Pennsylvania College of Technology-2016 4 Year RCMC Packet.old

Pennsylvania College of Technology

Four Year Program, 2016 RCMC

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Executive Summary

Within Frederick , Maryland lies 147 acres preapproved for a 441 dwelling development. Members of the project development team have located this plot and prepared the following proposal as to why this would be an ideal investment strategy for Independence Developers. The team has concluded based off the geographic location and demographics that constructing 200 townhomes, 114 cottages, 112 single family homes, and 15 estate home will provide us with a return on investment of $41,562,250. Independence Developers will need to use $16,096,014 of our own capital and a loan of $89,484,123 to break ground on the project. The development team has estimated that duration Tallyn Ridge will take 78 months to construct. At 52nd month, Independence Developers will breakeven on our investment on the property. With the resources Independence Developers possesses, we plan to construct our first sustainable development in Maryland, Tallyn Ridge. Tallyn Ridge will embrace the founder’s ideal of “Giving freedom back to the homeowner” through revolutionary building science studies and emplacing these techniques to build more air tight and efficient dwellings.

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Kyle Csorba Team Manager B.S. in Residential Construction

Technology & Management

Ben Thayer Build Science Specialist B.S. in Residential Construction


Bob Jackson Project Manager B.S. in Residential Construction


Edgar Sepulveda Lead Architect B.S. in Residential Construction


Matthew Jurado Financial Manager B.S. in Accounting

Ray Sassaman Site Manager B.S. in Civil Engineering Technology

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Assumptions Construction will begin on time without delays.

The duration of the project will continue without any delays due to legal,

code and safety violations.

Construction materials will be able to be acquired and shipped to site.

There will be enough crews to be hired for construction to be preformed

throughout the duration of the project.

All waste on site can be properly removed and free from any hazardous

waste. All utilities running to the site do not need to be adjusted and can meet the

demand of the development. All construction fees will remain at the same standard throughout the

duration. Cost for materials and labor will maintain the same rate throughout the

duration of the project. Loans and other financial means are able to be acquired by Independence

Developers to fund the project. Tax credits for energy efficiency that are due to expire over the next 5 years

will be renewed. Electric companies will buy back any extra electricity produced by the

homes on site and the natural gas generator. Each phase will begin on the predicted date without delay.

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Table of Contents

History of Frederick, Maryland Demographics Local Area/Attractions Target Market SWOT Analysis

Site Overview Costs Community Center Overview/Cost Earthwork Stormwater Management Utilities Green Initiatives

Overview Phase 1 Phase 2 Phase3 Phase4

Overview/Construction Costs Cottage Design Townhome Rear Loaded Design Townhome Front Loaded Design Single Family Detached Design Single Family Attached Design Estate Design Option Packages HOA Description Community Center

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Off-Site Construction

On-Site Construction

Products

Certifications

Tuscarora Creek

Greentree Homes

Villages of Urbana Development NV Homes

Ryan Homes

Clover Ridge

Drees Homes

Marketing Strategy

Sale’s Strategy

Loan Analysis

Realistic Pro Forma

Optimistic Pro Forma

Conservative Pro Forma

Breakeven

Risk Analysis

Withdraw Strategies

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Market Analysis

History of Frederick, Maryland

Demographic

Local Area/Attractions

Target Market

SWOT Analysis

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History of Frederick, Maryland

Frederick is the second largest city in Maryland and is located about an hour from the

Washington D.C. and the Baltimore metropolitan areas. As of the 2010 census, 65,239

people reside within the city of Frederick, while an

estimated 243,675 live in the surrounding county of

Frederick. Frederick offers a balanced and thriving

economy, a highly educated workforce, and a

quality of life that is nothing short of enviable.

Founded in 1745 by German settlers, Frederick is a

city rich in heritage, opportunity, and innovation.

Frederick is also steeped in Civil War history as it was briefly named as Maryland’s capital

after legislatures moved to vote on the possibility of seceding. The city saw considerable

fighting throughout the Civil War as it was a major crossroad. It was occupied by both the

Confederate and Union troops during the war’s duration. Due to it’s heavy involvement, the

National Museum of Civil War Medicine is located within the city.

Today, Frederick’s award-winning 40-

block historic district, parks,

neighborhoods and diverse industry base

offer residents and visitors a unique

blending of history and technology. On

22 weekends each year, downtown

Frederick and the neighboring 54 acres of

Baker Park play host to special events

which include weekly summer concerts,

monthly gallery walks, children’s

theatrical performances, and other events

which celebrate the season.

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Demographics More than a quarter of all residents in

Frederick commute 45+ minutes to

work. In addition, more than 43% of

Frederick residents make in excess of

$75,000 per year. Nearly 50% of

Frederick residents are married. This

gives proper credence as to the notion

that Frederick is a family oriented

community. This is how we determined

our target market of mid aged families

that make a bare minimum of $75,000 a

year. Tallyn Ridge will be driven with a

family oriented concept, with direct

access to the adjacent park.

Tallyn Ridge will also encompass sustainable and energy efficient development aspects.

Recent national and local housing trends suggest the need to implement green housing

initiatives. Studies conducted by the NAHB specifically highlight the advantages of utilizes

green technologies in the sale of new developments.

Beginning to implement new

home construction that are

more energy efficient will

drastically reduce the

consumption used in the area.

By Tallyn Ridge being the

most sustainable development

in the area, it will appeal to

those who are looking to

reduce their carbon footprint

and preserve the

environment. With the

purchase of a Independence Developer home, not only will the homeowners reap the

benefits, the community will become a healthier place to live. The demand for sustainable

homes in the Mid-Atlantic region is on the rise and is the direction the market is expected to

move over the next few decades.

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Local Area/Attractions Within the county lines of Frederick,

Highway 70, 270 and Route 15 all

intersect in the heart of Downtown

Frederick. With the quick avenues of

travel it allows access to major cities such

as Baltimore, Washington DC, and

Townson.

By the town of Frederick lies 4 high

schools, 3 middle schools, and 3

elementary schools. It hosts 3 colleges,

Frederick Community College, Hood

College, and Mount St. Mary’s University.

In addition to the highly regarded education systems in the area, Fort Detrick , the home to

the U.S. Army Medical Research and Material Command, resides in Frederick. Over the

years, Frederick has built up its retail business with locally owned business and the Francis

Scott Key Mall.

Downtown Frederick is known for its strong community presences hosting a variety of

events throughout the year. These events promote involvement within the community and

ideal for young families who are looking for an active lifestyle. Along with the community

events, Downtown Frederick has an abundance of shops, restaurants, and historic buildings

available for the public.

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Target Market In order to establish a targetable income

range for our units, we utilized a financial

calculation, known as, PITI, to establish

whether or not a potential buyer will qualify

for a prime mortgage with 20% down. We

strive for our potential buyers to attain an

optimal PITI for the sustainability aspect of

the development. In addition to financial

parameters, our target market will also

heavily encompass commuters,

environmental conscience individuals, and

families. Our development will primarily

target families looking to relocate out of the cities of Baltimore and Washington DC. The

Frederick area’s high population of families indicates that Tallyn Ridge can acquire the

target market we are planning to attract.

Estate: Our ideal target market for our estate style homes will earn in excess of $225,000 a

year. This will ensure continued affordability for our customers in the long run. Mid aged to

older families with children will enjoy the multitude of bedrooms and bathrooms the

Estates offer. The large floor plan and outdoor living also allows the homeowner to

entertain friends and extended families.

Single Family Homes: Our single family homes are most ideal for those that make in

excess of $150,000 a year. Our 4 bedroom floorplan will appeal to younger and older families

alike. It offers plenty of space for families to growth and stay financial stable with a low

expense home.

Townhomes: For our townhomes, we intend on targeting those that make in excess of

$100,000 a year. The townhomes 3 bedroom design and affordable price will attract young

families and commuters. It is an ideal purchase for those who wish to own a home of their

own but wish to do little maintenance.

Cottage: Our idyllic target market for the cottages will be those who make in excess of

$75,000 a year. The two bedroom design will enable starting families and green conscious

buyers to live affordably. We anticipate many of the cottages will be purchased by local

landlords in order to capitalize on potential rent revenues.

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Ma

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SWOT Analysis

Strengths Green Initiatives

Value in Comparison to Competition

Cost Savings Potential

Tax Benefits

Location

Weakness Site Development

Tallyn Ridge’s site has been preapproved. Although this does mean

construction can be quicker, it does not allow Independence Developers to

design the site the way we would prefer.

Heavily Reliant on Families

Since families are the primary target market, the biggest drawback could

be a limited desire for our homes by families.

Lengthy Development Plan

Due to the size of the size and the attention to energy efficiency, it will

take a projected X to complete the development.

Opportunities Strong Market Conditions

Commuters

Sustainable Appeal

Threats Rapid Obsolescence of Sustainable Technologies

Since building science is beginning to see more attention, improvements in

products and systems may occur during construction or after the

completion of Tallyn Ridge.

Opened Land that has the Potential to be Developed

Although Frederick has a high population, it is surrounded by fields that

have the potential to turn into other developments in the near future.

This will lead to a stronger competition pool that we will have to face.

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Site

Development

Site Overview

Costs

Community Center Overview/Costs

Earthwork

Stormwater Management

Utilities

Green Initiatives

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Site Overview The proposed area of development currently owned by MS Gladhill Farm, LLC is composed

of 441 residential plots just along Reichs Ford Road in Frederick County, Maryland. The

site is located approximately 40± miles northwest of Washington D.C. and 41± miles west

of Baltimore, Maryland. The site contains approximately 154.58± acres, of which 146.62±

acres are designated under the Planned Urban Development (PUD) zone and 7.96± acres

under the AG zone. The site is easily accessed from Reichs Ford Road off of Interstate 70.

Onsite, there are roughly 90 ± acres of open and tillable land, with the remaining being

moderately to densely forested on steep slopes. Elevations on the site range from approxi-

mately 330± feet above Mean Seal Level (MSL) near the entrance off of Reichs Ford Road,

to approximately 430± MSL near the western boundary of the site.

