Description
In this free 30-minute session, we answer the question: how does a real estate developer know what to pay for a piece of developable land? Participants will learn the basics of real estate development residual land valuation for both income-producing assets and unit sales assets, as well as the principles of valuation through comparable sales (comps). Participants follow along in Excel in real time and perform exercises to ensure they are grasping the lesson and are mastering the technical skills being taught.
Video (accompanying Excel file)
Slides
Hi, Bruce.
Love the video / spreadsheet and REFM generally. Really great tools. Do you mind providing a bit more clarity with respect to the formula used to estimate “Construction Loan Interest” in Cell F45 of the Office Model Tab (=D45*(1+(SUM(F34:F36)/12/2))*D44*SUM(F40:F43,F46)? Specifically, I’d really appreciate an explanation concerning the logic behind the following component of the formula: (1+(SUM(F34:F36)/12/2)). Not ruling out that my misunderstanding of it is perhaps attributable to my need for a refresher on basic algebra.
Thanks in advance for your time and assistance!
Hi Erik, does this help? https://www.getrefm.com/model-for-success/how-to-estimate-development-financing-costs-on-a-back-of-the-envelope-basis/
Yes. Thank you.