Budgets, Cash flow, and Feasibility
​
Create property development budgets, cash flows, and feasibilities that model income and expenditure, risk, and return sensitivities over the term of the development/investment deal and to establish property value.
In order for a project to be initiated, the developer must first conduct a feasibility study to determine if it is viable. Feasibility is determined by assessing the economical viability of a proposed venture by evaluating the startup costs, operating expenses, cash flow and making a forecast of future performance. The end goal for the investment is to generate a positive cash flow. The development budget is broken down into four steps; the preliminary budget, the post-bid budget, the budget vs. actual report, and the discounted cash flow financial model. These models help the developer determine if a project is feasible.
​
In Residential Land Development (LDEV 668), taught by Tim Early, we created a DCF model for a 30 acre site with 110 lots that included sales proceeds, cash flow and a debt schedule to analyze the feasibility of the development.
​
Click below to view to the full DCF model.