pennsylvania college of technology_2017 rcmc_4year

Pennsylvania College of Technology2017 RCMC Four Year Program 1

Pennsylvania College of Technology2017 RCMC Four Year Program

Presented By:

PD

enn

evelopers

Welcome Home


Table of Contents TCProject Overview

Market Analysis

Competition

Land Development

Product Description

Construction Management

Marketing & Sales Strategy

Financial & Risk Analysis

Bibliography

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Pennsylvania College of Technology2017 RCMC Four Year Program 32017 RCMC Four Year Program

Pennsylvania College of Technology 3

1Project Overview


Robert JacksonSenior Project Manager

Nicholas GiegerChief Estimator

Casey GrimLead Architect

Carlos Rojas Construction Manager

Chad HawkinsSite Manager

Hanna Williams Business Manager

Development Team

Project Overview1


Assumptions

Project Overview1- Penn Developers is a well-established production home builder in the Atlanta area.

- All existing retaining walls are in good structural condition.

- Water and sewer line layouts will meet all required conditions and will be approved by the city.

- Closing costs are a part of the land purchase cost.

- The pool and clubhouse are functional.

- The existing street lighting is functional and in working order.

- The cost of surveying and the creation of a geotechnical report is included in the land purchase price.

- Construction materials will be available and shipped to our new development site.

- All construction fees and permits will remain standard for the duration of the project.

- All waste from demolition and construction will be handled and disposed properly.

- We are able to use existing roads as construction roads and entrances.

- We will be approved for all necessary financial loans for the duration of the project.


Project Overview1Executive Summary

Dear Penn Developers Executives,

The research and development team has located a tract of property, ten miles outside of Atlanta, Georgia. The property is approximately 32 acres in the growing community of North Druid Hills, DeKalb County. The sale price is $45,800,000 and we are closing on February 1, 2017. The property is zoned for single family and multifamily homes. As it stands, there are 51 apartment buildings on the property. After research was completed, the research and development team concluded that demolition of all existing apartment buildings and construction of a combination of single family and multifamily homes will yield maximum profit. We expect at least an 18% internal rate of return on this new development.

The scope of work will include demolition of all 51 existing apartment structures. We will make the necessary changes to the utility and road structures. Penn Developers will construct 31 single family homes and 269 three-story townhomes. We will also make land improvements to green spaces and the existing pool and club house. The research and development team expects gross sales of $120,000,000+. The project is anticipated to take four and half years to be completed.

Penn Developers Research and Development Team is confident that this will be a high profit/low risk project. This proposal breaks down and outlines the steps needed to ensure a successful development.

Sincerely,

Robert JacksonPenn DevelopersSenior Project Manager

PD

enn

evelopers


Pennsylvania College of Technology 7

2Market Analysis


MarketAnalysis2

About Druid HillsDruid Hills was found and developed by Joel Hurt and Asa Candler, the founder of the Coca-Cola Company. The development began in the early 19th century and continued into the first of the 20th century. The neighborhood has continued to be one of Atlanta’s wealthiest neighborhoods while remaining a diverse tight-knit community. Druid Hills is located about 10 miles northeast of downtown Atlanta. Druid Hills has nine local parks, many of which have walking trails and playgrounds.

About Atlanta, GAAtlanta is one of America’s fast growing cities and is a hot spot for the housing industry. A small town that once was a railroad, linked between the south, west and north, has grown into a city with a population growth over five million. Atlanta is comprised of 242 neighborhoods, many of which are historical districts. In 1996, Atlanta hosted the Summer Olympics and is now known for its sports. Atlanta is a diverse, growing city with something to offer to everyone who is looking to call Atlanta a home.

Local Area - Shopping Within Five Miles - Toco Shopping Center (35 stores) - North Dekalb Mall - Several Hardware Stores - Five Grocery Stores- Airports - Atlanta National Airport (20 miles) - Two Municipal Airports

Attractions- Outdoor Recreation Areas - Allatoona Lake - Lake Point Sports Center - Lake Lanier - Clarks Hill Lake - Theatres and Art Museums - Alliance Theatre - Delta Flight Museum - Jimmy Carter Presidential Library - Children’s Museum- Landmarks - World of Coca-Cola Tour - The Georgia Aquarium - Olympic Park - College Football Hall of Fame - Pickett’s Mill Battlefield Historic Site- Events and Nightlife - Five Professional Sports Teams - Opera Nightclub - Uptown Comedy Corner


MarketAnalysis2Top Employers

Atlanta’s employment rate has increased 3.8% in 2016.

Dekalb County- Dekalb County Government- Emory University/Healthcare- Decatur Board of Education- Decatur Hospital

Atlanta, Georgia- Delta Air Lines- Emory University/Healthcare- The Home Depot Headquarters- AT&T Headquarters- Center for Disease Control

EducationPreK - 12- DeKalb Public County Schools System - Student Population = 101,142 - Fernbank Elementary School (Druid Hills) - Druid Hills Middle School - Druid Hills High School

- The Pasideia Private School - Student Population = 975

Higher Education- Emory University - Student Population = 14,513

- Georgia Institute of Technology - Student Population = 25,017

- Georgia State University - Student Population = 32,842

TransportationDruid Hills has many forms of transportation. The Marta Passenger Train stops near Druid Hills. The Gold Line is located nearby Lenox which is about 5 miles west of Druid Hills. The nearby town of Decatur has a passenger train station (blue line) that is about 3.5 miles south. There is also a public bus system that runs from Druid Hills and downtown Atlanta. The nearest bus stop is located at the corner of our development, North Druid Hills and Clairmont.

Druid Hills


MarketAnalysis2Demographics

Dekalb County - Population 734,870- Households 270,809- Families 161,453- Median Household Income $51,349- Median Family Income $60,718

Atlanta, Georgia- Population 5,700,000- Households 224,573- Families 181,681- Median Household Income $47,464- Median Family Income $59,711

North Druid Hills- Population 18,947- Households 9,760- Families 3,790- Median Household Income $48,530- Median Family Income $67,956

37%53%

3% 7%

34% 56%

5% 5%

82%

7% 7%4%

African American White Asian Other




MarketAnalysis2Housing Growth

According to the Building Permit statistics, provided by the National Association of Home Builders, as of July 31, 2016, there were 439.4 million permits for single family homes and 242.3 million permits for multifamily homes issued nationwide. The south has 239.08M for single family homes and 102.68M building permits for multifamily as of July 31, 2016. The area of Atlanta, Sandy Springs, and Marietta, Georgia has issued 15,992 single family building permits, 9,199 multifamily, and a total of 25,191 building permits as of August 2016.

Building Permits Across the Country

Building

Multi-FamilySingle Family

50%

16%

9%

25%

West

North East

Mid West

South54%

24%

15%

7%

42%

28%

13%

17%


MarketAnalysis2Target Market

Young Professionals: Age (25 - 35)

- Home Office- High Tech Homes- Located Near Facilities or Parks

- Arts and Entertainment Nearby- Modern Kitchen & Master Suites- Outdoor Fitness Area- Public Transportation

Needs In A Home Wants In A Home- May or May Not Have Children - Career Focused - Minimal Commute - Enjoys Home Entertaining - Work Carries Over to Home - Nearby Shops and Restaurants

Characteristics

Young Families: Age (30 - 50)

- Married with 1-3 children - Focused on well-being of children - Prefers to work from home - Works mid-day when children are at schools. - Quality School District

Characteristics

- Home Office- Safe Streets- Nearby Parks or Playgrounds

Needs In A Home- Green Space- Energy Efficiency- Short Commute- Pet Friendly

Wants In A Home

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

- Proximity to Downtown Atlanta- Growing Neighborhood- Community Diversity

- North Druid Hills & Atlanta is a Growing Area- Many Top Employers in Atlanta

- Initial Investment of $45,800,000 - Large cost before construction- New Home Buyers - North Druid Hills & Northern Atlanta area are very diverse. Our development relies on two target markets. - Re-development - Demolition & Utility Work

- Surrounding Developments - The Meadows at Druid Hills selling price ≥ surrounding developments- Natural Disasters - Earthquakes & Hurricanes


Pennsylvania College of Technology13

3Competition


Competition3D.R. Horton Inc.

Avg. Bedrooms Avg. Bathrooms Avg. Garage Square Footage Sales Price

4 3.5 2 2,000 $200,000

Home Design

and up

The BuildD.R. Horton stays true to their word by providing warranty plans for all newly built homes.

Marketing & SalesD.R. Horton has been the #1 builder since 2002. They are able to achieve this high stantard through effective marketing, advertising, and quality construction. D.R. Horton uses their well-developed website to attract homebuyers. Information sessions are another great tool they use to promote their nation-wide company. Most importantly, D.R. Horton takes annual income into consideration. They build several different divisions of homes; each designed and priced competively so everyone is able to afford a new home.

and up

Based on annual closings and gross revenue, D.R. Horton has been the #1 homebuilder in the United States since 2002. D.R. Horton was founded in 1978 to create livable and affordable homes that are high in energy efficiency and quality.

Why Are They A Competitor? - #1 Homebuilder Since 2002

- Delivered More Than 560,000 Homes to Homebuyers

- Delivered More Homes Than Any Other Homebuilder

- High Quality Materials & Craftsmanship


Competition3PulteGroup, Inc.


4 3 2 2,000 $200,000

Home Design

and upand up

The BuildPulteGroup focuses on constructing their homes with high quality materials. PulteGroup strives to make home buyers feel safe and secure in their new homes, by offering four different warranty plans. Warranties include: - 1 YR: Workmanship & Materials - 2 YR: Utilities - 5 YR: Water Infiltration - 10 YR: Structural Needs

Marketing & SalesPulteGroup is another top builder in the United States. They are known for their name as they promote their business through brochures and their PulteGroup/PulteHomes website. To attract their target markets, they host information sessions all across the nation.

With 65 years in the homebuilding industry, PulteGroup is known for high quality homes, energy efficient features, and high brand materials. Being ranked as the #2 homebuilder in the United States, PulteGroup is building in 24 states across the nation.

Why Are They A Competitor? - 2nd Largest Homebuilder in the US

- Building All Across the Nation

- High Level of Craftsmanship


Competition3CalAtlantic Group, Inc.Ryland and Standard Pacific merged together to create CalAtlantic. They have nearly 100 years of combined homebuilding experience. They are the 4th largest homebuilder in the nation, operating in 41 major markets in 17 states across the US.

