BUDGETS + CASH FLOW + FEASIBILITY
With most real estate driven deals, financial gain is a main driver for the developer, investor, or other parties to become involved with the project. Because of this fact, many steps must be taken into consideration throughout all stages of the development to ensure that every party involved is obtaining the benefits. Understanding this knowledge and how to accurately depict the proposed monetary structure for a project is vital and is a major component to many of the courses throughout the MLPD program.
In LDEV 668 (Residential Land Development) students were tasked with the creation of multiple analysis sheets to determine many factors for the project at hand. The first, a discounted cash flow model (DCF), was built for the Twin Creeks Master Planned Community in Allen, Texas which analyzed the sales proceeds for the project in an interactive spreadsheet. Additionally, students were asked to create a debt schedule for the project that allowed for the understanding of the flow of money through the project on a quarterly basis. The last portion of the project was to create a cash flow analysis that presented the returns to the project’s capital and the internal rate of return. Additionally, a lot affordability model was created to help determine how the proposed project yield could be absorbed in the current market with specific demographics. Both files with the listed components are attached below. (See Files 1 & 2)
Similarly, LDEV 669 (Income Property Land Development) covers the creation of a discounted cash flow model (DCF) and investor package for the Bluffs at Vista Ridge, a proposed apartment complex in Lewisville, Texas. Through the completion of this project, three DCF analyses were created to understand the differences between the proposed sponsor equity contribution variances. By utilizing a Stage 1 and Stage 2 financial analysis, the result of each varying equity contribution was presented. This was used to inform the proposed investors on the options that would be best for all parties financially. The final assessment also featured a waterfall distribution which showed the profit split between parties once the initial hurdle rate was exceeded. Additional items in this report included: company information, loan terms, location and site information, and a breakdown and analysis of the financial models. The completed DCF is attached along with the full investor package and a memo that analyzes the investment options below. (See Files 3, 4, & 5)