Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CMGT 7330 > Lesson 4: Know the Key Process of a Development > Flashcards

Lesson 4: Know the Key Process of a Development Flashcards

1
Q

The importance of understanding the development process.

A

UNDERSTAND THE BIG PICTURE OF THE CYCLE OF DEVELOPMENT.

UNDERSTAND THE IMPORTANCE OF CONSTRUCTION RELATIVE TO THE ENTIRE CYCLE OF DEVELOPMENT

UNDERSTAND THE POSITION OF A DEVELOPER.

HELP EVALUATE THE FINANCIAL POSITION OF A DEVELOPER

HELP EVALUATE RISKS ON TAKING ON A CONSTRUCTION PROJECT.

HELP PLANNING PROJECTS FOR THE COMPANY’S PIPELINE.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Process of development.

A

ACQUISITION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Acquisition process

A

SITE ACQUISITION PROCESS

GEOTECHNICAL REPORT AND STUDY

ENVIRONMENTAL REPORT

INITIAL CITY INQUIRY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Site acquisition process

A

SITE ASSEMBLY

MARKET OPEN LISTING

REDEVELOPMENT OF THE OLD SITE

ZONING AND DENSITY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Environmental report

A

PHASE 1: USED FOR DUE DILIGENCE OR FINANCING / NO SAMPLE COLLECTING OR TESTING IS REQUIRED / REVIEW SITE CONDITIONS AND DOCUMENTATION AND INTERVIEW

PHASE 2: POTENTIAL ENVIRONMENTAL CONCERNS TRIGGER THE PHASE 2 STUDY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Process of development

A

ACQUISITION PROCESS

PROFORMA PROCESS

LAND ACQUISITION COMPLETION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

A proforma analysis is a set of calculations that projects the financial return that a proposed real estate development is likely to create.

A

PROFORMA PROCESS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Legal / title search - search the land title office to check legal title, restrictions, lien, or any other title registered on land.

Financing arrangement - land financing.

Legal ownership structure - review typical structure.

A

LAND ACQUISITION COMPLETION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Process of Development

A

DESIGN AND PERMIT

CONSTRUCTION AND CLOSING

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Design and permit process.

A

REZONING PROCESS

DEVELOPMENT PERMIT / BUILDING PERMIT

PRE-SALE STARTS

CONSTRUCTION FINANCING PROCESS

DEMOLITION

TENDERING PROCESS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Construction and closing

A

BUILDING PERMIT

EXCAVATION

FINAL BUILDING PERMIT

SUBSTANTIAL COMPLETION

CLOSING

HOME WARRANTY / DEFICIENCY PROCESS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Rezoning process

A

UNDERSTAND COMMUNITY PLAN AND POLICIES

PRE-APPLICATION AND ENQUIRY

FORMAL APPLICATION AND SEEK PUBLIC INPUT

REZONING PLANNER MAKE A RECOMMENDATION TO CITY COUNCIL (REPORT WRITING)

PUBLIC HEARING

ZONING ENACTMENT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Development permit / Building permit

A

DP ENSURES THAT APPLICANTS’ DETAILED BUILDING DESIGN COMPLIES WITH ZONING AND DEVELOPMENT BY - LAW

BY -LAW REGULATES THE LAND USES, THE BUILDING LOCATION ON SITE, MAXIMUM HEIGHT AND SIZE, AND OTHER PROVISIONS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Pre-sale starts

A

IN BC, CONDO PRE-SALE CANNOT START UNTIL OBTAINING DP

PRE-SALES HAVE A WINDOW OF NINE MONTHS

PRE-SALE ACTIVITIES NEED TO SEIZE UNLESS
1) CONSTRUCTION FINANCING IS OBTAINED
2) BP IS OBTAINED

MUST REGISTER IN HOME WARRANTY AND ARRANGE FOR DEPOSIT INSURANCE PROVIDER (TRAVELER AND AVIVA)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Building permit (staged)

A

DIFFERENT CITIES HAVE VARIOUS PERMITTING PROCESS

STAGED BP IS PERMITTED (EXCAVATION PERMIT, SHORING PERMIT, FOUNDATION PERMIT, FULL BP)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Substancial completion

A

CONSTRUCTION LOAN PAYOFFVSTARTS

17
Q

Finance at various stages

A

LAND ACQUISITION FINANCING (55%-70%)

POST DP PRIOR TO BP

DURING CONSTRUCTION

COST OVERRUN AND DELAY IN THE CONSTRUCTION SCHEDULE

COMPLETION

18
Q

Land Acquisition Financing (55%-70%)

A

BANK LAND FINANCING PACKAGE COMPONENT

DEVELOPER BACKGROUND AND TRACK RECORDS

SITE ZONING, DEVELOPMENT POTENTIAL, GEOTECHNICAL AND ENVIRONMENTAL ISSUES

APPRAISED VALUE, PURCHASE PRICE, PROFORMA

LOAN REPAYMENT, TERMS, AND GUARANTEE

LOAN-TO-COST RATIO AND LOAN-TO-VALUE RATIO

INTEREST ONLY (18-24 MONTHS WITH RENEWAL)

