A proforma is a calculation that allows you to test and refine a development strategy. It is short of like a business plan for development. As such it must contain all of the costs and all of the income. By using this information you can make an educated guess about whether a development idea will work. Knowing this make it possible for you to enter ring as a developer. However, since our class is about ground up development it is assumed that you will come with differently rooted proposals with other outcomes.
Row heading in your proforma may include the following (among others).
Row heading in your proforma may include the following (among others).
Hard Costs
Land acquisition
Construction cost - building
Construction cost - site
Cost subtotal
Land acquisition
Construction cost - building
Construction cost - site
Cost subtotal
Soft Costs
Developer overhead
Design fees
Engineering fees
Real estate fees
Financing costs
Subtotal
Developer overhead
Design fees
Engineering fees
Real estate fees
Financing costs
Subtotal
Capital
Owner equity (11 or more percent typically)
Incentives
Loans
Owner equity (11 or more percent typically)
Incentives
Loans
ROI
Profit (10 percent minimum)
Profit (10 percent minimum)
Mor later.
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