Why Are They A Competitor? - 4th Largest Homebuilder in the Nation

- High Energy Efficient Homes

- 2016 Builder of the Year

- High Quality with Designer Knowledge


4 3.5 2 2,000 $300,000

Home Design

and upand up

The BuildCalAtlantic Group uses warranty plans to guarantee a safe, sustainable home for their customers. They are also known to use local suppliers to help out with the planning and construction of their homes including, designers, engineers, carpenters, etc.

Marketing & SalesCalAtlantic Group stays committed to their homebuyers every step of they way. CalAtlantic uses brochures to attract their target market;advertising all over the United States. They also use their highly developed website for future homebuyers to gather information about the business. Once construction begins, CalAtlantic builders stay in touch with their customers, letting them know the status of their home.


Competition3Ashton Woods HomesThe first Ashton Woods home was built in 1989. They are recognized as the nation’s 4th

largest private builder. Ashton Woods builds high quality homes in primary locations. They are currently building in southeast Texas and Arizona.

Why Are They A Competitor? - Build High Quality Homes

- 4th Largest Private Builder in the US

- Ranked Among Top 3 Most Trusted Builders in America

- 95% of Their Homebuyers Would Recommend Them to Others

Home Design

The Build


4 2.5-3.5 2 3,000 $300,000and upand up

Ashton Woods is ranked one of the top three for Most Trusted Builder in America. Ashton Woods Homes is also known for energy effciency. Many homes are built with fresh air ventilation, interior moisture management, and “right sized” HVAC equipment. With this advocacy, they want to be a name you can trust by offering customers various warranty plans. The offered warranty plans are as follows: - 1 YR: Workmanship & Materials - 2 YR: Delivery Portion of Utilities - 10 YR: Major Structural Components

Marketing & SalesAshton Woods advertises through informational brochures and their well-designed website. They attract their target market through their high quality construction of homes. Future homebuyers also love to buy from Ashton Woods because the designers take the time to sit down with them and create the home of a lifetime.



4Land Development


LandDevelopment4Phasing Map

2/1/2017 - 6/30/2017Phases 1 & 2 Phases 3 & 4

3/1/2018 - 6/30/2018

Phase 54/1/2020 - 8/8/2020

Final Land Upgrades8/1/2021- 8/20/2021


LandDevelopment4Site Costs

Utilities Cost/Unit Unit Amount Total Phase 1 Phase 3 Phase 5Water Main 6" 10.00$ LF 12000 120,000.00$ $64,800.00 $38,400.00 $16,800.00Water Connection 3/4" 3.00$ LF 6000 18,000.00$ $9,720.00 $5,760.00 $2,520.00Electric Line 5.00$ LF 9000 45,000.00$ $24,300.00 $14,400.00 $6,300.00Electric Connection 1,000.00$ Lot 300 300,000.00$ $162,000.00 $96,000.00 $42,000.00Sewer Main 8" 12.00$ LF 9000 108,000.00$ $58,320.00 $34,560.00 $15,120.00Sewer Connection 4" 4.00$ LF 8000 32,000.00$ $17,280.00 $10,240.00 $4,480.00Manhole 6,000.00$ Each 30 180,000.00$ $97,200.00 $57,600.00 $25,200.00Stormwater12" cmp 15.00$ LF 14000 210,000.00$ $113,400.00 $67,200.00 $29,400.0036" cmp 40.00$ LF 31 1,240.00$ $669.60 $396.80 $173.60Detention Outfall 7,000.00$ Each 4 28,000.00$ $15,120.00 $8,960.00 $3,920.00Stormwater Inlet 5,000.00$ Each 30 150,000.00$ $81,000.00 $48,000.00 $21,000.00Site developmentAsphalt Road & Curbing 9.00$ SF 200000 1,800,000.00$ $972,000.00 $576,000.00 $252,000.00Sidewalk 4.25$ SF 70000 297,500.00$ $160,650.00 $95,200.00 $41,650.00Grading 2,000.00$ Lot 300 600,000.00$ $324,000.00 $192,000.00 $84,000.00Geotextile 1.00$ SF 62000 62,000.00$ $33,480.00 $19,840.00 $8,680.00Foundation 125.00$ CY 8000 1,000,000.00$ $540,000.00 $320,000.00 $140,000.00Excavation 40.00$ CY 44000 1,760,000.00$ $950,400.00 $563,200.00 $246,400.00Structural Fill 40.00$ CF 50000 2,000,000.00$ $1,080,000.00 $640,000.00 $280,000.00Signs 75.00$ Each 40 3,000.00$ $1,620.00 $960.00 $420.00Landscaping 3,000.00$ Lot 300 900,000.00$ $486,000.00 $288,000.00 $126,000.00Driveway 4.25$ SF 75000 318,750.00$ $172,125.00 $102,000.00 $44,625.00Permits 900,000.00$ LS 1 900,000.00$ $486,000.00 $288,000.00 $126,000.00Mobilization 200,000.00$ LS 1 200,000.00$ $108,000.00 $64,000.00 $28,000.00E&S $0.00 $0.00 $0.00Compost Filter Sock 3.00$ LF 40000 120,000.00$ $64,800.00 $38,400.00 $16,800.00Construction Entrance 3,000.00$ Each 6 18,000.00$ $9,720.00 $5,760.00 $2,520.00

Total 11,171,490.00$ $6,032,604.60 $3,574,876.80 $1,564,008.60Avg./Lot 37,238.30$

Site Development: Site Costs


LandDevelopment4Permit Fees

Permit Fees Cost TotalWater and Sewer Access Fee Schedule $1,811.93/house 541,767.07$ Site Plan Review $100 Flat Rate 100.00$ Engineering (more than 2 Acres)Review $400+$15/Lot 4,885.00$ Inspection $400 + $100/acre 3,600.00$ Erosion Control (more than 2 Acres)Inspection $300 Flat Rate 300.00$ Review $200 base + $50/acre 1,800.00$ Clearing & Grubbing Permit

$300 Flat Rate 300.00$ $50/Acre, Min $100 1,600.00$

Grading Permit$300 Flat Rate 300.00$ $50/Acre, Min $100 1,600.00$

Certificate of Occupancy Fee$50/Lot 14,950.00$

Building PermitTownhouse 198,936.66$ Single Family 56,761.82$

Total 826,900.55$

Permit Fees


LandDevelopment4Erosion & Sedimentation Control

Erosion and sedimentation will be controlled using permanent and temporary (as necessary) seeding and mulching of all disturbed areas in conjunction with construction entrances, filter fabric fencing, and compost filter socks. The permanent detention basins will be modified during construction using a corrugated metal pipe riser on the outlet structure to contain sediment.

Bag Used For Modified Outlet Structure

Earthwork

Soil Conditions

Site GradingThe anticipated cut and fills will be on the order of 5 to 10 feet for final finished grading to achieve the planned first floor elevations. Little rough grading is anticipated due to the site being previously developed. Topsoil that is removed during rough or final grading will be screened and replaced. The grades of the road and the final grade will be approximately 4% with an approximate cross slope of 2% to aid in the management of storm water runoff.

According to the geotechnical report, the typical subsurface soil is located within the site boundary. It consists of relatively clean, moderately loose to moderately compacted fills, where fills have been tested. Firm residual soils of the Piedmont are shown, except in the thirteen boring locations noted in the report. Any exposed subgrade will be evaluated by a Geotechnical Engi-neer prior to any construction or filling. Areas identified that contain soft/loose existing fill soils will be reinforced with Tensar TX-140 geogrid. Any areas that require fill will be filled with compacted structural fill. The proposed structures will be supported by conventional shallow spread foundations as recommended.


LandDevelopment4Storm Water Management

Existing DrainageIn its existing condition, the runoff from the site exits directly into the water ways surrounding and flowing through the property. The site map indicates the existence of no detention ponds.

Proposed DrainageStorm water inlets will be located on each side of every proposed roadway at regular intervals and between townhouses that have rear yards against one another. The grading on site is designed to allow water to naturally permeate the soil. Dry-detention ponds are planned for the site to handle the difference between the pre-development conditions of the woods, with soil of the B-hydrologic group and the calculated post development condition. The ponds are located at the lowest elevations in each tract to work with the natural lay of the land. The size of the retention ponds are designed to handle the volume of runoff that is generated by a 100 year storm event for the region while keeping the water elevation below three feet. The volume has been calculated utilizing the Soil Conservation Service (SCS) hydrologic method. The approximate runoff difference between the pre and post development conditions is calculated to be approximately 1.4 million gallons. The outfalls of the detention ponds are designed to release runoff at a rate not exceeding the pre-developed condition. BMP’s such as grass channels and reforestation/revegetation will be employed in the many areas that are open/park spaces and are accounted for in the pricing of landscaping grading. The total volume of runoff calculated is not reduced by BMP’s in order to remain conservative. Due to there being no proper management of the storm water prior to our development, the quality of the surrounding water ways will be greatly improved. In the below image, the detention ponds are located in blue.


LandDevelopment4Tree Inventory

Minimizing tree removal, is a priority during our development of the site plan. Twenty trees any larger than 14 inches in diameter have been selected for removal without excess disruption of the existing site conditions and without accruing significant cost. Every tree that has been marked for removal will be replaced by two smaller trees in one of the designated green spaces. There are an additional nine smaller trees that pose an issue for construction. These trees have been designated to be moved with a tree spade of an estimated cost; $200 per tree. In the picture to the right, the green spaces are located in green.

LandscapingThe hardiness zone for DeKalb County is located in zone 7b and 8a. The site is slated to be landscaped with trees and shrubbery native to the area.

