From the course: Structuring a Construction Loan

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Loan-to-cost roundup: Nuances in line items

Loan-to-cost roundup: Nuances in line items

From the course: Structuring a Construction Loan

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Loan-to-cost roundup: Nuances in line items

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- [Instructor] Now, let us put it all together. Here are two summary development proformas. One for a mixed-use residential rental project and one for a condo project. Obviously, as a lender, you are going to want to delve deeper into these line items, and you would expect to see more granularity within each one of these line items in what a developer would provide to you for underwriting purposes. However, we can more easily see the key takeaways if we look at it in a summary form. In both scenarios, the number of buildable and saleable or rentable square feet is the same. Let us also assume that the spec, or level of finish, is also the same in both the for-rent and for-sale models. So where would these proformas be different then? There are many nuances that could make many of these line items that I am showing as the same value actually quite different in value, but I want to focus on the absolute specific differences. Some examples of the nuances, however, would include land…

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