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Basis For Interest

BFI - Basis for Interest Document

 

Key points:

 

Property information

Owner / seller and financial structure (REO / non-REO)

Acquisition cost (proposed offer)

Estimated cost to carry, improve & sell

Proposed exit strategy

Time period from acquisition to exit and/or return of capital

Revenue prediction at sale

Gross profit / margin estimates.

 

 

Valuation method:

- General criteria include

    acquisition below current and trailing market values 
    
    acquisition below replacement cost (for vertical projects)

 

 

Value Add

 - An understanding and definition of how we are increasing value

    Administrative (zoning, repositioning, etc.)
    
    
Strategic (individual versus bulk sales)

    Physical  (complete build-out, renovate, repair)
    
    
Financial  (cash infusion, marketing, adjust price point)

 

 

Exit Strategy

- A defined time frame for the proposed exit as backed by market data