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Reclaiming Vacant Properties
October 2019
Welcome & Agenda
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We train small-scale developersand coach the cities they love.
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Time
Development as we know it:
Sca
le
Middle-scaled housing doesn’t get built.
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Zero to three stories.Mostly residential.Builds community.
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We all need places to…
…earn a living.
…learn a skill.
…share a meal.
…be a kid.
…live your life.
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Hustle
Skillsets &Knowledge
Relationships
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Locally-Owned Development
High cost, limited reward
$500k to playWealth exported
Modest startup costsWealth retained
Multiplier effects
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Value Proposition forNeighborhoods and Cities
BUILDDeveloper Ecosystem
EARNResilientTax Base
Lenders and investorsCodes and processesInfill infrastructure
Tax revenueWealth retention
Adaptable districts
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Small and incremental
Large and master
planned
Corporate and institutional
Entrepreneurial and bootstrapped
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State of the Industry
Economies of scale
Specialization required
Regulatory patchwork
Citizen opposition
Major labor shortage
Concentrated wealth
Mismatched supply
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Increments of Development
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Nobody is Coming to Save You
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Small Development Workshop
Financial Analysis
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If you can’t get the revenue, then you shouldn’t build the building.
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Input what you can control.Observe the pro forma and adjust.
INPUTS
Project sizeHard and soft costs
Unit scenarioFinancing terms
Total costEffective income
Projected cash flowInvestment returns
OUTPUTS
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Pro Forma
BUILD FOR RENT
Rent collections- Operating expenses
- Debt payments
Annual cash flow,depreciation,
and equity
BUILD FOR SALE
Sale proceeds- Commissions etc.
- Debt payments
Pre-tax cash flow
We will focus on rentals because for-sale pro formas
are simpler.
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Rental Pro Forma Jargon
Potential incomeVacancy and nonpayment
Operating Expenses (Taxes, maint., etc)Reimbursed expenses (Commercial only)
Gross income
Net Operating Income
Debt serviceLeveraged cash flow