Catherine Bell walks through a residential development deal targeting 35-50% returns in 12-15 months. The project sells for $6.2 million with $1.2 million gross profit. Investors putting in $650k would get roughly $600k back in profit plus their capital returned, split 50/50 with the sponsor.
We're projecting out 35 to 50% ROI on these. So 12 to 15 months to have that kind of return is pretty freaking amazing. This is right up there for me with Triple Net Lease commercial medical office space. So again, this is where we do the numbers, tell us what to do, and it's right in my backyard. So I'm really excited about that. We'll be able to have eyes on it all the time. So it just goes through the economics and then the estimated total project cost. So land, construction, financing, legal costs, sponsor fees, estimated total costs, and then the exit of the sale. So we're estimating $6.2 million, which is very common in this area for that size of house. And so you take out the costs and the profit we're expecting to be $1.2 million. So then you've got to deal with the realtor's fees, the closing costs, unexpected overruns, taxes, financing. So these are all the fun things we get to go through. And so the likely distributable profit range is between $900,000 to $1.2 million. So if we do a profit split, there will be the sponsor side 50, the equity investor side 50. So then if you're splitting $1.2, $600,000 is the profit split to the investors. So how we participate, so if we raise $650, then a profit participation, the capital return, the profit
