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MPC/HB Guide - Data Input & Feature Information



MPC/HB looks at Developer as a (i) land developer, (ii) home builder, (iii) seller of Land Parcels (“LP”s) to Third Party Home Builders (“3rd PHB”s), (iv) Seller of Income Properties (“IP”s) to 3rd Party Developers, and, (v) IP developer/owner of select IPs.

Project results are heavily influenced by:
  • Project Timing (months to accomplish)
    • Land Negotiation Period
    • Due Diligence Period
    • Planning & Zoning Period
    • Off-Site Development
    • On-Site Development
    • Home construction period
    • Other Timing Matters:
      • Sale of Developer’s Homes
      • Sale of LPs to 3rd PHBs
      • Sale of Income Property Acres to 3rd Party IP Developers
      • Commencement of HOA budget funding
      • Land Purchase
  • Off-site and On-site Land Development costs
  • Impact and Usage Fees
  • Choice to be a Golf Community
  • Amenities
  • Home Builders’ Design Center
  • Debt Leverage levels
  • Profit margin on home sales
  • JV with Land Seller
  • LP sales to 3rd PHBs
  • IP sales to 3rd Party IP Developers
  • Project retention/development of IPs
  • HOA Budget
  • Models & Specs (options)
  • FF&E Finance (options)
  • Sale & Leaseback (“S/LB”) of the Model Homes - (options)

The Income Property Suites Programs are designed to link to MPC/HB when selected as a part of a Project.

The permutations and combinations of debt, equity, home sales, LP and IP sales and IP income are almost infinite.

Golf Impact On Project Economics

The Program has an AIR that runs in Section 14 - Golf Impact on Project Economics of Program Setup that allows User to make entries that affect the sales prices of (i) Land Parcels, and, (ii) both Developer and 3rd PHBs homes. See the discussion of " Golf Community Impact" in the Golf Module.

Income Properties Programs

If any of the 12 Income Properties are incorporated in the Project, there are two steps that must be followed:

  1. Enter the number of acres assigned to the IP.
  2. Elect one of the following options:
    • To sell the acres - select "N"
    • To develop the IP - select "Y"

Automated Data Input Routine (A.I.R.)

Data input for the Program is handled by offering User a guided procedure for making entries, choices and decisions. Such a procedure we refer to as an Automated Data Input Routine (“AIR”). There are 18 AIRs in the MPC/HB Program. They appear as User works through the 30 Section “Project Setup" routine (see "Contents"). Not all Sections required inputs, choices or selections.

About the AIRS:
  1. An AIR informs User about the nature of the next input.
  2. If an input area has existing data, User is informed as to the exact data entry that exists and is queried if User wants to make a change.
  3. If User elects to make a change:
    1. User is informed of any upper or lower input limits and is provided with a data input method (either a box or a form).
    2. Many data input methods are validated. Meaning, if limits are present, a User input must meet the criteria of the limitations; or, User will remain at that input step until:
      • i. An “in limit” input is made; or,
      • ii. User backs out of the routine. In that case, the AIR will bring to the User’s attention steps required to meet the needs of the Program.
  4. Then, AIR asks if User wants to change the input.
    1. If so, User cycles through the input process again.
    2. If not, AIR takes User to the next input step in the current Section or to the next Section.

Master Setup

Program Setup - Master AIR AIR Skip Over Jump To Section
1 Setting Up AIR No No
2 Land Use AIR No No
3 Calendar Timing Inputs AIR Yes No
4 Developer’s LPs Setup
Rental Home Community
AIR 4a
AIR 4b
5 Models, Specs, S/LB, FF&E AIR Yes 2
6 Developer’s Homes Construction AIR Yes 24
7 Land Pricing AIR Yes 2,24
8 Home Builder's Design Center Setup AIR Yes No
9 3rd PHB Setup AIR Yes 2
10 Land Development - Costs & Rebates AIR Yes No
11 HOA Budgets and Burden AIR Yes No
12 Land Purchase Contract - Deposits AIR Yes No
13 Debt Finance Setup
Debt Guarator
AIR 13a
AIR 13b
Yes 24
14 Golf Impact on Project Economics AIR Yes 24
15 Equity + Land Seller JV;
Developer Carried Interest;
Debt Guarantor Carried Interest.
AIR Yes 2,7,24
16 Cash Distribution(s) Setup AIR Yes No
17 Land Cost Allocations to LPs Confirmation Auto-Prompts for input
18 Income Property Links Ck Confirmation Display Linked Files
19 Income Property Selections Chart Chart showing Acreage allocation to all Land Uses
20 Income Property Uses Display On-Screen run down of all Income Property Types and Status in the Project
21 Retail Center Setup Ck Alerts if any settings are needed.
22 Report: Equity Provided by Project to Developed Income Properties Report – Only shows when Project is developed with one or more IP(s)
23 Commercial LPs Lease Rate Auto Adjust Report - AUTO resets any Commercial LP lease rate that results in less than Targeted ROI
24 A "post data input" AIR allowing User to fine-tune IRR. See “What-If” Analysis. AIR User works through different LJL setups to see IRR results
25 Display Cash Flow Summary Option to view Consolidated Cash Flow Statement
26 IRR Report and Equity Charts Option: view each Equity Class's Contributions and Distributions, by month.
27 Go/No-Go Routine & Go See Screen with Issues Option to view automated review of all input screens status w/ go-to any w/ issues
28 Developer’s Home Sales Chart Chart showing Developer’s Home Sales closings, by month, by LP, by UT
29 Tour Input Screens Auto guided tour to each DI Screen to view setups
30 Program Wrap-up & Close AUTO routine that displays alerts by any Input screen’s marker that has an issue

Number of Residential Land Parcels

There are three key Program Design Constraints:
  1. The Program is designed to accommodate 40 residential subdivision land parcels (“LP"s).
  2. Developer may retain up to 8 LPs ("DLP"s) for its homebuilding program consisting of up to 13,200 Homes.
  3. As set up by User, the difference in total LPs and LPs to Developer goes to third party home builders (“3rd PHBs” and “3rd PHB LP”s). There is a Program Constraint of 32 LPs that may be allocated to 3rd PHBs.
Pricing the 3rd PHB LPs:
  • User receives an On-Screen pricing guideline for setting LP sale prices to 3rd PHBs. This guideline is based on the Program’s “Developed Land Cost Allocation” algorithm plus a User provided profit margin.
  • Each 3rd PHB LP is assigned acres, units and timing (as to when it will be sold by Project to the respective 3rd PHB).
  • On-Screen alerts and messages guide User.

