2. BASIC TERMS & CONCEPTS
• FLOOR AREA – FLOOR AREA SHALL MEAN COVERED AREA
OF A BUILDING AT ANY FLOOR LEVEL.
• FLOOR AREA RATIO (F.A.R.) / FLOOR SPACE INDEX (FSI) –
MEANS THE QUOTIENT OF THE RATIO OF THE COMBINED
GROSS FLOOR AREA OF ALL FLOORS TO THE TOTAL AREA
OF THE PLOT.
3. BASIC TERMS & CONCEPTS
• TRANSFERABLE DEVELOPMENT RIGHTS (TDR)- A CERTIFICATE
FOR DEVELOPMENT RIGHTS OFFERED BY MUNICIPAL
CORPORATION TO THE LAND OWNER WHOSE LAND IS
RESERVED FOR PUBLIC UTILITIES LIKE GARDEN, PARKING,
SCHOOL ETC.
• SALEABLE AREA
• READY RECKONER (RR) RATES-
BASIS FOR COLLECTION OF STAMP DUTY ON PROPERTY
PURCHASE (LAND/DEVELOPED PROPERTY; BOTH COMMERCIAL
AND RESIDENTIAL)
RATES DETERMINED ON AN ANNUAL BASIS BY THE STATE
GOVERNMENT
DIFFER FROM LOCALITY TO LOCALITY IN A PARTICULAR CITY.
• SD/REGISTRATION
4. BASIC TERMS & CONCEPTS
• START-UP CAPITAL
• COST OF CAPITAL
• RETURN ON INVESTMENT
• CASH FLOW STATEMENT
• INCOME STATEMENT
• OUT RIGHT (OR) & JOINT VENTURE (JV)
5. TYPES OF REAL ESTATE
DEVELOPMENT DEALS
• JOINT VENTURE (DEVELOPER & LAND OWNER) DEAL
• OUT RIGHT PURCHASE & DEVELOPMENT DEAL
• JOINT DEVELOPMENT DEAL
• REDEVELOPMENT DEAL
• ANGEL INVESTMENT/PRIVATE PLACEMENT
6. DEAL PARAMETERS
• JOINT VENTURE
RATIO: 50:50 TO 65:35 (ON DEVELOPERS FAVOR)
DEPOSIT : 10 TO 15% OF LAND VALUE (REFUNDABLE & NON-
REFUNDABLE)
TDR PURCHASE
TDR CONSTRUCTION COST
• OUT RIGHT PURCHASE & DEVELOPMENT
LAND RATE
PAYMENT TERMS
7. REAL ESTATE CONSTRUCTION
PROFITABILITY VARIABLES
• DEAL CONDITIONS: RATIO, DEPOSIT, TDR (JV); LAND RATE &
PAYMENT TERMS (OR)
• OTHER START UP INVESTMENTS: MARKETING LAUNCH, SAMPLE
FLAT & SITE OFFICE
• LAND SIZE
• SALEABLE AREA
• FSI,
• LAND SIZE & SHAPE,
• ACCESS ROAD,
• MUNICIPAL CORPORATION/TOWN PLANNING (TDR/PAID
PREMIUM/PAID FSI ETC),
• ROAD WIDENING/ACQUISITION
8. REAL ESTATE CONSTRUCTION
PROFITABILITY VARIABLES
• LAND MARKET & RR RATE
• AVERAGE CONSTRUCTION COST
• AVERAGE SELLING RATE
• INFRASTRUCTURE & MSEB CHARGES FOR APARTMENT
• APARTMENT SIZE
• PLAN SANCTIONING COST AND SANCTIONING PHASES
• SD/REGISTRATION CHARGES
• TDR RATE
• UNIT SALE/MONTH & MARKETING STRATEGY
9. SALEABLE AREA QUICK FORMULAS
PUNE MUNICIPAL CORPORATION (PMC)
WITH TDR- 1:2 (TDR-0.55 @ RS 3500/SQFT)
WITHOUT TDR- 1:1.3
TOWN PLANNING (TP)
DEPENDING ON ACCESS ROAD- 1:1.5 TO 1:1.7
PIMPARI CHINCHWAD MUNICIPAL CORPORATION (PCMC)
WITH TDR- 1:1.9 (TDR- 0.4 @ RS 900/SQ.FT)
WITHOUT TDR- 1:1.35
10. PROFITABILITY ON CASH FLOW
& ROI
• PROJECT CASH FLOW
o EXAMPLE- REFER SPREADSHEET
• CASH FLOW VS INCOME STATEMENT METHOD
o EXAMPLE – REFER SPREADSHEET
