Managing Real Estate Construction Business

Trainings by Vidya Bhagwat

Agenda

• Identify Opportunities

• Identify various partners & vendors

• Real estate construction profitability Analysis

Trainings by Vidya Bhagwat

1. Identify Opportunities

• Identify upcoming market upcoming market

• Look for next two year growth

• Low investment

- Identify opportunity first

- Move fast

• High return

- Focus on project which can be sold on minimum time.

Trainings by Vidya Bhagwat

2. Identify various partners & vendors

• Role of Architects :

- choose architects who have executive project in market & have

good local

Co-operation :

• Contractor

- choose contractor with proven contract.

• Project manager :

- identify civil engineer who have 2-3 year experience who can

manage vendors & managers.

Trainings by Vidya Bhagwat

• Marketing & selling :

- marketing sales can be out source to marketing companies

or can be taken care of developers.

• Brokers / Real estate agents :

- create a consultant agent before launching a product so they

can give customer in pre-launch.

• Material supplier :

- look for material supplier who own branded agencies & give

you longer payment cycle.

Trainings by Vidya Bhagwat

3. Real Estate Construction Profitability Analysis

• Project initiation expenses.

• Project ROI calculation

• Construction product cycle & developers.

Trainings by Vidya Bhagwat

Project Initiation Expenses

Land owners deposits, total Laks Rs. 401Land owners deposits, refundable Rs. 200Land owners deposits, non- refundable Rs. 200SD/Registration Lakh Rs. 39Sanction cost Lakh Rs. 293Brokerage Lakh Rs. 44Legal, Lakh Rs. 0Land scaping / Boundary/Comms cost, Lakh Rs. 8Marketing/ initial launch cost Lakh Rs. 20Sample flat cum sales office construction cost Lakh Rs. 20Startup capital for construction/ buffer investment Rs. 50

Total 874

Trainings by Vidya Bhagwat

Project ROI CalculationSaleable area_total, sq ft 209,088Developers share in Joint-venture 50%Saleable are _ developers, sq.ft 104,544Average selling price Rs/sq.ft 5,345

Cash in Revenue _ apartment sale Lakh Rs. 5,588Revenue _ infrastructure charges + MSEB, Lakh Rs. 314land owners deposits, refundable lakh Rs. 200

Total cash in lakh Rs. 6,103

Cash outCOGS, Lakh 2,675sales & marketing (Reddvise), Lakh Rs. 113

Total cash out, Lakh Rs. 2,788

Total income tax paid in the project 200

Net cash ,Lakh Rs. 3,115

Multiple 3.565

Trainings by Vidya Bhagwat

Thank You