We are over budget

I’m over budget for nearly every item in our project. As we are now starting the infrastructure, I will begin posting and writing regular updates again. For full transparency, I’ve also decided to post my current balance sheet and give regular updates highlighting all costs and eventual income.

The total contribution for the project was $3.5 million. I purchased the property for $1.85 million. I assumed I could get the property entitled with $500-700K (including my costs) and would have another million left for infrastructure.

I figured at that point I would decide the best way to move forward, but my plan A was to raise more equity to finish the infrastructure and borrow from there to build the homes.

The deal with my investors was that I wouldn’t take a fee to do the project, but instead, I would apply all costs associated with finding the property and my expenses related to finishing it to the project. 

We are now beginning the infrastructure 12 months later than my original expectations. As a result, my payroll and travel costs have been much higher than I expected. 

Every single line item has also been much higher than I expected as I have had to go through multiple professionals on many items, as the original people I chose were not as capable as I originally thought.

As you can see, I have now spent $3.1 million of my original $3.5 million.

I am placing the final $400,000 down as a deposit on the infrastructure. 

I have decided not to raise new equity but instead to borrow to finish the infrastructure. Lenders will likely not give the full amount ($3.5 million) to finish all the infrastructure, so I will try to get a personal loan to cover the first million or so and will layer a loan on top of that to finish. 

I’m also in the process of selling half of my equity in order to have more cash on hand, just in case it’s necessary. 

Now that we are finally moving onto the actual construction, there will be many smaller details to share. As I’ve mentioned in prior emails, we are working on doing some video content to help give better insight into the process we’re going through. 

We’ve been experimenting with video types (length, style, content) and are currently leaning towards doing longer-form videos that emphasize our story and are less geared toward going viral.