UNIVERSITY OF SOUTHERN CALIFORNIA SCHOOL OF POLICY, PLANNING, AND DEVELOPMENT RED 598 An Entrepreneurial Approach to Homebuilding (79435) CLASS SYLLABUS
Adjunct Professor Ira C. Norris Tel: 909-635-2005 Email: [email protected] Assistant: Amy Beatrice [email protected]
Course Objectives Upon completion of the course the student will have an understanding of the structure of a home building entity. The student will be knowledgeable about the various disciplines required for a successful homebuilder operation. The student will also understand land acquisition and the structure of a typical land purchase. The ultimate objective is for the student to be able to create a feasibility analysis (with the help of professional consultants) to determine in more than a preliminary sense whether or not a home building project is feasible and meets profit objectives. The student will create a hypothetical company with a business plan. The student will also hypothetically create a single-family subdivision, and their final course project, which is the feasibility analysis, will pertain to that particular subdivision. Field trips are a possibility.
Course Requirements The student will prepare a business plan, a contract to purchase land, as well as the final project, which is a detailed feasibility analysis of their proposed subdivision.
Required Reading The only book that is of any benefit whatsoever in this class is the Subdivision Map Act of California.
Grading Grading criteria is based upon the quality of the three projects listed above as well as class attendance and participation.
Business Plan 25% Contract to Purchase Land 25% Final Project 40% Class Attendance/Participation 10%
Disability Services Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible. Your letter must be specific as to the nature of any accommodations granted. DSP is located in STU 301 and is open 8:30 am to 5:00 pm, Monday through Friday. The telephone number for DSP is (213) 740-0776.
Academic Integrity The University, as an instrument of learning, is predicated on the existence of an environment of integrity. As members of the academic community, faculty, students, and administrative officials share the responsibility for maintaining this environment. Faculty have the primary responsibility for establishing and maintaining an atmosphere and attitude of academic integrity such that the enterprise may flourish in an open and honest way. Students share this responsibility for maintaining standards of academic performance and classroom behavior conducive to the learning process. Administrative officials are responsible for the establishment and maintenance of procedures to support and enforce those academic standards. Thus, the entire University community bears the responsibility for maintaining an environment of integrity and for taking appropriate action to sanction individuals involved in any violation. When there is a clear indication that such individuals are unwilling or unable to support these standards, they should not be allowed to remain in the University. (Faculty Handbook, 1994: 20)
Return of Course Assignments Returned paperwork, unclaimed by a student, will be discarded after 4 weeks and hence, will not be available should a grade appeal be pursued following receipt of his/her grade.
Page 1 of 3 January 15, 2008
DEFINING THE BUSINESS:
1. Why you selected it – does it fit your personality? 2. Business Plan – assumes you are the entrepreneur 3. Organization Charts – your personal strengths/weaknesses 4. Selecting the geography 5. Corporate Culture – the message to your employees and all your policies – niche – attitudes about costs – quality – prompt pay
Assignments: Business Plan due January 22, 2008
January 22, 2008
PRODUCT DETERMINATION:
1. Locating the niche 2. Competitive analysis – value graphs 3. Pro Forma – working backwards – land residual 4. Where is land available at that price 5. Determining costs – land development/direct construction 6. What will set you apart from everyone else?
Assignments: Business Plan due
January 29, 2008
LAND ACQUISITION (part one):
1. Site location – methods to find land 2. The deal structure – constructing the offer – legal considerations 3. Improved sites vs. raw land 4. Joint ventures, limited partnerships, finding equity and debt 5. Conformity to business plan
Assignments: None
February 5, 2008
LAND ACQUISITION (part two):
6. Feasibility Studies – Municipal/County/State/Federal requirements 7. Fees – subdivision regulations, soils, sewer and water, utility availability and costs 8. Zoning – density, increasing requirements, policy vs. ordinances 9. Pending Legislation – moratoria, endangered species, wetlands, dust, etc. 10. Can you get a building permit – at what price – when?
Assignments: None
February 19, 2008
LAND ACQUISITION (part three):
11. HOA’s, Mello-Roos, Assessment Districts, Maintenance Districts – evaluate their impact 12. Regular monitoring City Council Planning Commission Meetings One-on-Ones with everybody Local newspapers BIA
Assignments: Prepare Offer to Purchase, due March 11, 2008
Page 2 of 3 February 26, 2008
FINANCING (part one):
1. A&D – Sources – percentages – availability to start up company 2. Construction – sources – percentages 3. Equity required
Assignments: None
March 11, 2008
FINANCING (part two):
4. Company cash flow 5. Project cash flow – release prices – retentions – interest reserves 6. Permanent financing
Assignments: Offer to Purchase due.
March 25, 2008
SALES & MARKETING:
1. In house vs. broker sales – duties, accountability, shopping, letters, phone banks, training, education, motivation, compensation 2. Model complex – when is it needed? Size of project, competition, local custom, costs – upgrades, furnishing, landscaping, signage 3. Sales office – elements, costs, the message 4. Advertising – newspapers, little magazines, broadcast 5. Referral sales programs 6. Brochures – yours vs. theirs – costs 7. Budgeting for all of the above 8. Research – demographics, focus groups, hot buttons, product, ads, brochures, sales techniques
Assignments: None
April 1, 2008
PURCHASING AND PRODUCTION (part one):
1. Architecture – from a cost and complexity standpoint vs. marketing standpoint 2. The bidding process – your costs vs. competitors costs 3. Legal and common sense requirements – insurance – business license – lien releases – joint checks – your contract vs. their purchase form 4. Field conditions – selecting the superintendent – pre-job meetings – communications – quality control – cleanliness 5. Subcontractors – friend or foe – his profit 6. Timeline
Assignments: None
April 8, 2008
COURSE REVIEW AND PREPARATION FOR FINAL PROJECT
Assignments: Final Project due April 18, 2008.
Additional dates will be scheduled for site visits. These will be arranged during the first class session.
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