Tract-PIE financial software generates accurate and detailed projections of cash flow, loan flow, profit & loss, balance sheet, and budget analysis projections for single and/or multiple phased development projects. The forecasts are based on fundamental input variables, and may reflect projects in the initial planning stages or already underway.
The Cash Flow Forecast displays the results of a detailed process by which all cost and income items are spread across the months (or quarters or years) of the project. The project may include an unlimited number of direct construction starts for production units in addition to model units. Up to 10 design types with separate costs and sales prices may be included in the product mix. Lot premiums are also included. The project may consist of lot sales as well.
Based on an input for average monthly sales rate, automatically produces a seasonally adjusted monthly sales projection. This sales projection may reflect the results of a pre-sale period (prior to the grand opening month) during which sales are subject to cancellation. Optionally, you may provide periodic unit sales as an overriding entry. The schedule of unit closings follows the unit sales by the indicated escrow period, but limited by the availability of completed inventory.
Tract-PIE features the use of scheduled-factoring that automatically time-phases the cash flows resulting from the start-up schedules for direct construction. The timing of the direct construction starts may be either user-defined or automatically scheduled in correlation to unit sales. The start-to-finish cycle for direct construction starts determines how the dollars will be spread in accordance with stored spread factors or on a straight-line basis.
Tract-PIE’s Cash Flow Forecast clearly displays the project “sequence of events” and cash flows for sales revenue and all cost categories. The net cash flow before financing is then displayed and becomes the basis for the pre-financing discounted cash flow analysis consisting of net present value and internal rate of return.
Tract-PIE performs detailed analyses for any combination of a purchase note for the acquisition of the land, a development loan for the completion of the finished lots, a construction loan that may actually represent several construction loans, and a miscellaneous loan to be used for any purpose desired. Equity financing can be automatically computed to cover the net funding requirements.
You may activate any or all of the loan categories as appropriate for the project. The amount of each loan may be determined as an input loan amount, as a percentage of costs assigned to the loan or as a percent of sales. Each loan is subject to a separate loan fee percentage and interest rate. The interest rate may be a stated rate or may fluctuate as a stated number of points over a prediction for the prime rate. Interest reserve amounts may be stated for each loan. The interest reserve will be withheld from drawable funds and will be used to cover interest costs until the reserve is depleted.
Loan draws are made in accordance with the forecast of drawable cash flows assigned to the loan. It is an easy matter to override the loan draw amount or to provide a positive or negative increment to add to the calculated loan draw for any period.
Tract-PIE provides flexibility with regard to stating the source of repayment of the loans. You can set up the normal sequence of loans making automatic release payments on prior loans so that no two loans mare secured by the same property at the same time. The timing and amounts for the repayment schedules are handled automatically once the source of repayment is indicated. Of course, all loan draw and repayment values may be specifically overridden by input on a period-by-period basis.
The equity financing category covers net funding requirements so as to maintain a cash balance of zero (or a stated cash reserve amount) until positive cash flows are available to repay the equity balance(s) and any returns) on equity. Any remaining cash is distributed as available. The equity funding and distributions of cash may be on the part of the developer alone (wholly owned project) or may represent a joint venture participation between the developer and the investor partner.
The Equity Financing category covers net funding requirements so as to maintain a cash balance of zero (or a stated cash reserve amount) until positive cash flows are available to repay the equity balance(s) and any return(s) on equity. Any remaining cash is distributed as available. The equity funding and distributions of cash may be on the part of the Developer alone (wholly owned project) or may represent a joint venture participation between the Developer and the Investor partner. A maximum of flexibility is provided to alter the default rules that apply to the joint venture participation.
A cash flow analysis section summarizes the net cash flow before financing, and the loan fees, interest, draws, and repayments for all loans in aggregate. The report then displays net cash flow after financing, cash balance, loans outstanding, maximum equity requirement, and maximum loan exposure. A summary for each equity partner is also displayed including the net present value and internal rate of return for the cash participation.
The Profit & Loss Forecast produces a period-by-period income statement for the project based on generally accepted accounting principles. Commissions & Closing Costs and Buydowns & Discounts are expensed directly as incurred at closes of escrow. Balance sheet assets include cash as well as capitalized cost balances. Liabilities and capital include all loan balances, accrued property tax, warranty reserve, net cash invested and cumulative profit.
The Budget Forecast/Analysis presents a separate column for each Plan Type in the product mix with additional columns to display each line item as Grand Total, Per Unit Average, Per Square Foot and Percent of Sales.
Tract-PIE calculates costs for each budgeted cash flow line item and allocates them to each plan type on a per-unit basis. The default allocation method is based on a per unit average, but alternative allocation methods of relative sales value or relative square footage may be triggered separately for each line item, if desired.
Although flexibility for sales and construction planning is part of the primary Cash Flow process, a stand-alone Sales & Construction Planning option is available as part of the system for much more detailed planning. This menu option provides separate modules allowing you to break up your planning process in any way that you wish in order to gain detailed visibility pertaining to sales and construction scheduling and cash flow. The units represented in the module may comprise a production phase, a plan type, model units, finished lots or any other planning breakout that you care to imagine.
Each module has its own number of units, sales schedule, selling price by period, construction cost, and construction cost spread factors. The construction schedule for each module may be user-scheduled, may coincide with the sales schedule, or may be triggered when an input percent of units is sold in the preceding module.
The sequence-of-events (i.e., unit sales, construction starts and completions, escrow closes and standing inventory), as well as sales revenue and construction cost disbursements are displayed separately for each planning module that you define.
Tract-PIE performs a time-phase consolidation of any number of primary Cash Flow/ Loan Flow/ P&L/ Balance Sheet reports in a single step. Consolidated reports may also be brought into subsequent consolidations, so the number of reports to be combined is unlimited. Although the primary report handles multiple-phase projects, it may be desirable to perform separate analyses for specific segments of the project followed by consolidating the results for each. This may be the case if the project involves components with totally different product types, or if the financing for components or phases is separate and unique, requiring separate analysis. This feature also allows for the combination of all of selected projects to be undertaken over time.