Sale Stream

Component 2: Sales Revenue & Cash Inflows

The Sales Revenue component models how you will monetize the development through unit sales. Unlike the Operational Stream's recurring rental income, this component captures one-time sales revenue with complex payment structures, buyer financing, and sales velocity curves that determine when cash flows into the project.

Key Difference from Operational Stream: Revenue comes from selling units (one-time transactions) rather than renting them (recurring monthly income). Payment timing is tied to construction milestones and buyer financing structures.

Overview

Component 2 walks you through 8 sequential steps to model your complete sales strategy and revenue structure. The component calculates gross sales revenue, applies realistic deductions (commissions, VAT, discounts), and generates a monthly cash inflow schedule that aligns with your construction timeline from Component 1.

What This Component Produces

  • •Monthly Sales Revenue Schedule: Cash inflows phased according to sales uptake curve and payment plans
  • •Gross to Net Reconciliation: Gross sales minus deductions (VAT, commissions, discounts, defaults)
  • •Buyer Mix Analysis: Cash buyers vs. mortgage buyers with different payment structures
  • •Funding Gap Analysis: Peak cash shortfall before sales revenue covers development costs

Step-by-Step Walkthrough

Step 1: Saleable BUA Ratio

Define the proportion of total built-up area (BUA) that is actually saleable. Not all constructed area generates revenue — common areas, corridors, plant rooms, and amenities are necessary but non-revenue-generating spaces.

Saleable BUA Ratio (% of total BUA)

Typical residential/office projects range from 70-90% saleable BUA depending on corridor and core efficiency. High-rise luxury towers often have lower ratios (70-80%) due to larger common areas, while mid-rise buildings can achieve 85-90%.

Calculation:
Saleable BUA = Total Building BUA × (Saleable BUA Ratio / 100)
Example: 147,208 sqft × 86% = 126,599 sqft saleable

Step 2: Average Sales Price

Set the blended average sales price per square foot for saleable units. This should reflect a weighted average across different unit types (studios, 1BR, 2BR, 3BR, etc.) and their respective market prices.

Average Sales Price (AED/sqft)

Use market comparables and AI-researched benchmarks to determine your average price. These values are dynamically researched in real-time by the AI based on your exact pin-drop location and building type.

Unadjusted Sales Revenue (Gross)

Based on total building BUA from Component 1, saleable BUA ratio, and average sales price. Deductions (VAT, commissions, defaults) are applied in later steps.

Total Building BUA: 147,208 sqft

Saleable BUA: 126,599 sqft

Average Price: 1,500 AED/sqft

Gross Sales Revenue: AED 189,898,320

Step 3: Payment Plan — Cash Buyers

Define the payment structure for cash buyers (buyers who pay without mortgage financing). Percentages must sum to 100% of gross sales value.

Down Payment (%)

Initial payment received at booking/signing. Typically 10-20% for off-plan sales.

During Construction (%)

Progress payments collected during the construction period. Typically 60-80%, often tied to construction milestones (e.g., foundation completion, structure completion, handover).

On Handover (%)

Final payment upon project completion and handover. Typically 10-20%.

Example: 10% down / 70% during construction / 20% on handover
For a 1,000,000 AED unit: 100,000 AED at booking, 700,000 AED during construction, 200,000 AED at handover

Step 4: Payment Plan — Mortgage Buyers

Define the down payment and mortgage assumptions for leveraged buyers. Mortgage buyers typically pay a smaller down payment directly to the developer, with the remainder financed through a bank mortgage.

Buyer Down Payment (Direct to Developer)

The portion of the unit price paid directly by the buyer to the developer (not financed).

  • Total Down Payment Amount: Fixed amount (e.g., 100,000 AED)
  • Received Over (Months): Typically M0-M2 (3 months) for booking and installments
  • Down Payment (% of unit price): Percentage (e.g., 10%)

Mortgage Terms

  • Mortgage Tenor (years): Loan duration (typically 15-25 years)
  • LTV (% of value financed): Loan-to-value ratio (typically 80-90% for expats, up to 95% for nationals)
  • Mortgage Rate (% p.a.): Interest rate on the mortgage (typically 4-6% in UAE)

Treatment: Down Payment is 100% Direct to Developer

The down payment is collected directly by the developer (not escrowed). The mortgage portion is paid by the bank to the developer, typically at handover or according to construction milestones depending on the mortgage structure.

Step 5: Sales Uptake Schedule

Choose a preset sales curve or provide a custom monthly uptake profile. This determines how quickly units are sold over the sales period, which directly impacts cash flow timing.

Front-loaded

Strong launch / early sales
Aggressive sales in the first 6-12 months, then tapering off. Common for well-located projects with strong marketing and pre-launch campaigns.

Even Over Sales Period ✓

Steady, consistent sales
Linear sales velocity throughout the sales period. Conservative assumption suitable for most mid-market residential projects.

Back-loaded

Slower start, stronger finish
Conservative early sales with acceleration as construction progresses and buyers gain confidence. Common for speculative developments or challenging markets.

Manual Monthly Profile: For advanced users, you can provide a custom month-by-month sales uptake curve. This is useful for phased developments or projects with unique sales patterns.

Step 6: Buyer Mix & Deductions

Define the mix between cash and mortgage buyers, and headline deductions from gross sales. These deductions significantly impact net developer proceeds and must be modeled accurately.

Buyer Mix

Buyers who pay without mortgage financing

Buyers who finance through bank mortgages

Deductions

Typically 2-3% in UAE

5% in UAE (if applicable)

Typically 1-2%

Negotiated discounts from asking price

⚠️ Impact on Net Proceeds: These deductions can total 10-15% of gross sales value. For a 200M AED project, this means 20-30M AED in deductions — a critical factor in project feasibility.