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Costs Item Quantity Unit Unit Price Sub Total

Miscellaneous Costs

Frederick County Fees 1 LS $750,000.00 $750,000.00

Builder Fees-Townhomes 200 EA $37,872.00 $7,574,400.00

Builder Fees-Single Family 241 EA $37,898.00 $9,133,418.00

Miscellaneous Total: $17,457,818.00

Site Development Costs

Mobilization 1 LS $1,050.00 $1,050.00

Soil Erosion and Sediment Control 57.22 AC $3,963.96 $226,817.79

Grading 98.80 AC $6,392.83 $631,612.00

Net Fill 15,588.00 LCY $1.98 $30,879.83

Environmental Cleanup 1 LS $1,018.04 $1,018.04

Tree Clear/Grubbing 11 AC $4,205.42 $46,259.60

SESC Excavation 5,700 BCY $2.09 $11,930.10

Utility Trenching 14560 BCY $1.31 $19,059.04

Site Development Total: $968,626.39

Road Costs

Subbase (4”) 7,165.40 CY $1.83 $13,091.18

Superpave Base Course (3”) 5,374.05 CY $39.05 $209,872.62

Superpave Intermediate Course (2”) 7,082.99 TONS $51.57 $365,262.71

Superpave Wearing Course (1.5”) 6760.55 TONS $49.50 $334,626.94

Curb and Gutter 45,142 LF $17.40 $785,561.08

Road Improvements 1 LS $261,600.00 $261,600.00

$1,970,014.53 Road Total:

Stormwater Management Costs

Storm Drains

42” RCP 844 LF $70.04 $59,115.45

36” RCP 803 LF $59.06 $47,424.38

30” RCP 988 LF $46.98 $46,413.28

24” RCP 2,879 LF $37.43 $107,758.09

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Costs

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Item Quantity Unit Unit Price Sub Total

18 “ RCP 2,254 LF $29.92 $67,435.17

15”RCP 7,408 LF $26.71 $197,882.50

15” PVC 337 LF $30.71 $10,348.93

12” PVC 30 LF $17.86 $535.92

8” PVC 85 LF $9.89 $840.74

Inlets 126 EA $757.09 $95,392.71

Manholes 41 EA $1,394.63 $57,179.87

Endwalls 4 EA $469.89 $1,987.55

Detention Ponds 4,285.93 CY $9.52 $40,802.05

Stormwater Management Total $733,802.05

Utilities

Water Line (8”) 33,356.35 LF $18.87 $629,267.54

Water Line (6”) 9 LF $14.46 $130.10

Valve (8”) 331 EA $423.50 $140,178.50

Valve (6”) 34 EA $310.10 $10,543.40

Waterline Fittings 261 EA $257.53 $67,214.25

Pressure Reduction Valve & Vault 1 EA $24,500.00 $24,500.00

Fire Hydrants 34 EA $1,823.12 $61,985.91

Sewer Line (8”) 18,158 LF $45.81 $831,781.66

Force Main (3”) 717 LF $12.15 $8,707.97

Force Main (2”) 65 LF $8.71 $566.02

Force Main (1.25”) 51 LF $7.29 $371.64

Natural Gas Line 41,436.6 LF $3.55 $147,074.74

Electrical Line 36,574.4 LF $3.21 $11,257.53

Communication Line 34,280.50 LF $2.30 $78,708.03

Manholes 165 EA $776.29 $128,088.35

Grinder Pump 12 EA $222.57 $2,670.78

Lift Station 1 LS $600,000.00 $600,000.00

$2,849.046.40 Utilities Total:

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Item Quantity Unit Unit Price Sub Toal

Signage, Paint and Lighting Costs

Street Lightining 481 EA $254.96 $122,636.24

Traffic/Street Signs

R1-1 55 EA $71.23 $3,917.76

R2-1 5 EA $55.29 $276.47

R4-7a 2 EA $55.29 $110.59

R14-1 66 EA $55.29 $3,649.34

W1-2 4 EA $97.00 $268.02

R4-7 1 EA $55.29 $55.29

D3-1 102 EA $63.26 $6,452.42

Pavement Markings 73,355.75 LF $.00011 $1,119.50

Signage, Paint and Lightning Total: $138,485.62

Sidewalks

Concrete Sidewalks 20,428.33 SY $8.51 $173,742.95

Pedestrian Walks/Bike Pathways 1,614.22 SY $8.51 $13,728.96

Paved Hiking Path 3,381.92 LF $6.77 $22,892.22

Bicycle Racks 26 EA $84.00 $2,184.00

ADA Ramps 45 EA $455.00 $20,475.00

Sidewalks Total: $233,023.12

Landscaping

Shade/Ornamental Trees 947 EA $59.50 $56,346.50

Evergreen Trees 312 EA $73.50 $22,932.00

Shrubs 319 EA $17.50 $5,582.50

Seeding 26 LS $660.88 $17,182.80

Planting Beds 14,700 SY $12.34 $181,412.70

Benches 100 EA $35.00 $3,500.00

$286,956.50 Landscaping Total:

Costs

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Costs

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All Totals

Miscellaneous $17,457,818.00

Site Development $968,626.39

Roads $1,970,014.53

Stormwater Management $733,116.63

Utilities $2,849,046.40

Signage, Paint, and Lighting $138,485.62

Sidewalks $233,023.12

Landscaping $286,956.50

Future Community Center $1,238,129.49

Grand Total $25,878,216.70

Average Cost per Lot $58,680.76

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Community Center Overview & Costs The future HOA funded recreational facility/community center is a 12,000 square foot steel

pre-engineered building which will be contracted to a design-build contractor by the HOA.

The proposed location for the facility is conveniently located along Pine Bluff Road on the

southwestern portion of the site and is proposed to be within the AG zoning designation.

Preliminary engineering estimates approximate that the cost of the building will be between

$1.61M to $2.31M, depending upon facility specifics, design standards and assuming a zon-

ing variance would be granted. It is anticipated that the facility will take less than 1 acre

from the open space and earth disturbance would be limited to 1± acre. Estimated costs for

construction include:

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Item Cost

Earthwork $6,400-9,100

Building $1,236,000-

1,764,000

Paving $301,554-

430,650

Curb and Gutter $15,660-

22,374

Concrete Sidewalk $1,700-2,430

Utilities $55,313-

78,975

Total $1,616,627-

2,307,529

As mentioned later, the Community Center will be designed and built by Morgan Keller

Construction. The project will be funded by the HOA fees accrued over the years of the

development. The Primer Management Group and Morgan Keller Construction will

establish a date when ground will break on the construction of the Community Center.

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Earthwork According to a NRCS Web Soil Survey, the soil within the boundary of the site consists pri-

marily of channery loam materials and classified as silty sand. Concrete slabs-on-grade sup-

ported by a layer of 4-inch granular material covered with a polyethylene vapor barrier

were recommended for floor slabs. Recommendations and considerations were provided in

the Report of Preliminary Geotechnical Exploration conducted by Geo-Technology Associ-

ates, Inc (GTA). GTA also suggests that shallow spread footing may be used to support

foundations and can be designed for net allowable bearing pressure of 1,500 psf to 2,500 psf

bearing on natural or controlled soils, and 3,500 psf to 5,000 psf bearing on weathered rock

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Surface and subsurface drainage also appear to be adequate. Final grades should be estab-

lished with the notion in mind to provide adequate surface drainage away from the founda-

tion as to prevent upheaval and movement of the slab-on-grade.

The majority of the on-site soils that will be excavated are suitable to be reused as a fill ma-

terial. Soils with a medium or high plasticity were observed in some areas on the site sug-

gesting that caution be used during the placement of these soils to avoid their use for direct

foundation or pavement support. Controlled fill should be used when applicable for founda-

tion or pavement support. According to the report, borrow should be dry and meet the re-

quirements of ASTM designation SM (silty sand), have a liquid limit of 40 percent or less, a

plasticity index of 15 percent or less, maximum grain size of less than 4 inches, being free of

any organic material and meet the approval by the geotechnical engineer.

The existing topography of the site will need to be altered to reach final grades. Proposed

final road grades and parallel bike/walkways (where applicable) were kept to a minimum

whenever possible, however some areas of the site reached a maximum of 12.45%. Although

the 100± foot elevation change on the property was not fully encountered within the extent

of the earthwork, an imbalance of fill material was calculated. To compensate for the defi-

cit, borrow material meeting the requirements of the geotechnical report will need to be im-

ported from an off-site location. The geotechnical report also indicated that any unstable

soils that may be encountered during construction will also have to be undercut to stable

soil and replaced with controlled fill material. The main intent of the final grading is to

maintain as much natural drainage as possible. With that in mind, the environmental site

design utilizes post-development stormwater drainage best management practices such as

bio-swales, submerged gravel wetlands, bio-retention ponds and permeable pavement.

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Stormwater Management According to the topographic map, there are 7 main drainage areas on the site in the

existing conditions. The majority of the existing drainage features merge to form small

tributaries and lead to ponds and wetlands on the site.

The proposed conditions continue to utilize the existing tributaries and ponds on the site.

There are 11 main drainage areas that are managed through the combined use of

stormwater drain pipes and other natural drainage features such as bio-swales, submerged

gravel wetlands, bio-retention ponds and permeable pavement. The continued use of the

existing ponds and natural drainage features does not only save time and money, as well as

promoting sustainability within the development and helping to mitigate the thermal

impacts to receiving waters by slowing down the flow of stormwater throughout the site.

The usage of the ponds for stormwater incorporates Tallyn Ridge’s sustainable approach to

sustainable construction by using and preserving natural water drainage features existing

on the site. Using these ponds to collect the stormwater is not only be sustainable but will

add a design feature for the whole development to enjoy.

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Utilities The utilities proposed to serve Tallyn Ridge will be provided by the municipality and local providers. The project will be have water and sewer service provided by a network of both public and private lines and connections.

