HBU Calculator — Highest & Best Use

Same lot · three builds · margin comparison. Shaded cells are inputs.

Shared lot inputs (one lot, three builds)

Property address / description

Lot dimensions

Lot square footage

Zoning code

Land cost

Site cost adjustments (tear-down, trees, utilities)

Shared assumptions

Hard money LTC %

Hard money interest rate (annual) %

Hard money origination (points, % of loan)

Hard money term (months)

Real estate commission %

Title & closing %

Soft cost — architecture & engineering

Soft cost — permits & impact fees

Soft cost — builder's risk insurance

Soft cost — utilities during construction

Margin target (walk threshold) %

Scenario inputs

Scenario name

Planned square footage

Beds / baths

Build cost ($/sqft)

ARV ($/sqft) ← from comp set

Calculated outputs

ARV

$719,400

$921,200

$1,049,600

Hard cost (build labor + materials)

$363,000

$462,000

$544,000

Land + site

$175,000

Hard money loan amount

$484,200

$573,300

$647,100

Hard money carry (interest)

$36,315

$42,998

$48,533

Hard money origination

$7,263

$8,600

$9,707

Soft cost subtotal (line items)

$15,000

Real estate commission

$43,164

$55,272

$62,976

Title & closing

$7,194

$9,212

$10,496

TOTAL COSTS

$646,936

$768,081

$865,711

PROFIT (ARV − Total Costs)

$72,464

$153,119

$183,889

MARGIN % (Profit / ARV)

10.1%

16.6%

17.5%

PASS / FAIL (vs 20% margin target)

FAIL

Decision

Best margin across scenarios

17.5%

Recommendation

WALK or renegotiate land below the breakeven point.

How to read it: if no scenario clears your margin target at the asking land price, lower the land number until one pencils — that's your renegotiation lever. If the seller won't move, walk. Sometimes HBU says "don't build" — and that's the right answer. Compare against the Triple M and Build Calc for single-scenario detail.