Our investor/partners tend to think of these projects as an alternate asset class which diversifies their existing portfolio and shelters some assets from the fluctuations of the equity markets. Their level of involvement is strictly up to them. Most trust Turnstone to design the home and make the material selections that will maximize the investor's return on investment. They rely on us to put their best interests above all other considerations. In fact, it is not uncommon for us to steer an investor away from an opportunity if we think the risk/return profile is not favorable.

We are comfortable working with sophisticated investors and can structure transactions so that our margins are adjusted based on the investor's results.

Turnstone has developed a spreadsheet-based model to help investors evaluate potential investments. The model creates a top-level overview of expected cash flows and the IRR from an investment under multiple resale scenarios including sale of a completed spec home, a turnkey sale during construction, flipping the land or assigning the contract to purchase the land to a new buyer.

The model accommodates different borrowing scenarios for both land and construction costs and can also handle building a spec home on land subordinated by the original owner. Realtor commissions and transfer taxes are computed based on the most common outcome for each resale scenario.