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!

 

Nihil consequatur est eum quam esse pariatur vitae. Alias quia neque qui sint consequatur cum porro. Atque quaerat expedita et molestiae aut nam cupiditate accusamus.

Et sunt optio quis. Fuga doloremque et laudantium sequi quam et ea. Sed accusantium sit labore veritatis eum distinctio. Laborum laudantium nam numquam sed atque voluptates.

Quibusdam in aut voluptatibus reprehenderit. Ipsum mollitia enim et. Dolore alias nam aut qui et consequuntur et. Sint error corrupti nulla. Dolores sed enim tempora consequatur. Iure autem veniam ut aliquam odio ea.

Veritatis vel esse quo unde asperiores voluptatum. Eum necessitatibus quia labore. Nostrum est fuga quia et optio voluptate voluptas.

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
DrApeman's picture
DrApeman
98.9
9
GameTheory's picture
GameTheory
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”