Thread by @TihoBrkan

If you:

1. work with extremely experienced construction team

2. take on minimal leverage

3. meaningfully save on hard costs (expensive materials) & soft costs (inhouse architecture)

4. buy sites from motivated sellers with unlevered profit on cost >30%

You cannot lose money.

Incase you’re wondering what happens during the worst downturns you will:

• have meaningful margin of safety from your initial purchase (you make your money when you BUY)

• even if prices decrease broadly, I’ll be adding additional value to your site

• safe with a minimal debt discipline by never putting your principal at risk & remaining in control of the project

• be making a substantial saving into your bottom line, either with in-house architects + designers or by keep expensive materials like marble & parquet at cost

And incase you’re wondering what happens incase the worse outcomes do not occur?

All of those edges, advantages and savings will probably result in you achieving a 50% to 100% ROE, with minimal debt.

Incase you do apply industry standard gearing, 4X to 7X ROE is possible.

Possibly the most important part — especially if you love real estate — is?creating spaces people love to live in and call home, which is meaningful work resulting in self satisfaction.

Ask any developer and they’ll tell you it’s true: they love walking a completed project.