Step 7: Default Rate & Bulk Sales

Capture expected buyer defaults and bulk / institutional sales. These are important risk factors that affect net revenue and cash flow timing.

Default Rate (% of gross sales)

Expected percentage of buyers who fail to complete their purchase.

Typical range: 2-5% for off-plan residential. Higher in economic downturns or for speculative investors.

Bulk Sales Share (% of units)

Percentage of units sold in bulk to institutional investors or investment groups.

Typical range: 5-15%. Bulk sales provide certainty but at discounted prices.

Bulk Sales Discount (% off list)

Discount offered to bulk buyers in exchange for purchasing multiple units.

Typical range: 5-10% discount from list price.

Step 8: Sales Launch Timing & Summary

Choose when sales begin relative to construction, and review the complete cash inflows summary.

Sales Launch Timing

For GCC off-plan projects, launches often occur up to 6-12 months before or around construction start.

Used to model reservation/EOI collections before full launch.

Summary: Cash Inflows (Sale Assets)

GROSS TO NET PROCEEDS RECONCILIATION

This shows how gross sales are adjusted for discounts, commissions, VAT, defaults and bulk sales to arrive at net developer proceeds.

Gross Sales (unadjusted):AED 189,898,320
Less Discounts & Deductions:AED 25,636,273
Net Proceeds:AED 164,262,047

Broker Commission: AED 3,797,966

VAT: AED 9,494,916

Escrow Fees: AED 1,898,983

Sales Discounts: AED 5,696,950

Defaults: AED 3,797,966

Bulk Sales Discount: AED 949,492

Path: Sale Assets (Residential / Office / Retail)

Saleable BUA Ratio: 86%

Average Price: 1,500 AED/sqft

Buyer Mix: 40% cash / 60% mortgage

Launch Offset: 6 months (pre-launch 10%)

Cash Plan (Down / During / Handover): 10% / 70% / 20%

Mortgage (LTV / Rate / Tenor): 90% / 5% p.a. / 20 years

Deductions: 2% commission, 5% VAT, 1% escrow, 3% discount

Default & Bulk: 2% default, 10% bulk @ 5% discount

Output: Cash Flow Preview — Pre-Financing

Upon completing Component 2, FeasiBuild generates a comprehensive monthly cash flow preview combining Components 1 (outflows) and 2 (inflows). This shows your project's cash position before financing (debt/equity) is applied.

Monthly Cash Flows Table

The table shows monthly cash inflows (Unit Sales, Bulk Sales) and outflows (Land, Construction, Soft Costs, POWC) from M0 through the construction period.

Cost ItemM0M1M2...Total
CASH INFLOWS
Unit Sales14,783,584199,778399,556...164,262,047
Bulk Sales1,642,62022,19844,395...16,426,205
TOTAL INFLOW16,426,205221,976443,951...164,262,047
CASH OUTFLOWS
Land Cost48,577,650——...48,577,650
Construction Cost—735,2961,113,448...87,794,322
Soft Costs8,340,4615,004,2763,336,184...16,680,921
Total Outflow57,444,8776,986,2524,993,957...157,442,609
NET CASH FLOW-41,018,672-6,764,276-4,550,006...6,819,438
CUMULATIVE NCF-41,018,672-47,782,948-52,332,953...6,819,438
⚠️ Fixed Assumption: 6-Month Post-Completion Period

The cash flow preview automatically extends 6 months beyond the construction period (e.g., months M31–M36 if construction ends at M30). This period is critical for capturing the final phase of cash collections.

Cash Inflows (Sales Proceeds)

Continue mapping over the construction period + the 6-month post-completion period. This captures final handover payments, mortgage disbursements from banks, and any delayed collections from buyers.

Cash Outflows (Construction)

Stop mapping at the end of the construction period. All construction costs, soft costs, and POWC are fully expended by the final construction month. Outflows are 0 during the post-completion period.

This period often shows a positive net cash flow as sales collections exceed zero outflows, helping to close the funding gap before financing costs are applied in Component 3.

Total Inflows

AED 164,262,047

Total Outflows

AED 157,442,609

Net Surplus (Pre-Financing)

AED 6,819,438

Funding Gap

AED 56,617,672

Peak negative cumulative NCF (Max funding req)

⚠️ Funding Gap Analysis: The funding gap (peak negative cumulative NCF) represents the maximum cash shortfall during development before sales revenue covers costs. This is the amount that must be financed through debt and/or equity. In this example, AED 56.6M is needed at the peak (typically early in construction when land is paid but sales are minimal).

Tips & Best Practices

Be Conservative with Sales Uptake

Overly optimistic sales velocity is the #1 cause of cash flow shortfalls in development projects. Use the "Even" or "Back-loaded" curve unless you have strong evidence for front-loaded sales (e.g., prime location, pre-launch commitments, strong brand).

Model Realistic Deductions

Don't underestimate deductions — they can total 10-15% of gross sales. Always include VAT (if applicable), broker commissions (2-3%), escrow fees, and realistic sales discounts (3-5%).

Pre-Launch Sales Reduce Funding Gap

Starting sales 6 months before construction and achieving 10-20% pre-launch sales can significantly reduce your peak funding requirement, lowering financing costs and equity needs.

Balance Cash vs. Mortgage Buyer Mix

Cash buyers provide faster, more certain cash flows but may demand discounts. Mortgage buyers pay closer to asking price but introduce bank approval delays and higher default risk. A 40/60 or 50/50 mix is typical for mid-market residential.

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