Native Tree and Shrub Species

Large & Medium TreesRed Maple / Acer RubrumSugar Maple / Acer Saccharum


LandDevelopment4Large & Medium Trees

River Birch / Betula Nigra

Sugarberry / Celtis Laevigata

Black Walnut / Juglans Nigra


LandDevelopment4Small Trees

Flowering Dogwood / Cornus Florida

Mayhaw / Crataegus Aestivalis

Sassafras / Sassafras Albidum

Bigleaf Snowbell / Styrax Grandifolius


LandDevelopment4Shrubs

Georgia Basil / Clinopodium Georgianum (Syn. Satureja Georgiana)

Littlehip Hawthorn / Crataegus Spathulata

Yellow Anise-Tree / Illicium Parviflorum

Drooping Leucothoe / Leucothoe Fontanesiana



5Product Description


Product Description5Single Family Homes

The Whitaker Home consists of 3 bedrooms, 3 full baths, and a 2 car garage with a total of 2,267 square feet. The exterior of the home is light brick with stucco applied around the gable ends. This style gives a calming natural feel to the scenery with an open concept in the living room and exterior views from all rooms of the house.

Whitaker Home



Hillsborough HomeHillsborough is a 2,275 square foot home with a brick façade on the front of the home and siding continuing on the sides. The Hillsborough exterior pursues a more rustic look than the Whitaker Home. The home consists of 4 bedrooms, 3 full baths, a 2 car garage, and an optional bonus room.



Adamsville HomeThe Adamsville Home is our smallest home, with a total of 2,115 square feet. The Adamsville consists of 4 bedrooms, 3 full baths, a 2 car garage and an optional bonus room. The feel of the Adamsville gives a more classic look to the exterior with standard brick on the front façade along with siding.


Product Description5Single Family Home Estimates

Phases WHITAKER HILLSBOROUGH ADAMSVILLEThe Meadows at Druid Hills SINGLE SINGLE SINGLE

SQUARE FOOTAGE 2267 2275 2115MASONRY

CONCRETE FLAT WORK FIRST FLOOR 8,200.00$ 8,200.00$ 8,100.00$ COST OF CONSTRUCTION 8,200.00$ 8,200.00$ 8,100.00$

FRAMINGEXTERIOR WALLS FIRST FLOOR 5,850.00$ 5,850.00$ 5,800.00$ INTERIOR WALLS FIRST FLOOR 1,450.00$ 1,350.00$ 1,400.00$ FLOOR SYSTEM SECOND FLOOR 3,500.00$ 3,500.00$ 3,400.00$ EXTERIOR WALLS SECOND FLOOR 5,850.00$ 5,850.00$ 5,800.00$ INTERIOR WALLS SECOND FLOOR 1,150.00$ 1,250.00$ 1,400.00$ FLOOR FRAMING THIRD FLOOREXTERIOR WALLS THIRD FLOORINTERIOR WALLS THIRD FLOORTRUSS PACKAGE 11,000.00$ 11,000.00$ 11,000.00$

COST OF CONSTRUCTION 28,800.00$ 28,800.00$ 28,800.00$ EXTERIOR FINISHES

ROOFING 8,850.00$ 8,900.00$ 8,850.00$ SIDING

STONE VENEERBRICK VENEER 4,000.00$ 6,800.00$ 3,900.00$ FIBER CEMENT 12,500.00$ 9,500.00$ 12,500.00$

COST OF CONSTRUCTION 25,350.00$ 25,200.00$ 25,250.00$ DOOR & WINDOWS

EXTERIOR DOOR 1,150.00$ 1,150.00$ 1,150.00$ INTERIOR DOOR 975.00$ 975.00$ 975.00$ GARAGE DOOR 765.00$ 765.00$ 765.00$ WINDOWS 4,225.00$ 4,225.00$ 4,225.00$

COST OF CONSTRUCTION 7,115.00$ 7,115.00$ 7,115.00$ INTERIOR FINISHES

INSULATION 2,200.00$ 2,200.00$ 2,200.00$ SHEET ROCK 6,950.00$ 6,950.00$ 6,950.00$

FLOORINGTILE 3,600.00$ 3,750.00$ 3,750.00$ HARDWOOD 12,100.00$ 12,100.00$ 12,100.00$ TRIM 5,300.00$ 5,300.00$ 5,300.00$ PAINT 3,200.00$ 3,200.00$ 3,200.00$

COST OF CONSTRUCTION 33,350.00$ 33,500.00$ 33,500.00$ APPLIANCES

FRIDGE 1,200.00$ 1,200.00$ 1,200.00$ RANGE 1,000.00$ 1,000.00$ 1,000.00$ WASHER & DRYER 950.00$ 950.00$ 950.00$

COST OF CONSTRUCTION 3,150.00$ 3,150.00$ 3,150.00$ MECHANICALS

ELECTRICAL 7,100.00$ 7,100.00$ 7,100.00$ PLUMBING 14,500.00$ 14,500.00$ 14,500.00$ HVAC 10,500.00$ 10,500.00$ 10,500.00$

COST OF CONSTRUCTION 32,100.00$ 32,100.00$ 32,100.00$ LANDSCAPING

DRIVEWAY 1,100.00$ 1,100.00$ 1,100.00$ LAND IMPROVEMENT 6,000.00$ 6,000.00$ 6,000.00$

COST OF CONSTRUCTION 7,100.00$ 7,100.00$ 7,100.00$

TOTAL COST OF CONSTRUCTION 145,165.00$ 145,165.00$ 145,115.00$


Product Description5Single Family Home Estimates

$8,200.00

$28,800.00

$25,350.00

$7,115.00

$33,350.00$3,150.00

$32,100.00

$7,100.00Whitaker Home

Hillsborough Home$8,200.00

$28,800.00

$25,200.00

$7,115.00

$33,500.00$3,150.00

$32,100.00

$7,100.00

Adamsville Home$8,100.00

$28,800.00

$25,250.00

$7,115.00

$33,500.00$3,150.00

$32,100.00

$7,100.00

Masonry

Framing

Exterior Finishes

Doors & Windows

Interior Finishes

Appliances

Mechanicals

Landscaping


Product Description5Single Family Home Schedules

The Meadows at Druid Hills

MASONRY 1 2 3 4 5 6 7 DAYS ON SITECONCRETE FLAT WORK FIRST FLOOR 3

FRAMINGEXTERIOR WALLS FIRST FLOOR 5INTERIOR WALLS FIRST FLOOR 2FLOOR SYSTEM SECOND FLOOR 2EXTERIOR WALLS SECOND FLOOR 6INTERIOR WALLS SECOND FLOOR 2TRUSS PACKAGE 1

EXTERIOR FINISHESROOFING 2

SIDINGBRICK VENEER 5FIBER CEMENT 2

DOOR & WINDOWS 4MECHANICALS

ELECTRICAL 5PLUMBING 5HVAC 3

INTERIOR FINISHESINSULATION 2SHEET ROCK 7

FLOORINGTILE 3HARDWOOD 3TRIM 3PAINT 3

APPLIANCES 1LANDSCAPING

DRIVEWAY 1LAND 2

72

ScheduleWHITAKER

TOTAL DAYS ON SITE

Whitaker Home












DRIVEWAY 1LAND 2

74

ScheduleHILLSBOROUGH

TOTAL DAYS ON SITE


Hillsborough Home












DRIVEWAY 1LAND 2

70

ScheduleADAMSVILLE

TOTAL DAYS ON SITE


Adamsville Home


Product Description5Townhomes

Exterior Style

Our townhomes consist of 2,469 square feet. We have two types of layouts for our townhomes, Wedgewood and Hazelton.

Interior StyleAs the exterior of our townhomes are simple and modern, our interior embodies luxury; withholding high quality flooring, cabinets, and fixtures.


Product Description5Townhomes

Wedgewood HomeOur Wedgewood Home consists of a 2 car garage and a bedroom or flex space on the lower level. It also has an open and spacious second level consisting of the dining, kitchen, and living. The third floor is comprised of 2 bedrooms, 2 full baths, and a laundry room.

Hazelton HomeThe Hazelton Home is similar in size to our Wedgewood Home, consisting of a 2 car garage. This home consists of 3 bedrooms, 3 ½ baths, as well as an entertainment room on the lower level.


Product Description5Townhome Estimates

Phases WEDGEWOOD HAZELTONThe Meadows at Druid Hills TOWNHOME TOWNHOME

SQUARE FOOTAGE 2469 2469MASONRY

CONCRETE FLAT WORK FIRST FLOOR 4,350.00$ 4,350.00$ COST OF CONSTRUCTION 4,350.00$ 4,350.00$

FRAMINGEXTERIOR WALLS FIRST FLOOR 3,550.00$ 3,550.00$ INTERIOR WALLS FIRST FLOOR 940.00$ 940.00$ FLOOR SYSTEM SECOND FLOOR 1,500.00$ 1,500.00$ EXTERIOR WALLS SECOND FLOOR 3,550.00$ 3,550.00$ INTERIOR WALLS SECOND FLOOR 940.00$ 940.00$ FLOOR FRAMING THIRD FLOOR 1,500.00$ 1,500.00$ EXTERIOR WALLS THIRD FLOOR 3,550.00$ 3,550.00$ INTERIOR WALLS THIRD FLOOR 940.00$ 940.00$ TRUSS PACKAGE 5,550.00$ 5,550.00$