19
Q

Post DP prior to BP

A

ARRANGE DEPOSIT INSURANCE

NEGOTIATE AND SELECT CONSTRUCTION FINANCING

ALTERNATIVE LENDER FOR SECOND FINANCING

FINALIZE EQUITY / DEPOSIT / LOAN PORTION

20
Q

Post DP prior to BP (Typical Example)

A

EQUITY 10,000,000
DEPOSIT 15,000,000
BANK 75,000,000
TOTAL 100,000,000

21
Q

During Construction

A

FIRST DRAW CONDITION: ALL EQUITY HAS TO BE IN PLACE BY THE FIRST DRAW

DEPOSIT AND CONSTRUCTION DRAWS WILL BE ON A SPLIT 50/50 BASIS

CONSTRUCTION DRAW IS SUBMITTED BY THE DEVELOPER, VERIFIED BY THE QUANTITY SURVEYOR (ACTING ON BEHALF OF BANKS), AND FUNDED BY THE BANK

22
Q

Cost overrun and delay in the construction schedule

A

ASSESSED BY BANK AND QS

THE TIMING OF THE DELAY IS CRITICAL

THE REASON FOR THE DELAY IS ALSO CRITICAL.

POSSIBLE WAYS TO FUNDING OVERRUN ARE CONTINGENCY AND EQUITY.

23
Q

Completion

A

PEAK OF THE LOAN AT COMPLETION

LOAN PAYOFF FROM SALES PROCEEDS

BANK REQUIRES A MINIMUM PERCENTAGE OF SALES PROCEEDS TO PAY DOWN THE DEBT

GST REMITTANCE.

24
Q

Evaluation of developers

A

REPUTATION

SELECTION OF CONSULTANTS

FINANCING READINESS

FINANCING PARTNERS

PRE-SALE ACTIVITIES AND PROGRESS

25
Q

Reputation

A

REPUTATION IN THE MARKET

SCALE OF PAST PROJECTS

DELAY (IF ANY) IN PROJECTS

QUALITY OF PROJECTS

NEW PROJECT TYPE AND / OR MARKET

26
Q

Selection of consultants

A

MOST OF THE PROFITS ARE LOCKED IN AT THE EARLY DESIGN DUE DILIGENCE STAGE

REZONING AND DENSITY NEGOTIATION IS THE KEY.

ARCHITECT PLAYS A VITAL ROLE IN THE REZONING AND DESIGN STAGE.

OTHER CONSULTANT’S COORDINATION WILL DETERMINE THE QUALITY OF THE DRAWING AND THE ABILITY TO SOLVE CHANGING REQUIREMENTS.

27
Q

Financing readiness

A

OVERALL CORPORATE GUARANTEE

LAND VALUE LIFT

CASHFLOW MANAGEMENT

28
Q

Financing partners

A

PAST RELATIONSHIP WITH FINANCING PARTNERS

HISTORY AND OVERALL SUPPORTIVENESS

29
Q

Pre-sale activities and progress

A

ABILITY TO CREATE VALUE AND SET THE PRICE

MONITOR SALES PROGRESS AND BALANCE THE BANK REQUIREMENT ON PRE-SALE AND MARKET ABSORPTION

ABILITY TO HOLD WHEN PRE-SALES ACTIVITIES SLOW DOWN DUE TO MARKET CONDITIONS

30
Q

Developer’s financing

A

ABILITY TO GET FINANCING FOR A PROJECT

ABILITY TO PAY GC ON TIME

RELATIONSHIP WITH THE FINANCIAL INSTITUTION

LIQUIDITY AND CONTIGENCY

DEVELOPER’S INTERNAL ACCOUNTING / FINANCE TEAM’S PROFESSIONALISM

31
Q

Evaluation of GC - from developer’s perspective

A

REPUTATION

BACKGROUND AND HISTORY

MOST RECENT PROJECT

REFERENCES

TRADE RELATIONSHIP

QUALITY OF TRADE

INSURANCE CLAIM HISTORY

BONDING ABILITY

32
Q

General Contractor’s Finance

A

COLLECTION OF PAYMENTS

PAYMENT TERMS FOR SUBTRADES

CREDIT POLICIES AND RELATIONSHIP WITH VENDORS

FINANCE / ACCOUNTING TEAM’S EFFICIENCY

OPERATING LINES

RELATIONSHIPS WITH BANKS

OVERHEAD CONTROL AND UTILIZATION

33
Q

Are centralized insurance and loss control programs that can protect the project owner, general contractor, and / or subcontractors under a single insurance policy or set of policies for the construction project.

A

WRAP-UP INSURANCE PROGRAM

34
Q

Protect your construction projects from specific kinds of property damage.

It also typically includes coverage for expenses related to construction should property damage occur and delay the completion of a project.

Umbrella coverage / Corporate coverage

Corporate and personal guarantee

Claim process

Lien / bond

A

BUILDING RISK INSURANCE

35
Q

Deficiency and home warranty

A

DEVELOPER / GC / TRADES’ RESPONSIBILITIES

HOME WARRANTY

COSTS

CONFLICTS OF INTERESTS

36
Q
A

CMGT 7330 (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions