> For the complete documentation index, see [llms.txt](https://blueprint.builtbydao.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://blueprint.builtbydao.com/invest/financial-model.md).

# The Financial Model

{% hint style="info" %}
A 14-tab workbook, pressure-tested and rebuilt on HUD-credible costs. Per-hub economics, the build fund, the staged raise, the network curve, ownership crossover, returns, and sensitivities. **Zero formula errors.** Full workbook available in the data room.
{% endhint %}

## The cost basis (honest, sourced)

|                               | Detroit | Chicago | Blended |
| ----------------------------- | ------: | ------: | ------: |
| Total development cost (TDC)  |   $232K |   $315K | $273.5K |
| Unit market value             |   $175K |   $215K |   $195K |
| Conventional rehab comparable |   $270K |   $370K |   $320K |
| New construction (context)    |   $448K |   $580K |   $514K |

In disinvested neighborhoods **cost exceeds value** — the subsidy gap that defines affordable housing. BBD shrinks it (\~15% below a conventional rehab) and captures it (stacked subsidy), leaving the community the owner.

```mermaid
xychart-beta
    title "Per-home cost basis — blended ($K)"
    x-axis ["Build cost (TDC)", "Market value", "Conv. rehab", "New construction"]
    y-axis "Thousands USD" 0 --> 550
    bar [273.5, 195, 320, 514]
```

## How the cost comes down

Only the **hard cost (\~70% of TDC)** can go non-cash; soft costs are always cash. Of hard cost, trainable labor settles in EQTBLT (coverage capped at \~65% — licensed trades stay cash) and 50%+ of materials are salvaged. Non-cash share of TDC ramps **22% → 33%** as the workforce and salvage pipeline mature. Real cash cost per home: **\~$213K early → \~$184K mature.**

## The income engine + break-even

A hub is sustained the way every community developer is — **developer fees on build volume (\~$752K/yr at stride) + market-rent NOI (net 50%) + commercial leasing** — against opex + debt service.

| Per-hub, at build stride                     |                                                Figure |
| -------------------------------------------- | ----------------------------------------------------: |
| Homes built / yr                             |                          18 (early) → 30 (stabilized) |
| Developer-fee income (\~10% of TDC × volume) |                                          \~$752K / yr |
| Market-rent NOI                              |      net 50% of rent, growing with the held portfolio |
| Operating result                             | fees + NOI + commercial leasing − opex − debt service |
| Break-even                                   |            \~Year 2 at volume · Year-1 bridge \~$589K |

{% hint style="warning" %}
Break-even is \~**Year 2** once at volume, with a \~**$589K** bridge — **contingent on sustained subsidized build volume.** If grant capture lags, the build *slows*; it does not go insolvent (see [The Honest Case](/invest/the-honest-case.md)).
{% endhint %}

## The build fund — the subsidy, baked in

A \~$232–315K home can't be funded by sales + conservative debt alone; a gap remains, filled by grants/subsidy — and it lands right on the researched **35–40% viability gate** (51% early, 44% stabilized). Grants are a structural funding layer, not a bet.

## The long arc (context, not the pitch)

At full build-out over a generation, the network converts public subsidy into community-owned market value at scale — but **Round 1 is about proving one hub.** The long-term curve lives in the model's *Network* and *Ownership Crossover* tabs.

| At full network build-out (generational, perfect-case) |            |
| ------------------------------------------------------ | ---------: |
| Community-owned assets at market value                 |     $7.03B |
| Development cost to build them                         |     $9.84B |
| **Subsidy captured for the community**                 | **$2.81B** |

*Hubs scale \~28 → 72 units/yr over a \~40-year horizon; community ownership crosses **49% (Yr 1) → 86% (Yr 5) → \~100% (Yr 20)**. Year One proves one hub.*

```mermaid
xychart-beta
    title "Community ownership share (%)"
    x-axis ["Yr 1", "Yr 5", "Yr 20"]
    y-axis "Community %" 0 --> 100
    line [49, 86, 100]
```

{% content-ref url="/pages/ziNGmaTTbQC1hUfi8rtt" %}
[Investor Returns](/invest/returns.md)
{% endcontent-ref %}


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