COST OF CONSTRUCTION 22,020.00$ 22,020.00$ EXTERIOR FINISHES

ROOFING 4,200.00$ 4,200.00$ SIDING

STONE VENEER 4,000.00$ BRICK VENEER 3,900.00$ FIBER CEMENT 6,000.00$ 6,000.00$

COST OF CONSTRUCTION 14,200.00$ 14,100.00$ DOOR & WINDOWS

EXTERIOR DOOR 1,150.00$ 1,150.00$ INTERIOR DOOR 650.00$ 650.00$ GARAGE DOOR 765.00$ 765.00$ WINDOWS 3,250.00$ 3,250.00$

COST OF CONSTRUCTION 5,815.00$ 5,815.00$ INTERIOR FINISHES

INSULATION 2,850.00$ 2,850.00$ SHEET ROCK 7,950.00$ 7,950.00$

FLOORINGTILE 4,250.00$ 4,250.00$ HARDWOOD 11,100.00$ 11,100.00$ TRIM 5,800.00$ 5,800.00$ PAINT 3,600.00$ 3,600.00$

COST OF CONSTRUCTION 35,550.00$ 35,550.00$ APPLIANCES

FRIDGE 1,200.00$ 1,200.00$ RANGE 1,000.00$ 1,000.00$ WASHER & DRYER 950.00$ 950.00$

COST OF CONSTRUCTION 3,150.00$ 3,150.00$ MECHANICALS

ELECTRICAL 6,600.00$ 6,600.00$ PLUMBING 16,000.00$ 16,000.00$ HVAC 11,050.00$ 11,050.00$

COST OF CONSTRUCTION 33,650.00$ 33,650.00$ LANDSCAPING

DRIVEWAY 1,100.00$ 1,100.00$ LAND IMPROVEMENT 8,500.00$ 8,500.00$

COST OF CONSTRUCTION 9,600.00$ 9,600.00$

TOTAL COST OF CONSTRUCTION 128,335.00$ 128,235.00$


Product Description5Townhome Estimates

Masonry

Framing

Exterior Finishes

Doors & Windows

Interior Finishes

Appliances

Mechanicals

Landscaping

$4,350.00

$22,020.00

$14,200.00

$5,815.00$35,550.00$3,150.00

$33,650.00

$9,600.00

Wedgewood Home

$4,350.00

$22,020.00

$14,100.00

$5,815.00$35,550.00$3,150.00

$33,650.00

$9,600.00

Hazelton Home


Product Description5Townhome Schedules

Wedgewood Home




EXTERIOR FINISHROOFING 2


DOOR & WINDOWS 4MACHENICALS





DRIVEWAY 1LAND 2

68

ScheduleWEDGEWOOD

TOTAL DAYS ON SITE


Product Description5Townhome Schedules

Hazelton Home




EXTERIOR FINISHROOFING 2


DOOR & WINDOWS 4MACHENICALS





DRIVEWAY 1LAND 2

68

ScheduleHAZELTON

TOTAL DAYS ON SITE


Product Description5Building Methods

Standards

- Foundation: Slab on Grade

- Framing: Conventional Lumber Framing, TJI Floor Joists, & Engineered Trusses

- High Insulation R-Value (Fiberglass)

- Hardwood and Tile Flooring

- Granite Countertops

- Wolf Appliances

- Stainless Steel Kitchen Appliances

- Low Flow Fixtures

- Low-E Windows

- Two Tone Paint

Upgrade Package

Upgrade Package Additional PricesLevel 2 Granite Countertops

Level 2 Tile Flooring

Higher R-Value Insulation

Covered Patio

Hardwood Flooring & Trim

Smart Home Set-Up

$3,200

$1,900

$6,000

$8,500

$5,800

$2,260


Product Description5Green Building

Penn Developers Green Building Strategy is based from the ICC 700 National Green Building Standard (NGBS). We strive to design homes that are not only atheistically pleasing but also energy efficient. We want our customers to enjoy indoor air quality, energy efficient appliances, sustainable lot design, and new acquired knowledge.

Lot Design, Preparation, & Development Resource Efficiency

During the design and construction process, we strive to minimize our impact

on the environment. We do this by purchasing bulk materials when they are needed. Purchasing these materials this

way helps to minimize the waste that could be generated.

Energy Efficiency

Improvements will be made to the entire building envelope. HVAC systems,

appliances, lighting and performance windows will increase in quality as well as

energy efficiency.

Indoor Environmental Quality

Water Efficiency

Water Efficient appliances will be installed in the homes. Theses appliances

include, a dishwasher, a washing machine, showerheads, faucets, and

water closets.

Homeowner Education

Homeowners will be receive a thorough education using manuals, operating guides, and our own green building

specialists.

The indoor air quality of the home will consider many improvments including,

HVAC equipment, low-allergen materials, and products with minimum off-gassing and/or low volatile organic compounds.

Our construction site consists of both residential and multifamily homes. As a

company, we strive to preserve the environment. During construction, we will

maintain the existing trees as well as establish a sustainable lot design while

planning for prepartion and development.


Product Description5Why Green Building Matters

Green Building is important to the housing industry and homeowners across the world. It not only helps the consumers but it helps the environment too. For consumers, it lowers total ownership costs through the increase of durability, utility savings, and the overall environment of the home. It also improves the environment by creating an increase of awareness for important resources that will be preserved for the future.

Benefits of Green Building

Environmental Benefits- Reduce Wastage of Water

- Conserve Natural Resources

- Improve Air and Water Quality

- Protect Biodiversity and Ecosystems

Economic Benefits- Reduce Operating Costs

- Improve Occupant Productivity

- Create Market for Green Product and Services

Social Benefits- Improve Quality of Life

- Minimize Strain on Local Infrastructure

- Improve Occupant Health and Comfort


Product Description5Building Envelope

The Building Thermal Envelope UA is less than or equal to the total UA resulting from the U-factors. DeKalb County, Georgia is rated a Climate Zone 3. The U-factor requirements are listed below.

Table 703.2.1(a)Equivalent U-Factors

Climate Zone

FenestrationU-Factor

SkylightU-Factor

CeilingU-Factor

FrameWall

U-Factor

Mass Wall

U-Factor

FloorU-Factor

Basement Wall

U-Factor

Crawlspace Wall

U-Factor

3

0.350.55

0.030

0.060

0.098

0.047

0.091

0.136

Table 703.2.5.1Fenestration Specifications

Climate Zones

U-Factor SHGC

Windows & Exterior Doors(Maximum Certified Ratings)

3 0.35 0.25

Climate Zone 3, Mixed-Humid

Radon Zone, Zone 1, High PotentialTermite Zone, Heavy


Product Description5Architect Appreciation

Shapiro & Company Architects, Inc.

Frank Betz Associates, Inc.Frank Betz Associates, Inc. has been specializing in custom and stock home plans since 1976. Located in Kennesaw, Georgia, Frank Betz Associates, Inc. has established an incomparable reputation as one of the leading provider of home plans. Their team of design experts have more than 100 years of experience combined. Their main goal is create plans for a home that is always set to its highest standards in residential design. They have been awarded the American Institute of Building Design, Grand ARDA Award for Best Model Home, Dream Home Source Best Selling Designer, and Builders Magazine Designer of the Year four times in a row. Being one of the nation’s leading designers of custom and predesigned house plans, their company is the perfect blend of liability and trend-setting design.

Shapiro & Company Architects, Inc. specializes in residential architecture that captures and enhances the vision, goals, and aspirations of every customer. Their main offices are located in Memphis and Nashville, Tennessee. Shapiro & Company’s team consists of architects, designers, and associates that are provided with a range of professional services. The firm serves with custom residential, multifamily and traditional neighborhood developments. Shapiro & Company Architects, Inc. have been given five stars from several sources of reviews. The firm focuses on details and the design, making sure that customers are satisfied with their home.



6Construction Management


ConstructionManagement6

Management Structure

Penn ConstructionPenn Construction is responsible for all townhome and single family home construction. At Penn Construction, our mission is to build the best quality homes that attract and satisfy everything the client is looking for. Our company, which is a subsidiary of Penn Developers, achieves our goal by producing high quality homes with durable materials, high quality appliances, and dedication that is set to produce a strong community.

Senior Project ManagerResponsible for overseeing the entire jobsite and in charge of the whole construction team. As the Senior Project Manager, he/she will divide their time between all of the jobsites that are active, ensure all finances are in order, and take care of subcontractor acquisition.

Project ManagerResponsible for his/her assigned divisions, consisting of mixed-use or residential development sites. The Project Manager will report to the Senior Project Manager on a daily and/or weekly basis. While the Project Managers are on the jobsites, they will be responsible for keeping track of costs including, budgets. They will make sure that the schedules are accomplished on time, while also managing the the jobsite.

SuperintendentsResponsible for overseeing the fieldwork on the jobsite. They will be in the field on a daily basis, ensuring the accuracy of site drawings (blue-prints). They will also ensure that the best quality is being put forward while answering any questions that the subcontractors might have.

Assistant SuperintendentsResponsible for answering to the Superintendent. He/she will be helping the Superintendents with daily responsibilities; making sure everyone is on schedule, reporting any issues that may occur and completing the daily work log that will be handed to the Project Manager at the end of the day.


ConstructionManagement6Warranty Plan

At Penn Developers, we take care of our customers and take pride in the homes that we build. We offer an outstanding warranty service that customers can add to their home.

Penn Developers Limited Warranty Plans

1-YRCoverage

10-YRCoverage

Our policy responds to all claims within 48 business hours.

Structural Warranty Covers the

structural needs of the home.

Workmanship & MaterialsConstruction defects are

resolved with Service Requests


ConstructionManagement6Safety Plan

Penn Developers holds safety precautions to the highest of standards. Injuries commonly occur on construction sites because of dangerous equipment and incompliance with proper procedures. Accidental injuries on a construction job site put the company at risk for being the subject of a lawsuit. To prevent any lawsuits and keeping our employees safe, we have developed a safety plan. Penn Developers safety plan consists of the following:

- All Superintendents and Assistant Superintendents will be OSHA-30 certified.

- Mandatory Safety meetings, known as “Tool Box Talks,” will be held once a week at the discretion of the Superintendents. The meetings will consist of all jobsite employees and subcontractors. We will discuss safety topics/procedures to ensure that employees are educated and up-to-date on current jobsite safety standards.

- Penn Developers will keep a record of serious work related injuries and illnesses to remain compliant with OSHA’s employer safety standards. Minor injuries that only require first aid, will be addressed by the Superintendent.

- A first aid kit will be available in the construction office along with a complete SDS portfolio that will be updated by the Assistant Superintendent for the duration of the project.

- Daily site inspections will be conducted by the Superintendents to ensure that we are in compliance with all of OSHA’s requirements, and immediate action will be taken to remedy any safety hazards. - All jobsite employees and subcontractors will be required to wear proper personal protective equipment (PPE) at all times.


ConstructionManagement6Work Log

In order to keep Penn Developers organized and moving forward, we will be using a construction management software called ProCore. Each employee will have a personal log-in to access their schedules, construction documents and digital time cards. Subcontractors hired out by Penn Developers will also have a log-in to access their schedules and time cards. Some advantages to ProCore is that we can track the progress of a job individually or as a whole. This will allow us to make improvements to our schedule as well as increase performance. ProCore works with Android, Windows and Apple platforms. It can be accessed with mobile phones or through a desktop computer.

