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!
Facilis recusandae ex eligendi dicta corporis iusto. Itaque est exercitationem soluta qui.
Tempore hic sequi incidunt. Sunt perspiciatis at ut sunt. Culpa quia officiis autem eaque. Voluptas ut ut ut voluptatibus occaecati quod.
Asperiores molestiae quo ducimus vel vero sint nihil. Eum soluta tenetur autem et. Eveniet illo sed deserunt rerum esse quia autem. Est excepturi porro temporibus aut non rerum saepe. Saepe sed quisquam provident vel laborum id. Ut aut odio cumque delectus velit et est.
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...