez Thanks guys for the updates!! We would LOVE 0% down @ 80% ARV for new multi-family builds, alas the lenders in that market don't love us that much!!

@Scott Choppin   we pay cash for the dirt then only borrow vertical and horizontal..  makes our loan packages zing through loan committee.. I let the other guys in town try for the max leverage deals.

but I am unaware of any lender private or bank that will do 100%  ... what the OP talked about is defiantly an anomaly or they are premier ( high net worth depositers in the bank)