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How this analysis works — assumptions, formulas, and limitations
Project budget & timing
Development costs include purchase, closing, construction, contingency, professional fees, and conversion costs. Monthly holding expenses run through project completion. Unit sales use the month you enter; the project ends at the later of the target completion or last unit sale. Figures are USD and pre-tax.
Construction financing
The project loan is capped at purchase and development costs and assumed fully drawn at acquisition. Interest is paid monthly on the opening balance. Net unit sale proceeds repay that loan first. Financing points are charged up front. This conservative simplified model does not simulate construction draws, lender release prices, capitalized interest, or a loan maturity date.
Sale profit & returns
Profit equals gross sale proceeds less all project costs, including holding, selling, and financing costs. Margin divides profit by gross sales; return on cost divides profit by total costs. Equity return divides profit by peak cumulative equity required. These are project returns, not annualized returns or IRR.
Hold & mixed exits
Estimated value created includes the market value of retained property and is partly unrealized. After the project period, retained property is refinanced at the entered LTV. Refinancing pays off remaining project debt; net cash position includes sale proceeds, project costs, and refinancing fees. Rental operations start after that transition. No interim rent is assumed during construction or sellout. Break-even sales are an estimate at current carrying and interest costs; changing sale proceeds may change the debt repayment path.
Rental performance
Stabilized NOI equals annual rent less vacancy, management, and annual operating costs. Debt service is the amortizing refinance payment. Cash on cash uses equity remaining after sales and refinance; it is unavailable if no cash remains invested. Yield on total project cost includes costs for sold units in a mixed exit.
Conversions & feasibility
A selected condo or conversion strategy is an assumption, not confirmation that it is legally possible. Confirm zoning, unit creation, subdivision, condo registration, lender releases, permitting, and local requirements. Enter those costs and delays. Income taxes, depreciation, interim rental income, appreciation, and phased construction are not modeled.
Compare saved renovation projects
Compare like strategies: sale profit is realized at sale; value created for a hold includes retained property value.
| Project | Exit | Total cost | Profit / value created | Return on cost | Peak equity | Annual rental cash flow |
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