What If Analysis ?

"What If" is essentially a KPI What-If? Analysis tool. It allows the User to manipulate and measure four major Project Economic Elements which in aggregate have the greatest effect on determining the feasibility of a Project.

After all data input is provided to the Program via Sections 1 through 16, User has the opportunity to test key decisions that have the greatest impact on IRR.

Section 24 of Program Setup has an option to play the WHAT-IF? game.

By selecting this option, User is taken to the “What-If” Screen. Here, User is offered two ways to play:

Random - User works in any order through the four elements of data input:
1. Sections 6, 7 & 9 Effects on Revenue and Profits:
  • Home Construction
  • Land Pricing
  • Markup - LP sales to 3rd PHBs
2. Section 13 - Debt Loan / Cost Ratios:
  • Land Loan
  • A&D Loan
  • Home Construction Facilities (3)
3. Section 14 – Golf Community - Profit Enhancement:
  • Developer's Home Sales
  • LP sales to 3rd PHBs
  • LP sales to IP Developers
4. Section 15 – JV Land Seller as a JV Partner

At any point User may call for an IRR computation to test the new setup.

Guided - User is taken sequentially through the four elements of data inputs and offered IRR updates at the end of each element.

On-Screen charts and graphs assist User in understanding the dynamics of each setup. An optional printout of the Screen gives User a report for future reference.

To view a further explanation of how What-If ties in to the evaluation of Program IRR results, click on tab “Input Flows”.

Linked Properties

Links between the parent Project and Income Properties
Hotel (Project Owned Income Property)
Statement of Cash Flows Transactions with Parent (the "Project")
Sources of Funds
Cash (Equity Investment from Parent) 1 $4,500,000
Uses Of Funds
Operating Cash Distributions to Parent 2 $1,750,000
Liquidation Distribution to Parent 3 $7,200,000
Whirlwind MPC - Dallas, Texas (the "Project")
Statement of Cash Flows-Project Owned Income Property Affiliates (Hotel)
Sources of Funds
Operating Cash Distributions from Hotel 2$1,750,000
Liquidation Distribution from Hotel 3 $7,200,000
Uses Of Funds
Cash (Equity Investment in Hotel) 1 $4,500,000
Other Owned Income Properties:

Data Input Screens

Data Input Screens

Nav Button Screen Name AIR On-Screen Setup Section
CA Land Fully Absorbed Costs – Allocation to Uses1 N X
CD Equity-Holders’ Priorities, Preferences & IRRs Y 16
D Debt Financing Y 13,24
DC Design Center Y 8
E Equity Financing Y 15,24
HOA Home Owners Associations Y X 11
L Land Price Y 7,24
L Land Seller JV Y 15,24
L Developer’s LPs Setup Y 4
L2 Acres Allocations; LPs; IPs; Streets; Setbacks Y 2
Lc Land Purchase Contract Deposits Y 12
LT Land Parcel Disposition Finance Transactions N X
M Project Timing; Home Construction Y 3,6
MS Models, Specs, S/LB, FF&E setup Y 5
NL Names & Labels N
S-1 Development Costs; Developer’s Overhead Y 10
S-2 Professionals; Amenities; Real Estate Taxes; Economic Development Incentives Y 10
1. Generally, no User setup required. These schedules are self-adjusting to most Program requirements. User receives alerts if attention is required.

Names & Labels


User has the following data entry requirements:
  • Project Name
  • Location - City and State
  • Name Developers Land Parcels / Subdivisions
  • Name Developers Home Models / Unit Types
  • Give Abbreviations for Unit Types
  • List Professionals Engaged
  • Select Monitor Size utilized by User

Land Purchase Contract


  • Enter each Contract Deposit as a percentage of the Purchase Price
  • Designate each deposit as Applicable to the Purchase Price or Not Applicable to the Purchase Price
  • Enter the time interval between each Deposit
  • Name of Land Seller

Rental Home Community


When the election is made to employ Developer's LP-1 as a rental home community, User will be taken through a series of inputs that are designed to facilitate:

  • Rent Rates and Operating Expenses for the Homes.
  • Selling and Retro-fit expenses when the Homes are sold.
  • Number of months after construction completion before rents commence.
  • Number of months before the Homes are sold when rents terminate.

When the Rental Home Community Option is elected, the Program eliminates any Models and Specs otherwise designated for LP-1. In the Rental mode, the Program remains unaffected as to the following:

  • The A&D Loan and Construction Loan amounts and amortization schedules
  • Homes Construction Start schedule
  • Homes Construction Period
  • Homes Construction Cost
  • Gross Sale Price of the Homes

NOTE! A Screen M alert will appear on Screen L. That will be for ''Low Profit'' for Home Sales in LP-1. This results from Sales and Retro-fit Expense absorbed in the month of Liquidation.

All Rental Homes are sold in the last month of the Project's Program Calendar.

At the end of the Rental Homes setup routine, User is shown a comparative analysis of:

  • Rental Home Community option elected - the combined benefit of Net Sales Price and Net Rental Income
  • Rental Home Community option not elected - Net Sales Price

WIP as of 10-12-2017:

  • A “Rent To Own” option is being designed as a User option.
  • The Rental Home Community option will be added to the What-If analysis.

Project Timing


The Program Calendar extends for 120 months (10 years). Program events are timed into the Program Calendar by either numerical or date formats. Data Input Screens report events in both (i) Program Months and (ii) Calendar Months. Here is an example:

  • The first month of the event is month 37.
  • An event takes 12 months to complete.
  • The Program will end the event in month 48.
  • The first and last month count in the total of 12 months.
Key Timing Inputs for the MPC/HB Program are made in an AIR that runs in Section 3 of Program Setup. They are:
  • Project Start Date
  • Negotiation Period for Land Purchase
  • Months to prepare for Land Purchase Closing
  • Months for Planning & Zoning (“P&Z”) approvals
  • Land Close: Before or After P&Z completed
  • Months for Off-Site Development work
  • Delay in start of On-Site work after completion of Off-Site work
  • Delay (after On-Site completion) in Production Units construction starts
  • Monthly Gap between Unit Type Starts
  • Land Parcels On-Site Development starts “spread” in months apart

Note: In the Beta version of MPC/HB and all IP Suites Members, the Program Calendar will be 240 months.

