Profit Margin

[Donald Trump]

I am new to this forum and have enjoyed reading most of the material as it is quite interesting to see that there are many individuals like me who want to learn about developing.

Attached there is a sheet I downloaded today from the site and have slightly modified to incorporate the margin scheme at time of sale. I would really appreciate if the sheet could be reviewed to confim if my calculations are correct.

Hope to get your feedback.

DT

 

[Ausprop]

looks pretty good... why have you taken selling fees out of cell C15?

interest rate extraordinarily low?

 

[GIDDO]

Hi Donald Trump,

My question would be :

Is 7% a good enough ROI ?

I would be concerned about a return of only nett 84k on a turnover of $1.3m.

Especially when you consider there is no safety margin amount it seems.
For example what if consultants fees go up to $74 instead of $50k.

Then your nett would be maybe say $60k instead of $80k.(not quite right I know)

How would it look then? 4.6% POI ? or thereabout?

Am I confused or what? I am not always all that quick with figures. Tell me if I am wrong..

 

[Ausprop]

u r right Giddo but I am assuming there is more to this than a normal devy, ie. an old PPOR or somehting? I am no mortgage broker but I don't think a bank would touch such a skinny deal?

 

[Donald Trump]

looks pretty good... why have you taken selling fees out of cell C15? I thought that the selling cost should be a deduction at time of sale for margin scheme? Is this not the case?

interest rate extraordinarily low?

yes, the interest rate is low, but for the purpose of the exercise I just wanted feedback on the formula's to ensure that the model works irrespective of content.

 

[Belu]

i would make things into percentages if possible Eg: stamp duty, sales fees, etc.

Also why is tax set at 25%? I take it that on this you are on the top tax bracket?

Cheers

 

[Ausprop]

I thought that the selling cost should be a deduction at time of sale for margin scheme? Is this not the case?

not that i am aware of - just a normal expense

 

[grossreal]

hi Donald Trump
couple of things you have missed
council and da cost
architect cost etc
and if you change the rate to 8.5%the number look very thin.
have a look at jaffasoft.com and he had a excel that you can fill in.
there were some floating around on here also at one stage and some one better at findng them then me can add them.
I have a few but they are not for a board that include all of the requirements.
and if you are asking would a lender lend on the excel simply no the margin has to be over 20%.
for a duplex with a 600k end sale
the land has to be under 150k per side to make the numbers work.
yours is 660k so the land would have to have come in at 300k not 537k
and then you can move the numbers around to make it work.
hope this helps