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Now that you picked out the land...
Do you want to go commercial? Do you want to go SFR units or multi-units? How will your project plan flow with the city’s future planning? Since the value of the land is worth only as much as the income it generates, then the highest and best use must be determined.
JamberCorp can provide an analytical model to evaluate the value and the risk associated with real estate acquisition, development and disposition. We begin with developmental costs then proceed to an income/expense analysis of proposed office buildings, shopping centers, conventional apartments, federally assisted apartments, condominiums, co-ops or PUD’s and finish with a back-door approach to valuing land.
Can you field a super team for 2008, 2009, 2010???
Core Team Members:
Development Team Members:
- Planning Commission
- Department of Transportation
- City Council
- City Department of Economic Development
- Zoning Department
- Private Investor Money: Millennium Mortgage
- Proximate Neighbors/Public Hearings
- US Postal Service
- Home Owner’s Association
- Water/Utilities/Sewer Departments
- Fire Facility Usage
- Traffic Engineering
- Parks
- Chamber of Commerce
- Metro Transit
Costly, time consuming issues and due diligence
Negotiations/Concessions
- Understanding Local Regulations
- Study of City Master Plan
- Environmental Problems
- Geological Studies
- Approval Process/Zoning/Entitlement
- Selecting Location/Market Study/Absorption Levels
- Infrastructure Improvement analysis
- Outside-Third Party Viewpoint
- Pitfall/Exit Strategy Analysis
TIP: Hire the Geologist immediately:
Soil conditions can have a major impact on the excavations costs and structural cost, which can dramatically reduce the value of the land. Following are some examples showing how soil conditions can influence excavation and construction costs and reduce the value of the land which may amount to a total project failure.
Example 1:
Foundations and piles. Poor soil conditions, such as peat, rock, expandable clay etc increase construction coast which lowers the land value. Sites located near water often require expensive piling and foundations which lowers the land value.
Example 2:
Retaining walls. To utilize a sloping site it may be necessary to build costly retaining walls lowering the land value.
JamberCorp as your advisor:
When timing a cycle when is it best to purchase? Is it at the end of a boom, during a recession or at rock bottom. Levels of inflation, interest rates, job growth and population growth are market factors that can cause failure. But finding markets where jobs are increasing, where median income is rising, and where companies are relocating and hiring people creates the conditions that make commercial property a successful investment.
The assembling of all the demographic studies of an area is another way to keep failure at bay. Focusing on population trends, where the movement is to (when and why?), the number of people moving, and what factors attract people to an area.
The big box retailers, as an example, spend millions of dollars every year on demographic studies to build there next stores. JamberCorp won’t charge that much but will provide a great deal of research and information as a courtesy to earn your trust and future business.
An example of some of the reports and studies we can generate for your study:
- Demographic Profiles
- Competitor Profiles
- Business Locations
- Drive Times and Mileage
- Trend Maps (color coded)
- Marketing Campaign
- Comps
- Standard Geographies (State, MSA. Etc)
- Census Tract (is there special bond financing in county)
- Consumer Expenditure
- Business Information/Points
- Financial Data
- Flood Maps
- Retail Market Potential
- Aerials
TIP$:
Increase Profitability by Reduced Costs!!!
Reducing costs is easier to do than increase sales production because every dollar in cost reduction goes directly to the bottom line. Whether your company is a developer, builder or general contractor, large or small, developing commercial or residential real estate, the same fundamentals apply to all which is to always increase profitability and reduce expenses.
Follow the money!
The real possibility of lowering the cost of materials and supplies could be done by going around the many levels of mark-up. Going directly to the source does not mean your local lumber yard, nationally known retailer, or distributor. In fact, finding the source is to “follow the money” from the retailer to the national wholesale building and supplies company.
Se habla credit!
What about purchasing all the building materials and supplies on credit through extended terms without incurring interest charges. A direct trade line of credit will allow your business to generate additional cash flow by paying for the building materials and supplies when the permanent (Millennium) financing is in place. By altogether avoiding deferred payments your company could free up capital for other items like payroll.
Reducing time in “labor”!
The most effective method of reducing direct labor costs is to simply reduce the number of days required by your subcontractors and or employees on the job. Break away from the tradition of scheduling and economizing the best way possible to keep only those necessary on the job. Instead, embrace the timed tested less labor intensive alternative methods of construction which could include wood and steel panels with insulation. These methods combine three separate individual labor steps into one simple process that delivers pre-engineered sections to the job site for easy assembly in a fashion similar to either a larger erector set. The result is a dried-in-shell completed in drastically less time and labor resulting in a rosier bottom line!
Boost Production:
Using this alternative construction method will not only decrease the building and sales cycles, but also allow your company to build more units with additional profitability.
For even more details of what Jamber Properties can do for you by finding or selling land for development, contact us.
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