property development nuts and bolts..

1. Arch. Cristina
UAP, PIEP, CREB
www.spacef0rms.ph
By

2. graduate of University of the Philippines, School of
Architecture and Technology Management.
She lectures on Real Estate Property Development
and conducts industry training seminars on real
estate
market
feasibility
analysis
and
development.
She is an architect and urban planner, and works
extensively with the top developers in the country.
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3. Concept
SITE Selection
preliminary market FEASIBILITYstudy
preliminary PLANS & specifications
mortgage / financing
final market feasibility STUDY
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4. Developing the CONCEPT
technical plans & specifications
Project COSTS
financial analysis
RISK Analysis
Construction
Marketing and Selling

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5. CONCEPT
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6. The real estate developer must first have an IDEA,
usually based on:
experience in the market place,
or intuition about a residential real
estate development that he/she
believes the market demands.
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7. SITE SELECTION
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8. define the market area
Looking for potential sites
SITE SELECTION & EVALUATION
OFFER
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9. … travel with an easy heart and happy
expectations…
FEASIBILIT Y
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10. Engage an independent real estate expert
Market research
demand analysis
An accurate preliminary analysis of demand is critical
to the market feasibility of any project.
existing and planned project competition
if the existing competing developments that are
available > the forecasted demand, then the
developer should not pursue the project.
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11. PLANS
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12. Engaging an architect / env. planner
Preliminary technical plans
road layouts, preliminary designs, number of lots, etc.
Preliminary cost estimates
including financial analysis using DCF
Coordination with planning authorities
If a zoning change is necessary, it should be coordinated for
review and approval early in the development process.
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13. FIN ANCING
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14. Engaging an architect / env. planner
preliminary market feasibility study
preliminary plans and specifications
Project description
proposed mortgage loan terms and
conditions
financial statement
resume showing the developer’s experience

15. FEASIBILIT Y
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16. After securing a mortgage loan
commitment,
detailed analysis of the population
demographics
existing and potential competitors
Supply and demand analysis
Est. lot absorption & prices
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17. www.spacef0rms.ph
FIN AL
PLANS

18. final technical drawings
for the roads, the structures, exact legal descriptions
of each lot, the plating and staking of the lots, as
well as any engineering drawings regarding earth
moving, and utility layouts
COORDINATION with contractor and
utility companies
close the development loan
to acquire the property, and begin construction of
the roads, utilities, and lots
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19. COS T
ES TIMATES
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20. Direct costs
land acquisition costs, engineering costs,
construction costs, and marketing costs.
Indirect Costs
professional and consultancy fees – such as
market feasibility analysis and appraisal, legal
and accounting fees, and financing costs
*contingency fund for unexpected additional costs.
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21. FIN ANCIAL
AN ALYSIS
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22. Shows the PV of the cash outflows &
inflows, and the project NPV
thru the DCF, the development project can be
objectively assessed as attractive or not.
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23. RISK AN ALYSIS
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24. primary risk - marketing risk or the risk of
xx lots per quarter at the average xx price
per lot.
additional risks such as development
costs overruns, bad weather, increased
interest rates, labor strikes, and others.
*breakeven point analysis
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25. CONS TRUCTION
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26. Even during the initial phases of the
development, it’s advisable to
coordinate with Contractors
Utility companies
authorities
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27. MARKETING
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28. Promotion, marketing and sales
An in-house marketing salesperson or
local real estate brokerage firm can
conduct the sale of lots
In either case, the sales commissions are a
marginal expense and should be considered in the
financial forecasts.
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29. CONCLUSION
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30. Real estate development can be very
exciting, requires you to be creative, but
can be profitable.
there are real risks associated with real estate
development because risks and returns are
directly related, and expected high returns
usually indicate high risks
Large developments that require huge initial
development costs and longer absorption periods
are considerably more risky than smaller
developments

31. … stop searching forever, happiness is
sitting next to you…
Arch. Cristina Ang
+63 917 792 6322
www.spacef0rms.wordpress.com
www.facebook.com/spaceforms.ca

32. www.spacef0rms.ph