As per the Frederick County Adequate Public Facilities Letter of Understanding, multiple conditions were proposed to mitigate the burden on existing facilities due to the addition of the Tallyn Ridge development on the systems. In the letter, the Frederick County Division of Utilities and Solid Waste Management (DUSWM) deemed the Project to be conditionally approved for water and sewer service. Water and sewer classification at the property is W4/S4 and in Pressure Zone 2. Extensions and improvements to the existing water and sewer utilities will be required to support the development. Utility construction must meet the requirements of the Frederick County DUSWM, Division of Engineering and Planning.

Water

According to the conditional approval, the existing water distribution and treatment system is considered to be adequate to provide service connections to Tallyn Ridge. Conditions to the approval include constructing an extension to the finished water piping from the Zone 2 water main. The extensions will be located at the end of Pinecliff Park Drive, as well as from the River Oaks development, and will include constructing pressure reducing valves at the end of the main line.

Sewer

According to the conditional approval, the existing Ballenger-McKinney Wastewater Treatment Plant is considered to have adequate capacity to serve public sanitary sewer lines and connections to Tallyn Ridge. Under the conditions, a sewage pump station will have to be constructed to provide an operational capacity equaling that of Tallyn Ridge, plus 15% of the Frederick County reservation to use in the event of a health emergency or excess public need. The pump station is estimated to cost $600,000 to connect to the existing sanitary sewer system.

Electric The electric, if used, will be provided to the Tallyn Ridge development by Potomac Edison Electric, a FirstEnergy Company.

Communications

Communications that will be available will include cable (TV and Internet) and telephone. Cable will be provided by Comcast, while Verizon will provide for the telephone connections.

Natural Gas A natural gas easement runs on the property. This natural gas transmission line, by Washington Gas, will be able to provide Tallyn Ridge with the natural gas needed to support a natural gas generator that will produce the electricity and heat for the development.

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Green Initiatives As per Maryland’s Department of the Environment, stormwater management must be

regulated for the offsite discharges of stormwater. These regulations require the site to have

an environmental site design (ESD) to mimic the runoff characteristics of the site as if it

were covered with woods in good condition. Environmental site design includes strategies

and features which are meant to mimic the natural hydrologic condition of the site. When

the site design decreases the all of these natural features are exhausted, the use of structural

best management practices (BMPs) may be used to further manage the stormwater.

An ESD also includes the stormwater to be micro-managed, meaning it will provide

treatment of stormwater close to the source of the runoff. The micro-management of a site

will incur the creation of many micro-drainage areas on the site. A site as large as Tallyn

Ridge results in the creation of numerous ESD structural BMPs.

The proposed structural BMPs help to the control the stormwater throughout the site when

natural hydrologic conditions cannot be met. Such BMPs like submerged gravel wetlands,

drywells, micro-bioretention basins, permeable pavement and bio swales, handle additional

stormwater discharges that are created from the increase in impervious area.

The environmental site design, along with other site features, help to increase the

sustainability of a site. According to a publication by the City of Portland’s Environmental

Services, there are three principle guidelines to follow for a sustainable site development,

especially in stormwater practices. Sustainability guidelines to develop urban environments

follow a design that avoids impacting already natural resources, promotes natural

hydrologic conditions in the development and also promotes healthy waterways through

discharging quality stormwater runoff (“Sustainable Site Practices”, pg. 3)

As used in the proposed site design, to increase the sustainability of a site in stormwater

management practices, various actions may be taken. Actions to increase a site’s

sustainability include those which micro-manage the drainage areas, supports native and

abundant trees and vegetation and creates vegetative buffers along waterways, reduces the

impervious areas, maintains floodplains and wetlands and prevents and controls erosion and

pollution of sediment. Many of these actions have been used in the proposed site design for

Tallyn Ridge and can be accomplished by following the use of best management practices

that are typically standardized by Maryland’s Department of the Environment.

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Phasing

Overview

Phase 1

Phase 2

Phase 3

Phase 4

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Overview The construction will begin in the southwestern portion of the proposed site, closest to the

access off of Reichs Ford Road, and gradually continue to the northeastern portion in a 4-

phase development. The site is designed to prevent interference of construction activities

between the builders and residents. It is also organized to minimize the number of occupied

dwelling units that are facing active construction . The overall phasing duration will

expand over a 78 months. Independence Developers will be able to reach our 78 month goal

by beginning the next phase at the end of home construction in the previous phase. This

allows for the equipment to stay on site and be in constant use. It also compresses the

schedule’s duration from 108 months to our desired 78 month plan.

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Phase 1 This phase begins the construction and will provide a

choices for 5 out of the 6 types of building lots that will

be available to prospective buyers. Approximately 26%

of the lots will be constructed over 27 months to include

41 single-family detached

cottage lots

17 single-family attached

(front loaded) lots


(rear loaded) lots


(front loaded) lots


(rear loaded) lots

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Task Name Duration Start Finish

Phase 1 Notice to Proceed 1 Day 4/1/16 4/1/16

Mobilization 2 Days 4/4/16 4/7/16

Environmental Cleanup 5 Days 4/4/16 4/8/16

Tree Clearing/Grubbing 6.5 Days 4/6/16 4/13/16

Rough Grading 7 Days 4/13/16 4/21/16

Lot Survey/Stakeout 16 Days 4/6/16 4/27/16

Soil Erosion and Sediment Control

Installation

3 Days 4/13/16 4/15/16

Home Construction 390 Days 4/27/16 10/25/17

Fine Grading 15 Days 10/25/17 11/15/17

Pump Station Construction 180 Days 4/25/16 1/2/17

Off-Site Improvemetns 107 Days 4/1/16 8/31/16

SESC Excavation 6.5 Days 11/15/17 11/24/17

Curb and Gutter Constuction 29.5 Days 11/15/17 12/27/17

Sidewalk/Pathway Construction 17 Days 11/15/17 12/8/17

Utility Earthwork 16 Days 11/15/17 12/8/17

Stormwater Utility Construction 66 Days 12/8/17 3/12/18

Water/Sewer Utility Construction 86 Days 12/8/17 4/9/18

All Other Utility Construction 41 Days 12/8/17 2/5/18

Roadway Construction 28.5 Days 4/9/18 5/17/18

Landscaping 11.5 Days 5/17/18 6/4/18

Street Lighting/Signage 28 Days 5/17/18 6/27/18

Phase 1 Complete 1 Day 6/28/18 6/28/18

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Phase 2 This phase is split between the eastern

and western portions of the site. One

part of this phase begins on the eastern

side of Tallyn Ridge Drive and extends

toward the north. The second part

extends the completed construction

from Phase 1 toward the north on the

western portion of the site. This phase

will provide a choices for 4 out of the 6

types of building lots that will be

available to prospective buyers.

Approximately 31% of the lots will be

constructed over a 33 month period to

include:


(front loaded) lots


(rear loaded) lots


(front loaded) lots


(rear loaded) lots

Phasi

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Mobilization 1 Day 10/3/17 10/3/17

Tree Clearing/Grubbing 8 Days 10/4/17 10/13/17

Rough Grading 5.5 Days 10/16/17 10/23/17



Installation

3.5 Days 10/16/17 10/19/17




Curb and Gutter Constuction 35 Days 10/4/19 11/22/19



Stormwater Utility Construction 78.5 Days 10/31/19 2/20/20

Water/Sewer Utility Construction 102.5 Days 10/31/19 4/1/20

All Other Utility Construction 48.5 Days 10/31/19 1/2/20

Roadway Construction 34 Days 4/1/20 5/18/20

Landscaping 14 Days 5/18/20 6/4/20

Street Lighting/Signage 33.5 Days 5/18/20 7/2/20


29



Ph

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Phase 3 This phase extends toward the north

from all of the completed construction

from the previous phases. Within this

phase, the construction on the western

portion of the site will be completed.

It will also complete the remaining

amount of single-family attached lots

and will include the first few estate

lots. This phase will provide choices

for all 6 types of building lots

available to prospective buyers.

Nearly 23% of the lots will be

constructed over a 22 month period to

include:

5 single-family estate lots


cottage lots


(front loaded) lots


(rear loaded) lots


(front loaded) lots


(rear loaded) lots



Mobilization .5 Days 8/13/19 8/13/19

Tree Clearing/Grubbing 5.5 Days 8/14/19 8/22/19

Rough Grading 4 Days 8/23/19 8/28/19



Installation

2.5 Days 8/23/19 8/27/19




Curb and Gutter Constuction 25.5 Days 12/9/20 1/14/21






Roadway Construction 24.5 Days 4/13/21 5/18/21


Street Lighting/Signage 24.5 Days 5/18/21 6/22/21


30



Phase 4 This phase completes the construction of all

the building lots and extends the construction

toward the project limits in the northeast from

the previous phase. This phase will provide a

choices for 3 out of the 6 types of building lots

that will be available to prospective buyers.

The remaining 20% of the lots will be

constructed during XX including:

10 single-family estate lots


cottage lots


(front loaded) lots

Phasi

ng



Mobilization .5 Days 12/3/20 12/3/20

Tree Clearing/Grubbing 5 Days 12/4/20 12/10/20

Rough Grading 3.5 Days 12/11/20 12/16/20



Installation

2 Days 12/11/20 12/15/20



SESC Excavation 5 Days 5/5/14 5/11/22

Curb and Gutter Constuction 23 Days 5/5/14 6/7/22


Utility Earthwork 12.5 Days 5/5/14 5/24/22




Roadway Construction 22 Days 8/24/22 9/23/22


Street Lighting/Signage 22 Days 9/26/22 10/26/22


31



Product

Details

Overview/Construction Costs

Cottage Design

Townhome Rear Loaded Design

Townhome Front Loaded Design

Single Family Detached Design

Single Family Attached Design

Estate Design

Option Packages

HOA Description

Community Center

32



Overview & Construction Costs

Estimating: Independence Developers used the 2015 RS Means book along with custom

estimating software to determine our construction costs. These prices also have included

and a location factor applied to them. Due to our involvement across multiple states, we

used a location factor and keep a base price for ease of estimating. Each type of dwelling

was estimated based upon the quantity of material and labor hours required. The cost for

labor was the number of hours without trade overlap. Independence Developer will confirm

all bids to cost per phase before construction begins. Construction estimates may be subject

to change.

