Project Strategy

A Project Strategy is a generic approach for transforming a property into something of higher value. A successful strategy must increase a property's value by more than its transformation costs, and this increase must be substantial enough to justify the risk involved in the process. Transformation costs include hard, soft, and carrying costs.

Project Strategies can include sales, rental, and refinancing components. For example, one rental Project Strategy involves buying single-family homes, renovating them, and renting them out. Another rental Project Strategy is acquiring underperforming office space and converting it into apartments.

A simple "for-sale" Project Strategy is house flipping: buying and renovating homes to sell. A more complex strategy is buying a property with favorable zoning, expanding it, and converting it into multiple units for sale as condos.

An example of a blended approach is the "BRRRR" strategy, which stands for "buy, renovate, rent, refinance, and repeat." This project strategy involves buying an asset, improving it, leasing it out, refinancing, and using the proceeds to repeat the process and build a rental portfolio. Purchasing land to construct a mixed-use building or hotel can also involve rentals, sales, and refinancing.

To be successful, a real estate transformation project must be planned using a solid Project Strategy. Having a clear strategy helps the developer select the right property, capital structure, transformation team, and value realization team to execute effectively.

Project Vision and Project Strategy are closely related; a property's Project Vision is built on a generic Project Strategy. Then, the Project Vision further accounts for the property's unique features, such as its configuration, location, and zoning. It defines specific details about the building to be developed, such as its appearance, use, number of floors and units, and target customers. A Project Vision is a specific expression of a more general project strategy.