Land Banking & Even-Flow Production Cash Flow Modeler

1. Acquisition Strategy Land Banking

2. Production Pacing

3. Lot & Cost Assumptions

Total Subdivision Lots 250 lots

Total buildout capacity across parcel.

Raw Lot Cost $75,000

Cost per finished lot paid to land bank / seller.

Option Deposit Fee (%) 8.0%

Off-balance-sheet non-refundable lot deposit to land partner.

Vertical Construction Cost $220,000

Direct sticks & bricks hard construction cost per home.

Average Home Sale Price $410,000

Gross retail sales closing realization.

Monthly Absorption Pace 12 homes/mo

Sales & closing throughput per month.

Construction Debt Interest (APR) 7.5%

Floating line of credit carrying cost on outstanding debt.

Lennar Even-Flow Doctrine: "By controlling land through options rather than owning it, and locking build rates to consistent cadence, we convert volatile land risk into variable, asset-light manufacturing throughput."

Initial Capital Outlay
$1,500,000

            8.0% option deposit (JIT takedown)
          

Peak Debt Exposure

$11.20M

Max draw against revolving facility

Break-Even Month

Month 9

Cumulative cash flows turn positive

Project IRR (Annualized)

24.6%

Levered project return

Total Net Profit

$14.25M

$57,000 net margin per lot

24-Month Cumulative Cash Flow & Capital Exposure

Evaluating working capital trough, inventory under construction, and payback timeline

Horizon: 24 Months

Interest Rate vs Absorption Sensitivity Net Margin %

Shows net profit margin resilience across capital cost spikes and sales slowdowns:

Pace \ APR	5.5%	7.5%	9.5%

Land Bank vs Outright Comparison Head-to-Head

Dimension	Land Banking	Outright
Initial Land Check	$1.50M	$18.75M
Peak Capital at Risk	$11.20M	$24.80M
Break-Even Timing	Month 9	Month 16
Annualized IRR	24.6%	13.8%
Balance Sheet Weight	Off-Balance Sheet	Heavy On-Balance

24-Month Pro-Forma Cash Flow Ledger Click to Inspect Monthly Draws

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Mo	Starts	Closings	Active WIP	Revenue	Land Outlay	Direct Builds	Interest Carry	Net Monthly	Cumul. Cash