Worked example
GDV 2.5m, total costs (excl land) 1.6m, target profit 0.32m, land bid 0.4m. Total project cost 2.0m.
- Senior at 65 percent LTGDV: 1.625m max draw.
- Senior at 80 percent LTC: 1.6m max draw.
- LTC binds first; senior facility sizes to 1.6m.
Equity gap
Equity gap = total project cost minus senior debt. In the worked example: 2.0m minus 1.6m equals 0.4m. That has to come from developer equity, mezzanine or pref-equity.