Land Density - Residential Lps


User makes two entries that determine residential density:
  1. Maximum density in Units per Acre for any one residential LP.
  2. Maximum density in Units per Acre for the Project (all residential LPs).

Program On-Screen alerts notify User during setup when a density Program Constraint is violated and ques User as to an acceptable entry.

Third Party Homebuilder (“3rd PHB”)


A strong contributor to a profitable Master Planned Community is the sale of residential land parcels to 3rd PHBs. In that regard, MPC/HB allows up to 40 Land Parcels to be designated for residential subdivisions. There are three abbreviations associated with residential LPs: (i) LP for all LPs, (ii) DLP for Developer’s land parcels; and, (iii) 3rd PHB LP for third party homebuilder land parcels. Program design constraints impose the following limits for a Project:

  • Total - 40 LPs
  • Developer - 8 LPs.
  • 3rd PHBs - 32 LPs.

If Developer elects less than 8 LPs, the maximum number of LPs for the Project is 32 plus the number of LPs allocated to Developer. The AIR in Section 9 - Acreage Setup, guides User in handling the LP setup. The 3rd PHB LP setup can be handled in one of two modes, either (i) Manual or (ii) Auto.

Givens - Based on the setup of Total LPs, Developer LPs and Acres allocated to Developer LPs, the Program determines the number of (i) LPs; and, (ii) Acres for assignment to 3rd PHBs.

Inputs: (in the remainder of this Topic, LP refers to 3rd PHB LP)
  • Assign Acres to each LP
  • Assign Units to each LP
  • Timing (to the Program Calendar) for closing of the sale of each LP
  • Profit Margin on the LP sales transactions
  • 3rd PHB home construction inputs – Because User may elect the Option for the Project to share in 3rd PHB homes sales revenues, three inputs1 are required for computing total revenue from 3rd PHB home sales:
    • Land Price - as a percentage of home sales price (to compute home sales prices)
    • Home Starts per month - as a percentage of total Units in each LP.
    • Construction and Marketing period (in months) required to get to closing.
Auto mode - In Auto mode, the Program handles the LP setup, as follows:
  • Spreads Acres among the LPs and works out any uneven allocation requirement of acres among LPs.
    Example: In Program Setup, 3rd PHBs are allocated 370 acres and assigned 7 LPs. An algorithm sets the allocation for the 370 acres among the 7 LPs, as follows:
    • 50 acres each for 6 LPs; and,
    • 70 acres for the 7th LP.
  • Enters a sale closing date for the first LP that is one month after the completion of Off-Site Development; and enters, a closing date for each subsequent LP in one-month increases.
  • For the items below, reports existing data entries, does not change them and gives User the opportunity to do so:
    • Targeted Profit - will alert User to make an entry if data cell is blank or zero.
    • The three 3rd PHB home sale inputs1 (see above).

Land Pricing


Land Price is one of the most significant variables in the financial structure of a real estate development. In this AIR, User is given the opportunity to test the impact on Project IRR while making the Land Price decision.

User has three land purchase pricing methods from which to select:

  • (i) Per Residential Unit
  • (ii) Per Gross Acre
  • (iii) Fixed Price

The resulting Land Purchase Price is compared to Appraised Value (“AV”), which is a User input. If User’s price is over or under AV, User will receive an alert and a suggested price which User may elect to have the Program employ or User may elect to keep the existing setup.

The Land Pricing AIR runs in Program Setup - Section 7, as follows:
  • User receives an On-Screen IRR report for the Project and Equity Classes.
  • User is queried to set Land Price selecting one of the three optional methods shown above.
  • The Program will reset the Project economics, factoring in the Land Price.
  • An On-Screen report compares IRRs before and after Land repricing.
  • Retry – At the end of this Section’s AIR, User is offered the opportunity to try different Land Prices while observing the IRR results for each Equity Class and the Project.

Later in the Project Setup routine, in Section 24, User has the opportunity to change both Land Price and the Equity setup (including the “JV with Land Seller” option) to evaluate effects on Project IRR.

Land Seller - Joint Venture


Land Seller - Joint Venture with Developer in the Project

This accommodates the Land Seller contributing all or a portion of the Land Purchase Price to the Project. The JV decision is made in an AIR that occurs in Section 15 of Program Setup.

Land Seller JV Decision – User makes an entry during the AIR that tells the Program if there is a JV between Land Seller and the Project. If there is a decision for a JV, the second entry will be queried. If a JV is not elected in the first step, there will be no query for the second entry.

JV Elected – The percentage of Land Price contributed to Project as Land Seller’s Equity will be requested. This entry sets the percentage of the Land Purchase Price that will be contributed to the Project by Land Seller. Class E-7 is reserved for Land Seller’s Equity account. The percentage data entry is validation controlled in a range of 10% to 100% of the Land Purchase Price.

Timing of Land Seller’s Capital Contribution - When a Land Seller JV is elected, Land Seller’s capital contribution occurs in the month of the Land Purchase closing.

Acreage Allocation & Land Usages


User sets the land allocation and IP selections in the following order:
As Example:
Gross Acres acquired 1200
Acreage Allocation for non-development purposes:
Streets & Setbacks 100
Green Area 70
Amenities 16
Design Center 14
Acres for Developer’s DLPs 600
Total acres allocated to IP’s selected as part of the Project (individual IP’s selected and acres allocated) 80
Remaining acres are assigned to 3rd PHB LPs. (under “Suites Release Schedule”, see "Suite Members") 320

Golf Course Information: Golf Module

Acres allocated for an IP have two usage options:

  • Sell to a 3rd Party Developer – The acreage sale will be based on Program’s “Developed Land Cost Allocation” plus a User provided markup.
  • Develop – Under this option, User employs the respective Staircase Suites program to setup that IP.

The AIR in this Section of Program Setup takes User through the Acres acquired, Acreage allocation, IP selections and Density setup. Inputs subject to Program Design Constraints have a validation component in the AIR.

