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* Land Development Model, An Appraisal and Valuation Tool
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AN APPRAISAL AND VALUATION TOOL
This is a simple but powerful, straightforward, fast-working yet
inexpensive land development model. It is the result of an effort to
create an appraisal and valuation tool that:
1). Estimates the profitability of 'single and multi-phase' land
subdivisions in one step;
2). Extends analysis beyond 'gross profit' to 'profit before tax',
resulting in an interest cost calculation based on the cumulative
effect of the absorption rate, project duration, lender loan
requirements, seller financing, interest rate fluctuations during the
project period, phasing decisions, land purchase option alternatives,
and residual land;
3). Allows for quick and easy 'what-if' analysis on all land
development components - above and below the gross profit level.
The model requires windows and excel to run and is delivered over the
internet at the time of purchase.
The cost of the model is just $74.99 - completely refundable if you
are not 100 percent satisfied with the product.
How is the model structured?
* Analysis of up to three phases in one step;
* Project duration up to ten years;
* Excel functionality (save-as, print, passwords);
* Development components entered on single input page;
* Output pages generated after input entry;
* Links provide easy access to and from all model pages;
* Profitability measures visible on input page;
* Visible and hidden worksheets password protected;
* Includes take off page for pre-model entry.
What can I do with the model?
* Analyze single and multi-phase subdivisions;
* What-if analysis on all development components;
* Evaluate and estimate option value;
* Make phasing decisions;
* Estimate profit by year, phase, and project;
* Estimate interest cost by year, phase, and project;
* Generate, save, and print profit tables;
* Generate, save, and print cash flow tables;
* Generate, save, and print lot sale schedules;
* Analyze effect of seller financing on profit;
* Analyze effect of seller financing on equity-in;
* Extract rates and ratios from the market;
* Recognize timeline concept of development process;
* Evaluate the effect of interest rate trends;
* Demonstrate concept of leverage;
* Demonstate concept of time value of money;
* Save project scenarios under unique filenames;
* Analyze profit before tax;
* Analyze individual owner profit after tax;
* Create profit tables under multiple scenarios;
* Estimate land value based on target profit ratio;
* Conduct cost/benefit analysis;
* AND more ....
The model allows for one-step analysis of subdivisions with one,
two, and three phases; or analysis of an unlimited number of phases
one phase at a time.
Given the model's capacity for simple 'what-if' analysis over the
full spectrum of land development components, combined with its
user-friendly excel functionality, any number of related project
scenarios and associated model results may easily be produced,
compared, and saved under distinct filenames in a matter of minutes
with just a few keystrokes.
The model may be used by real estate appraisers, real estate agents,
lenders, developers, other professionals or anyone having an interest
in the subdivision process. A sample land development project - a
tutorial - is incorporated to the website. It demonstrates first the
input of land development components and second the significant output
capacity of the model.
The links below provide a gateway to the website and an easy way to
get a feel for how the model works. Simply use your browser's back
button to return to your previous spot.
Note that the model is not intended to be a multi thousand dollar
software package. There are several such land development products out
there, but unless you are in the business on a daily basis the cost
can be prohibitive - not to mention the steep learning curve that
often comes with more sophisticated products.
This is a simple but powerful, straightforward, fast-working yet
inexpensive land development model.
If you wish to ask us a question about the model, and we will get
back to you as soon as possible.
Website Quick Trip
Input of variable land development components are easily entered to
the model's input page. Field-clearing and auto-entry macros enhance
data input efficiency.
Data entry is very easy. A couple times through it and you will have
it, we promise! The tutorial demonstrates the data input process and
output capacity of the model.
It is important that users have absolute confidence that unnecessary
entries are not made to the model and that required input are
accurately entered. A prompt column and model consistency section are
incorporated to the LDM input page to ensure entry errors or
ommissions are not made.
Model output include profit and cash flow tables, a profit by phase
table, a project summary table, a lot sale schedule, among others. All
output tables and schedules can be printed.
It is very easy to conduct 'what-if' analysis on any land development
component. Simply modify any of the components and the impact on
profitability is calculated by the model.
You do not have to be an expert in the field to use the model. In
fact, the model can be helpful to the novice in gaining an
understanding of the land development process.
We have identified fifteen land development components. The
components are interrelated and as such modification of any one of
them affects profitability to some degree.
The land development process is made up of three distinct and
progressive stages. The first is the 'negotiation, planning, and
permitting' stage, the second is the 'construction and holding' stage,
and the third is the 'absorption or selling' stage.
The land development model can handle subdivisions with one, two, and
three phases. It is designed in such a way that real estate options
and residual land are part of the analysis. As such, the model may be
useful in terms of estimating the value of land options.
One of the model assumptions is that the developer's ownership is in
the form of a pass-through entity (i.e., S-Corp, LLC). As such the
entity is not taxed, but project income flows through to the owner
personally and is taxed at his or her tax rate.
The model requires windows and microsoft excel to run.
To enable the macros, go to Tools menu > Macro submenu > Security tab
and set security level to medium. When you open the LDM you will be
notified that the file contains macros and asked to enable or disable
the same. Click on 'Enable Macros'.
Mathematical models inherently operate under a set of parameters, and
thus a set of assumptions.
Uncertainty of the variable input. Estimates are prone to some error.
Additionally, the structure of the model requires 'cash flow timing'
designed to reflect timeline concepts ....
Integration of a GIS and the appraisal office allows for
visualization of parcel attributes and neighborhood features.
Navigation made easy. The map provides access to all website pages.
Click away!
Please type your question or comment. Then type your first name and
e-mail address. Last, because we want to know you are a real live
human - and not a computer! type the word you see, then click the
'Submit' button.
Because its a simple but powerful, straightforward, fast-working yet
inexpensive land development model. Give the product a try. It is a
great appraisal and valuation tool - and it is so simple to use.
