Missing Middle Housing Break-Even Analysis: Month 18 Target

Fixed costs $15.2K/mo Base overhead

Contribution margin 91% After variable costs

Break-even revenue $16.6K/mo Monthly target

Break-even timing Month 18 First breakeven

Break-even calculator

Test whether monthly revenue covers variable expenses and fixed costs, and see where break-even lands.

Lean Base Full

Monthly revenue Revenue is the cash coming in that has to cover direct costs and overhead. $ Low sales High sales Variable expenses These are the direct sales and lead-gen costs that rise as volume rises. $ Light costs Heavy costs

Money available to cover fixed costs $182,160 $198,000 revenue - $15,840 variable expenses

Margin ratio

92%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the business has to cover before profit starts. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which missing middle housing expenses are fixed, and which move with sales?

Cost classification

This model breaks even in Month 18, one month after the $7.677M minimum cash point, so cost labels matter. Keep fixed overhead separate from project margin, or sales can look profitable while the company still burns cash.

Expense	Cost	Break-Even Treatment	Common Mistake
Land acquisition	Fixed	Include as committed capital once each site is owned, from the listed acquisition month and purchase price.	Treating owned land like monthly rent and understating early cash need.
Construction labor and materials	Variable	Tie directly to each project budget, such as $800,000 for Oak Townhome and $1.8M for Cedar Row.	Spreading project overruns across overhead instead of the specific development.
Entitlement, design, and engineering	Semi-fixed	Load by project phase before construction starts, because spend steps up as each site moves into approvals and design.	Ignoring pre-construction cash burn before any sale proceeds arrive.
Site work and utilities	Semi-variable	Scale by site scope, since base mobilization is needed but utility work rises with project complexity.	Using one flat per-unit average across duplexes, townhomes, and row projects.
Sales commissions	Variable	Apply to sales volume at 6.0% in Year 1, 5.5% in Year 2, and 5.0% from Year 3 onward.	Booking commissions before the sale date instead of when units sell.
Marketing and lead gen	Variable	Model as a sales-linked rate: 3.0% in Year 1, falling to 1.5% by Year 4.	Treating buyer demand spend as fixed while launches shift by project month.
Corporate office rent, insurance, software, utilities, travel, and legal retainer	Fixed	Carry $15,150 per month from Month 1 through Month 60 before payroll.	Burying recurring overhead inside project margin and overstating unit profitability.
Wages	Semi-fixed	Step payroll with headcount: about $37.7k per month in Year 1 and $58.3k per month in Year 2.	Modeling staff as fully variable even though payroll is committed before sales close.

How does break-even change from a lean two-project start to the full ten-project buildout?

Scenario table

Lean stays under water because fixed overhead is still too heavy, base gets close to break-even as later sales start, and full buildout has the widest cushion. The table uses the model’s overhead and margin signals because unit pricing isn’t in the source data.

Planning figures only; they show model pressure, not guaranteed pricing or sales speed.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean case — 2 projects	$147k	$13k	$529k	91.0%	-$395k	Still below break-even; the first two projects do not cover overhead.
Base case — 6 projects	$916k	$73k	$735k	92.0%	$108k	Near break-even; Year 2 staffing step-up is the watch item.
Full buildout — 10 projects	$2.12M	$138k	$735k	93.5%	$1.25M	Best cushion; later launches absorb fixed cost more easily.

What breaks the break-even plan for this missing middle housing project?

Stress test

The plan is most exposed to slower sales, higher build costs, and any delay past Month 18. Fixed overhead keeps running, so the Month 17 cash trough is the real pressure point.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$20.0M	$0 gap	Little cushion before the Month 17 cash trough.
Revenue shortfall	Year 1 sales land $1.0M below plan.	$21.0M	$1.0M gap	A modest sales miss quickly eats contribution.
Fixed-cost increase	Construction budget runs 10% over the $11.15M build budget.	$21.2M	$1.2M gap	Build overruns need more than dollar-for-dollar sales.
Margin pressure	Sales commissions and marketing rise from 9% to 11% of revenue.	$20.5M	$0.5M gap	Higher broker and lead costs thin the spread.
Combined pressure	Year 1 sales miss by $1.0M, construction runs 10% over, and break-even slips one month.	$23.1M	$3.1M gap	Stacked delays can push cash need past the low point.

What should a founder verify before buying the site and starting construction?

Founder checklist

Before you commit, make sure the site, build budget, hiring plan, and sales pace still get you to break-even on time. If the plan needs more than the $7.677M cash floor or slips past Month 18, the deal is too thin.

1Zoning FitBefore close

Confirm the site allows duplex, townhome, or similar medium-density use before land purchase, because a mismatch here can blow up the break-even case.

2Build Bids$11.15M

Get contractor bids tied to the full $11.15M construction budget, so you are pricing the real job instead of leaning on rough allowances.

3Cash Floor$7.677M

Fund the minimum cash point plus contingency, and keep the $197k capex separate from project spend so early work does not drain operating cash.

4Overhead Ramp$73.5k/mo

Approve the hiring plan before Year 2, when monthly overhead rises to about $73.5k, or fixed cost growth will push breakeven out.

5Absorption PlanMonth 18

Test slower unit sales against the Month 18 breakeven point and Month 32 payback, because delayed closings keep cash tied up longer.

6Sales Load9.0% Y1

Lock the 6.0% sales commission and 3.0% marketing assumptions before launch, since that 9.0% variable load sets how much each sale can cover fixed costs.