Discounts: Due to the high amount of purchasing done by Independence Developers from

manufactures, we are expecting a reducation in prices due to the high volumes. An average

savings we expect to see is 10% on materials. This is expected from previous developments

constructed across the state of Maryland.

Scheduling: Independence Developers used national average labor times for each phase. The

final schedule will include trade overlap, where multiple construction phases can be taking

place at the same time. Independence Developers' marketing department conducted

research to determine market absorption rate, this shows how fast the units can be erected

to command the optimum return from this development.

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Type of

Dwelling

Number

Constructed

Construction

Cost

Sales Price Price

per

SqFt

Total

Construction

Cost

Total Profit

Greenwell

Cottage 114 $226,189.80 $325,000 $252.92 $25,785,637.20 $11,264,362.90

Herrington

Townhome 86 $297,251.80 $450,000 $175.10 $25,563,654.80 $13,136,345.20

Cunningham

Townhome 114 $296,251.80 $450,000 $167.54 $33,772,705.20 $17,527,294.80

Lincoln 55 $350,128.38 $560,000 $191.52 $19,257,050.90 $11,542,949.10

Chapman 57 $338,493.00 $540,000 $188.42 $19,294,101.00 $11,485,899.00

Greenbrier

Estate 15 $488,905.50 $785,000 $152.13 $ 7,333,582.50 $ 4,441,417.50

33



The Greenwell Cottage The Greenwell Cottage is a state of the art, energy efficient home. With an array of solar

panels on the roof, radiant floor heating through out and double insolated walls, this home

is sure to be a money saver. This home includes a detached garage and also an outdoor en-

tertaining patio.

Prod

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etails

Upgrades Trim Appliance

Car Charging Station

Level 1 $712.00 $5,740.00 $2,200

Level 2 $1,112.00 $6,985.50 $2,200

Level 3 $1,503.00 $10,124.00 $2,200

Materials Price Days

Slab on Grade $ 11,240.75 3.5

Exterior Wall Framing $ 5,844.96 2

Exterior/Roof Finishes $ 56,394.40 7.5

Floor Framing — —

Interior Wall Framing $ 1,504.62 1

Truss Package $ 8,789.40 1.5

Windows $ 5,400.00 1

Exterior Doors $ 6,800.00 0.5

Interior Wall Finish $ 5,936.20 4

Floor Finishes $ 12,647.59 1.5

Insolation $ $5,269.32 1

Kitchen $ 9,720.00 1

Garage $ 15,000.00 2

Plumbing/Bathroom $ 14,944.00 1

Electrical $ 3,700.80 1.5

HVAC $ 3,353.85 2

Earth Works/Landscaping $ 7,446.77 8

Appliances $ 5,740.00 .5

Solar Panels and System $ 8,559.10 2

Construction Fees $ 37,898.00 —

Total Construction cost $ 226,189.80 41.5

Sale Price

Profit

Details:

1285 Sq.Ft.

2 Bedrooms

2 Full Bathrooms

Back Patio

Features:

Detached 1 Car Garage

Open Floor Plan

Double Insulated

Walls

Radiant Floor Heating

Solar Energy Package

Energy Efficiency:

HERS Rating: 12

88% more efficient than

standard homes

ICC 700-2012 NGBS

Section Points Level

Lot Design 155

Quality of

Construction 153

Energy Efficiency 125

Water Usage 114

Pollutant Source

Control 138

Building Owner’s

Manual 14

Total Points 699

Bronze Silver Gold Emerald

34



The Greenwell Cottage

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Floor Plan

35



The Greenwell Cottage

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Rear Elevation

Kitchen/Living Room

36



The Herrington Townhome The Herrington Townhome is a spacious modern home. This townhome has an attached

garage in the back opening up more space on the first level. The first level is very open with

a large living room. In addition, the third floor is open with a wet bar and outdoor living

area. The townhome is equipped with solar panels and power storage.

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Slab on Grade $ 5,779.46 4.5

Exterior Wall Framing $ 4,995.54 6.5

Exterior/Roof Finishes $ 49,703.37 6

Floor Framing $ 17,648.22 3.5

Interior Wall Framing $ 3,681.68 2.5

Truss Package $ 15,000.00 2

Windows $ 3,600.00 1.5


Interior Finish $ 32,713.80 5.5


Insolation $ 6,160.10 3

Kitchen $ 15,715.00 1.5



HVAC $ 7,489.73 2


Appliances $ 5,740.00 1

Solar Panels and System $ 11,982.74 2.5

Construction Fees $ $37,872.00 —

Total Construction Cost $ 297,251.80 48.5

Sale Price

Profit

Upgrades Trim Appliance Car

Charging Station

Level 1 $1,853.00 $5,740.00 $2,800

Level 2 $2,167.00 $6,985.50 $2,800

Level 3 $3,587.00 $10,124.00 $2,800

Details:

2570 Sq.Ft.

2.5 Bathrooms

2 Bedrooms

Rear Loaded (Garage)

Features:

Outdoor Living Area

Open first floor

3rd Floor Rec. Room With

Wet Bar.

Gated Front

Energy Efficiency:

HERS Rating: 28


standard homes

ICC 700-2012 NGBS


Lot Design 155

Quality of

Construction 150


Water Usage 100

Pollutant Source

Control 132

Building Owner’s

Manual 14

Total Points 668


37



The Herrington Townhome

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Main

Floor

Third

Floor

Second

Floor

Roof/

Solar

Panels

38



The Herrington Townhome

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Rear Elevation

Living Room

39



The Cunningham Townhome The Cunningham Townhome has a modern feel on the inside and a historic stone exterior.

This townhome is great for young couples and families. The first level is the kitchen and the

living area. Second floor is where the master and spare bedroom is. The third floor is an

open entertaining area with a wet bar and outdoor porch

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Slab on Grade $ 5,779.46 4.5






Windows $ 3,600.00 1.5





Kitchen $ 15,715.00 1.5



HVAC $ 7,489.73 2



Solar Panels and System $ 11,982.74 2.5

Construction Fees $ $37,872.00 —

Total Construction Cost $ 296,251.80 48.5

Sale Price

Profit


Charging Station

Level 1 $1,853.00 $5,740.00 $2,800

Level 2 $2,167.00 $6,985.50 $2,800

Level 3 $3,587.00 $10,124.00 $2,800

Details:

2686 Sq.Ft.

2.5 Bathrooms

2 Bedrooms

Frontloaded (Garage)

Features:

Outdoor Living Area

3rd Floor Rec. Room With

Wet Bar.

Gated Front

Energy Efficiency:

HERS Rating: 28

72% more efficient than stand-

ard homes

ICC 700-2012 NGBS


Lot Design 155

Quality of

Construction 153


Water Usage 100

Pollutant Source

Control 132

Building Owner’s

Manual 14

Total Points 671


40



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The Cunningham Townhome

Main Floor Second Floor Third Floor Roof/Solar Panels

41



The Cunningham Townhome

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Dining Area

Rear Elevation

42



The Lincoln The Lincoln Home is a great single family home. This home comes with an detached garage

allowing the seperation between the two structures. The first floor is an open modern layout

with the kitchen and living room flowing into one. The second story has three bedroom one

full bath and the master is also located on the second.

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s

ICC 700-2012 NGBS


Lot Design 155

Quality of

Construction 149


Water Usage 96

Pollutant Source

Control 138

Building Owner’s

Manual 14

Total Points 667



Slab on Grade $ 9,331.00 6.5






Garage $ 11,685.38 3

Windows $ 12,600.00 1

Exterior Doors $ 11,300.00 .5

Interior Finish $ 33,351.17 4

Floor Finishes $ 36,799.20 6


Kitchen $ 11,340.00 1.5



HVAC $ 7,480.26 2

Earth Works/Landscaping $ 19,156.55 5.5




Total Construction Cost $ 350,128.38 53

Sale Price

Profit

Details:

2924 Sq.Ft.

2 .5 Bathrooms

4 Bedrooms

Features:

Detached 1 Car Garage

Open Floor Plan

Master on First Floor

Energy Efficiency:

HERS Rating: 37


standard homes


Charging Station

Level 1 $3,628.00 $5,982.00 $2,800

Level 2 $4,255.00 $7,285.50 $2,800

Level 3 $4,761.00 $11,855.00 $5,600

43



The Lincoln

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Main Floor

Second Floor

44



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Bonus Room Eat-In Kitchen

The Lincoln

45



The Chapman The Chapman Home is a great single family home. This home comes with an attached

garage allowing the easy access between the two structures. The first floor is an open

modern layout with the kitchen and living room flowing into one. The second story has

three bedroom one full bath and the master is also located on the second.

Prod

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etails

ICC 700-2012 NGBS


Lot Design 155

Quality of

Construction 149


Water Usage 96

Pollutant Source

Control 132

Building Owner’s

Manual 14

Total Points 661



Slab on Grade $ 9,331.00 6.5






Windows $ 12,600.00 1

Exterior Doors $ 11,300.00 .5

Interior Finish $ 33,351.17 4



Kitchen $ 11,340.00 1.5



HVAC $ 7,480.26 2

Earth Works/Landscaping $ 19,156.55 5.5





Sale Price

Profit

Details:

2866 Sq.Ft.

2 .5 Bathrooms

4 Bedrooms

Features:

Attached 1 Car Garage

Open Floor Plan

Master on First Floor

Energy Efficiency:

HERS Rating: 36


standard homes


Charging Station

Level 1 $3,628.00 $5,982.00 $2,800

Level 2 $4,255.00 $7,285.50 $2,800

Level 3 $4,761.00 $11,855.00 $5,600

46



The Chapman

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Second Floor

Main Floor

47



The Chapman

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Bedroom TV Room

48



The Greenbrier Estate Named after the beautiful Greenbrier State Park, this estate home features an eloquent

modern interior and rustic stone exterior. This high end house is perfect for large families

and is a great house to entertain in. This house features a large outdoor patio with

optional outdoor kitchen and bar setup.

