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The primary exit is to sell the land to the homebuilder
who is under contract on the property. A contract
is entered into, and a timetable determined, before
a property is purchased. Significant, non-refundable
earnest money is required of the homebuilder in
order to demonstrate their commitment to the project.
They are also responsible for planning and zoning
work in order to create a major financial investment
from the homebuilder, making its commitment to the
property substantial. |
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If
the homebuilder decides not to move forward for any reason,
all of the planning, engineering, and zoning work shall
be assumed by MLI, and completed by another homebuilder
that is in partnership with MLI. Because of MLI’s
relationships with several homebuilders in the area, the
property can be sold to another such entity at a similar
price point. |
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The
MLI team is comprised of experienced development professionals,
who are capable of finishing the project to whatever level
of completion is required. While not the goal of the business
plan, this provides a crucial exit strategy, as MLI is
able to complete the development and sell off finished
lots to smaller homebuilders (in the case of the decline
of large homebuilding conglomerates) and actually sell
those lots at a premium, as smaller builders are having
an increasingly difficult time gaining access to lots ready
for construction. |
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