Create a feasbility study about pre selling low
cost lot
Okay, I will create a feasibility study outline for a pre-selling low-cost lot project, based on the
structure provided in the document.
Feasibility Study: Pre-Selling Low-Cost Lots
I. Project Summary
Name of the Project: (e.g., "Sunrise Estates," "Affordable Haven," or a specific location-
based name)
Location: Specific city/municipality, barangay, and general area description. Include
accessibility to major roads, public transportation, and essential services.
Descriptive Definition of the Project: A residential development offering affordable lots for
pre-selling, targeting low-income families and individuals. Detail the approximate size of lots,
planned amenities (if any), and the overall concept of the community.
Project Objectives:
Provide affordable housing options to low-income families.
Generate profit for the developer/investors.
Contribute to the local economy through job creation and increased property values.
Create a sustainable and well-planned community.
Feasibility Criteria:
Market demand for low-cost lots.
Technical viability of the land development.
Financial profitability and return on investment.
Socio-economic benefits to the community.
Environmental sustainability.
Highlights of the Project: Summarize the key selling points, such as affordability, location
advantages, potential for appreciation, and community features.
Major Assumptions & Summary of Findings: Briefly state the key assumptions underlying
the study (e.g., projected sales rate, construction costs, interest rates) and summarize the
main findings regarding feasibility.
Conclusion of the Study: State whether the project is feasible based on the findings, and
any recommendations for moving forward.
Limiting Conditions: Potential risks and challenges, such as delays in permits, fluctuations
in material costs, or changes in market conditions.
II. Market Study
Project Description: Detailed description of the project, including:
Total land area
Number of lots to be offered
Average lot size
Target market (income level, family size, etc.)
Pricing strategy for pre-selling
Planned amenities and infrastructure
Demand:
Market research on the demand for low-cost housing in the target location.
Demographic analysis of the population in the area.
Surveys or interviews to gauge interest in the project.
Analysis of existing housing supply and demand gap.
Supply:
Inventory of existing low-cost housing projects in the area.
Analysis of competitor pricing and offerings.
Identification of potential substitute products (e.g., apartments, townhouses).
Demand-Supply Analysis: Compare the estimated demand with the available supply to
determine the potential market share for the project.
Price Study:
Analysis of prevailing land prices in the area.
Determination of the optimal pre-selling price for the lots.
Consideration of pricing strategies (e.g., early bird discounts, installment plans).
Factors Affecting the Market:
Economic conditions (e.g., employment rate, interest rates, inflation).
Government policies and regulations (e.g., housing subsidies, zoning laws).
Infrastructure development in the area.
Social and demographic trends.
Analysis of Research Data: Summarize and interpret the market research findings to
support the feasibility of the project.
Marketing Program:
Target market segmentation and profiling.
Marketing objectives (e.g., sales targets, brand awareness).
Marketing strategies (e.g., online advertising, print media, site visits).
Marketing Plan:
Detailed action plan for implementing the marketing program.
Marketing budget and resource allocation.
Timeline for marketing activities.
Metrics for measuring marketing effectiveness.
III. Technical Feasibility
The Project: Elaborate on the technical aspects, reiterate the land area, number of lots, and
other physical specifications.
Site Development Plan:
Topographical survey and site analysis.
Land use plan and layout of the development.
Road network and drainage system design.
Location of utilities and amenities.
Construction Plan and Process:
Detailed description of the construction process.
Equipment and machinery requirements.
Quality control procedures.
Construction Schedule:
Timeline for each phase of the construction process.
Milestones and deadlines.
Project management plan.
Materials/Equipment & Supply:
List of materials and equipment required for the project.
Identification of suppliers and vendors.
Procurement and inventory management plan.
Utilities:
Plan for providing water, electricity, and telecommunications services to the
development.
Coordination with utility companies.
Waste Disposal:
Plan for managing solid waste and sewage.
Compliance with environmental regulations.
Construction Cost:
Detailed estimate of all construction costs, including materials, labor, equipment, and
permits.
Contingency plan for unexpected expenses.
Labor Requirements:
Number of workers required for each phase of the construction.
Skills and qualifications needed.
Recruitment and training plan.
IV. Financial Feasibility
Presentation of Major Assumptions: Clearly state all the key assumptions used in the
financial analysis (e.g., sales price, sales volume, construction costs, interest rates,
operating expenses).
Summary of Project Cost: Total project cost, broken down into land acquisition,
development costs, marketing expenses, and other costs.
Sources of Financing:
Equity contribution from the developer.
Debt financing from banks or other lenders.
Pre-selling proceeds.
Financial Statements:
Projected Income Statement: Project revenues, expenses, and net income over a
period of 5-10 years.
Projected Cash Flow Statement: Project cash inflows and outflows over a period of 5-
10 years.
Projected Balance Sheet: Project assets, liabilities, and equity at the end of each year.
Financial Analysis:
Profitability:
Gross Profit Margin
Net Profit Margin
Return on Sales
Liquidity:
Current Ratio
Quick Ratio
Cash Solvency:
Growth Overtime:
Decision Criteria:
Payback Period: The time it takes for the project to recover its initial investment.
Net Present Value (NPV): The present value of the project's expected cash flows,
minus the initial investment.
Benefit/Cost Analysis (Profitability Index): The ratio of the present value of benefits to
the present value of costs.
Internal Rate of Return (IRR): The discount rate that makes the NPV of the project
equal to zero.
Sensitivity Analysis: Assess the impact of changes in key assumptions (e.g., sales price,
construction costs) on the project's profitability.
Analysis of ‘With or Without the Project: Compare the financial position of the developer
with and without undertaking the project.
V. SOCIO-ECONOMIC STUDY
Show how the project can contribute to:
The standard of living: Providing affordable housing can improve living conditions for
low-income families.
Enhance community development: The project can include amenities and infrastructure
that benefit the entire community.
Increase both foreign exchange savings and reserves
Aid in the lowering of prices
Increase local demand for local materials & labor
Impact of the project in terms of:
Employment & Income, resulting in the improvement in the standards of living of its
employees and their families.
Taxes, since the increase revenues of local and national governments can then be used
for the development of the community.
Supply of housing, observing the different possibilities of influencing prices and foreign
exchange balances
Demand for home-grown to allow local producers to sell more materials
VI. ORGANIZATION & MANAGEMENT STUDY
Legal structure of the development company.
Management team and their qualifications.
Organizational chart and responsibilities.
Staffing plan and compensation structure.
Administrative policies and procedures.
VII. ENVIRONMENTAL STUDY (Impact Assessment)
Potential environmental impacts of the project (e.g., deforestation, soil erosion, water
pollution).
Mitigation measures to minimize environmental damage.
Compliance with environmental regulations and permits.
VIII. RECOMMENDATION
Overall assessment of the project's feasibility.
Recommendations for moving forward with the project.
Suggestions for improving the project's profitability or sustainability.
IX. ANNEXES
Market research data
Site plans and technical drawings
Financial statements
Permits and licenses
Other supporting documents
This outline provides a comprehensive framework for conducting a feasibility study on a pre-
selling low-cost lot project. Remember to adapt it to the specific characteristics of your project
and the local market conditions. Good luck!
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