A maximum Project configuration would consist of:

  • Acreage allocations for streets, setbacks, green space, Amenities and an optional Design Center.
  • 40 LPs for residential subdivisions:
    • Up to 8 LPs which are retained by Developer for its home building operation (“DLP"s).
    • A maximum of 32 LPs sold to 3rd PHBs.
  • 12 Types of Income Properties.
(see Topics “Number of Residential Land Parcels”, “Land Density” and “The Income Property Suites Programs”)

Developer’s Overhead Costs


  • Mobilization
  • Office & OH
  • Staff
  • Printing
  • Outside Professionals:
    • Engineers
    • Land Planners
    • Zoning Consultants
    • Legal
    • Traffic
    • Endangered Water Ways
    • Consultant - Builders
    • Consultant - Financing
    • Consultant - Construction Management
  • Marketing
  • Front End Marketing
  • Project Amenities Budget
Other Project Revenue & Costs:
  • Model Homes Maintenance
  • Model Homes Landscape Maintenance
  • Model Homes Area Retro-fit at Liquidation
  • Real Estate Taxes
  • Economic Development Incentives

An AIR is being developed for this data input section.

Cash Distributions Setup


The Program is engineered to accommodate up to seven equity classes if used in a manual setup mode and six classes when used in the Program Setup mode.

A minimum number of equity classes would be one, two or three, as follows:

  • E-1 – Outside Capital
  • E-6 – Developer (if entitled to a Carried Interest)
  • E-7 – Land Seller in a JV with the Project (if the JV option is elected)

Cash Distributions are handled in Section 16 in Program Setup. Each Equity Class is set up in an AIR that employs a DI Form, as shown in the following:

Available for Project Y/N Note: There is a Table for each Equity Class, 1 through 5
Eligible Rate CUM ROC IRR Term
Preferred Y/N % Y/N Y/N %
1st Priority Y/N % Y/N Y/N %
2nd Priority Y/N % Y/N Y/N %
3rd Priority Y/N % Y/N Y/N %

  • Available for Project – Determines if the Class will be included in the Project. In some setups involving a Land Seller JV option, E-3 and/or E-4 may not be employed.
  • Eligible – Is the Class eligible for the distribution step?
  • Rate – The rate of return applicable to the distribution step.
  • Cum – Is the distribution subject to accumulating if not fully funded? If not, it has no future effect on distributions. If it is cumulative, the shortfall accumulates as a priority right, at the same distribution step, in the next distribution.
  • ROC – Return of Capital – Does the amount received reduce the Capital Account balance?
  • IRR Term – Determines if the Class is retired from the Project at such time as it achieves a targeted IRR.
Note: (In the Program Setup mode, E-5 is not used.)

Development Costs


Options for cost allocation methods for Off-Site Cost Items include:

  • (i) Per Acre
  • (ii) Per Unit
  • (iii) Lump Sum

Off-Site Development Costs:
  • Roads & Crossings
  • Grading & Drainage
  • Traffic Control Devices
  • Bridges
  • Endangered Waterways
  • Water & Sewer System
  • Electric & Other Utilities
  • Permits & Fees
  • Extraordinary Costs - Lift Stations (water and/or sewer); off-site road improvements
  • Professional Costs
  • Developer OH & Profit

Note: Regarding the Off-Site Development budget, a potential significant one-time cost factor pertains to dry utility providers. Most dry utility providers require full payment in advance of construction. This means they will not schedule your project for construction until full payment and the signed contract have been received. The service provider must also be provided with a recorded final plat and necessary easements.

On-Site Development Costs - Developer's Land Parcels:
  • Fire Lines & Hydrant System
  • Water
  • Sewer
  • Electric & Other Utilities
  • Streets Curbs & Gutters
  • Drainage
  • Traffic Control Devices
  • Bridges & Crossings
  • Fencing
  • Fees & Permits
  • Professional Costs
Project Amenities Budget
Other Project Cost & Revenue data inputs:
  • Costs:
    • Model Homes Maintenance
    • Model Homes Landscape Maintenance
    • Model Homes Area Retro-fit
    • Real Estate Taxes
  • Revenue Sources:
    • Economic Development Incentives
    • Development Rebate Entitlements from Adjacent Land Developers

User has two choices as to the scope of detail to provide for the Site Development Cost section:

  1. Detailed Input: several line item inputs for each of the above; or,
  2. Macro Input: One number for each of the following:
    • Pre-Land Acquisition
    • Final Planning & Engineering
    • Project Off-Site Development
    • Developer's DLPs On-Site Development
    • Developer's Internal Overhead
    • Amenities
    • Real Estate Taxes
    • Economic Development Incentives

Home Construction Costs


For the purpose of a Project’s feasibility analysis, the Home Construction Cost component of the MPC/HB Program provides User with several “big picture” tools and procedures to use in developing home construction cost and revenue factors. These tools and procedures are described below:

  • About the “Home Construction Database” or (“HCDB”) – The Program provides 13 sets of Home Models (see Glossary of Terms, “UT”) to be used to set the ranges for size, cost, and construction period (in months) of homes to be built by Developer.
  • Using the Staircase Home Spec Translator Interface (“HST”), User may upload their floor plan specifications to the MPC/HB database and employ same in the Project Feasibility analysis.
  • Starting with LP-1, which contains the smallest and least costly set of 11 home types, User has a vast array of options as to setting up the Developer’s home building program which can encompass up to 8 DLPs and 88 UTs.
  • Each database set provides the following data:
    • Square Footage of Homes – starting with the first Unit Type in each Land Parcel, the UTs progress in size increments through the last Unit Type in the set.
    • Percentage change in Construction Cost from smallest to largest Unit Types.
    • Construction Cost per Square Foot.
    • Allocation of Construction Cost across NAHB’s standard cost classes.
    • Sales Price of Homes (based on User choice of (i) % of Construction Cost; or, (ii) Gross Profit Margin).
    • Construction Period (in months) based on: Home’s total square footage / square feet build rate per month.
    • Change in Percentage Allocation across Unit Types (increase/decrease/no change).
  • Return On Investment ("ROI") Target.
  • Feedback Report (Home total cost and Profit, a side panel Land Parcel usage review).
  • Dynamic “In Routine” reporting and sensitivity analysis, including:
    • During Program Setup, Home Construction Profit is reported for each DLP.
    • Profit Report is followed with the Project's IRR.
    • User Option - change home construction profit input setup and loop to see home construction profit and Project IRR results. Project finance (Debt and Equity) is reset by the Program in this routine.
Help & Guidance:
  • "Go Find It" contains five Home Construction related sections.
  • On-Screen charts and graphs called with a click.
  • On-Screen messages called with a click.
  • User Assistance Guide uploaded with a click.

