Break-Even Analysis For Real Estate Developers: Month 21 Target

Fixed costs $21.6K/mo Base overhead

Contribution margin 100% No variable spend

Break-even revenue $21.6K/mo Overhead target

Break-even timing Month 21 Model break-even

Break-even calculator

If monthly revenue is still below overhead, this calculator shows the gap fast.

Lean Base Full

Monthly revenue Monthly rent or sale revenue drives the margin available to cover overhead. $ Low rent High rent Variable expenses Direct costs that rise with revenue go here. $ Low costs High costs

Money available to cover fixed costs $57,300 $57,300 revenue - $0 variable expenses

Margin ratio

100%

Covers fixed costs

$14,883 short

Fixed monthly costs Monthly overhead and salaries must be covered every month. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which real estate developer expenses are fixed, and which move with projects or sales?

Cost classification

Break-even is modeled at Month 21, but that only holds if overhead, project costs, and carrying rent stay in the right buckets. Blending land, construction, and corporate overhead into one burn line hides the real cash gap.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Keep as monthly overhead from Month 1 through Month 60.	Tying it to project starts instead of office capacity.
Property Insurance	Fixed	Model as recurring overhead across the planning period.	Treating it like a deal-by-deal construction expense.
Utilities and Internet	Semi-variable	Use a base monthly amount, with room for usage changes as sites and staff grow.	Assuming the bill stays flat as operations expand.
Legal and Compliance Retainer	Semi-fixed	Keep the retainer in overhead, then step it up when deal volume requires more support.	Putting every legal dollar into project variable spend.
Payroll	Semi-fixed	Model in staffing steps; payroll rises from about $50.6k/month in the first year to about $109.7k/month in Year 4.	Using one flat payroll number for all five years.
Land Acquisition	Variable	Assign the $5.6M owned-site spend to specific projects, not monthly overhead.	Spreading land purchases evenly across every month.
Construction Budget	Variable	Track the $3.705M construction budget by project timing and build duration.	Treating construction like steady corporate burn.
Leased-Site Rent	Semi-fixed	Carry leased-site rent as a step expense that begins when rented sites are added.	Ignoring the rent step when a leased project starts.

How does break-even shift from a lean buildout to the full development plan?

Scenario table

Lean and full cases move break-even because rent revenue stays below the fixed load. The base case is closest to balance, but it still needs the later project cash flow to reach Month 21.

Planning assumptions only; no sale prices are provided, so break-even can move with timing and rent.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean first-three-project case	$272k	$0	$722k	100%	-$450k	Rent covers only part of the burn.
Base seven-project case	$662k	$0	$722k	100%	-$60k	Cumulative break-even lands by Month 21.
Full seven-project peak-staff case	$662k	$0	$1.313M	100%	-$651k	Peak staffing deepens the monthly gap.

What breaks the break-even plan for this real estate developer?

Stress test

Year 5 fixed overhead is about $1.244M/month, while full rental fees are about $662k/month. A 10% revenue drop, a 10% cost rise, or 90% margin pressure quickly widens the monthly gap, and the combined case pushes it to about $833k.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.244M/mo	$582k gap	EBITDA stays negative and cash bottoms at -$11.177M in Month 59.
Revenue shortfall	Rental fees fall 10%.	$1.244M/mo	$648k gap	Lease-up delay makes the revenue hole wider before exits.
Fixed-cost pressure	Fixed overhead rises 10%.	$1.369M/mo	$707k gap	Staff and overhead growth add pressure even if sales hold.
Margin pressure	Contribution drops to 90% of base.	$1.382M/mo	$648k gap	Lower margin eats the same revenue base faster.
Combined pressure	Rental fees fall 10%, margin drops to 90%, and fixed costs rise 10%.	$1.521M/mo	$833k gap	That combo pushes the cash gap much farther out and delays payback.

Can this developer prove site control, lease-up, and cash capacity before buying land and breaking ground?

Founder checklist

Not yet unless the team can lock site control, bids, and early lease-up before Month 5. Break-even lands in Month 21, but minimum cash falls to -$11.177M by Month 59, so every major commit has to pass a cash test first.

1Site Control$5.6M

Verify clean control of the five owned parcels before closing, because those land buys total $5.6M and set the pace for the whole project.

2Build Lock$3.705M

Lock contractor bids before Month 5 construction starts, because the seven build budgets add up to $3.705M and overruns hit cash early.

3Lease-Up Proof$66.2K/mo

Require signed leases, pre-sales, or intent before the next big spend, because the seven listed rents total $66.2K/month and that proof has to show up before more capital goes in.

4Overhead Load$140.1K/mo

Check the full monthly burn, because Year 5 payroll, fixed expenses, and rented-site carry run near $140.1K/month before any sale proceeds.

5Staff Ramp$102.8K/mo

Hold the Year 5 staffing shape until demand is real, because payroll alone reaches about $102.8K/month and the model only adds more people as the portfolio grows.

6Cash Cushion-$11.177M

Match equity and lender support to the worst cash draw, because minimum cash lands at -$11.177M in Month 59 and payback takes 60 months.