I've purchased some land out right and have been talking with a developer friend of and I ask him to look at the project with me. I have a little experience in this filed but not a lot.
His firstI contribute 90% of the land value ( undeveloped 5 mill ) ( developed 50 mill ) . Approx 10 mill in construction total loan and cost and two years. Not a complex project. His contribution to be 10% ( the development fee ). Then a 60/40 split going forward , profitability after year two 3 mill a year to about 4 mill by year 5.
The property is in a Oppurtunity Zone as well. So after ten years could essentially sell off tax free for a sizable figure. 80/100 million.
HELP / Thoughts ? Suggestions ?
What is an Industry norm ?