Most books stop at stabilized assets. Linneman dedicates significant space to ground-up development. He explains the "Land Leverage" concept—where the riskiest equity (the land buyer) gets paid last. If you don't understand the , you should not invest in development.
| LTV Ratio | Interest Rate | IRR to Equity | |-----------|--------------|----------------| | 60% | 5% | 9.2% | | 75% | 6% | 6.1% | | 80% | 7% | 2.3% (negative after fees) | peter linneman real estate finance and investments pdf
Real Estate Finance and Investments: Risks and Opportunities Most books stop at stabilized assets