a. When you do a Property Development Feasibility Assessment before you start your development project what % Net Profit (or Return of Capital Cost) are you looking for before you decide to continue?
b. How often do you update this Feasibility Assessment (and cash flow analysis) over the life time of your development project?
c. Once you completed your project what is the % Deviation in Net Profits (or Return of Capital Cost) before you started and now that you have completed the project?
d. Do you think doing a feasibility assessment is a waist of time and effort – why?
e. Can my accountant help me with this?Thanks to all!!
Hi,
a) 25-30% of total project cost
b)constantly, especially when interest rate goes up!
c)surprisingly none, the actual profit was $75K per house, same as what was estimated/hoped for when the block was purchased [the initial assessment was each house would make a profit of $60K] However, the deviation in the actual cost was 25% [originally thought $200K per house ended up costing $245K]d)the feasibility study is a must before the commencement of any planning/application. I did mine on the back of an envelop.
e)Yes, but it will cost you.
KY
Where can I get help and at what cost? Those who have done it self where did you learn?
For my Feasibility Assessment I want to achieve the following –
Want to understand the different values, obtaining the costs and then for you to determine if it is in my best interest to continue with the development.
·Know my costs / profits before I commit
·Compare current opportunities with previous developments to show when I'm ‘on the money’
·Refine and compare my costs and selling price after each stage of the development to show estimate accuracy
·Provide clear decision points before I move to the next stageThanks all!!
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