Models & Specs


User Guided Input Routine – User is guided in the setup by an AIR that runs in Section 5 of Program Setup. The AIR offers a flexible approach to setting up each of the four sub-sections as follows:

1. Model Homes:
  • Choice to include Models in the Project.
  • Option to apply Premium Pricing to Models when sold.
  • Choice to add the cost of FF&E to the Sales Price.
  • If Models are included in the Project, 2 options are available to designate where:
    • Default – Each UT in each Developer DLP gets 1 model.
    • Custom – User determines which UTs receive Models and how many.
2. Spec Units:
  • Choice to include Specs in the Project.
  • Option to apply Premium Pricing to Spec Units when sold.
  • If Specs are included in the Project, 2 options are available:
    • Default – each UT in each Developer DLP gets 1 Spec.
    • Custom – User determines which UTs receive Specs and how many.
  • S/LB of the Models
  • Finance the FF&E
  • Neither
3. S/LB - Data Input Fields:
  • Lease Rate
  • Markup or Markdown over Production Unit of same type for:
    • Base Cost
    • Upgrades
    • FF&E
4. FF&E Financing Data Input Fields:
  • Interest Rate.
  • Interest Payment Interval.
  • Loan Expenses.
  • Loan Amount (as % of FF&E cost).
  • FF&E Cost.

HOA Budgets


User navigates to the HOA DI Screen and with On-Screen inputs completes the HOA budget.

HOA funding is handled, as follows:
  • Monthly costs are allocated based on acreage ownership. These costs are shared by:
    • Developer
    • 3rd PHBs
    • IP owners
    • Developer as an IP developer/owner
  • As homes are sold, Home Buyers step into the sharing of HOA costs. These buyers include:
    • Developer's Home Buyers
    • 3rd PHBs’ Home Buyers

Home Buyers progressively take on a larger share of the HOA operating cost to a point where they, and the IP owners (inlcuding Developer), relieve Developer and 3rd PHBs of the HOA burden.

The MPC/HB software currently has a capability of one master HOA. Multiple HOAs will be accommodated in the Beta Test version.

Land Transactions


This is more of an internal computational schedule than a DI Screen. The process conducted by the algorithms in this schedule assures that the Land Purchase Price is allocated on a Per Acre basis across all Land Uses.

Generally, User is not called on for input. Certain Commercial Center elections require User to make an input. In any such event, User receives an On-Screen alert as to specific action to undertake.

Debt Guarantor Carried interest

Using Equity 5 for Debt Guarantor’s Carried Interest
  • Of the seven Equity Classes, Equity 5 is reserved for an optional ‘’Debt Guarantor’’.
  • In the AIR “Initial Equity Classes Capital Setup”, which runs in both Sections 13 and 15, User is queried if a Debt Guarantor is to be included in the Equity Classes structure.
    • If User answers YES, User is queried as to what percentage of ‘’Total Project Debt’’ Guarantor is guaranteeing.
    • Based on that answer, User is given guidance as to the minimum percentage interest Guarantor should receive in Cash Distributions.
    • The guidance is the percentage of Project Debt guaranteed divided by 10.
    • User is then queried to enter Guarantor’s percentage interest in Cash Distributions.
  • Guarantor’s Preference and Priorities, as selected by User, is handled in the AIR contained in Cash Distributions, Section 16.

Developers DLP Setup


  • Following User’s setup of Developer’s number of (i) DLPs; and, (ii) Acres, which is done in Screen L2. In Screen L User completes Developer’s setup for each DLP by entering the number of:
    • Acres
    • Unit Types
    • Units
  • On-Screen messages and alerts will provide User with guidance during the above setup.
  • If a Density violation results from a User entry, User will be alerted.
  • User determines which UT set is called from the Data Base by selecting Low, Middle or High.
  • The Program handles the selection of the UTs and uploads the related size, costs and construction period from the Program home construction data base.
  • Based on the choice of Low, Middle or High, the impact on Project home construction cost and home sales revenue is significant.
    • Low - starting with UT 1, progress in adding UTs toward the higher numbers (progressing upward in square footage).
    • High - starting with UT 11, progress downward toward the lower numbers (UTs get smaller in square footage).
    • Middle – The Program determines the UTs to achieve a Middle result.

Here is an example of User electing 5 UTs for one of the DLPs. The Program’s selection of which 5 UT’s is based on Users choice of Low, Middle or High:

UT# SF Cost/SF SP/SF Low Mid High
1 1700 $100 $250 X1
2 1800 105 255 X2
3 1900 110 260 X3
4 2000 115 265 X4 X1
5 2100 120 270 X5 X2
6 2200 125 275 X3
7 2300 130 280 X4 X1
8 2400 135 285 X5 X2
9 2500 140 290 X3
10 2600 145 295 X4
11 2700 150 300 X5

(SF-Square feet, CC/SF-Construction Cost per SF, SP/SF-Sales Price per SF)

Land Allocation costs


Fully Applied Land Cost (“FALC”) is determined by adding to the Land Purchase Price all Project costs.

FALC is then applied to Land Uses on a per acre basis based on one of the following methods:
  • Pro rata to all Land Uses
  • 100% to Developer
  • 100% to 3rd PHBs
  • 100% to specific Income Properties

The Program is preset as to these methods of FALC allocation but User may change the setup.

The following categories of Project costs comprise FALC:
  • Land Cost
  • Pre-Land Acquisition
  • Internal Costs
  • Final Planning & Engineering - Outside Professionals
  • Model Homes Sale/Leaseback Expense
  • Model Homes FF&E Cost
  • MPC's Share - HOA Budget Expenses
  • Models Maintenance
  • Models - Retro-Fit
  • Land Contract Deposits Not Applicable to Purchase Price
  • Taxes on Inventory Land
  • Design Center
  • Off-Site Development
  • On-Site Development
  • Amenities
  • Loan Points & Costs
  • Interest

Design Center

Design Center is the Master Planned Community’s marketing center. It’s where visitors arrive and is the portal to the Project itself. It is the Project’s show-pony.

A well-conceived Design Center contains a common area which features the master plan topographical table model showing the layout of the streets, amenities, land uses and golf route (where the MPC is a golf community). Each residential subdivision is featured as are the income property land parcels. Ideally artist conceptual renderings of the built-out MPC will be on display.