Project Use

- Daily Log In

- Inspection Reports

- Punch List

- Schedules

- Photo Recording

- Change Orders

Management Use

- Bidding - Contracts

- Timecards

- Submittals


ConstructionManagement6Quality Assurance

Precision/AccuracyPenn Developers establishes rules for the quality of work that is pursued. Every Project Manager and subcontractor is trained to understand what type of workmanship is acceptable and unacceptable. Our company tolerances are set at high standards. The tolerances start from the foundation and go all the way to the roof. If something does not go above and beyond the codes/rules, our company will not accept it. We will continue to build upon our standards and make sure everything is done completely and effectively.

WarrantyAll work will be completed with the material warranty specifications. Likewise, all warranty materials that are purchased by a subcontractor are handed to the jobsite supervisor. At the conclusion of a house, all warranty information will be organized in a binder and given to the new homeowner.

As a company, we think it is important that our homebuyer’s complete maintenance checks throughout their home. Promoting this, we provide home care guides and seasonal maintenance checklists on our website for homebuyers to print out and complete. These checklists allow the customers to relay information back to our company to see if any of the issues are covered by our material/quality warranties. Our customer service benefits our customers with quick service action, commitment, and strong long-lasting relationships.


ConstructionManagement6Quality Control

Before ConstructionA meeting with the Project Manager and the customer/homebuyer will take place in orientation form. The ProjectManager will explain to the customer what to expect and what processes will occur as their house is under construction. Customers can expect a weekly phone call in regard to the progress or updates on their future home. This gives customers a chance to ask any questions they may have regarding the progress, etc.

During ConstructionDuring orientation, the homebuyers will be made aware of construction check points that they will need to be a part of. Homebuyers will need to check-in during pre-drywall. This ensures that they can see where all electrical fixtures are placed. A week before closing, the homebuyers will have to check-in again and complete a conformation home walkthrough. This allows the customer to point out anything that needs to be corrected or touched up.

After ConstructionA final meeting will take place between the Project Manager and the new homeowners. The homeowners will receive their new house keys and the Project Manager will inform them everything that they can expect in their new home. This includes: appliance warranty information, paint information, and a reminder about receiving a phone call in the up-coming months about how they are enjoying their new home.


ConstructionManagement6Material Purchasing

We understand the risk involved with purchasing material. To eliminate the risk, the only materials that will be pre-purchased will be bulk items used in every home. This ensures that we will receive the lowest prices and it eliminates the potential for delays. Penn Developers will take the necessary steps to ensure that all expenditures are done efficiently and effectively. Custom materials and special orders will be completed simultaneously to the job.

-Dimensional Lumber

-Sheet Goods

-Manufactured Lumber

-Hardware

-Fuel

Material StagingStrategic material staging is crucial to maintaining a strict, fast pace schedule. These three material staging areas are centrally located during construction in all five phases. When choosing the staging site, Penn Developers considered the ease of access, the size andcapacity, material safety, quality and the effect on current residents. We will use these staging areas for development materials such as pipe, basins, and heavy equipment. Once the home construction starts, materials such as trusses and clear span joists will be kept in the staging areas. Due to confined space, we feel this will be the best practice. The staging areas will be returned to green space once construction for each phase is complete.

Stage APhases 1, 2 & 3

Stage BPhase 4

Stage CPhase 5

A

B

C


ConstructionManagement6Home Owners Association (HOA)

All-In-One Community ManagementPenn Developers will leave All-In-One Community Management in charge of property management after construction is complete. All-In-One offers superior property management and maintenance. They will set-up and organize a Home Owners Association as well as a community financial system.

Provided Services

Board Meeting Assistance

- Landscape Maintenance- Common Area Management - Pool Safety and Club House Management- Parking Management and Enforcement- Enforcement of Rules and Regulations

Management & Maintenance

- Assessment Collection- Yearly Budgets- Financial Statement Preparation

Financial Management- Guidance on Meeting Procedure - Annual Election Management



7Marketing & Sales Strategy


Marketing Objectives

Marketing Mix

The Meadows at Druid Hills offers both aesthetically pleasing

townhomes and single family homes, with a choice for

homeowners to add their own spark and opinions. The modern,

comfortable feeling of the well-designed neighborhood also values many hiking trails, as well as a playground for children and an

all year-round swimming pool.

Our homes meet the needs of our target market and provide

superior living at an affordable price. Ensuring a highly

competitive, affordable home, we will achieve our profit levels and

internal rate of return.

Located northeast of Atlanta, GA, the neighborhood of Druid Hills, is full of shops, restaurants, parks,

and schools. Public transportation is provided to many citizens who

commute to the city. The neighborhood of Druid Hills also

provides a safe and affluent environment for many current and

future homeowners.

The young professionals and families will be reached through

many marketing strategies. Social Media, Internet, and Print

advertisements will be provided to our target market. Support Media

including, Model Homes, Development Site Signage and

New Development Launch Parties will also attract our future

homeowners.

Product Price

Place Promotion

Marketing &Sales Strategy7Penn Developers will provide highly competitive homes within the 32-acre plot

of land in The Meadows at Druid Hills. To ensure competitive advantage, Penn Developers has established the following key marketing objectives: - Educate and motivate future homeowners in the Atlanta, Georgia area through extensive advertisements. - Guarantee that our townhomes and single family homes are meeting specific requirements, including: safety, durability, energy efficiency and attractiveness. - Uphold affordable, competitive prices for our homes everywhere. - Provide substantial customer service to all current and future homeowners. - Commit to solving customer needs, wants and desires. - Maintain company values, missions, professional reputation and ethical conduct. - Pursue strong, reliable customer relationships with homeowners.


Marketing &Sales Strategy7Methods of Advertising

Advertising will be an essential point for reaching out to our specified target markets. We will market our quality homes through multiple advertising platforms including, social media, the internet, in-home and out-of-home publications, as well as promotional selling models and agencies. Our advertising will be coordinated by our Penn Developers, marketing associate, who has had multiple years of notable experience. We will sell our homes not only as a dwelling, but as a welcoming home investment to the current and future economic environment.

Social Media AdvertisingAs of 2016, there are 2.3 billion active social media users globally. Thus, social media users have risen by approximately 176 million in the last year. Due to the quick increase in users, social media sites are a prime marketing opportunity. Moreover, there are 1 million new active mobile social media users every day. With all generations using social media sites and mobile phones, it allows us to promote and appeal our affordable, quality homes to our specific market.

FacebookAmong today’s internet usage, statistics show that an average of 81% of people who use Facebook are between the ages of 18-49. Statistics also show that 74% of Facebook users are within urban settings and 78% earn ≥ $75,000 per year. With these statistics, Facebook will be our number one social media advertising site, used to promote our homes in affluent neighborhoods as well as reaching out to the young professionals and single families. A Facebook Advertisement page will be set up to promote our business and homes. We will post insights on our homes as well as initial renderings, site plans, construction, development, and finished home photos. Prospects will be able to “like” different options within our Facebook page that will lead to new insights on our current target market. Facebook also allows our company to advertise the business, by choosing who and where we want to attract with just the click of a button. All-in-all, marketing on Facebook will help our business build long lasting relationships with new and current customers.

PinterestWe will also advertise our homes through Pinterest, an online media site that shares photos and ideas using “pinboards”. Today’s statistics show that an average of 36.5% of internet users from the ages of 18-49 use Pinterest. This percentage exceeds much of the other age groups. In this case, we will post many home furnishing photos and/or ideas that will co-inside with the furnishings in our homes. Once users start searching for home ideas, they will be able to “pin” them to their boards. Users will also be able to find our Penn Developers website, connected to the photo or idea to discover additional information on our homes and/or homebuying.

Internet AdvertisingThe Internet will be great tool to attract our target market. We will highly advertise and sell our company through our Penn Developers website and the new developments website, The Meadows at Druid Hills. We will tie both of our websites to search engine optimization. This will ensure that our websites appear high on the list results, when prospects are looking to buy a home in our area. We will also hire outside realtors to attract our market through online real estate listings such as Houzz.com and Homefinder.com as well as the realtor company websites.


Marketing &Sales Strategy7Print Advertising

In addition to marketing, we will advertise throughout local Atlanta magazines, newspapers, billboards, and bus/train signage. We will use Marta to help advertise our company as well as our new development on buses and in train stations. Penn Developers will also provide development site signage and brochures on the outside proximity of the construction site. Our development site signage will provide a basic layout of The Meadows at Druid Hills and interested prospects will be able to take a free brochure for additional information.

Promotional AdvertisingPromoting our business, we will provide a Spec Home/Model Home within the development. Utilizing an end-townhome, we will allow future homebuyers to view and browse many options that are offered. With an infinite amount of finishes and designs, customers will be able to work with our engineers to make them feel at home. Our Spec Home/Model Home will also provide prospects with the ability to perceive the highest quality construction of a Penn Developers home. Physically viewing our Spec Home/Model Home will surround customers with confidence and trust.

Welcome Home

PD

enn

evelopers

Welcome Home


Marketing &Sales Strategy7Community Out-Reach

Penn Developers is proud to announce that we will be providing a community out-reach program twice a year. We will put together a 5k Run/Walk in Druid Hills each spring and fall. The 5k Run/Walk will be located through the hiking trails within the neighborhood. A community out-reach program benefits people who are unable to help themselves and/or educate people on certain subects. This community out-reach appeals to many of the Millennials who we are targeting for our new home development. We will also provide more information about our new housing development to get our name out into the crowd.

American Heart AssociationThe American Heart Association advertises ways to give back. We will support the American Heart Association and the American Stroke Association by using their FUNraiser tool. The FUNraiser tool is a

great way to collect funds through an online webpage using our 5K Run/Walk event. All

proceeds from our commnunity out-reach 5K Run/Walk will go towards the American Heart

Association and the American Stroke Association. Moreover, we are joining the fight against our

nation’s #1 and #4 killers; heart disease and stroke. Our donations will support life-saving efforts

including, research, education, better health, patient care, and populations at high risk.


Marketing &Sales Strategy7Marketing Break-Down

Social Media Internet

Print Promotional

30%

70%

Facebook

PinterestReal-Estate Listings

Search Engine Optimization

Penn Developers Website

New Development Website

50%

20%

15%

15%

50% 50%

Spec Home

Model Home

15%

15%

30%

30%

5%5%

Magazines

Newspapers

Billboards

Bus/Train Stations

Development Site Signage

Brochures


Sales Objectives

Sales Incentives

Follow-UpPenn Developers top priority is the customer. We love to build quality homes, while allowing the customer to have a say too. During any construction of a home, we update the customer on the current situation or status. Once the home is built and the customers have settled in, we do check-ups. It is our responsibility to make sure the customer feels safe and comfortable in their new home. We make friendly one-month and ten-month checkup calls. In addition to checkups, we provide substantial customer service. Customers can schedule warranty checkups as well as repairs. If any repairs are needed to be addressed, we send out hired vendors immediately. We believe that committing and following up with our customers, builds long-lasting relationships.

