Property Development Excel Model
  • Property Development Excel Model
  • Property Development Excel Model
  • Property Development Excel Model
  • Property Development Excel Model
Originally published: 04/08/2020 21:17
Publication number: ELQ-95638-1
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Property Development Excel Model

A 24-monthly financial model for property development.

Description
This is a simple and insightful financial model for property development projects. The model uses typical cost structure including land acquisition costs, construction costs (i.e. hard costs), soft costs (e.g. architect, project management, advertising, property taxes, etc.) and financing costs. Revenues are based on when the sales will start. Cashflows are based on the construction and unit sales timeline.

The model also assumes that equity is the first source of funding any expenditures and the last recipient when property sales start.

The model has monthly cashflows across a maximum 24-month development and sales planning timeline; Internal return of return (IRR) is calculated based on these cashflows.

The model calculates the required equity and bank financing based on the assumed gearing. To facilitate decision making, the model has a dashboard that will show the impact on the financial outcome (sales, profits, equity requires, IRR) of the various assumptions almost instantaneously.

The dashboard also show the cash ebbs and flows from equity investors, from the initial month and equity call is made to the last equity distribution is made from the sales of units.

The model is simple enough to be a building block for a deeper analysis using Monte Carlo Analysis.

This Best Practice includes
1 Excel model

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Further information

This model provide users with a Microsoft Excel-based tool for property development projects

This model can be used in valuing and assessment of return of investment for potential property development projects

This model is not meant to be used for detailed, account by account budgeting of projects. This model may not be used to determined actual value of a property for legal cases.

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