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My First Property Development Feasibility Calculator
When I started my career in real estate development, there was no one to show me how the numbers came together. I had a property development mentor who gave me a two-decade-old version (yep, it was the year 2000 version) of a complex property development feasibility template with no training and no explanation of decision metrics and no method behind the madness. Believe it or not, I never used it because I was scared of numbers like most people. I hated them & most of all, I hated doing financial feasibilities. But the ONE THING I wanted to do was real estate development projects. And grow to a level where I could do that for others. I understood very early that if that's what I wanted to do, there were no escaping numbers. No matter what, I just had to master the property development feasibility study. Property Development is the most lucrative property investment strategy under the sun. And at the same time, if you get your numbers wrong, your project has the potential to suck up a whole lot of profit $$$ from your bottom line. But if this is what I wanted to do, I knew I had to Know My Numbers, as they determined everything - from what I was going to pay for land (residual value of land) to what I was going to inject from my pocket and precisely what did the project needed to bring it home. I started with a simple property development spreadsheet on excel - and did my first project, only to find out that I had missed
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allowing for a big chunk of costs and that so much more was missing from my feasibility template… This is what it looked like when I started…(it was like going to war in my underwear. I wouldn't recommend anyone do this ever.)
Then I improved upon it and did my next project and again realised that my feasibility template calculations weren't up to scratch. So I improved upon it again & have been doing so since 2012.
I have lost money due to my bad judgements and incorrect feasibility assumptions. My gut feelings, hunches, thumb rules, and ballpark numbers have often landed me in hot soups. I've learned from the university of hard knocks…
