Long time fan of the forum and I am coming to you today with an urgent request to help understand how to get to a purchase price for a modelling test practice.
I have the following information:
GIA - 50,000
70% OMV and 30% Social Housing @ 35% of OMV
Demolition Costs: 5/sft
Construction Costs: 200/sft
I've been told "You should target a geared profit on cost of 20% to dictate purchase price" and this is where I run into an issue. I've done a BTR model before know how to determine a sale price based on a Cap Rate and NOI but I've not done a Build-to-Sell model and had to work out a Purchase Price.
Any help here? No other information apart from in the next stage where a 65% Debt Facility will be taken out.
I'm just struggling to understand how to get to the purchase price.