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03-20-2017, 02:55 PM #1
Reputation points: 10
- Join Date
- Mar 2016
- Posts
- 4
(Please excuse any grammatical errors, posting from my phone)
Hello Everyone,
Although I am new to this forum, I have 10+ years experience in ABL and specialized in Construction Deals. Land aside, what portion of the revenue is overstated? In construction, it is few and far between where the contractor provides 100% of the work in house and pays cash for the materials (COD). With that said, via Mechanic Lien Laws, Id estimate the gross revenues should be discounted at least 20% - 30% for materials alone. If the contractor is acting as a General Contractor and Sub-contracting the work out, revenues should be discounted an additional 20% - 30%. Lastly, retention receivables are often removed or discounted 75% where looking at their assets.
Raw Land is a tough one too. The question is, where is the land located? Downtown, Commercial, Residential. Is it permitted? Can it be added to city services (water/power)?
If the account pencils out, Id be interested in the deal. Send me a PM if you want to discuss it further.
-Robby
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