Reagan,

I am still reviewing the numbers but here are some initial thoughts.

Are you proposing a cost plus contract with no cap?

What role would you play in obtaining financing? Any experience with FHA
221(d) loans?

Although your fees are lower than George and Larry I am still getting market
quotes lower yet. I have received estimates structured as follows:

5% - onsite expenses, supervision, clean up, equipment
2%- overhead
4%- profit

I just wanted to give you this initial feedback. I have also attached an
extremely primitive spreadsheet to outline the project. As you can see even
reducing the builders fees to the numbers above the project would only
generate $219,194 of cash flow for a return of 21%. I am not thrilled about
such a low return. I think I need to find a way to get the total cost down
to $10,500,000 which would boost the return to 31%. Any ideas?

I realize that you are offering significant development experience plus you
local connections. I am not discounting those services. I will be out of
the office for the rest of the week, but I will call you early next week.

Phillip