Equity is an important source of capital for developers and that's why we've introduced the ability to model Equity finance in the Appraisal Tool. That means you can now get a more complete picture of your projects' potential returns.
What is it?
The Equity feature gives you the ability to account for Equity by setting the profit share (%), rate and term. That means you can model the share of your project that will be owned by Equity partners, and understand the return they will receive.
One you've added an Equity source, the cost of Equity and the Developer's profit share can now be seen in the Financial Summary on your appraisal.
Currently, the feature displays Equity return and interest as being paid in a lump sum after full project completion, and when all units have sold.
Why does this benefit you?
With LandFund's Brokerage service, we can source the Equity funding you need for your project, and now you can instantly model those deals in the Appraisal Tool. You'll get:
More accurate financial models, with both debt and Equity funding sources included
Ability to assess returns to Developer after profit sharing with Equity partners
Better evaluation of deal structures with different Equity share offers
How to use the Equity feature
Head to the funding section of your appraisal and click "Add Equity" to input Equity sources
The financial summary will then display Equity funding costs and Developer profit after profit sharing.
Plus, your lender-ready report will now include your total capital sources, including Equity.
Use the icons on the right to duplicate, edit or remove funding sources.
Equity in the Cashflow
Equity funding sources now feature in the Cashflow. That means you can easily get a complete picture of your cashflow balance, when equity has been modelled.
In the Cashflow, we've also added line items for:
Interest
Provider profit share
These are paid at the end of the project once all units have been sold.
What's still to come?
Since this is the first iteration, we know there's still work to be done, and that's why we need your feedback.
We'd be really grateful if you could tell us what you like about our new Equity modelling feature, and what you don't.
Get in touch by dropping us an email at: funding@land.tech