Capitalizing TI & LC
Is there a way to create an option to capitalize TI & LC (or any capex) in the purchase? Many value-add projects hit negative leveraged CF in the first year which would force you to raise more equity.
Thank you!Spencer BurtonKeymaster
Thanks for the question. The solution to this would be to use the Development module, set Operation Begin to month 1, and enter all capitalized costs on the Budget tab. The “Land Cost” would include property acquisition in month 1 of the analysis, and any subsequent costs meant to be capitalized are entered in the project budget.
I have planned to create a tutorial in the coming weeks to explain this concept, as this question has come up several times recently. I’ll look to update this thread when that tutorial is live.
Much appreciated Spencer. Thank you & awesome job with this ACRE platform.
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