Property Development Break-Even Analysis: Month 29 Cost Recovery

Fixed costs $17.5K/mo Core monthly overhead

Contribution margin 91.5% After variable fees

Break-even revenue $19.1K/mo Monthly target

Break-even timing Month 29 First profit month

Break-even calculator

See whether monthly revenue covers variable costs and the fixed monthly cost base.

Lean Base Full

Monthly revenue Revenue has to cover sales-linked costs and fixed overhead. $ Slow month Busy month Variable expenses These are direct costs that rise with each sale or lease. $ Lower fees Higher fees

Money available to cover fixed costs $70,500 $75,000 revenue - $4,500 variable expenses

Margin ratio

94%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the margin has to cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which property development expenses are fixed, and which move with sales?

Cost classification

Break-even in Month 29 only holds if land, build, carry, and selling items are classified cleanly. Mislabel one major line, and the model can hide cash pressure before the Month 42 cash low.

Expense	Cost	Break-Even Treatment	Common Mistake
Land acquisition	Semi-fixed	Recover through project revenue when each owned parcel sells or stabilizes.	Treating each parcel like monthly rent.
Construction labor and materials	Variable	Scale with project scope, schedule, and overruns during each build period.	Hiding change orders in overhead.
Brokerage & Sales Commissions	Variable	Apply the sale-year rate, ranging from 3.0% to 4.5% of revenue.	Using one flat rate for all years.
Property Management & Leasing Fees	Variable	Apply only when leasing revenue exists, ranging from 0.0% to 4.5% by year.	Applying fees before lease-up.
Office Rent	Fixed	Carry $8,000 per month across the full Month 1 to Month 60 plan.	Allocating it only to one project.
Payroll	Semi-fixed	Model staffing step-ups from about $33k to $56k per month by year.	Missing added staff in later years.
Corporate Insurance and Legal & Accounting Fees	Fixed	Carry $4,500 per month combined as recurring overhead.	Treating corporate overhead as project-only spend.
Utilities, Software, Marketing, and Travel	Fixed	Carry $4,950 per month combined within the planning range.	Excluding small recurring overhead from break-even.

How does break-even shift from a lean two-asset build to a full six-asset pipeline?

Scenario table

Larger builds lift monthly revenue, but they also widen the cash gap because carry, fees, and staffing rise with the pipeline. The real test is whether sales close before the project hits its cash trough.

Scenario figures are planning assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean two-asset build	$717k	$22k	$508k	97.0%	$187k	Two sales in Month 29 and Month 34 reduce carry, but the cushion is still thin.
Base five-asset platform	$3.03M	$182k	$621k	94.0%	$2.23M	Model break-even lands at Month 29, but five-asset carry still stretches to Month 60.
Full six-asset platform	$6.2M	$527k	$733k	91.5%	$4.94M	Break-even lands at Month 29, but cash still bottoms at -$14.285M in Month 42 and payback waits until Month 57.

What breaks the break-even plan for this property development business?

Stress test

The plan only reaches break-even in Month 29, but cash bottoms out at -$14.3M in Month 42. So the real risk is timing: a delayed sale, one extra carry month, or 1-point fee pressure can erase the cushion fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$962,000	$0 cushion	Barely balanced at Month 29.
Revenue shortfall	Sale revenue is $10M lower in a sale year.	$10,962,000	$10.0M gap	One missed sale overwhelms the fixed load.
Fixed-cost pressure	Carry lasts one extra month in later years.	$1,763,000	$801k gap	One extra month adds about $733k of burn.
Margin pressure	Fee rates rise by 1 percentage point.	$972,000	$10k gap	A 1-point fee hike takes about $100k off each $10M sale.
Combined pressure	Sale slips one month, carry extends one month, and fees rise 1 point.	$11,863,000	$10.9M gap	Timing and fee drift together push cash back under stress.

Is the project ready before you buy land and start construction draws?

Founder checklist

Do not commit to land or major build spend until the exit months, cash trough, and cost load all line up. This model only works if you can bridge the Month 42 low and still reach the Month 29 to Month 60 sale or lease windows.

1Exit DemandMonth 29-60

Verify each planned sale or lease exit has a real buyer or tenant path at Month 29, Month 34, Month 43, Month 57, and Month 60.

2Land ControlMonth 3-21

Confirm acquisition timing from Month 3 for Urban Loft through Month 21 for Condo Tower before you tie up capital in owned parcels.

3Zoning PathPre-close

Check zoning alignment and the entitlement path before closing so approvals do not push the build and hold costs up.

4Build Ramp$20.4M / 10-20 mo

Lock contractor bids and draw schedules to the $20.4M construction budget and the 10- to 20-month build windows starting from Month 6 through Month 25.

5Cash Cushion-$14.285M

Fund the Month 42 cash trough of -$14.285M before you rely on sale proceeds, or the project can run out of runway.

6Margin Load3.0%-8.5%

Check that brokerage and leasing fees stay between 3.0% and 8.5% of revenue, because that margin has to cover $17,450 of monthly overhead and payroll that rises from $400k in Year 1 to $670k in Year 3.