Budgets, Cash Flow, and Feasibility

MLPD Graduates are equipped with the financial knowledge that is essential to ensuring the financial feasibility of land and property development projects. Specific financial models and budgets can be used by developers to asses future risks, gain liquidity from financial institutions, and attract equity from investors. In residential land development projects, the budgeting process is executed in the following phases: the preliminary budget, post-bid budget, budget vs. actual report, and discounted cash flow (DCF) modeling. DCF Models of residential and commercial developments are used to monitor the sources and uses of cash. As a part of my MLPD curriculum, two colleagues and I created the DCF model for a 258 single-family lot development. This example and others are displayed below. Ultimately, financial models and budgets are continuously reviewed and adjusted to ensure the financial feasibility and progress of a project.