As the residential land parcels are sold to 3rd PHBs, they will occupy their own area in the Design Center where models and renderings of their homes, floor plans and upgrade options are displayed.

In Section 8 of Program Setup, an AIR queries User to determine the size of the Design Center, the acreage required and the cost of (i) the Design Center building, (ii) FF&E; (iii) landscaping; and, (iv) development fees. A Debt financing option for the Design Center costs is included in the AIR.

The Project’s economics incorporate the following:
  • Costs - Site development; building construction; FF&E, landscaping; development fees.
  • Debt - Debt finance proceeds; debt service.
  • Operations - Operating net income after debt service.
  • Liquidation – Net sales price; conversion costs and debt retirement. At the end of the Project, the Design Center is converted to an alternative use and sold.
  • Lease Space Income - 3rd PHBs pay rent for their display area. Income Property owners may also use the Design Center for marketing purposes and would pay a fee for doing so. These considerations are incorporated in the Design Center AIR.

Debt Financing


The Debt AIR is in Section 13 - Program Setup and guides User through the following areas of Debt Financing:
  • Land Acquisition and Development Loan (“A&D Loan”)
    • Land Purchase Loan
    • Off-Site Development & Planning and Engineering
    • On-Site Development
  • Home Construction Loan Facility (“HCLF”) – Where Developer is also a Home Builder, the Program offers three classes of Construction Loans:
    • Model Homes
    • Specs Units
    • Production Homes
  • Model Homes FF&E
  • Finished Lot Sale & Repurchase / Land Banker
Land Acquisition and Development Loan (“A&D Loan”)
  • Land Purchase:
    • Land Loan Amount – The loan to cost (L/C input) is located in Screen D. This Debt related matter runs in Section 13, Program Setup. It has a major influence on the amount of Equity that will be required by the Project. User has an option to size the Land Loan based on:
      • Option 1 – Traditional - Results in Loan Amount being less than Land Cost. User’s L/C input less the percentage of the Land Purchase Price contributed by Land Seller as an equity investment in the Project.
      • Option 2 – Aggressive - Results in total Land financing greater than Land Cost. The L/C input is provided by User in Screen D. The Loan Amount is not impacted by Land Seller’s JV capital contribution.
    • Three Land Loan Options:
      • Type 1 - Short Term – Among other reasons, applies where the Original Land Lender will not be the A&D Lender. This is applicable to land purchased from a government entity (such as a State Land Trust) that (i) provides acquisition financing; and, (ii) requires the loan to be retired prior to land development.
      • Type 2 - Short Term Replacement Loan – A Type 2 loan may or may not be employed by the Program. The determination is made when User’s input tells the Program if the Original Land Loan is Short Term or Long Term. If Long Term is selected, there will be no need for a Type 2 Loan.
      • Type 3 - Long Term – Use this when Land Lender is the A&D Lender.
  • Off-Site Development and Planning & Engineering – Comprehensive budget dealing with the entire Master Planned Community. In the AIR that runs in Section 10 - Program Setup, there is an option to (i) do 9 Macro Inputs (use for a first pass); or, (ii) engage in the line item budget requirements.
  • On-Site Development – Pertains only to Developer’s DLPs. There are currently no short-cuts available. The A&D Loan amortizes into the three Construction Loan facilities in the month of each Developer home construction start.
    • At User option, revenues from 3rd PHB and IP Land Parcel may be applied in whole or part to amortize the A&D Loan.
    • In a straight “Land Development” setup, Developer is not a home builder. In that scenario, LP sales proceeds and (if the option is selected, Project's sharing in 3rd PHBs home sale revenue) are the sole sources of A&D Loan amortization.

Debt Financing

Home Construction Loan Facility (“HCLF”) – Where Developer is also a Home Builder, the Program offers three classes of Construction Loans:

  • Model Homes
  • Specs Units
  • Production Homes

In that the HCLF may be from either the same or different sources for the three classes of homes (Models, Specs and Production), the Program offers three facilities.

This facilitates a User Option to select (i) unique terms and conditions; or, (ii) set up all three classes the same.

Setup inputs include:
  • Model Homes & Spec Units
    • L/C ratio for both upgrades and standard costs
    • Interest Rate, Loan Costs & Amortization Period
  • Production Homes
    • L/C Ratio
    • Interest Rate, Loan Costs & Amortization Period
Model Homes FF&E Financing

If Developer elects not to sell the Models under a S/LB, FF&E financing is an option.

  • Model Homes Sale/Leaseback (“S/LB”) - Models are sold to Investor in the month following their construction completion.
  • Pricing ranges from a plus or minus adjustment to cost (which inlcudes base cost plus upgrade cost and may or may not include FF&E costs.)
  • The lease expires in the month the last Production Home of same type is sold.
  • Program queries User for input for maintenance and Retro Fit costs.

This routine runs in Section 5 (Models and Specs) in Program Setup.

Finished Lot Sale & Repurchase

Finished Lot Sale & Repurchase Agreement1 (“FLS/RA”) – A FLS/RA transaction with a Land Banker may be the Land Loan Replacement source, in which case:

  • The FLS/RA choice will require Equity to fund any shortfall that occurs when the Original Land Loan is retired by the FLS/RA facility.
  • No User requirement. This is AUTO computed.
Income Properties ("IP")

Where Developer elects to develop and own an IP, Debt financing is set up in the Income Property’s program. Note: The Project handles all Equity requirements for Project owned IPs.

1. A traditional lender will be the Replacement Lender if FLS/RA is not selected. User options include:
  • An increase in loan amount by the Replacement Lender.
  • Loan Costs.
  • Interest Rates.

Loan costs will be financed in the Replacement Loan. The Replacement Lender will be the A&D Lender.

2. In the Auto Equity input routine, User determines:
  • The amount of Working Capital.
  • Elects if there is a JV with Land Seller; and if JV is elected, enters the percentage of the land purchase price Land Seller leaves in the Project as its equity.
3. Developer’s Carried Interest

is a User input. It sets Developer’s sharing in Cash Distributions after payments of Priorities and Preferences to the other Equity Classes.

4. “Cost Items”

are listed in the Debt and Equity DI Screens and consist of capital costs eligible for Debt and Equity financing.

