CalculateRealEstateROI

Strategy

Real Estate Development

Creating value by ground-up construction or substantial repositioning, capturing developer margin between cost and stabilized value.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Core concepts

Entitlement risk

Zoning, permitting, and approval delays are the largest controllable risk.

Capital stack complexity

Senior construction + mezzanine + equity layers, each priced for its risk.

Examples

  • Ground-up 40-unit apartment: $8M cost, $11M stabilized value.

Practical applications

  • Experienced operators with capital and team.

Common mistakes

  • First deal without development experience.
  • Underestimating entitlement and construction timeline.