Property Developments» Development Method
Phase 4: Asset Liquidation
Objective: Sell the income producing asset at the end of Phase 3 and over an extended period of time.
Timeline: Ongoing
Related expenses: Continual holding costs, expenses, and capital requirements associated with selling the final assets and ultimately sales commissions, broker fees and advertising expenses.
Potential Risks: Short-term risks are minimal, unless the market changes dramatically and end-user buyers are unable to afford suggested purchase price. Other considerations include the real estate market at the time of sale, future interest rates, fluctuating capitalization rates, future purchaser demand, availability of debt, and mismanagement.
Rewards: Reasonable projections on total cost of 20 - 25% are typical, but actual returns will vary greatly depending on product and market conditions.
Investment Opportunity: An investment-centric real estate project provides the opportunity to leverage our core competency of land acquisition and development with the financial strength of our core stakeholders. Our end product is a quality home, office or retail space that will have long lasting and appreciating value. The market attractiveness of our final products makes for prime investment property that ultimately attracts stable tenants providing for competitive rents and long term leases.
Why Core Phases?
According to Merriam-Webster a Phase is a clearly distinguishable period or stage in a process, in the development of something, or in a sequence of events. Heaven Investments follows clearly defined process to improve efficiency and build value. Our standard for using high quality materials, veteran project managers, experienced labor and attention to detail creates a final product we are proud to put our name on.
What is the difference between investment-centric land development and typical land development? In a typical land development scenario the development company either self-funds or works with a bank/lender to leverage capital to build out the property. In an investment-centric land development model the developer works with private investors to leverage their capital investment to secure land and then develop the land into residential, retail, commercial, or mix-use real estate. The investors earn a higher rate of return on their capital investment and can often earn equity appreciation at the end of the development. The development company gains faster access to funds when needed thereby shortening development time and enabling access to more acquisition opportunities by being able to negotiate and close deals without waiting for bank approval.