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Slab on Grade $ 17,141.25 5






Windows $ 8,400.00 3

Exterior Doors $ 10,500.00 2



Insolation $ 8,199.52 3.5

Kitchen $ 11,340.00 3

Garage $ 27,055.00 2

Plumbing/Bathroom $ 21,074.00 5.5

Electrical $ 14,849.28 4

HVAC $ 13,457.16 2.5




Outdoor Living $ 24,500.00 3



Sale Price

Profit

Upgrades Trim Appliances Outdoor Living

Car Charging

Ports

Level 1 $3,455 $5,740 $24,500 $2,800

Level 2 $6,255 $6,985.50 $28,900 $2,800

Level 3 $9,160 $10,124.00 $32,150 $5,600

Details:

5160 SqFt

3 Full and 1 half Bathroom

8 Bedrooms

Attached Garage

Features:

Open Floor Plan

1st Floor Master

Large Outdoor Entertaining

Area

Natural stone façade

Energy Efficiency:

HERS Rating: 41

59% more efficient than standard

homes

ICC 700-2012 NGBS


Lot Design 155

Quality of

Construction 138


Water Usage 94

Pollutant Source

Control 132

Building Owner’s

Manual 14

Total Points 644


49



The Greenbrier Estate

Prod

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Second Floor

Main Floor

50



The Greenbrier Estate

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Upstairs With Upgraded Trim Package

Kitchen

51



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Option Packages Independence Developers will offer option packages due to the high amount of presales that

we are predicting. We want to give the homeowners the ability to choose different features

to customize their homes. We have included different options depending on the structure

ranging from additional storage space to outdoor living and additional rooms.

Back Patio/Outdoor Living

Materials Price Labor

Concrete $4,031.04 1

Forming $379.95 1

Finishes $1,070.16 1

Fire Pit $3,500.00 2

Stone $1,651.86 1

Counter Top $4,890.60 1

Total $15,523.61 7

Townhome

Extra Bedroom


Walls $230.24 1.5

Drywall $939.01 2.5

Trim & Door $591.12 1

Total $1,760.37 5

Cottage

52



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Estate




Forming $456.95 1


Fire Pit $4,500.00 2

Stone $5,139.72 2


Total $24,564.92 9

Back Patio/Outdoor Living-Upgraded



Forming $546.25 1

Finishes $3,132.00 2.5

Fire Pit $5,550.00 2.5

Stone $7,709.58 3


Refrigerator $1,020.00 .5

Grill $2,100.00 .5

Total $24,564.92 12 Gaming Room


Built-In Desk $1,412.00 1.5

Built-In Shelf $1,623.00 2.5

Electronics $3,125.00 2

Total $6,160.00 6

Option Packages Single Family




Forming $268.72 1


Fire Pit $3,750.00 2

Stone $4,863.21 2


Total $19,730.45 9

53



HOA Description Independence Developers will hire The Premier

Management Group, Inc. to provide all needed

HOA services. The Premier Management Group has

twenty years of experience and specializes in single

family and townhomes. Upon completion of the

Tallyn Ridge Development, The Premier Management Group assume control of the

development and maintenance costs.

Their services they provide include but not limited too:

Collection of all fees and dues from owners of development.

Organize board meetings.

Hires needed staff.

24 hour emergency manager.

Financial services.

Some other hospitality features include:

Dry-cleaning

Car detailing

Dog walking

Independence Developers will ensure that the fees paid to The Premier Management Group

will be used for the following:

Maintenance of green space

Trail upkeep

Funds to be used to construct community center

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54



Community Center To promote the community involvement and wellness, an area of land has been set aside for

the construction of a community center in the future of the development. The community

center will be funded thorough the HOA fees. It will take some time for the funds to accrue

to construct the community center, but this will ensure that development is being occupied.

As more homeowners move into the homes, it will increase the funds in the community

center budge.

After consulting with The Premier Management Group, we have agreed to seek out a local

design build firm to construct the community center. Since Independence Developers does

not participate in commercial construction, a design build firm would be more apt to

construction the center more efficiently then ourselves.

After researching and interview potential

contractors, the community center construction

board decided on Morgan-Keller Construction to

design and construct the center. Morgan-Keller’s

portfolio consists of medical and commercial

buildings in the Frederick area. They also

specialize in sustainable construction. By Morgan-

Keller Construction already being experienced in

sustainability, it will allow them to continue the

environmentally friendly approach that Tallyn

Ridge is being founded on.

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55



Building

Science

Off-Site Construction


Products

Certification

56



Off-Site Construction Independence Developers utilizes our ability to

prefabricate our homes in a climate controlled

factory environment. Having our home designs

panelized off site not only decreases the amount of

labor, but allows for Independence Developers to

maintain its 5 star level of quality control.

Through years of research and advances in building

science, Independence Developers will begin to

institute double wall construction with staggered

studs negating thermal bridging throughout the

dwellings and provided an air tight home. Building

two walls on site for a home would be extremely

labor intensive and counterproductive. This is where

our prefabrication ability is key in introducing a

new kind of production building. With two 2x4 walls

and an inch air gap, it will allows us to achieve an

R-34 value 70% more than required by the 2015

IRC.

In conjoin with the double wall construction, Murus’s graphite enhanced EPS SIP panels

will be installed in the ceilings achieving an R-52 value exceeding the R-49 required. Using

SIP panels will allowing a constant thermal barrier across the full ceiling and prevent any

insulation movement like with conventional blown in fiberglass. Not only, will it provide a

tighter building envelope, setting the ceilings with SIP panels will expedite the building

process allowing the homes to be completed at a faster pace. Using a SIP panel for ceiling

construction will negate the possibility of wind washing

allowing for a constant and even amount of insulation across

the whole structure.

Due to the foam core, SIPs do not allow the installation of

recess lighting in the ceilings. Because we were planning on

removing the Recessed lighting in the first place, to reduce

the thermal breaks in the building envelope, this did not

hinder our decision to use SIP’s. One of the requirements in

Ch. 7 (703.5.2) of the National Green Building Standards,

requires us to have less than 1 recessed lighting fixture per

400 sqft of ceiling.

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BIBS

We are suggesting that Independence Developers use a Blow-In-Blanket system (BIBS) for

the wall insulation, and there are many benefits to doing so. One of the biggest reasons that

this system is better than traditional methods in just the pure R value of the material. The

BIBS R-value is 4.23 per inch, 30% more than the traditional fiberglass batts. Another

advantage this system has is the fact that it aids in the overall air quality of the home. The

BIBS material is moisture, allergen, and pollutant resistant. The last of the benefits to be

highlighted is that the insulation within the system is made up of up to 25% recycled

material, reducing the carbon footprint of each and every home on the site.

The benefits of a Blow-In-Blanket System

is that fact the loose strands of fiberglass

are compacted to the point that they will

not settle. This allows for the same R-

value to be achieved over the duration of

the home. In addition, it the loose

fiberglass can surround any receptacles

preventing any gaps within our thermal

envelope. Maintaining a tight thermal

envelope is key when trying to construct

an energy efficient home. This is why

Independence Developers work with their

subs to ensure that no breaks occur in the

thermal envelope and if one does occur, it

is repair to eliminate any heat loss and air

penetration.

Solar Panels

All homes within Tallyn Ridge will come equipped with solar panels. The amount of panels

on each home will be able to sustain the a normal electric load and then an additional 25%.

The additional 25% of collected energy will account for extra electric usage, cloudy days,

and the ability to sell electricity back to the local electric companies. This will aid in keeping

utilities costs down for the homeowner and even a chance for them to profit off their home

by simply living in it.

58




Shallow Frost Protected Slab

The last of our onsite building science

highlights might just be the most

important and drastic changes from

standard construction technics. By

taking away the full basement and

replacing it with a shallow frost protected

slab, we eliminate many energy inefficacy

and even health hazards. A full

basement, if not properly taken care of,

can be a breeding ground for mold and

mildew due to the cool moist air that is

present. With the understanding that

some home buyers may be turned off by

the lack of a basement or storage space,

we have added a couple elements for storage solutions. These can be found in the garage

with a power lifted platforms, and the SIP’s panels used for the ceiling can double as a floor

for storage.

As we seen by research done by

Independence Developers building

scientists, the cost between full

basements and crawlspaces is almost

double then a frost protected slab.

With our homes being a minimum of

1,200 SqFt and an average of 2,700

SqFt, our cost will be well below the

$20 line not only being more

efficient for us as a builder, but

transition to the homeowner with

heating savings.

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Products Shingles

Independence Developers plans on using light colored shingles with cool roof technology built in. These shingles have a ceramic type coating on the granular surface to reflect the suns UV rays that normally heat up the roofs surface. This heat generated be the sun’s rays will in turn heat up the attic space and cause the house to be less efficient. Through testing, the shingles with this coating have been proven to reflect 20% more of the sun’s rays than uncoated equivalent shingles

Reflective Barrier In addition to the cool roof shingles Independence Developers plans on installing a radiant barrier system to the underside of the top cords, of the trusses. These products have been tested and can further reduce the radiant solar penetration into the attic space. With the combination of these systems, the attic space can be at an almost livable temperature. One of the indirect benefits to these products is in the HVAC system, because the ducts will be running in a 85-95 degree space, instead of a 150 degree space on the 90 degree day, that are common during the summer months in the Fredrick area.

Appliances We plan on installing all Kenmore Energy Star qualified products. This will give our homes both a consistent look and high efficiency with a total Energy Star, energy savings of $309 per year.

Recycled Materials Whenever possible we would use recycled products in the construction of the home. Recycled product can range from the glazings in windows to metal fasteners and even old concrete as aggregate in our slabs.

House Ventilation Due to the tightness of our planned building envelope a whole home mechanical ventilation system. Independence Developers have put energy efficiency in the forefront and with this system it is no different, we plan on using a ventilator with heat recovery and an Energy Star rating.

Radiant Floor Heating We also believe that the use of a radiant floor heating system on the first floor would be the most energy efficient option. The benefits of the system don’t stop at the energy efficiency of the structure, there is a comfort factor that people, that already have the system, say is intangible.

Reflective Barrier System

60



Certifications

National Green Building Standards

Following the NAHB’s National Green Building Standards, we are proud to say that

Independence Developers has achieved an Emerald rating on all of the homes in our

proposed development. Emerald is the highest rating a hose can achieve by these standards.