Equity Financing


Equity may be comprised of up to seven classes. The Program’s Auto Equity setup calls for:
  • E-12 – Funds Working Capital (one-time funding).
  • E-24 – Funds stipulated Cost Items (synced to Project’s needs).
  • E-3 – Funds any month’s negative cash flow.
  • E-4 – Provides funding for Cost Items not fully funded by other Equity Classes (synced to Project’s needs).
  • E-5 - Reserved for Debt Guarantor. When used E-5 receives a Carried Interest Capital Account as consideration for providing a guarantee recquired by Lenders and is not a provider of capital.
  • E-63 – Developer’s Carried Interest Capital Account. Not a provider of capital.
  • E-7 – Land Seller’s Capital Account (when the JV Option with Developer is selected; funds on Land Close Date).

Before the point in time where the Property has operating cash sources (Land Parcel sales, Home Sales, Sharing in 3rd PHB Homes Sales Revenue and Net Cash Flow from Developer owned IPs), to the extent Debt proceeds do not cover costs, the remainder will be funded by one or more classes of Equity.

Once the property is on a “cash flowing” footing, net cash flows relieve Equity of Cost Item funding(s).

During the Operating Cash Flow period, for a number of reasons, negative cash flows may occur. Equity Class 3’s role is to fund any such monthly negative cash requirements.

Equity Financing

Equity Setup - There are two primary setup options for User to employ in setting up Equity:
  1. Manual - User may employ up to six contributing classes of Equity and specify which Equity Class (or Classes) cover which Cost Item’s Equity requirement.
  2. Auto - An alternative approach is to let the Program’s Equity Funding Algorithm (“EFA”) solve that riddle. In this latter case, the EFA routine leads User through a setup decision-making process. The basic steps are:
    • Do you want a JV with Land Seller?
    • If Yes, what percent of the Land Sales Price is Seller leaving in the transaction as its Equity (Class E-7)?
    • How much Working Capital (“WC”) do you want in the Project?
    • The EFA routine using Equity Capital provided by Classes 1, 2, 3 and 4 to develop the Equity solution.
    • Where Land Seller JV is selected, the timing of investment and amount of E7’s capital does not change.
    • At the end of the EFA routine, User has the opportunity to accept the initial Equity solution or loop again to modify (i) E-7 options; and (ii) WC amount.
    • At the end of each Equity loop routine, User reviews screen data to determine if the capital requirements and Project IRR are suitable. When that is the case, User has the option for Program Setup to continue to completion or to step out of the routine.

Equityholders Priorities, Preferences & IRR by Class


User inputs are required to establish the parameters of the Cash Distribution Waterfall. At User option, the following distribution steps may be employed for each participating Equity Class:

Rate of Return
(NA if Class not eligible for the event)
Equity Class Pref. Rate 1st Priority 2nd Priority 3rd Priority

1 ROC – Return of Capital - Used in the Cash Distributions setup to classify each cash distribution step as an event that does or does not reduce Equityholders’ capital account balances. This effects the burn-off of Priority Rights in the Cash Distribution Waterfall.

Other User inputs include:
  • Distribution Intervals – Monthly, Quarterly, Annual.
  • Percentage of available cash to distribute.
  • Parameter for timing of the last distribution before the liquidating Distribution.

Alerts and Messages to assist User.

When the IRR routine is initially called during the Section 23 AIR, User is queried for an “increment of change” input for the IRR calculation. Otherwise, the IRR routines are computed in an algorithm that requires no action on the part of User. IRRs are determined for each Equity Class and for the Project.

Notes Debt & Equity

  1. A tradition lender will be the Replacement Lender if FLS/RA is not selected. User data input requirements include options that offer (i) an increase in loan amount by the Replacement Lender, (ii) loan costs, and, (iii) interest rate. Loan Costs will be financed in the Replacement Loan. The Replacement Lender will be the A&D Lender.
  2. In the Auto Equity input routine, User determines (i) the amount of Working Capital and (ii)(a) if there is a JV with Land Seller, and, if so, (ii)(b) the percentage of the land purchase price Land Seller leaves in the Project as its Equity.
  3. Developer’s Carried Interest is a User input. It sets Developer’s sharing in Cash Distributions after payments of Priorities and Preferences to the other participating Equity Classes.
  4. “Cost Items” are listed in the Debt and Equity input screens and consist of capital costs eligible for Debt and Equity financing.

Go Find It

Each of these topics, and many others, are covered in the Master Users Guide and in Topical User Guides accessed via On-Screen button clicks. User Guide documents open in a separate window making two screen or split screen operation preferable while learning the Staircase MPC/HB software. As of August 1, 2017, Topics include:

