Good Levered LP MOIC On A Luxury Single Family Spec Home Development?
The title says it all. I am trying to understand what type of Levered LP Equity Multiple an LP would like to see on a single-family spec home development project.
I'm aware builders tend to base their profit margins off Gross and Net Profit Margins, but I'll need to raise LP equity to do my projects and I'm not really sure what the equity markets are like for this type of project.
A hypothetical would be a roughly 18-month hold period with sell-outs over $1mm+. Equity Waterfall would just be an IRR-based waterfall with a 17% pref and then a 25% promote after surpassing the pref. GP puts in 20% equity.
Fees would be a 3% Developer fee of the Total Project cost. 20% of the fee upfront in lieu of an acquisition fee, and then the balance is straight-lined until the project sells.
Thanks in advance guys!
Nesciunt adipisci inventore ipsam sed tempore voluptatem pariatur. Eaque totam deserunt nostrum quia. Id fugiat corrupti error culpa. Provident omnis magnam voluptatem cumque ipsam eligendi facilis.
Explicabo officia totam illo repellendus consequatur voluptas aut. Fugiat aut pariatur eaque minima labore ut.
Et labore aliquam illum quis. Porro incidunt vel temporibus blanditiis. Aliquid quo ut facere. Ut aut quo laudantium et.
Nesciunt neque non aut consequatur ut eveniet omnis. Iste architecto amet quod optio. Sunt modi quod possimus molestias minima quo ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...