Project Planning for New Model
Home Pre-construction
Rey Ross
GBA 573
July 10, 2003
Project Overview
To increase efficiency in the homebuilding
process and maximize profitability
Assess and reduce risks that can cause
delays before construction begins
Standardize the pre-construction project plan
to establish an accurate means of estimation
for future projects
Revenues/Cost
INDIRECT CONST RUCT ION BUDGET WORKSHEET
PROJECT:
Mandalay
DATE:
NUMBER OF PHASES
DATE PRINTED:
PROJECTED ABSORPTION:
TOTAL NO. OF UNITS
101
INDIRECT CONSTRUCTION BUDGET SUMMARY
NO.
1
2
3
4
5
6
7
8
9
10
11
12
DESCRIPTION
ARCHITECTURAL PLANS
(06-600)
FRONT YARD LANDSCAPE PLANS
(06-601)
INSURANCE PREMIUMS
(06-608)
BOND PREMIUMS
(06-609)
CONSUMER RESEARCH
(06-623)
PLOT PLANS AND SITE PLAN
(06-622)
CONCEPTUAL ARCHITECTURAL DRAWINGS
(06-624)
CC&R'S & LEGAL
(06-628)
DRAFTING AND ENGINEERING
(06-630)
MISC. (Blue Prints , Mes s enger, etc..)
(06-632)
CONSTRUCTION CHANGES
(06-635)
MODEL COMPLEX CONVERSION
(06-640)
GRAND TOTAL BUDGET
TOTAL COST PER PLAN:
TOTAL
BUDGET
$51,000
PERCENT
OF TOTAL
26.53%
Page 2
$9,000
4.68%
Page 2
$0
0.00%
Page 2
$0
0.00%
Page 2
$0
0.00%
Page 2
$22,725
11.82%
Page 2
$30,000
15.61%
Page 2
$11,000
5.72%
Page 2
$16,500
8.58%
Page 2
$12,000
6.24%
$15,000
7.80%
$25,000
13.01%
$192,225
100.00%
REFERENCE
Page 2
$1,903
FINAL COST AT
COMPLETION
$0
Measures of Success
Increased profit as percent of revenue
Increased accuracy in project cost and
schedule estimation
Decreased direct budget due to reduction in
construction defects throughout the process
Decreased indirect budget due to efficient
standardized project plan
Increase in customer satisfaction
Feasibility Analysis
Mandalay (Neighborhood R1) at Lomas Verdes SPA II
Conceptual Floorplan Decision Point (B)
December 13, 2002
I.
II.
III.
THE PROPERTY
A. Project Location:
Lomas Verdes - Chula Vista, California
B. Number of Lots:
101
THE MARKET
A. Market Niche:
Single-family detached 2,700 to 3,600 sq. ft. on 6,000 sq. ft. lots
B. Buyer Profile:
Move-up Buyers with 1 to 4 Children and Empty Nesters
THE PRODUCT
A. Product and Pricing
INITIAL BUSINESS PLAN
DECISION POINT A
Plan
1
2
3
W/Avg.
Sq. Ft.
2,700
3,100
3,400
3,070
Base
Price
$378,990
$405,990
$434,990
$406,931
B. Direct Construction Cost Goals:
Untrended Cost per Sq. Ft.:
C. Indirect Construction Cost Goals:
Cost per Sq. Ft.:
D. Amenity Level:
E. Plotting:
F. Model Cost Goal:
IV.
05/30/02
Price
Sq. Ft.
$140.37
$130.96
$127.94
$132.54
Mix
33
34
34
101
$43.24 (400/500)
$1.82 (600)
B
PAHL and Pre-plot
$701,000
CONCEPTUAL FLOORPLAN
DECISION POINT B
Plan
1
2
3
W/Avg.
Sq. Ft.
2,729
3,180
3,510
3,144
Base
Price
$450,990
$470,990
$500,990
$474,554
B. Direct Construction Cost Goals:
Untrended Cost per Sq. Ft.:
C. Indirect Construction Cost Goals:
Cost per Sq. Ft.:
D. Amenity Level:
E. Plotting:
F. Model Cost Goal:
12/12/02
Price
Sq. Ft.
$165.26
$148.11
$142.73
$150.95
Mix
33
34
34
101
$45.53 (400/500)
$1.78 (600)
B
Pre-plot
$701,000
BUSINESS PLAN
Net Project Profit:
Profit Per Unit:
Profit as Percent of Revenue:
$8,258,000
$81,762
17.7%
Net Project Profit:
Profit Per Unit:
Profit as Percent of Revenue:
$12,727,000
$126,010
23.6%
Risk Management Strategy
REQUEST FOR BUILDERS RISK INSURANCE
TRACT CONSTRUCTION
DEVELOPMENT NAME: Lomas Verdes
CONST. LENDER: ANYBANK
DATE OF START: xx/xx/xxxx
PROJECT NAME: Mandalay
ADDRESS: N/A
SUBMITTED BY: Rey Ross
PHASE: Models
LOAN NO. xxxxxxxxxxxx
PHONE:
xxx-xxxx
SIZE
LIV/GAR
COMPLETED
COST
COMPLETED
COST X 104%
PAGE 1 OF 1
DATE: 7-10-03
LOT NO.
STREET ADDRESS
PLAN /
MODEL NO.
31
1476 Heatherwood Avenue
1
2,717/608 S.F.
$135,850
$141,284
$42,416.00
32
1482 Heatherwood Avenue
2
3,206/677 S.F.
$147,797
$153,708
$41,867.00
33
1488 Heatherwood Avenue
3
3,509/646 S.F.
$160,361
$166,776
$33,374.00
TOTAL
$461,768
UPGRADES /
MODELS ONLY
$117,657
Communication Strategy
Weekly: Project Manager
Bi-weekly: Project Team
Monthly: Executive Committee
Quarterly: Sponsor or Equity Partner
Gantt Chart
Work Breakdown Structure
Plot Plans
Development Review
Model Interiors and Landscaping
Construction Loan
Plan Check & Final Pre-Construction
Conclusion
Focused Team Members
Volatile Market – Risk assumed
Market sets the price
Due diligence



Communication
Market studies
Accurate forecasting