Home 2.0 Blog Archive

Wednesday, October 12, 2016


Oakley Home 2.0 Pro Forma Overview

This past weekend, I was able to complete my Assembly Cost Construction Estimate for the Oakley Home 2.0 Project, which while a critical step in the development process, is only a small part of the overall project pro forma. So what is a pro forma you might ask?
A pro forma is the single most important document for any real estate developer. With a literal meaning in Latin of 'as a matter of form', the pro forma is a spreadsheet that lists a series of assumptions and projections regarding anticipated acquisition costs, construction costs, development costs, expenses (including utilities, maintenance, taxes and insurance), income from rents and the eventual sale price of the project.
With the Oakley Home 2.0 currently being developed as a for sale market rate home, the pro forma I have been developing does not take into account the rental component that other development projects like my thesis did, but incorporates all the other areas mentioned. Having past projects to reference with the Pleasant Ridge house and several other new homes I worked on while a construction manager for Cincinnati Housing Partners, I feel like I have a pretty good grasps on the overall development costs and unlike the first Starter Home 2.0 project in Pleasant Ridge, Oakley actually has quite a bit of new homes being constructed throughout the neighborhood, which provides for good comps in determining the eventual sales price of the property upon completion. Below are some screenshots from my in progress pro-forma to give an idea what the format looks like (I've left number values left blank for the time being)