Real Estate Investment Project Example

OPTION 1, BANK FINANCE

ESTIMATED ROI 266% (Including resale and marketing costs)
INITIAL INVESTMENT €3.474.378

LAND LOCATED IN L’HIVERNAGE MARRAKECH FOR THE CONSTRUCTION OF A RESIDENCTIAL BLOCK.

QUALITY: HIGH

TARGET MARKET: BUSINESS & RESIDENTIAL

TIMEFRAME: 18 Mnths

PROJECT:                                                                                             -1/0/+5

BUILD SURFACE:                                                                             1267m2

LAND COST:                                                                                      €3,347.920

PURCHASE COSTS:                                                                         €1.072.338

*BUILD COST:                                                                                    €3.801.000

TOTAL PROJECT COST:                                                                 €8.221.259

ESTIMATED RESALE AND MARKETING COSTS                  €1.008.000

BANK FINANCE @ 70% OF PROJECT                                       €(5.754.881)

INTEREST 8%/ANNUM                                                                 €   690.585                                                           

**NET REVENUE:                                                          €19.168.975

GROSS PROFIT:                                                                                €9.249.131

ROI:                                                                                                      266%

OPTION 2, SELF FINANCE

ESTIMATED ROI 119% (Including resale and marketing costs)

LAND LOCATED IN L’HIVERNAGE MARRAKECH FOR THE CONSTRUCTION OF A RESIDENCTIAL BLOCK.

QUALITY: HIGH

TARGET MARKET: BUSINESS & RESIDENTIAL

TIMEFRAME: 18 Mnths

PROJECT:                                                                                             -1/0/+5

BUILD SURFACE:                                                                             1267m2

LAND COST:                                                                                      €3,347.920

PURCHASE COSTS:                                                                         €1.072.338

*BUILD COST:                                                                                    €3.801.000

TOTAL PROJECT COST:                                                                 €8.221.259

ESTIMATED RESALE AND MARKETING COSTS                  €1.008.000

**NET REVENUE:                                                          €19.168.975

GROSS PROFIT:                                                                                €10.947.716

ROI:                                                                                                      119%

*BUILD COSTS:

Agency Fees:                       2.5%

Registration duties:            2.5%

Legal fees:                            1%

Notary and Stamp duty:    1%

Land registry:                      1%

Notary Tax:                          0.5%

Architect Fees:                    3.5%

Engineer Fees:                    1.5%

Project management:        1.5%

TOTAL:                                  15%

**NET REVENUE BASED ON A CONSERVATIVE 15% INCREASE PER ANNUM.

Purchase and sale prices subject to 20% TVA(VAT)

All transactions must be made in convertible Dirhams.

Euro prices are approximate, subject to exchange rate fluctuations.

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