We had done this using a few, simple, technics in addition to the ones we have already

outlined, one of these includes moving water heaters out of the garage and into a more

efficient location in the home. Two more steps taken have been, Removing carpets to reduce

allergens, and adding occupancy sensors in strategic locations for lighting. We have chosen

to do all of these thing because we want to make Independence Developers a house hold

name and synonymous with green building.

In addition to the NAHB’s Green Building Standards we have chosen to pursue further

certification with two more nationally recognized standard and organizations Energy Star

and HERS Rating System.

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Home

Ch. 5 Land

Ch. 6

Resources Ch. 7

Energy Ch. 8 Water

Ch. 9 Pollutant

Source

Ch. 10 Manual

Points Over

Total Achieved

Greenwell 155 153 125 114 138 14 158 699

Cunningham 155 153 117 100 132 14 130 671

Herrington 155 150 117 100 132 14 127 668

Lincoln 155 149 115 96 138 14 126 667

Chapman 155 149 115 96 132 14 120 661

Greenbrier 155 138 111 94 132 14 103 644

Requirement 121 119 100 92 97 12 100 641

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Certifications

ENERGY STAR

ENERGY STAR is the most widely known name in

green technologies, therefore there is no one better for

Independence Developers to partner with. The first step

to getting their certification is to become an ENERGY

STAR certified builder, which we have already started

the process of. Next, we took their strict guidelines and

designed our floor plans around them. ENERGY STAR

also has two optional certifications, the Advanced

Lighting Package and the Indoor airPLUS. Choosing to

pursue qualifying for these was a simple one, our homes

have 100% ENERGY STAR light fixtures, for the lighting package, and advanced

moisture and pest control with a third-party inspection, for the airPLUS. Also, as part of

the qualification process the home needs to be at least a 30% efficiency rating using the

HERS Rating scale.

HERS Rater

The Home Energy Rating System Rater (HERS Rater) is a software system that calculates

the energy efficiency of a home, developed by the Residential Energy Service Network

(RESNET). The way this rating system works is by comparing the standards of a dwelling

vs that of a home built meeting minimum codes requirements. Therefore, a home meeting

minimum codes would have a HERS index of 100, and a zero energy home would have a

HERS index of 0. Each point in the index represents 1% reduction of energy. To meet the

minimum requirements for the ENERGY STAR home, a home needs to have a HERS

rating of 70, and all of our homes surpass this.

Greenwell Cunningham Herrington Lincoln Chapman Greenbrier

HERS

Rating 12 28 28 37 36 41

Percent

Efficient 88% 72% 72% 63% 64% 59%

62



Competition

Site Overview

Tuscarora Creek

Greentree Homes

Villages of Urbana Development

NV Homes

Ryan Homes

Clover Ridge

Drees Homes

63



Tuscarora Creek Development Tuscarora Creek is a development currently in the process of being built 10 miles to the

northwest of Tallyn Ridge. Construction has been in the past few years, and the

development is planned to exceed 1,000 homes. Tuscarora Creek will be composed of 5

different single family home designs and 3 townhome designs. Tuscarora Creek will offer

amenities such as community centers, sport fields, a community pool, dog park, and

walking trails.

Tuscarora Creek is being spearheaded by a single developer, Greentree Homes. Greentree

Homes is proposing that they are building a sustainable community by constructing the

dwellings up to the Federal Energy Star standards. Greentree is also offering immediate

delivery by offering up to a 4% discount on selected townhomes.

Below is Tuscarora Creek’s site plan. Homes that are in filled in red are sold, green are

available, and off-white are proposed lots that are not constructed yet. This map and

availability are as November 2015.

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Greentree Homes Greentree Home is a part of the F.O. Day

Company, which is based out of Rockville,

Maryland. F.O. Day Company is an

infrastructure focused developer, but utilizes

Greentree Homes to generate residential

projects. Greentree Homes was established in

1997 and focus their building in Frederick

County, Maryland and Loudoun County, Virginia. Greentree specialize in single family and

townhomes, with a small portion of the designs being for custom homes on 10-15 acre lots.

All their homes are covered with a 1 year warranty for workmanship, 2 year warranty for

mechanical work, and a 10 year structural warranty.

Greentree Homes claims that Tuscarora Creek will be a sustainable development by using

energy efficient appliances and reusing stormwater. Greentree Homes are able to claim a

HERS rating of 70 due to their ENERGY STAR certification.

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Community Amenities & Features Comparison

Villages of Urbana Features Price Tallyn Ridge Features Price

Distance to Local Schools $3,000 Distance to Downtown $3,000

Distance to Retail Locations $2,000 Distance to Local Park $2,000

Basement Construction $10,000 Slab on Grade Construction N/A

Standard Wall Construction N/A Double Wall Construction $15,000

Square Footage N/A Square Footage $10,000

On-Site Amenities $3,000 On-Site Amenities $2,000

70 HERS Rating $2,000 28 HERS Rating $10,000

NAHB Emerald Certified $5,000

Smart Home Ready $2,500

Solar Panel Equipped $7,500

Total $22,000 Total $57,000

The Community Amenities and Features Comparison chart highlights cost difference a

homeowner would be expected to spend extra on each home. If Greentree Homes and

Independence Developers homes were to sit on the same lot, our home would be able to

demand an additional $35,000.

65



The Baker Square Feet: 2,053

Bedrooms:3-6

Bathrooms:2.5-3.5

Price: Colonial-$376,900

Craftsman- $380,900 Shingle- $384,900

Price Per SqFt: $183.58-187.48

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The Stonegate Square Feet: 2,562

Bedrooms:4-6

Bathrooms:3.5-5


French Country- $413,900 Victorian- $416,900

Price Per SqFt: $160-162.72

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67



The Rosemont Square Feet: 2,740

Bedrooms:4

Bathrooms:3.5


Victorian- $424,900 Shingle- $427,900


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The Edison Square Feet: 1,680

Bedrooms:3

Bathrooms:2.5

Price: $259,990

Price Per SqFt: $154.76

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The Jefferson Square Feet: 2,296

Bedrooms:4

Bathrooms:2.5-3.5

Price: $296,990

Price Per SqFt: $129.35

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70



Villages of Urbana The Villages of Urbana was constructed in 1999 and is centrally located in Frederick

County, 5 miles to the southeast of the Tallyn Ridge Site. The Villages of Urbana are

composed over 3,000 homes built by NV Homes, Ryan Homes, Main Street Homes, and

Parkwood Homes. In addition to the surplus of homes located in the development, it

contains, community parks, clubhouses with pools and tennis courts, biking and hiking

trails, and a new school. Villages of Urbana also provides the community with retail

amenities with chain restaurants, banks, spas, and other popular retail stores. Due to their

presence in Frederick, Villages of Urbana only have townhomes from NV Homes and Ryan

Homes remaining to be sold.

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71



NV Homes NV Homes was founded in 1979 and is a

production builder with homes built in

Washington DC, Delaware, Virginia, North

Carolina, Pennsylvania, and Maryland.

Within Frederick, NV Homes has a strong

production presence with homes being built in

three developments but primarily in the

Villages of Urbana.

NV Homes are offering a townhome design, The John Jacob Astor, at Villages of Urbana,

beginning at $390,000 with additional options. Within the townhome, the floor plan is 2,400

sqft at a minimum with a 2 car garage, and higher end finishes throughout the home.

NV Homes have no claim to being energy efficient and have built standard production

homes. The issues with these homes is that they do not exceed energy codes and are not

geared to efficiency. This puts a burden onto the homeowners to retrofit the home in the

future to decrease energy costs if they so desire.

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Square Footage $5,000 Square Footage N/A

Bedroom/Bathroom $2,000 Bedroom/Bathroom N/A






Total $29,000 Total $47,000


homeowner would be expected to spend extra on each home. If NV Homes and



72



The John Jacob Astor Square Feet: 2,600-3,242

Bedrooms: 3-4

Bathrooms: 3.5-4.5

Price: $419,900-479,900


Main Level Floorplan Upper Level Floorplan

Lower and Optional Bonus Level Floorplan

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73



Ryan Homes Ryan Homes was founded in 1948 and is

a production builder with homes built in

Delaware, Florida, Illinois, Indiana,

Maryland, New Jersey, New York,

North Carolilna, Ohio, Pennsylvania,

South Carolina, Tennessee, Virginia,

Washington DC, and West Virginia. Ryan Homes focus on building single family homes and

townhomes due to the market demand. Prices for their homes nationwide can range from

under $100,000 to above $600,000 proving that they are a very versatile company.

Ryan Homes are offering a townhome design, Strauss. The Strauss has two options of a 1

car garage, $390,000, and a 2 car garage, $410,000. Within the townhome, the floor plan is

2,400 sqft depending on the options that the homeowner chooses.

Ryan Homes created the BuiltSmart approach to their homes. It allows the homes to be

30% more efficient as calculated by the HERS index. They accomplish through energy star

appliances, high efficiency HVAC systems, and sustainable construction practices.

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Bedroom/Bathroom $2,000 Bedroom/Bathroom N/A






Total $24,000 Total $52,000


homeowner would be expected to spend extra on each home. If Ryan Homes and



74



Strauss Square Feet: 2,476+

Bedrooms: 3+

Bathrooms: 2.5+

Price: One Car Garage- $390,000

Two Car Garage- $410,000


Upper Level Floorplan

Lower Level Floorplan

Second Floor and Attic Option Floorplan

Main Level Floorplan

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75



Clover Ridge Development Clover Ridge is a development designed and built by Drees Homes, a well established

production home building company. Clover Ridge has just begun construction in late 2015

and be comprised of 9 different single family home designs. Of the 9 home designs, 8 are two

stories and only 1 is single story.

Homes in Clover Ridge range from 2,230-3,264 sqft with a price range of $384,900-507,900.

The homes come with a variety of choices from 3 bedrooms 2 baths to 4 bedrooms and 3.5

baths. All of the homes within Clover Ridge have a 2 car garage

Clover Ridge is located on the northern side of Frederick and is 7 miles from Tallyn Ridge

and a 20 minute commute.

