Smart Feasibility Calculator - Walkthrough

Property Development Feasibility Calculator - Smart Feasibility Calculator

Project settings

Select GST & VAT percentages as applicable or select “not applicable” to turn them off altogether. Customize the currency symbol, and specify the type of project between residential, commercial, or mixed-use. Specify hurdle rates, sensitivity assumptions, construction cost, and sale value calculation methods.

Land acquisition costs

This section allows you to acquire the development site and finance the land acquisition. This loan is independent of a construction loan, which typically comes into play when the project is ready for construction.

Developing residential, commercial or mixed-use projects

Based on your project, this section allows you to add multiple types of units you are going to develop. For example, a typical apartment development might have 10 x 3 bedroom units, 10 x 2 bedroom units, and 4 retail premises on the ground floor. This section allows you to account for building costs and sale value based on either total area or an average per-unit value.

Accounting for interim income

Interim income is income your project generates while it is being developed. For example, you could lease the development site while you are getting ready for construction. SFC allows you to capture these costs and use them to reduce the total developer equity required.

Project development costs

The Smart Feasibility Calculator allows you to consolidate all development costs, add contingency allowance individually, and allocate what percentage of those costs make up hard costs, i.e., your lenders’ total development costs. In addition, you can add individual cost items and bifurcate them between hard and soft costs.

Funding table & project financing options

Why do you have funding table in Smart feasibility calculator?

In a nutshell , to make sure that we don’t run out of money halfway through the project. That’s the most straightforward answer. Lenders will always use one, but when we use it, we plan our development
and our cash outflow requirement one step ahead of our lenders.

With the funding table, we have the flexibility to determine if and what percentage of the project’s hard and soft costs will be funded by the developer and the bank.

This affects what we can borrow, which will directly impact the amount of money
we need to have to do the project.

Important: The only way to maximize the return on your own money is by using as little as possible & completing your project as early as possible.

Learn more: Property development feasibility study

Development finance

The development funding section is the most important and comprehensive in Smart Feasibility Calculator. All project finance is made up of two main components. Debt and equity

Debt comes from lenders, and equity comes from the developer. The Smart Feasibility Calculator allows you to further split this in two.

For example, let’s say you need to borrow 70% of total development costs, and you will contribute 30% from your equity/cash. SFC allows you to further split the 70/30 contribution, i.e., you can split the 70% into a construction and mezzanine loan, and you can split the 30% between the developer and investor.

This allows you to account for 4 different facilities at different interest rates and terms. In addition, it allows you to inject a buffer amount into the project to cover any tax input credits that you, as a developer, might need to come up with.

Project summary

The Smart Feasibility Calculator gives you a detailed summary page with various sensitivity analysis tables that you can share with your clients, investors, project stakeholders, or associates.

It covers all your standard develop and sell decision metrics to help you fine-tune your project’s feasibility. I do several feasibility studies for any one project. I make various assumptions to ensure that I have covered all possible scenarios before I move ahead. The Smart Feasibility Calculator allows me to do that in less time and more efficiently.

Checkout the published summary page here.

Smart Feasibility Calculator on Mobile

The Smart Feasibility Calculator, a development feasibility tool, works on your mobile device. So while you are out and about, please feel free to work right from the palm of your hand. Do all the same feasibility calculations and make all the same development feasibility assumptions right from your phone without ever opening your desktop.