Marketing &Sales Strategy7

Pre-sale

New Development Launch PartiesAs a sales strategy, we will host new development launch parties at the development site. The launch parties will begin as soon as the land is purchased. We will host our launch parties once a month to attract our target markets. We encourage anyone to join if they are looking for a safe, affordable home. This gathering will allow future homebuyers to look at photos, site layouts, and home plans. As construction begins, future homebuyers will also be able to view our Spec Homes/Model Homes.

Partner DiscountsAmid to performing our best quality work, we partner with other industries to provide excellence in our homes. We, Penn Developers, push for innovation and quality products just as much as today’s industry leaders do. It is important to incorporate today’s top industries into our homes to provide a long-lasting, safe home for our buyers. We partner with the following industries:

Within the first half of 2017, we will promote a $10, 000 off sales incentive. In other words, new homebuyers can receivce a home discount within the first 6 months of business at The Meadows at Druid Hills. This sales incentive will only last during the first 6 months of the year 2017. We will not start construction of the home until the second half of 2017, once the incentive is completed.

- Maintain company values, missions, professional reputation and ethical conduct.- Guarantee that our homes meet specific requirements, including: safety, durability, energy efficiency and attractiveness.- Provide monthly development launch parties to attract new homebuyers.- Strive to create strong business ties with local real estate agencies and independent realtors. - Withstand good construction techniques and abilities (OSHA), while keeping the development clean of waste.- After homes are built, we will stay committed to fixing any issues that the homes may have in the future.



8Financial & Risk Analysis


Financial &Risk Analysis8Realistic Financial Analysis

Townhome

Single Family

Number of Units Total SalesSales Price

Total Sales

31

269 $470,000.00

$610,000.00 $18,910,000.00

$126,430,000.00

$145,340,000.00

Home Sales

Break-Even Analysis

The Realistic Pro Forma represents the most likely projection of revenues and expenses over the entire project. Our home sale prices are based on the current market values and trends. We will break-even during the beginning of the third period. As a result, we will attain an internal rate of return of 20%.


Financial &Risk Analysis8

First Second First Second First Second First Second First Second

-$ 8,540,000.00$ 9,760,000.00$ -$ -$ -$ -$ -$ -$ 610,000.00$ 18,910,000.00$ -$ 19,740,000.00$ 26,320,000.00$ 9,400,000.00$ 9,400,000.00$ 18,800,000.00$ 9,400,000.00$ 21,150,000.00$ 9,400,000.00$ 2,820,000.00$ 126,430,000.00$ -$ 28,280,000.00$ 36,080,000.00$ 9,400,000.00$ 9,400,000.00$ 18,800,000.00$ 9,400,000.00$ 21,150,000.00$ 9,400,000.00$ 3,430,000.00$ 145,340,000.00$

-$ 7,164,550.00$ 9,483,730.00$ 2,466,700.00$ 2,466,700.00$ 4,933,400.00$ 2,466,700.00$ 5,550,075.00$ 2,466,700.00$ 616,675.00$ 37,615,230.00$ Land Acquisition 46,800,000.00$

800,000.00$ -$ 1,100,000.00$ -$ -$ -$ 1,100,000.00$ -$ -$ -$ 3,000,000.00$ 6,032,604.60$ -$ 3,574,876.80$ -$ -$ -$ 460,563.60$ 1,103,445.00$ -$ -$ 11,171,490.00$

53,632,604.60$ 7,164,550.00$ 14,158,606.80$ 2,466,700.00$ 2,466,700.00$ 4,933,400.00$ 4,027,263.60$ 6,653,520.00$ 2,466,700.00$ 616,675.00$ 98,586,720.00$ (53,632,604.60)$ 21,115,450.00$ 21,921,393.20$ 6,933,300.00$ 6,933,300.00$ 13,866,600.00$ 5,372,736.40$ 14,496,480.00$ 6,933,300.00$ 2,813,325.00$ 46,753,280.00$

Gross Profit Rate (% of Sales) N/A 75% 61% 74% 74% 74% 57% 69% 74% 82% 32%60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 10,000.00$ 10,000.00$ 500,000.00$

(53,692,604.60)$ 21,055,450.00$ 21,861,393.20$ 6,873,300.00$ 6,873,300.00$ 13,806,600.00$ 5,312,736.40$ 14,436,480.00$ 6,923,300.00$ 2,803,325.00$ 46,253,280.00$ (22,013,967.89)$ 8,632,734.50$ 8,963,171.21$ 2,818,053.00$ 2,818,053.00$ 5,660,706.00$ 2,178,221.92$ 5,918,956.80$ 2,838,553.00$ 1,149,363.25$ 18,963,844.80$ (31,678,636.71)$ 12,422,715.50$ 12,898,221.99$ 4,055,247.00$ 4,055,247.00$ 8,145,894.00$ 3,134,514.48$ 8,517,523.20$ 4,084,747.00$ 1,653,961.75$ 27,289,435.20$

N/A 44% 36% 43% 43% 43% 33% 40% 43% 48% 19%

-$ 28,280,000.00$ 36,080,000.00$ 9,400,000.00$ 9,400,000.00$ 18,800,000.00$ 9,400,000.00$ 21,150,000.00$ 9,400,000.00$ 3,430,000.00$ 145,340,000.00$

-$ 7,164,550.00$ 9,483,730.00$ 2,466,700.00$ 2,466,700.00$ 4,933,400.00$ 2,466,700.00$ 5,550,075.00$ 2,466,700.00$ 616,675.00$ 37,615,230.00$ 800,000.00$ -$ 1,100,000.00$ -$ -$ -$ 1,100,000.00$ -$ -$ -$ 3,000,000.00$

6,032,604.60$ -$ 3,574,876.80$ -$ -$ -$ 460,563.60$ 1,103,445.00$ -$ -$ 11,171,490.00$ 46,800,000.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 46,800,000.00$

60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 10,000.00$ 550,000.00$ (53,692,604.60)$ 21,055,450.00$ 21,861,393.20$ 6,873,300.00$ 6,873,300.00$ 13,806,600.00$ 5,312,736.40$ 14,436,480.00$ 6,873,300.00$ 2,803,325.00$ 46,203,280.00$

-$ -$ -$ -$ -$ -$ 2,178,221.92$ 5,918,956.80$ 2,838,553.00$ 1,149,363.25$ 12,085,094.97$ (53,692,604.60)$ 21,055,450.00$ 21,861,393.20$ 6,873,300.00$ 6,873,300.00$ 13,806,600.00$ 3,134,514.48$ 8,517,523.20$ 4,034,747.00$ 1,653,961.75$ 34,118,185.03$

19,136,908.69$ 28,587,008.69$ 38,843,051.89$ 34,111,001.89$ 29,378,951.89$ 31,580,201.89$ 23,109,366.36$ 20,021,539.56$ 18,253,611.56$ 14,104,898.31$ 53,632,604.60$ 44,999,870.10$ 36,036,698.88$ 33,218,645.88$ 30,400,592.89$ 24,739,886.89$ 24,739,886.89$ 24,739,886.89$ 24,789,886.89$ 24,789,886.88$ 72,769,513.29$ 73,586,878.79$ 74,879,750.77$ 67,329,647.77$ 59,779,544.77$ 56,320,088.77$ 47,849,253.25$ 44,761,426.45$ 43,043,498.45$ 38,894,785.19$

46,800,000.00$ 41,600,000.00$ 36,400,000.00$ 31,200,000.00$ 26,000,000.00$ 20,800,000.00$ 15,600,000.00$ 10,400,000.00$ 7,800,000.00$ 5,200,000.00$ 57,648,150.00$ 51,242,800.00$ 44,837,450.00$ 38,432,100.00$ 32,026,750.00$ 25,621,400.00$ 19,216,050.00$ 12,810,700.00$ 9,608,025.00$ 6,405,350.00$

104,448,150.00$ 92,842,800.00$ 81,237,450.00$ 69,632,100.00$ 58,026,750.00$ 46,421,400.00$ 34,816,050.00$ 23,210,700.00$ 17,408,025.00$ 11,605,350.00$

(31,678,636.71)$ (19,255,921.21)$ (6,357,699.23)$ (2,302,452.23)$ 1,752,794.77$ 9,898,688.77$ 13,033,203.25$ 21,550,726.45$ 25,635,473.45$ 27,289,435.20$ 72,769,513.29$ 73,586,878.79$ 74,879,750.77$ 67,329,647.77$ 59,779,544.77$ 56,320,088.77$ 47,849,253.25$ 44,761,426.45$ 43,043,498.45$ 38,894,785.20$

-44% 17% 17% 6% 7% 14% 7% 19% 9% 4%N/A -61% -14% -4% 3% 12% 14% 18% 19% 20%

Income

Cost of ConstructionGross Profit

Land Development

Retained Earnings

Balance Sheet

Cash Flows From Operations

Net Cash Flow

Home Building Costs

Land Development

Marketing

Less: Income Taxes

Marketing

Sales RevenuesLess: Cash Expenses

Earnings (Loss) Before Income Taxes

Project Internal Rate of Return (IRR)

Internal Rate of Return

AssetsCashCapitalized Costs

Total AssetsLiabilities

Note Payable: A & D Loan

Total LiabilitiesOwner's Equity

Total Liabilities and Owners Equity

Return on Assets (ROA)

Note Payable: Construction Loan

Less: Income Tax

Land Acquisition

Net Income

Cash FlowsProfit Margin (% of Sales)

Demolition Costs

Total

Realistic Pro Forma

Demolition Costs

Revenues

Expenses

Single Family Home Sale Revenues

Total Revenues

Home Building Costs

2019 2020 2021YearSemi-Year

2017 2018

Townhome Sale Revenues

66


Financial &Risk Analysis8Conservative Financial Analysis

Townhome

Single Family


Total Sales

31

269

$590,000.00

$460,000.00

$18,290,000.00

$123,740,000.00

$142,030,000.00

Home Sales

Break-Even Analysis

The Conservative Pro Forma represents any reasonable decreases that may occur in the market value of our homes. We are prepared for a potential decline in the market value, up to 3%. Anything exceeding 3%, we will activate our exit strategy. As a company, we anticipate our break-even point during the middle of the third period. The Conserative Pro Forma still achieves an 18% internal rate of return.




