All Forum Posts by: Grant P.

The project would look far different to get it to 10, essentially a different project, just the same dirt.

But I completely agree that with the numbers as they are it does not make sense as an investment.

As condos, this project would bring in 1.575m as a conservative estimate based on comps, with the 1.2m investment

What I meant is to get the cap rate to 10 we would have to make significant changes to the building that would hurt the potential value as condos down the road.

Also I am not taking into account my or my fathers time, which is not what I want in the future.

I guess I need to dissect this more, I'm just confused on what numbers to focus on.

Exactly this is what I am getting at. The market will absolutely support this. I know this does not really come into play when dealing with an investment property, but this would when we go to sell the building.

I think there is more value in it as condos then apartments, but due to the greater liability issues and this being our first project we are trying to make it work and hold it for a few years before we package to sell it/convert to condos.

Also without question I think we can get the cap rate to 10% for investment purposes, however I have not been estimating for my time or my fathers time.

The simple answer to this is yes, this concept could not be created without specific knowledge or expertise.

To give a little more info on our team,

Myself-
Young professional with a background in-
Construction management for a large general contractor-working on a $40m building onsite

Commercial development for a large privately held development and investment company

And finally for the bulk of it I have been working in finance-
Selling securities, investments, etc.

In a nutshell I bring almost nothing to the table other than a good understanding of numbers and the ability to run the day to day.

My father-

Owns and operates one of the best architecture firms in the mountain west. Has 30+ years experience, designs over $150M in new construction annually. Has been AIA Denver firm of the year, AIA Colorado firm of the year..........The list goes on

He is truly a wealth of knowledge, sits on many design review boards and is an overall badass

This is the value that I am trying to exploit!!!!

I know the numbers I threw out there are way to basic, and I probably shouldn't have done that.

I was really looking for how to analyze the deal. I have no experience with this, and have been reading every book I can get my hands on, yet the software I'm working with really doesn't allow me to do what I want.

The only way I have figured it out is essentially build 2 proformas.

Just more curious how everyone else would go about projections for a new development/hold as investment property.

Once I get some better projections together, I will post them up for you guys to pick apart. I'm sure you know the numbers better than I do.

Grant

Hello all,

Seeking advice on how to analyze potential apartment development to hold and carry as an investment.

The building would be 8 units total project cost in the 1.2m range, and would be projected to gross $125,000 before expenses. The numbers look very good on the proforma's that I have built, but the real value could be in the concept.

I have run projections and financial proformas from an investment standpoint, but these do not take into account the added value from developing the project.

To anyone that has developed investment property and can provide any insight on how you would go about making projections please feel free to contribute. I think I have a good handle on the numbers, and they look EXTREMELY promising as is, but I'm missing a big piece, which is the increased value of the building.

Also when you develop projects, do you build a development fee into your projections if you own the project? How about design services? The architect is part of the team as well. The building will be financed, but no additional investors, just us.

Thanks in advance,

G

Hello all,
I have never made a post as I never felt it necessary, but now as a licensed broker and potential developer/investor its time to start taking advantage of all the resources that Bigger Pockets has to offer. I literally have about 100 questions ready to go.

I was lucky to be based in Denver, and attended the summit this year, and I can safely say that I visit BP on a daily basis. Although what we plan to get into is a bit different than what others here are, the wealth of knowledge is abundant here.

I hope to not only take advantage of all that BP has to offer, but build my knowledge as I progress in my career and hopefully can be a contributor in the near future.

It was great to meet everyone at the summit and look forward to meeting the online community as well.

To a happy, healthy and profitable 2012

Grant