Development Modeling during Construction
Hey Gang,
Does anyone have experience modeling a development deal mid construction? Im rebuilding a dev model for a project that is currently in progress and wondering how to handle the equity inflows/ interest reserves. Do you just hard coat all of the equity inflows/ project costs that have occurred with the appropriate date? What about running the remaining interest reserve?
I'm a little confused at where to start. Any tips would be helpful.
Thank you!
In short, yes...anything that has already occured should be hardcoded. It's up to you if you want to have those "actuals" impact your projections or not.
Ha, I'm running the same exercise myself right now! Typically I hard code the equity draws to date and figure out what if any cost savings the project might have on the back end so I can build out a construction loan draw schedule and properly capture these savings (they are often times much more impactful than you might think). Assuming all your equity is drawn at this point (AKA you are drawing on the construction loan currently), just make it easy on yourself and hard code it.
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