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Investment Scenario-$100k Investment for 5 Year Term.

Posted on 3/24/23 at 11:28 pm
Posted by T4
Member since Mar 2014
288 posts
Posted on 3/24/23 at 11:28 pm
What would be the Target Rate of Annual Return you would be happy with earning in the current environment we find ourselves in for the following scenarios:

Scenario 1

-Mixed Use Real Estate Development
-Market Leading Prime Property Owned Free and Clear
-Master Planned
-Fully Approved
-Capital Investment, Interest Only, No Equity
-$100k Liquid Capital Investment
-5 Year Term
-Must stay Invested for entire 5 Year Term, No Annual Dividend
-Payout in Full 62 Months from Investment Date

Target Non Compounded Annualized Rate of Return?

Scenario 2

-Mixed Use Real Estate Development
-Developer/GC and Private Equity Group Partnership
-Market Leading Prime Development Land Owned Free a Clear
-Master Planned
-Fully Approved
-Capital Equity Investment
-$100k Liquid Capital Investment
-5 Year Term
-Must stay Invested for entire 5 Year Term, No Annual Dividend
-Principal Plus 2 Years Non Compounded Interest Paid out at 62 Months from Investment Date
-Equity Equals Investment Amount as % of overall development cost.

Target Non Compounded Annualized Rate of Return?

If the option to reinvest principle after 5 year term was available, assuming the Target Rate of Return is met or exceeded, would you reinvest?
This post was edited on 3/24/23 at 11:30 pm
Posted by thelawnwranglers
Member since Sep 2007
38830 posts
Posted on 3/25/23 at 6:01 am to
FRC yolo lol
Posted by Im4datigers
Northern Virginia
Member since Oct 2003
4466 posts
Posted on 3/25/23 at 7:14 am to
15% min on a construction deal IMO.

Between the two projects you mention, I’m going with which one has the most preleased space and/or prime location

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