-$ 8,260,000.00$ 9,440,000.00$ -$ -$ -$ -$ -$ -$ 590,000.00$ 18,290,000.00$ -$ 19,320,000.00$ 25,760,000.00$ 9,200,000.00$ 9,200,000.00$ 18,400,000.00$ 9,200,000.00$ 20,700,000.00$ 9,200,000.00$ 2,760,000.00$ 123,740,000.00$ -$ 27,580,000.00$ 35,200,000.00$ 9,200,000.00$ 9,200,000.00$ 18,400,000.00$ 9,200,000.00$ 20,700,000.00$ 9,200,000.00$ 3,350,000.00$ 142,030,000.00$


800,000.00$ -$ 1,100,000.00$ -$ -$ -$ 1,100,000.00$ -$ -$ -$ 3,000,000.00$ 6,032,604.60$ -$ 3,574,876.80$ -$ -$ -$ 460,563.60$ 1,103,445.00$ -$ -$ 11,171,490.00$

53,632,604.60$ 7,164,550.00$ 14,158,606.80$ 2,466,700.00$ 2,466,700.00$ 4,933,400.00$ 4,027,263.60$ 6,653,520.00$ 2,466,700.00$ 616,675.00$ 98,586,720.00$ (53,632,604.60)$ 20,415,450.00$ 21,041,393.20$ 6,733,300.00$ 6,733,300.00$ 13,466,600.00$ 5,172,736.40$ 14,046,480.00$ 6,733,300.00$ 2,733,325.00$ 43,443,280.00$


(53,692,604.60)$ 20,355,450.00$ 20,981,393.20$ 6,673,300.00$ 6,673,300.00$ 13,406,600.00$ 5,112,736.40$ 13,986,480.00$ 6,723,300.00$ 2,723,325.00$ 42,943,280.00$ (22,013,967.89)$ 8,345,734.50$ 8,602,371.21$ 2,736,053.00$ 2,736,053.00$ 5,496,706.00$ 2,096,221.92$ 5,734,456.80$ 2,756,553.00$ 1,116,563.25$ 17,606,744.80$ (31,678,636.71)$ 12,009,715.50$ 12,379,021.99$ 3,937,247.00$ 3,937,247.00$ 7,909,894.00$ 3,016,514.48$ 8,252,023.20$ 3,966,747.00$ 1,606,761.75$ 25,336,535.20$

N/A 44% 35% 43% 43% 43% 33% 40% 43% 48% 18%

-$ 27,580,000.00$ 35,200,000.00$ 9,200,000.00$ 9,200,000.00$ 18,400,000.00$ 9,200,000.00$ 20,700,000.00$ 9,200,000.00$ 3,350,000.00$ 142,030,000.00$

-$ 7,164,550.00$ 9,483,730.00$ 2,466,700.00$ 2,466,700.00$ 4,933,400.00$ 2,466,700.00$ 5,550,075.00$ 2,466,700.00$ 616,675.00$ 37,615,230.00$ 800,000.00$ -$ 1,100,000.00$ -$ -$ -$ 1,100,000.00$ -$ -$ -$ 3,000,000.00$

6,032,604.60$ -$ 3,574,876.80$ -$ -$ -$ 460,563.60$ 1,103,445.00$ -$ -$ 11,171,490.00$ 46,800,000.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 46,800,000.00$

60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 10,000.00$ 550,000.00$ (53,692,604.60)$ 20,355,450.00$ 20,981,393.20$ 6,673,300.00$ 6,673,300.00$ 13,406,600.00$ 5,112,736.40$ 13,986,480.00$ 6,673,300.00$ 2,723,325.00$ 42,893,280.00$

-$ -$ -$ -$ -$ -$ 2,096,221.92$ 5,734,456.80$ 2,756,553.00$ 1,116,563.25$ 11,703,794.97$ (53,692,604.60)$ 20,355,450.00$ 20,981,393.20$ 6,673,300.00$ 6,673,300.00$ 13,406,600.00$ 3,016,514.48$ 8,252,023.20$ 3,916,747.00$ 1,606,761.75$ 31,189,485.03$

19,136,908.69$ 27,887,008.69$ 37,263,051.89$ 32,331,001.89$ 27,398,951.89$ 29,200,201.89$ 20,611,366.36$ 17,258,039.56$ 15,372,111.56$ 11,176,198.31$ 53,632,604.60$ 45,286,870.10$ 36,684,498.89$ 33,948,445.89$ 31,212,392.89$ 25,715,686.89$ 25,715,686.89$ 25,715,686.89$ 25,765,686.89$ 25,765,686.89$ 72,769,513.29$ 73,173,878.79$ 73,947,550.77$ 66,279,447.77$ 58,611,344.77$ 54,915,888.78$ 46,327,053.25$ 42,973,726.45$ 41,137,798.45$ 36,941,885.20$

46,800,000.00$ 41,600,000.00$ 36,400,000.00$ 31,200,000.00$ 26,000,000.00$ 20,800,000.00$ 15,600,000.00$ 10,400,000.00$ 7,800,000.00$ 5,200,000.00$ 57,648,150.00$ 51,242,800.00$ 44,837,450.00$ 38,432,100.00$ 32,026,750.00$ 25,621,400.00$ 19,216,050.00$ 12,810,700.00$ 9,608,025.00$ 6,405,350.00$

104,448,150.00$ 92,842,800.00$ 81,237,450.00$ 69,632,100.00$ 58,026,750.00$ 46,421,400.00$ 34,816,050.00$ 23,210,700.00$ 17,408,025.00$ 11,605,350.00$

(31,678,636.71)$ (19,668,921.21)$ (7,289,899.23)$ (3,352,652.23)$ 584,594.77$ 8,494,488.77$ 11,511,003.25$ 19,763,026.45$ 23,729,773.45$ 25,336,535.20$ 72,769,513.29$ 73,173,878.79$ 73,947,550.77$ 66,279,447.77$ 58,611,344.77$ 54,915,888.77$ 46,327,053.25$ 42,973,726.45$ 41,137,798.45$ 36,941,885.20$

-44% 16% 17% 6% 7% 14% 7% 19% 10% 4%N/A -62% -16% -6% 1% 10% 12% 17% 18% 18%Project Internal Rate of Return (IRR)

Capitalized CostsTotal AssetsLiabilities

Note Payable: A & D LoanNote Payable: Construction Loan


Retained Earnings Total Liabilities and Owners EquityInternal Rate of ReturnReturn on Assets (ROA)

Cash

Less: Cash Expenses Home Building Costs

Demolition Costs Land Development

Land Acquisition MarketingCash Flows From Operations

Less: Income TaxesNet Cash FlowBalance SheetAssets

Sales Revenues

Demolition CostsLand DevelopmentCost of ConstructionGross Profit

MarketingIncomeEarnings (Loss) Before Income TaxesLess: Income TaxNet Income

Profit Margin (% of Sales)Cash Flows

Home Building Costs

Conservative Pro FormaYear 2017 2018 2019 2020 2021 TotalSemi-YearRevenuesSingle Family Home Sale RevenuesTownhome Sale RevenuesTotal RevenuesExpenses

68


Financial &Risk Analysis8Optimistic Financial Analysis

Townhome

Single Family


Total Sales

31

269

$650,000.00

$480,000.00

$20,150,000.00

$129,120,000.00

$149,270,000.00

Home Sales

Break-Even Analysis

The Optimistic Pro Forma shows a potential increase of 3% in market value. We feel this is possible based on rising market trends, location, and the local home building growth rate. This financial analysis projects our company to break-even at the end of the second period. The optimistic projection enables us to generate a 22% internal rate of return.




-$ 9,100,000.00$ 10,400,000.00$ -$ -$ -$ -$ -$ -$ 650,000.00$ 20,150,000.00$ -$ 20,160,000.00$ 26,880,000.00$ 9,600,000.00$ 9,600,000.00$ 19,200,000.00$ 9,600,000.00$ 21,600,000.00$ 9,600,000.00$ 2,880,000.00$ 129,120,000.00$ -$ 29,260,000.00$ 37,280,000.00$ 9,600,000.00$ 9,600,000.00$ 19,200,000.00$ 9,600,000.00$ 21,600,000.00$ 9,600,000.00$ 3,530,000.00$ 149,270,000.00$


800,000.00$ -$ 1,100,000.00$ -$ -$ -$ 1,100,000.00$ -$ -$ -$ 3,000,000.00$ 6,032,604.60$ -$ 3,574,876.80$ -$ -$ -$ 460,563.60$ 1,103,445.00$ -$ -$ 11,171,490.00$

53,632,604.60$ 7,164,550.00$ 14,158,606.80$ 2,466,700.00$ 2,466,700.00$ 4,933,400.00$ 4,027,263.60$ 6,653,520.00$ 2,466,700.00$ 616,675.00$ 98,586,720.00$ (53,632,604.60)$ 22,095,450.00$ 23,121,393.20$ 7,133,300.00$ 7,133,300.00$ 14,266,600.00$ 5,572,736.40$ 14,946,480.00$ 7,133,300.00$ 2,913,325.00$ 50,683,280.00$


(53,692,604.60)$ 22,035,450.00$ 23,061,393.20$ 7,073,300.00$ 7,073,300.00$ 14,206,600.00$ 5,512,736.40$ 14,886,480.00$ 7,123,300.00$ 2,903,325.00$ 50,183,280.00$ (22,013,967.89)$ 9,034,534.50$ 9,455,171.21$ 2,900,053.00$ 2,900,053.00$ 5,824,706.00$ 2,260,221.92$ 6,103,456.80$ 2,920,553.00$ 1,190,363.25$ 20,575,144.80$ (31,678,636.71)$ 13,000,915.50$ 13,606,221.99$ 4,173,247.00$ 4,173,247.00$ 8,381,894.00$ 3,252,514.48$ 8,783,023.20$ 4,202,747.00$ 1,712,961.75$ 29,608,135.20$

