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Strategies
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Risk
Management |
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Procedures |
Identification |
Locating a good development property is critical to a projects success.
- Broker network. Brokers see many properties before their listed.
- Internet & Periodicals. Search all printed and Internet advertising.
- Serendipity. Often a property is found when looking for another.
- Unsolicited offers. If a property looks good, make an offer.
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| Acquisition |
Buy for the least possible price; it improves profitability, hedges against falling values, and leaves an option to resell the property.
- Always check comparable properties; the offering price may be too low.
- Offer better terms with a lower price.
- Options and long feasibility periods can lower carrying costs.
- Renegotiate while still in contract if issues arise in the feasibility study.
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| Finance |
All aspect of equity, lending, and distribution are defined in the LLC
Raise all proceeds for the project at the conception of the LLC.
- Identify lending institutions and gain preliminary approval before closing.
- Look for loans combining initial purchase with a construction option.
- Establish equity early; this is leverage in purchasing terms.
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| Entitlements |
The rights to develop the property must be established prior to purchasing property or buildings.
Verify all Planning, Zoning, and Building department codes.
- Contact all neighbors, Associations, and other potential opposition.
- Check Toxic, Archeological, Biological, and Historic components.
- Establish geotechnical and structural engineering feasibility.
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