Special offer

Proposal Starting Point: How Would You Handle It?

By
Mortgage and Lending with Arnold Fitger Williams

Proposals float across my desk in several ways.

This one is from the south:

20 acre site.

Purchase price is roughly 1.4 million, cost to develop individual 1-2 acre lots roughly 900k.

This development would create 4-6 retail corner or near corner highway lots for restaurants, retail strip center and Gas stations and would sell for approximately 450-5500k each. This development would also be an alternate entrance from a main highway into a large Industrial business park that is almost completed.

Summary : purchase and development- 2.3 million
Interest Carry 2 years .36 million
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2.66 million
Sales on 4-6 retail lots 5 lots x 500k each 2.5 million
Sales on 10-12 interior lots 150-175k each x 10 1.5
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Gross 4 million
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Potential net Profit --------------------------------------- 1.3 million
without Construction buildouts.

I'm likely to send him the CCIM worksheet so that we can nail down a few more numbers before I start to gather documentation for lenders. Am I missing something obvious?

Comments (3)

Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Arnold, You posted this over two months ago. Did you do the deal? My main question was why the developer doesn't want to "build-out" at least one of  the lots. He could have paid for the whole thing by putting a gas station on one of the corners.

If he had approached obtaining financing from this perspective would it have been easier or harder?

Bill Roberts

Jul 20, 2007 05:02 AM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Arnold, I'll try one more time. I am truly interested in how you proceeded with this transaction and if a different approach might have been beneficial.

Bill Roberts

Aug 03, 2007 06:35 AM
Arnold Williams
Arnold Fitger Williams - Los Angeles, CA
This transaction is in process, so I will decline comment until it is finished.
Aug 03, 2007 11:01 AM