N/A 44% 36% 43% 43% 44% 34% 41% 44% 49% 20%

-$ 29,260,000.00$ 37,280,000.00$ 9,600,000.00$ 9,600,000.00$ 19,200,000.00$ 9,600,000.00$ 21,600,000.00$ 9,600,000.00$ 3,530,000.00$ 149,270,000.00$

-$ 7,164,550.00$ 9,483,730.00$ 2,466,700.00$ 2,466,700.00$ 4,933,400.00$ 2,466,700.00$ 5,550,075.00$ 2,466,700.00$ 616,675.00$ 37,615,230.00$ 800,000.00$ -$ 1,100,000.00$ -$ -$ -$ 1,100,000.00$ -$ -$ -$ 3,000,000.00$

6,032,604.60$ -$ 3,574,876.80$ -$ -$ -$ 460,563.60$ 1,103,445.00$ -$ -$ 11,171,490.00$ 46,800,000.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 46,800,000.00$

60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 60,000.00$ 10,000.00$ 550,000.00$ (53,692,604.60)$ 22,035,450.00$ 23,061,393.20$ 7,073,300.00$ 7,073,300.00$ 14,206,600.00$ 5,512,736.40$ 14,886,480.00$ 7,073,300.00$ 2,903,325.00$ 50,133,280.00$

-$ -$ -$ -$ -$ -$ 2,260,221.92$ 6,103,456.80$ 2,920,553.00$ 1,190,363.25$ 12,474,594.97$ (53,692,604.60)$ 22,035,450.00$ 23,061,393.20$ 7,073,300.00$ 7,073,300.00$ 14,206,600.00$ 3,252,514.48$ 8,783,023.20$ 4,152,747.00$ 1,712,961.75$ 37,658,685.03$

19,136,908.69$ 29,567,008.69$ 41,023,051.89$ 36,491,001.89$ 31,958,951.89$ 34,560,201.89$ 26,207,366.36$ 23,385,039.56$ 21,735,111.56$ 17,645,398.31$ 53,632,604.60$ 44,598,070.10$ 35,142,898.89$ 32,242,845.89$ 29,342,792.89$ 23,518,086.89$ 23,518,086.89$ 23,518,086.89$ 23,568,086.89$ 23,568,086.89$ 72,769,513.29$ 74,165,078.79$ 76,165,950.77$ 68,733,847.77$ 61,301,744.77$ 58,078,288.77$ 49,725,453.25$ 46,903,126.45$ 45,303,198.45$ 41,213,485.20$

46,800,000.00$ 41,600,000.00$ 36,400,000.00$ 31,200,000.00$ 26,000,000.00$ 20,800,000.00$ 15,600,000.00$ 10,400,000.00$ 7,800,000.00$ 5,200,000.00$ 57,648,150.00$ 51,242,800.00$ 44,837,450.00$ 38,432,100.00$ 32,026,750.00$ 25,621,400.00$ 19,216,050.00$ 12,810,700.00$ 9,608,025.00$ 6,405,350.00$

104,448,150.00$ 92,842,800.00$ 81,237,450.00$ 69,632,100.00$ 58,026,750.00$ 46,421,400.00$ 34,816,050.00$ 23,210,700.00$ 17,408,025.00$ 11,605,350.00$

(31,678,636.71)$ (18,677,721.21)$ (5,071,499.23)$ (898,252.23)$ 3,274,994.77$ 11,656,888.77$ 14,909,403.25$ 23,692,426.45$ 27,895,173.45$ 29,608,135.20$ 72,769,513.29$ 74,165,078.79$ 76,165,950.77$ 68,733,847.77$ 61,301,744.77$ 58,078,288.77$ 49,725,453.25$ 46,903,126.45$ 45,303,198.45$ 41,213,485.20$

-44% 18% 18% 6% 7% 14% 7% 19% 9% 4%N/A -59% -11% -2% 5% 14% 16% 20% 21% 22%Project Internal Rate of Return (IRR)

Capitalized CostsTotal AssetsLiabilities

Note Payable: A & D LoanNote Payable: Construction Loan


Retained Earnings Total Liabilities and Owners EquityInternal Rate of ReturnReturn on Assets (ROA)

Cash

Less: Cash Expenses Home Building Costs

Demolition Costs Land Development

Land Acquisition MarketingCash Flows From Operations

Less: Income TaxesNet Cash FlowBalance SheetAssets

Sales Revenues

Demolition CostsLand DevelopmentCost of ConstructionGross Profit

MarketingIncomeEarnings (Loss) Before Income TaxesLess: Income TaxNet Income

Profit Margin (% of Sales)Cash Flows

Home Building Costs

Optimistic Pro FormaYear 2017 2018 2019 2020 2021 TotalSemi-YearRevenuesSingle Family Home Sale RevenuesTownhome Sale RevenuesTotal RevenuesExpenses

70


Financial &Risk Analysis8Reputation Risk

Establishing a reputation for quality home building is an event tried in the court of the public opinion rather than the court of law. Reputation is valuable in the fiercely competitive market of land development. We, Penn Developers, are continually setting the expectations high in the areas of quality and craftsmanship.

Our top priority as a company is the satisfaction of our customers. In every situation, we strive to meet the needs of the customer; no matter the cost. The satisfaction of the client and their opinion of us as a business is far more valuable.

Penn Developers works tirelessly to maintain trust, especially within the community. We do this by communicating efficiently with our customers, putting our best effort into meeting the needs of the customers, and keeping our promises. Each time we provide a client with what we promised them, we are able to establish another positive relationship within the community.

Our company is constantly researching new techniques and technology in order to improve our market analysis. Improving our market analysis, we are able to remain current on existing trends, demographics, and changes in the economy. Penn Developers understands that risks are unavoidable, so plans and procedures are in place in order to manage any unplanned situations that may arise.


Financial &Risk Analysis8Supply Shortages

Within the scope of this project, a risk that Penn Developers may face is supply shortages and fluctuation of construction costs. The construction industry is still recovering from the collapse of the housing market in 2008. Due to the collapse of the housing market, many supply companies went out of business. In turn, there are fewer suppliers competing for consumers in the industry. The lack of competition has created higher material supply prices nationwide. Prices for local natural materials have also increased in the Atlanta area. Materials such as cement, sand, and stone have been affected due to an absence of supply and demand.

Since the collapse of the housing market in 2008, the population has risen by 1.18 percent, and there has been an increasing demand for housing in the United States. According to RSMeans Construction Cost Index (CCI), the construction costs in the Atlanta area have risen by 3.5 percent since the year 2011.

Penn Developers plans to work with local suppliers in order to maximize resources to keep construction costs at a minimum. In order to keep construction costs low, Penn Developers will be regularly negotiating prices of materials. Also, locking in prices of materials throughout the duration of the project will allow us to keep our competitive advantage. This strategy will help to aid our financial risks within our projections and to keep our construction schedule going as planned.


Labor Risk

Financial &Risk Analysis8After the recession of 2008, many skilled laborers retired early and/or switched fields.

Currently, the construction industry is experiencing a shortage of skilled employees. Since we are in the process of transitioning to a new president in our country, the labor industry has come to an awkward moment in regards to immigrant workers on large construction projects. During our presidential election, the president who was elected expressed very strong views on immigrant labor, causing workers to be more susceptible to the types of jobs that will expose them.

Penn Developers will make efforts to prevent labor shortages on this project, along with future projects too. The following are strategies used to minimize labor risks:

- In order to prevent labor shortages, Penn Developers will take precautionary measures to ensure that safety is our #1 priority for both the community and our employees.

- Penn Developers will make sure all jobsite employees are educated and trained on OSHA standards and jobsite safety.

- By educating employees on safety precautions and by helping laborers educate themselves on proper procedure, Penn Developers is cutting down on worker’s compensation claims.

- Construction Managers will supervise the jobsite carefully by making sure the subcontractors are well-known and have good reputations by keeping a positive rapport with the them and their employees.

- Penn Developers will maintain management accountability by holding weekly “Tool Box Talks” to discuss safety and OSHA standards with all employees on the jobsite.


Financial &Risk Analysis8Exit Strategies

Sale After Demolition

Penn Developers has generated several risk management strategies that can be implemented in the event of any external influences that will negatively impact the continuation of construction. The following exit strategies are viable options that can be used throughout the various stages of construction:

Selling the land after demolition is a strategy that can be enforced if Penn Developers becomes financially unstable after acquiring ownership of the property. We believe that after the demolition of all existing units on the property, we will be able to return it back to the market with an increased property evaluation of 3% -5%.

PhasingThe land development process has been divided into five phases. Phase 1 will consist of constructing 15 single family homes and 49 townhomes. Phase 2 will only begin after Penn Developers has shown positive presales in Phase 1. By dividing the project into phases, we are minimizing our financial risks associated with land development, and ensuring that we are maintaining our financial projections. If a phase is showing less than adequate presales/sales Penn Developers will implement our Change in Sales strategy.

Change in SalesChange in Sales strategy will be implemented during each phase of construction. During this time, Penn Developers, will conduct a sales evaluation. If sales are falling below our 65% threshold, we will analyze the problem, re-evaluate sales prices, marketing strategies, and the overall design of the product. This will allow us to mitigate the situation and make essential alterations to improve performance and generate sales.

Rent to OwnPenn Developers will implement the Rent-to-Own strategy if presales fall short of meeting 65% of the presale threshold. This strategy will be offered exclusively for the sale of townhomes. Rent-to-Own will not be an option for single family homes. In a soft market, the Rent-to-Own option can produce more cash flow, yield a higher sale price, and expand our target market. Penn Developers will maintain 100% ownership of the property throughout the duration of the Rent-to-Own process. The residents who choose to utilize the Rent-to-Own option will be subject to a rigorous screening process. The following are stipulations for the Rent-to-Own agreement:

- 24-Month Term

- A 2.5% security deposit (non-refundable) due at signing.

- Monthly payments will be based on a Fair Rental Market Evaluation.

- A $300.00 additional premium, also non-refundable, will be escrowed and can be used in addition to the original down payment toward the purchase of the townhome.

Maintenance and asset collection will be managed by All-In-One Community Management Company.



9Bibliography


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