Conceptual Sitework Budgeting

During the Discovery Phase of a new project, the developer wishes to minimize his or her at risk expenditures and not engage a lot of consultants until they are fairly confident in the viability of the project.

Initially, developers will utilize the B.O.W.A.G. method or “big ole wild a–– guess” to plug rough sitework costs into the proforma. However, an example of how dangerous it is to use this method to make decisions to move forward on developing a piece of land estimating $100K per acre versus $200K per acre on say a 50 acre site. The risk of not doing the required due diligence can be costly.

DISCOVERY PROCESS

When a specific site is indentified for a prospective project, the developer must go through a Discovery Process to determine its viability based on many factors. In lieu of hiring a multitude of consultants, during the Discovery Process to investigate the technical aspects of the site, adding to at risk costs, Paris Projects utilizes its 30 years of experience and knowledge of diverse disciplines to assist the developer to provide preliminary conceptual site work analysis in a short period of time.

Initially, the developer must evaluate if current landowners are willing to sell at a price that makes the deal work. This process alone can take months or years depending on the number of properties required for an assemblage and if the sellers are realistic and open to selling their property.

We Can’t Finish Until We Start!

During the inception and due diligence of a new project, a developer is trying to minimize his/or her at risk pursuit costs while verifying as many constraints and challenges as possible that may effect the cost proforma. More times than not, a developer will ask when can we complete the project and turn it over to the user… to which our response is, “WE CAN’T FINISH UNTIL WE START!”.

The decision to move forward with a new project is a huge balancing act and commitment of resources including time, talent and lots of money.

How Recessions Have Shaped My Real Estate Development Outsource Consultant Business

I am now again addressing and evolving in response to my 4^th recession in 28 years.

When I graduated from Texas A&M with a degree in Building Construction back in 1981 we were in the midst of a recession. I interviewed with many companies but only found a job thru a friend on campus whose dad owned a constructions company in Dallas. I was so grateful to have my first job with a salary of $17,000 per year.

I worked diligently for the next  8 years with this company, highly trained in their corporate structure and culture. I was a huge profit center for the company, managing numerous projects when the savings and loan sparked recessions decimated the Texas economy.