5 Steps to the Feasibility Study Suite
Without a comprehensive understanding of the characteristics of your real estate property and its surroundings, you won't even know where to begin effectively developing your real estate property. When obtaining the most information possible you'll be able to take the next steps to develop a project with its optimal potential.
Developing a product that lacks demand, especially at the wrong time, could result in losing your and your partner's entire investment. By gaining clear insight into the supply pipeline and market demand, you'll be able to deliver products that are highly desirable, thereby maximizing your chances of success.
Lacking a clear vision of your development won't allow you to accurately underwrite your project. Utilizing a schematic design provides you with the visual representation necessary that defines the bulk and size of your project, so you can produce a concise and precise financial plan for your development.
Having no investment deck, you risk deterring potential investors and lenders from financing your project. A solid well-thought-out investment deck instills confidence in you and your partners, provides a thorough insight into your project, and increases the chances of attracting the capital you need.
Clarify Your Financial Plan
& Attract the Capital You Need
Without a clear financial plan for your real estate development, you lack the confidence to attract the capital to see your project through its exit. However, with a detailed pro forma, you'll have what it takes to make your project a financial success.
The Challenges Faced Without a Pro Forma
Are you prepared to go to the next level? Many real estate developers don't realize how lacking a pro forma affects their project. Here are just some examples:
Lenders ignore your proposals.
Investors don't want to partner with you.
Partners won't even tell you why they're not interested.
You can't find the confidence to believe in your own project.
Financial overruns are realized too late in the project.
Making poor decisions on building type and finishes.
Not having a backup plan when the market changes.
A Clear Financial Pro Forma Leads to a Successful Project.
When blindly developing a real estate project without a clear financial plan, you reduce your chance of getting good financing and compounding the risks of an already risky endeavor. So why would you take the chances? By conducting a comprehensive financial pro forma on your real estate development, you're ensuring your partners, investors, and lenders have a solid project and give yourself the confidence and belief that the project will work out to the exit. Real estate development projects can take millions of dollars and years to complete from concept to exit. So, it's not only about the money you risk; it's precious time you put in, and lenders know that. The right move is to do the math before you begin a project. It's part of your due diligence. Verify that your project is financially viable with a pro forma so that you can unlock your borrowing power. Forget the back of the envelope calculation. That's not going to cut it. And don't be afraid of discovering the project is not the right one. It's better to pass on a project today than to be forced to pass on it when you find out after you spent precious years and millions of dollars getting it nowhere. Develop your project with more ease when you have no doubt your project is going to work.
With ProFormax, you can take the guesswork out of real estate development and unlock the best financing terms from lenders and investors. When you present a viable financial pro forma, you'll have them competing to invest in your deal. Our team will conduct a comprehensive financial pro forma on your project, so you'll gain the confidence to see it through to success. ProFormax will verify that your project is viable and has multiple exit strategies, ensuring you're covered in various scenarios. With ProFormax, you can adjust your design and budget until your project is feasible and then insert the report into your investment deck to attract the best lenders and investors. So don't leave your time and money to change with back-of-the-envelope calculations. Instead, get the industry-required real estate development pro forma and approach your project with the professionalism it deserves. Click on ProFormax for a sample report and take the first step towards a successful real estate development project.
Know Your Numbers & Avoid the Mistakes
At BLDGUP, we recognize the challenges in securing financing for real estate development projects and the risks of investing in a project without a clear understanding of its financial viability. We learned this lesson the hard way. When we embarked on our first large-scale project and were asked by a bank lender for a financial pro forma, we spent countless weeks learning Excel and number crunching, only to submit a rushed report that didn't meet the lender's requirements. But we didn't give up. Instead, we sought advice and consultation from others and eventually perfected our pro formas through years of trial and error, practice, and countless fees paid to brokers and advisors. Today, our refined pro formas are so advanced that we can confidently underwrite projects of any size, easily articulating the project's financial potential to our lenders and partners. And now, we want to share our valuable expertise and team of experts with others who need the same tools to succeed in real estate development. So, we created ProFormax - a real estate development service that gets all your inputs and assumptions into a thorough and concise financial real estate pro forma to add to your arsenal of development tools. Our tested pro forma report assures you to avoid the risk of investing millions of dollars and years of work into a project that may not succeed. Instead, use it to gain a clear financial picture of projects and discuss the detailed numbers with partners. With ProFormax, you won't have to go through decades of the same painful learning curve and costly trial-and-error process that we did. Instead, you can leverage our team's expertise and let us create a thorough pro forma for your project that you can insert into your investment deck. As a result, you'll be able to turn around your financial plan to your lenders and partners fast without the hassle of doing it yourself and gain the confidence you need to develop your real estate project successfully. Hear how satisfied our partners are with our work:
Developing Properties From:
Vacant Office Parks
Houses of Worship
Save Yourself Time & Money. Clarify Your Financial Plan & Attract the Capital You Need.
Are you developing a real estate property? Hopefully, you're going through the proper steps as any other developer should. Before you even break ground on a project, you must do your due diligence and assess the project's viability. First, you're conducting a site analysis to understand the characteristics of your subject lot. Once you understand the property, you should do a market study to learn what sells best in the marketplace. With those pieces in mind, you're envisioning a project, so you have a schematic design created to visualize it. Then, it's time to determine if the project is worth pursuing financially. So, now you must take all the real estate you have in the schematic design and convert it into a financial pro forma – a financial calculation, projection, or forecast of a real estate development project, typically prepared by real estate developers, investors, or lenders. It estimates a real estate investment's potential profitability and feasibility by projecting future cash flows, expenses, and income over the project's life. A pro forma considers various factors, such as construction costs, market trends, financing costs, and expected rental or sale revenue, and estimates the expected return on investment. A well-prepared pro forma is essential for making informed investment decisions and securing financing for real estate projects. It's a vital step in the development process that can save you time, money, and headaches. Several groups of people will need to see your pro forma. First, you must convince yourself that the project is worth pursuing. Once you've done that, you can use the pro forma to attract investors and partners and to convince the bank lender to provide the financing you need. To be effective, a pro forma needs to be accurate and concise. It should clearly outline your budget, including soft and hard costs, and explore multiple exit strategies if the primary one doesn't work out. It should also contain stress tests for various changes in the marketplace, such as interest rates, material and operating costs, and sales or lease fluctuations. A well-prepared pro forma is an essential tool for any real estate developer. It allows you to make informed decisions and move forward with confidence. So, if you're embarking on a real estate development project, leverage BLDGUP's ProFormax to guide your investment decisions and secure the funding you need.