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Drees Homes Drees Home was founded by German

immigrants in 1928 with their first

home built in Kentucky and has been

successfully in business for 87 years.

Drees Homes is currently ranked as the

nation’s 7th largest privately-owned homebuilder and 23rd overall. Drees works with the

homeowners to customize the floor plans allowing them to build the home they want. They

currently are located in Texas, Kentucky, Ohio, Indiana, Florida, Tennessee, North

Carolina, Washington DC, Virginia, and Maryland.

Drees Homes began to incorporate 21st century technology in their homes making them

more efficient. Each home rated on the HERS index to establish the home’s efficiency. On

the high end, Drees Homes’s have achieved a 60 which means their homes are 40% more

efficient.

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Bedroom/Bathroom N/A Bedroom/Bathroom $2,000






Total $21,000 Total $59,000


homeowner would be expected to spend extra on each home. If Drees Homes and



77



The Ashton



Square Feet: 2,230-2,250

Bedrooms:4

Bathrooms:2.5

Price: $384,990-411,900


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The Buchanan Square Feet: 2,741-2,782

Bedrooms:4

Bathrooms:2.5

Price: $434,900-469,900





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79



The Jayden Square Feet: 2,433-2,456

Bedrooms:3

Bathrooms:2.5

Price: $472,900-507,900





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80



Marketing

Marketing Strategy

Sales Strategy

81



Marketing Strategy Advertising will be a pivotal point of our marketing strategy. We will emphasis our green

initiatives, energy savings, and sustainability in order to demonstrate the developments

potential cost savings and Independence Developers’ conscience effort to limit our carbon

footprint of our homes. We sell our homes as not only a dwelling, but as an investment in

the environment.

Social Media and Internet Advertising:

Currently we spend 1.72 hours a day on social media which accounts to 28% of internet

usage. This high amount of traffic on these sites offers a prime marketing opportunity. With

all generations using these sites, it will allow us to painless appeal to our target market.

Google: Google has become a household name for researching

items such as news to products to trivia. By using Google’s

Adsense and utilizing Google’s search engine, it will help us

capture much of the traffic for people looking to buy homes in the

Frederick area. Utilizing a proper combination between paid

advertising and organic search results will result in an extremely

cost effective advertising method. We intend for more than 60% of

our buyers to come from this method. An SEO (Search Engine

Optimization) expert may need to be consulted in order to help us

attain this goal.

Facebook: A Facebook page will be set up in the incipient

stages of building. In addition to being uploaded to the

developments website, initial renderings and site plans will be

made available on the developments Facebook page. As

construction is being completed, photos from finished homes

can be uploaded allowing potential buyers to see the finalized

product we offer. Our Facebook page, in combination with

Facebook’s powerful targeting program for advertisements,

will ensure that we are able to draw the customers from within

our target base. Once the development is completed, we will be

able to transition the page to the HOA to be used for future

properties for sale by current owners.

Instagram: Instagram has the capability of integrating

Facebook’s powerful marketing tools directly into their platform.

We will be able to post progress pictures as well as options offered

to entice potential buyers to upgrade. In addition to the photos

that will be uploaded, we will also be able to offer brief walk

throughs of the homes in its finished state.

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Mark

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Marketing Strategy

Advertisements placed in Newspapers:

In addition to running advertisements in the physical newspapers that are circulated,

having advertisement on the company’s website will also allow us to target more potential

homeowners looking for a new home.

Washington Post: The Washington Post Reaches 1.3 million people in the DC Metro

area, of which 35% of the readership earns in excess of $100,000.

Baltimore Examiner: Reaches most of the Baltimore Metropolitan area and has in

excess of 236,000 daily readers.

The Frederick News-Post: Local advertising of our development will enable us to

target people currently within our market.

These are just a few of the most popular newspapers we can utilize to attract our desired

target market in the immediate area.

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Mark

eting

Marketing Strategy Billboards

Billboardsare an effective way of targeting commuters. Well placed billboard

advertisements outside the DC and Baltimore metropolitan areas will assist in the targeting

of our desired customers. Key placements within Frederick will further help target those

within our local market.

Showroom

Utilizing the Francis Scott Key Mall, Independence Developers will open a showroom

within the mall. This will allow individuals to browse and see the options and finishes we

have to offer within our homes. It will also provide a place for presale homeowners to come

in and work with designers to customize their home prior to completion of construction of

their future home. Do to the high foot traffic through the mall it will also provide a valuable

Marketing tool that we will see a return on.

Having the show room paired with our model homes, will allow potential homeowners the

ability to see the quality of an Independence home. Being able to physically see the features

of a home in person is one of the best marketing techniques.

84



Sales Strategy Our selling strategy will focus on incorporating a large brokerage firm in order to reach a

wide variety of potential customers. A contract will be agreed upon with local and regional

real estate agents with Coldwell Banker. Coldwell Banker’s vast operations in the

Washington D.C. and Baltimore metropolitan area will enable us to accurately target our

desired demographic. They are also extremely prevalent in the Frederick Area. In addition

to commission, Coldwell Banker agents will be offered a tiered level of incentives in order to

provide motivation for selling our properties.

In the first phase of building, we plan on establishing our model homes and units for

perspective buyers. We will allocate plots throughout all phases to accommodate for each

model. Walkthroughs will allow the future homeowners to have a feel of where they can

potentially live for the coming years of their lives and understand the quality of Archaeo

Construction. Due to the limited availability of single family homes, we have no intentions

of displaying a model single family home.

We expect to incorporate an on-site sales office to attract commuters, in addition to those

travelling on highway 70. Our sales office will be staffed by one individual 8-4 Monday

through Friday and 10-4 on Saturdays, with special availability for qualified perspective

buyers. The high community development, will enable us to post brochures and other

literature in relation to the future development. We will establish and maintain a culture of

sales education and training in order to efficiently sell our homes. Our sales force will

promote the perception of ability to inspire a confidence and evoke a purchase decision from

potential buyers.

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Tier 1

5 Homes Sold

•$500 Gift Card

Tier 2

10 Homes Sold

•0.5% Continuous

Commission

Increase

Tier 3

20 Homes Sold

•Vacation

Package

85



Financial

Analysis

Loan Analysis

Realistic Pro Forma



Breakeven Point

Risk Analysis

Withdraw Strategy

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Fin

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Loan Analysis Due to the uniqueness of this project, we have decided to take an alternate approach to

displaying the financial position of our proposal. Tract-Pie has enabled us to take an

innovative approach at preparing our pro forma statements. Our corporate structure as an

S Corporation will act as a flow through entity, pass-ing all profits to our owners/

shareholders.

Financing:

- $90,000,000 Total Borrowed

- $42,000,000 Max Outstanding

- 7% Annual Interest Rate

- 2% Fees

5 Year Repayment Period

We have decided its best not to undertake this project with a partner. Our long held

reputation of quality developments and successful business would enable us to pull a large

construction loan with relatively low leverage. In order to complete our project, we intend

to borrow a total of around $90,000,000. This will cover less than half of all construction

and site development costs, but our cash flows farther into the project will be significant

enough to keep construction going at the same pace consistently. We will receive this loan in

a revolver loan form, drawing from it as needed, at a 7% interest rate with a 2%

administration, closing, and maintenance fee attached. The loan agreement is set at 5 years,

although we expect for the loans to be repaid in full before the loan reaches maturity. A pre-

determined amount of the construction loan will be set aside for interest payments.

87



Realistic Pro Forma Our realistic pro forma reflects all 441units being sold. Total revenues generated from sales

will garner $223,710,308. Total cost of sales is $170,788,224 and after loan repayment and

consideration of interest we will retain a profit margin of 18.58%. This profit margin

includes all fees and expenses. We have decided to allocate 4% of every homes selling price

towards advertising. This will ensure we are able to get top dollar for every unit. We have

conservatively accounted for price escalations over the coming years to encompass rising

demand and inflation. We anticipate that our loan will be paid back in full by the end of the

4th year. We will purchase the land, outright, at the beginning of construction in order to

demonstrate good faith with our financing partner, the bank. If everything goes

accordingly, after repayment of financing, we will stand to make $41,562,250.

Fin

an

cial

An

alysis

Type of

Dwelling

Number

Constructed

Construction

Cost

Sales Price Price

per

SqFt

Total

Construction

Cost

Total Profit

Greenwell

Cottage 114 $226,189.80 $325,000 $252.92 $25,785,637.20 $11,264,362.90

Herrington

Townhome 86 $297,251.80 $450,000 $175.10 $25,563,654.80 $13,136,345.20

Cunningham

Townhome 114 $296,251.80 $450,000 $167.54 $33,772,705.20 $17,527,294.80

Lincoln 55 $350,128.38 $560,000 $191.52 $19,257,050.90 $11,542,949.10

Chapman 57 $338,493.00 $540,000 $188.42 $19,294,101.00 $11,485,899.00

Greenbrier

Estate 15 $488,905.50 $785,000 $152.13 $ 7,333,582.50 $ 4,441,417.50

Absorption

Average Absorption per Sales Month 6.1

Project Duration (months) 76

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Fin

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Realistic Pro Forma

Loan Finance Summary

Construction Totals

Max Loan

Amount $89,484,123

Max Balance

Outstanding $41,641,515 $41,641,515

Loan Fees ($) $1,789,682 $1,789,682

Loan Fees (%) 2.00% 2.00%

Interest Rate (%) 7.00% 7.00%

Interest Paid $9,570,151 $9,570,151

Interest Draws $9,570,151 $9,570,151

Non-Int Draws $79,913,972 $79,913,972

Total Draws $89,484,123 $89,484,123

Total Repaid $89,484,123 $89,484,123

Lender IRR(%) 8.72% 8.72%

Loan-to-Val (%) 40.00%

Loan-to-Cost (%) 49.13%

Project Cash Flow

Without

Loans After Loans

Total Net Cash

Flow $52,922,084 $41,562,250

Max Net Cost

Outstanding $5,762,738 $7,640,370

Internal Rate of

Return (%) 202.92%

Net Present

Value $52,922,084 $41,562,250

Land Residual

Value $52,922,084 $41,562,250

Discount Rate

(%) 0.00% 0.00%

Equity Multiple 3.59

Return on Asset

(%) 149.85%

Equity Participation

Developer

Total Equity Advanced $16,096,014

(%) of Total Equity 100.00%

(%) of Total Cost 8.84%

Maximum Equity Balance $16,038,806

Profit Distribution $55,079,291

(%) of Profit Distribution 100.00%

Net Present Value $41,562,250

Discount Rate (%) 0.00%


Profit Summary

Net Profit after Returns on

Equity $41,562,250

(%) of Gross Sales Revenue 18.58%

(%) of Total Costs 22.82%

89



Optomistic Pro Forma In our optimistic pro forma, we have increased our selling points of all of our units. This

would be the best case scenario to account for the rise in prices due to high demand. We

believe this is extremely feasible due to the uniqueness of our project. We believe that after

we have shown the feasibility of the project, and the potential cost savings, the value of the

homes will rise. In our optimistic pro forma, we anticipate to achieve 26.24% gross profit

margin, or $62,393,270.

