What the Numbers are Based On

Purchase Price

Actual purchase price for the property.  Note that this does not include costs associated with the purchase such as: financing costs, inspections, appraisals, attorney, closing costs, etc.  These are all included under Project Costs.

Project Costs

Project Costs include the following:

 

  1. Acquisition Costs
    1. Real estate attorney
    2. Property inspections
    3. Closing costs (title fees, title insurance, transfer stamps, recording fees, etc)
    4. Property survey
  2. Financing Costs
    1. Appraisal
    2. Loan origination fees
    3. Monthly payments on purchase and construction loan
    4. Construction loan draw fees
  3. Construction Costs
    1. Contractor material and labor costs
    2. Owner supplied materials
  4. Other Costs
    1. Insurance (property, liability and builders risk)
    2. Utilities (water, gas, electric)
    3. Any other holding costs
  5. Project Management (by Paragon)
Appraised Value

After-repaired-value determined by a licensed appraiser, performed prior to obtaining construction loan.  It is based on the expected value of the property should all proposed repairs be completed.

Equity

Equity here is based on Appraised Value minus Purchase Price and Project Costs