  • 1. - Acres– Usage Allocation of acquired Acres
  • 2. - Amenities
  • 3. - Apartments - Decision to include in MPC/HB?
  • 4. - Apartments - Acre Allocation
  • 5. - Apartment Suite Access
  • 6. - Cash Distributions – Basis for Distributions
  • 7. - Cash Distributions – Preferred Rate
  • 8. - Cash Distributions – Priorities
  • 9. - Cash Distributions – Spacing - increase in % Distributed
  • 10. - Cash Distributions – Stop Distributions
  • 11. - Cash Distributions – Timing of First Distribution
  • 12. - Cash Distributions – IRR Tests by Equity Class
  • 13. - Commercial Pads - Set Size in Acres
  • 14. - Commercial - Total Acres Allocation
  • 15. - Commercial - Pads Developed by MPC
  • 16. - Commercial Pads - How Many?
  • 17. - Commercial Pads - Pricing to 3rd Party buyers
  • 18. - Commercial Pad Sales Profit Target
  • 19. - Construction – Builders Profit & Overhead (3 items)
  • 20. - Construction – Months to Build: SF/Month
  • 21. - Construction – Months to Build - change by UT size
  • 22. - Construction – 16 standard Cost Groups - Setup
  • 23. - Construction Budgets – Homes – Data Set selection
  • 24. - Construction – Setup For Home Sales Pricing
  • 25. - Construction – Home Construction Cost Allocation
  • 26. - Construction – Home Construction Profit Target
  • 27. - Construction – User Review of Homes Statistics
  • 28. - Construction – Mandatory Inputs Check List
  • 29. - Developer’s Internal Costs – Pre-Land Closing
  • 30. - Developer’s Internal Costs – Post-Land Closing
  • 31. - Developer's Fees and Profit Sharing
  • 32. - Density Limits (2) - Project and any LP
  • 33. - Development Cost Allocation
  • 34. - Distributions/Priorities/Preferences/IRR Exit Targets
  • 35. - Economic Development Incentives
  • 35. - Equity – Setup for up to 7 classes
  • 36. - Equity Classes - By Class, selection of eligible Cost Items
  • 37. - FF&E – Model Homes
  • 38. - General Working Capital – setup
  • 39. - Golf Course - Conversion to other uses
  • 40. - Golf Course - Decision to include in MPC/HB?
  • 41. - Golf Course - Acre Allocation
  • 42. - Golf Course Program Location
  • 43. - Golf Operations Budgets (6 Departments)
  • 44. - Golf Course - Revenue Mgr - Private/Public/Mix
  • 45. - Golf Course Construction Budget
  • 46. - Golf Course - Tee Sheet Manager
  • 47. - Golf Operations Summary
  • 48. - Green Space - Acre Allocation
  • 49. - HOA Setup
  • 50. - Home Construction Cost - Data Base
  • 51. - Home Configuration – Floorplan by UT by LP
  • 52. - Home Construction – Models – Financing Setup
  • 53. - Home Construction – Production – Financing Setup
  • 54. - Home Construction – Specs – Financing Setup
  • 55. - Home Sales Profit Target
  • 56. - Hotel - Decision to include in MPC/HB?
  • 57. - Hotel - Acre Allocation
  • 58. - Hotel Suites File Access
  • 59. - Industrial Park Suites
  • 60. - Initial Capital Reserves - setup
  • 61. - Interest Payment basis – Debt
  • 62. - Interest Rates – Debt
  • 63. - Income Properties Debt Financing
  • 64. - IP - Income Properties Suite Information
  • 65. - Land Acquisition & Development Loan/A&D Loan
  • 66. - Land Appraised Value
  • 67. - Land Bank Financing – Finished Lots
  • 68. - Land Development – Final Planning & Engineering
  • 69. - Land Development – Off-Site
  • 70. - Land Development – On-Site
  • 71. - Land Development – Permits & Fees
  • 72. - Land Owner - Joint Venture with Developer
  • 73. - Land Parcels - Home Construction - Timing & Cost Spread
  • 74. - Land Parcels Names
  • 75. - Land Parcels - Designated for Developer
  • 76. - Land Parcels – For 3rd Party Homebuilders
  • 77. - Land Parcels – Sales to 3rd PHBs - Pricing
  • 78. - Land Purchase – Purchase Price, Deposits, Timing
  • 79. - Land Purchase Financing - Short Term, Long Term
  • 80. - Land Seller Entity Name
  • 81. - Land Use & Residential Density
  • 82. - Loan Expenses - Debt
  • 83. - Loan to Value Ratios (FF&E)
  • 84. - Loan to Value Ratios (all debt classes but FF&E)
  • 85. - LP – Residential Land Parcel
  • 86. - Model Homes - FF&E Financing
  • 87. - Model Homes - FF&E Pricing
  • 88. - Model Homes – Premium Pricing
  • 89. - Model Homes - Sale & Leaseback setup
  • 90. - Model Homes – Selection for each DLP
  • 91. - Model Homes - Include in Project - Yes or No
  • 92. - Monitor Setting
  • 93. - Names and Labels
  • 94. - Navigation of Input Screens
  • 95. - Office Park
  • 96. - Office - Mixed Use
  • 97. - Off-Site Development – Debt Setup
  • 98. - On-Site Development – Debt Setup
  • 99. - Organization Chart - Data Input Screens
  • 100. - Original Land Loan – Debt Setup
  • 101. - Planning & Zoning Period – Debt Setup
  • 102. - Pre-Land Acquisition – Developer’s Internal Costs
  • 103. - Pre-Land Acquisition – Due Diligence Period Costs
  • 104. - Pre-Land Acquisition – Professional Costs
  • 105. - Program Setup
  • 106. - Program Overview Presentation
  • 107. - Program Save
  • 108. - Profit Target – Land Parcel Sales
  • 109. - Project Amenities - Acres Allocation
  • 110. - Program Data Input Guide
  • 111. - Project Name and Location
  • 112. - Project Timing – Due Diligence Period
  • 113. - Project Timing – Gap between Unit Type Starts
  • 114. - Project Timing – Home Construction Start Date
  • 115. - Project Timing – Land Negotiation
  • 116. - Project Timing – DLP On-Site Development Starts
  • 117. - Project Timing – Off-Site Development Period
  • 118. - Project Timing – On-Site Start Date
  • 119. - Project Timing – Planning & Zoning Period
  • 120. - Project Timing – Program Calendar Start Date
  • 121. - Retail Center Suite
  • 122. - Retail / Mixed Use
  • 123. - Screen Setting Options
  • 124. - Replacement Land Loan – Financing Setup
  • 125. - Screen View and Size Settings
  • 126. - Screens Views - Buttons and Keys
  • 127. - S/LB – Model Homes
  • 128. - Senior Village Suites
  • 129. - Spec Homes - Setting the Sales Closing Dates
  • 130. - Spec Homes – Premium Pricing
  • 131. - Spec Homes – selection for each DLP
  • 132. - Spec Homes - include in Project - Yes or No
  • 133. - Streets & Setbacks - Acreage Allocation
  • 134. - Storage Facility Suite
  • 135. - Taxes on Inventory Land
  • 135. - Third Party Home Builders (3rd PHBs)
  • 136. - Unit setup for each Land Parcel - Developer's LP's
  • 137. - Unit setup for each Land Parcel - 3rd Party HB's LP's
  • 138. - Unit Type - Number of UT's for each DLP
  • 139. - Unit Types – UT (names and abbreviations)
  • 140. - Unit Type AUTO Select - High, Middle, Low
  • 141. - Units - Total for Project (AUTO computed)
  • 142. - User Assistance Resources
  • 143. - User Screen View - Options for Sheets Visible1
  • 144. - User Screen View – Navigation Menu in the Ribbon1
1- Excel test version

Topics in development

as of August 1, 2017
  1. Automated Input Routines (“AIR”):
    1. Site Development Costs – Part 1
    2. Site Development Costs – Part 2
    3. Income Property (“IP”) Acreage Assignments and related Inputs
  2. Home Builder Data Base.
  3. Auto Program Setup.
  4. Glossary of Terms - Unique terms and abbreviations in Staircase MPC/HB’s lexicon.
  5. Program Calendar/Project Timing.
  6. Golf Property Impact on Project Economics.
  7. AIRs List and Purpose.