Fin

an

cial

An

alysis

Type of

Dwelling

Number

Constructed

Construction

Cost

Sales Price Price

per

SqFt

Total

Construction

Cost

Total Profit

Greenwell 114 $226,189.80 $375,000 $291.83 $25,785,637.20 $16,964,632.80

Herrington 86 $297,251.80 $475,000 $184.82 $25,563,654.80 $15,286,345.20

Cunningham

Townhome 114 $296,251.80 $475,000 $176.84 $33,772,705.20 $20,377,294.90

Lincoln 55 $350,128.38 $580,000 $198.36 $19,257,050.90 $12,642,949.10

Chapman 57 $338,493.00 $550,000 $191.91 $19,294,101.00 $12,055,899.00

Greenbrier 15 $488,905.50 $800,000 $155.04 $ 7,333,582.50 $ 4,666,417.50

Absorption



90



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Loan Finance Summary

Construction Totals

Max Loan $95,107,997

Max Balance $40,744,609 $40,744,609

Loan Fees ($) $1,902,160 $1,902,160

Loan Fees (%) 2.00% 2.00%


Interest Paid $6,648,031 $6,648,031

Interest Draws $6,648,031 $6,648,031

Non-Int Draws $88,459,967 $88,459,967

Total Draws $95,107,997 $95,107,997

Total Repaid $95,107,997 $95,107,997

Lender IRR(%) 6.78% 6.78%



Project Cash Flow

Without

Loans After Loans

Total Net Cash

Flow $70,943,461 $62,393,270

Max Net Cost

Outstanding $5,661,898 $7,628,521

Internal Rate of

Return (%)

Net Present

Value $70,943,461 $62,393,270

Land Residual

Value $70,943,461 $62,393,270

Discount Rate

(%) 0.00% 0.00%


Return on Asset

(%) 236.24%

Equity Participation

Developer




Maximum Equity Balance $8,286,671






Profit Summary


Equity $62,393,270



91



Conservative Pro Forma In our most conservative pro forma, we can anticipate a gross profit margin of 15.61%. A

return of any lower would trigger us to activate our withdrawal strategy. This would be our

worst case scenario. That being said, we feel this scenario is extremely unlikely. The recent

popularity in green technologies gives us a strong target market to tap into.

Fin

an

cial

An

alysis

Type of

Dwelling

Number

Constructed

Construction

Cost

Sales Price Price

per

SqFt

Total

Construction

Cost

Total Profit

Greenwell

Cottage 114 $226,189.80 $300,000 $233.46 $25,785,637.20 $ 8,414,362.80

Herrington

Townhome 86 $297,251.80 $425,000 $165.37 $25,563,654.80 $10,986,345.20

Cunningham

Townhome 114 $296,251.80 $425,000 $158.23 $33,772,705.20 $14,677,294.80

Lincoln 55 $350,128.38 $560,000 $191.52 $19,257,050.90 $11,542,949.10

Chapman 57 $338,493.00 $540,000 $188.42 $19,294,101.00 $11,485,899.00

Greenbrier

Estate 15 $488,905.50 $785,000 $152.13 $ 7,333,582.50 $ 4,441,417.50

Absorption



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Fin

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Loan Finance Summary Construction Totals

Max Loan

Amount $85,978,969

Max Balance $41,362,137 $41,362,137

Loan Fees ($) $1,719,579 $1,719,579

Loan Fees (%) 2.00% 2.00%


Interest Paid $9,500,520 $9,500,520

Interest Draws $9,500,520 $9,500,520

Non-Int Draws $76,478,449 $76,478,449

Total Draws $85,978,969 $ 85,978,969

Total Repaid $85,978,969 $ 85,978,969

Lender IRR(%) 8.65% 8.65%



Project Cash Flow

Without

Loans After Loans

Total Net Cash

Flow $44,772,601 $33,552,502

Max Net Cost

Outstanding $5,739,370 $7,544,974

Internal Rate of

Return (%) 176.19%

Net Present

Value $44,772,601 $33,552,502

Land Residual

Value $4,772,601 $33,552,502

Discount Rate

(%) 0.00% 0.00%


Return on Asset

(%) 120.61%

Equity Participation Developer




Maximum Equity Balance $ 19,312,920






Profit Summary


Equity $62,393,270



93



Fin

an

cial

An

alysis

Breakeven

Realistic Breakeven

With sticking with our estimated absorption rate and sales, Independence Developers will

be expected to breakeven around the 52nd month of construction. Although this is late in

our 78 month overall estimated construction time. It will lead to a strong closing to the

development. Due to the success we are expecting of Tallyn Ridge, this is a reasonable goal

for Independence Developers.

Optimistic Breakeven

With maintaining the same absorption rate but higher selling prices, Independence

Developers will hit our breakeven and begin to see profits after 49 months of construction.

The higher selling price will allow us to see a profit sooner than our realistic option. Our

optimistic view is possible due to the current energy efficient movement that is seen across

the nation.

Conservative Breakeven

If we need to lower our sale price because the expected demand of sustainable home is not

what we were predicting, Independence Developers will see a breakeven mark at 54 months

of construction. This will be a slight set back and result in a reduced profit margin, but the

overall development in itself will still yield an overall profit.

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Fin

an

cial

A

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Risk Analysis Recession and Housing Market Downturn

One of the biggest risks of a housing plan over many years is the unforeseen economic

future. The possibility of a limited demand of new homes is always possible and could strike

at anytime. Our financial advisors within Independence Developer have planned for such

things.

Reduction in home’s sale price will be adjust accordingly to the new loan interest rates

Production on homes on site will be reduce to fit a decreased absorption rate

If we continue to see that homes are not being sold at an appropriate rate, Independence

Developers will reanalyze the site to see the profitable once the market returns. This analyze

will occur after 4 months of not achieving our absorption estimate.

Optimistic Outcome

Withhold the land and postpone all construct on site

All profits made up to this point will be put towards paying off the projects debt.

Reanalyze and redesign home footprints to fit new market

Pessimistic Outcome

Complete remaining homes currently being constructed

Sell off remaining land

All profits will be paid to expenses to limit the amount of debt incurred from the project

95



Fin

an

cial

An

alysis

Risk Analysis Implementing Sustainable Building Practices

The building science usage in Tallyn Ridge is unconventional for production builder’s to

implement. Since it is Independence Developer’s first full scale sustainable development, it

poses the possibility for construction costs to be too high resulting in our home’s being

priced too high.

After extensive research about sustainable homes, we are extremely confident that we not

have issues with homes selling within Tallyn Ridge with the target market we have selected

and the geographical location. The home market is becoming more aware of passive homes

and the benefits the offer to homeowners and the environment. However, if we begin to

notice our absorption rate is too low, we will implement the following courses of action to

prevent the project entering debt.

Lower selling prices on the homes by 2.5% of original cost

If sales do not begin to increase, sales prices will be lowered by 5% of original cost

If home sales continue to stay stagnant and not meet the absorption rate, homes will be

converted back to traditional building practices.

Removal of solar panels and smart wiring from homes

Single 2x6 wall construction

Trusses with raised heals instead of SIP ceilings

Precast walls instead of shallow frost protected slab

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Withdraw Strategy Due to the possibility that the energy efficient approach to Tallyn Ridge is not successful as

we plan it to be, our financial advisors suggest that if our sales do not reach 50% after the

first phase is complete, our risk analysis plans will begin to be implemented. If sales

continue to fall after sale reductions are in placed and construction is slowed, we will end

construction at the end of the phase and sell off the remaining land.

The sales of each phase will be analyzed at the end to see if home prices need to be adjusted

to fit the market and if our absorption rate is too high or low. If Independence Developers

feels that the profitable of Tallyn Ridge is not what it is expected to be, construction will be

completed of that phase, and remaining lots and land will be sold off to local contractors to

finish the development how they see fit. We will recoup as much capital as possible to pay

off any loans and stay profitable.

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Work Cited https://www.cityoffrederick.com/

https://en.wikipedia.org/wiki/Frederick,_Maryland

http://www.tuscaroracreek.com/

http://www.greentreehomes.com/

http://www.villagesofurbana.com/

http://www.ryanhomes.com/

http://www.nvhomes.com/

http://www.dreeshomes.com/

https://www.resnet.us/hers-index

http://www.homeinnovation.com/green

http://www.nahb.org/en/industry-professionals/student-chapters/residential-construction-

management-competition/rcmc-4-year-program.aspx

https://www.cityoffrederick.com/DocumentCenter/View/4070

http://energy.maryland.gov/business/Pages/incentives/cleanenergygrants.aspx

http://www.seia.org/policy/finance-tax/solar-investment-tax-credit

http://tract-pie.com/

http://www.zillow.com/

http://www.truilla..com/

http://www.morgankeller.com/

http://www.premiermanagementgroup.com/

http://www.murus.com/

https://www.google.com/webhp?hl=en

Documents

Pennsylvania College of Technology-2016 4 Year RCMC Packet.old