Financial Feasibility quantifies the costs of development to determine whether the returns justify the investment. The financial feasibility of a development project includes estimating the elements of the project budget, operating pro forma, cash flow, debt and equity financing alternatives; and evaluating a project’s return to the investor(s).

Typical Components of a Financial Feasibility Study include:

  1. Executive Summary
  2. Introduction
  3. Project Description – Site Plan, project size and mix, amenities
  4. Project Costs – Hard costs & soft costs
  5. Project Financing – Conventional, Tax-exampt, HUD, etc.
  6. Sources and Uses of Funds
  7. 10 Year Project Pro forma
  8. Key Ratios – Internal Rate of Return, Debt Coverage Ratios, Net Present Value
  9. Sensitivity Analysis
  10. Conclusions and Recommendations