How to solve the problem of carrying costs in a development.

Very often when developers do their first development they go broke. That is just the nature of the beast. It is like any other major task that someone takes on for the first time. They do not know what they do not know. Although there are many mistakes that can be made in any development in the end what creates the failure is the carrying costs of the development. The units do not sell as well as anticipated which extends the time of the project and interest eats up all the profit. However, there is a way to at least help the process. A new developer should find a project where there is some cash flow already. They are not that uncommon. A small acreage in a developing area with a house or even better a multifamily building that in the end can be subdivided off. This way the income can create some insurance against a decreased absorption and possibly save the project. 

There are no comments

Thank you! Your comment has been submitted and is awaiting approval.

Bill Hubbard

Bill Hubbard

Broker/Owner
CENTURY 21 Executives Realty Ltd.
Contact Me

Blog Archives

Tags