Introduction
Introduction Unit Sales, Land Development, Subdivision, Condo Development Sample
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The analysis and all reports
and graphs were prepared using a combination of four products,
planEASe, the
Reporting Extension, the
Graphics Extension, and the
Monthly Extension.
This is a relatively complete
planEASe report package for Pine Lake HomeSites, a 170 Lot Land Development
project planned with the Unit Sales capability added in planEASe Version 10. It
is “relatively” complete because the reporting you need and want for a property
will vary depending on the characteristics of the property (and the person for whom
the reports are prepared). Since planEASe/Windows can produce more than 100 different
reports and more than 200 graphs, it is obvious that many available reports and
graphs are not shown in this sample report package. Please check with us for your
particular concerns.
Typically, the first reports
show the costs of the development process. Unique in planEASe Unit Sales is the
relationship between the Unit Sales draw loan and the development costs and unit
sales. Now if you modify the development spending items, the draws are all updated
automatically. Likewise, as you sell the units, the draw loan interest and balance
are repaid automatically at the rate you specify. The Project Cost Summary, Project
Bill of Materials, and Monthly ProForma Income Statement are some of the reports
that show the development process.
The Monthly ProForma Income
Statement (printed in landscape format) shows the financial projection of property
operations for the development and sales period. The flexibility is not obvious
from the report itself. For instance, after tax results are (optionally) deleted
with one keystroke, eliminating the Taxable Income and Taxes section. Further
controls allow you to display the Unit Sales and/or Expenses in detail (as shown)
or in total. Notice that the tax deduction of development expenses is allocated
to the times of unit sales, since land developers are treated as “dealers” for tax
purposes and their development costs are held in “inventory” for tax purposes. Interest
on the draw loan is specified as “accrued” rather than “paid”, so the specified
draw discharge payments are made on the first of the month following the unit sale,
and are allocated first to discharge accrued interest, with the remainder, if any,
applied to reduce the remaining balance. While the capability
is not used here, you may add Revenues and Expenses which are not allocable to the
Units, and they will be treated as normal Revenues and Expenses for tax purposes
(ie: declarable as incurred).
Following this, Sensitivity
Analyses show how the NPV of the project varies with changing several key assumptions.
Sensitivity Analysis can be used to show the variability of any assumption
versus any rate or return (or present value). We could have included twenty
different (and interesting) Sensitivity Analyses. Understand the depth here … when
you vary a Development Cost in Sensitivity, the corresponding Draw in the Unit Sales
Draw Loan is changed accordingly, affecting the interest, balance, load period,
taxes, et cetera.Only after all these changes have been made
is the IRR or NPV requested produced.
After the Sensitivity Analyses,
the Risk Analysis shows how you may combine uncertainty for several assumption values
into a risk analysis (with graph) showing both the range and the probability of
obtaining a particular rate of return (or present value).
The extensive Assumptions
Report, shows the assumptions on which all of the foregoing reports are based. We
hope you notice how readable this is. Readability is enhanced by the ability to
attach Page Notes to any assumption page. Again, the flexibility and capability
are not clear. Loans for which the amounts are zero are not shown. Same for Revenues
and Expenses. Many useful assumptions are not shown (because they are not used).
For instance, there is a Revenue Cap (and Expense Cap) which allows
you limit the growth rate and/or dollar amount of any revenue or expense. This is
just one example --- just because you don't see it, don't believe it doesn't exist
... call us first!!
The Unit Sales analysis capability
is a part of the optional planEASe Monthly Extension, and you must purchase
it to analyze Unit Sales project. Some reports shown (the Income Statement, and
the Assumptions Report) are products of our optional Reporting Extension
and Monthly Extension (where shown monthly). This and the Graphics Extension
are additions to planEASe we recommend for those using the software to present their
analysis results to clients, funding sources and/or other outside parties.
Introduction Unit Sales, Land Development, Subdivision, Condo Development Sample
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