Illustrations
Four engagements, in figures.
A residence, raw land, a commercial building and a waterfront rebuild: each with its economics, the asset applied and where it settles. Representative figures; every engagement is priced individually.
Each engagement pairs a fixed-price construction agreement with a separate purchase agreement for the asset, executed together and secured before mobilization. The purchase closes at a defined milestone and is credited against that pay application. Billing and retainage follow standard AIA practice.
Example 1 · Residential
A $1 million home improvement, and a Cobra
Kitchen, primary suite, impact openings and the systems behind them, in an occupied waterfront residence. The owner applies a Shelby-licensed continuation Cobra.
Palm Beach County · occupied residence · no change to the footprint
| Schedule of values | Scheduled value |
|---|---|
| Design coordination, engineering and permits | $50,000 |
| Demolition and protection of finished areas | $37,500 |
| Structural and framing modifications | $75,000 |
| Impact-rated windows and doors | $150,000 |
| Mechanical, electrical and plumbing | $175,000 |
| Kitchen: cabinetry, stone and appliances | $200,000 |
| Primary suite and bath | $112,500 |
| Flooring, millwork and finishes | $137,500 |
| General conditions | $62,500 |
| Contract sum | $1,000,000 |
Asset applied
- Asset
- Shelby-licensed continuation Cobra
- Agreed purchase price
- $75,000
- Secured
- Purchase agreement executed with the construction agreement; purchaser noted as lienholder on the Florida title until closing.
- Closes
- Rough-in, credited against that pay application.
Billing
| Pay application | Work completed | Retainage | Amount due | Asset credit | Cash |
|---|---|---|---|---|---|
| Mobilization and demolition | $150,000 | ($15,000) | $135,000 | — | $135,000 |
| Rough-in inspections passed | $300,000 | ($30,000) | $270,000 | $75,000 | $195,000 |
| Finishes installed | $300,000 | ($30,000) | $270,000 | — | $270,000 |
| Substantial completion | $150,000 | ($15,000) | $135,000 | — | $135,000 |
| Retainage reduction at 90% complete | — | $45,000 | $45,000 | — | $45,000 |
| Final completion | $100,000 | $45,000 | $145,000 | — | $145,000 |
| Total | $1,000,000 | — | $1,000,000 | $75,000 | $925,000 |
10% retainage until 90% complete; half released at 90%, the balance at final completion.
- Price agreed at signing; independent inspection before the milestone.
- The car changes hands at rough-in. Retainage follows under the construction agreement, lien rights intact.
Example 2 · Land
Seven rural acres, from raw land to an entitled site
Seven acres under a rural land-use designation, intended for a residence and a collector’s barn. The economics are governed less by construction than by entitlement: land use, wetlands, species and utilities.
Rural future land use · ≈0.5 acre jurisdictional wetland · well and septic · county-road frontage
Entitlement sequence
1Due diligence
30–60 days
- Boundary, topographic and tree survey; title commitment
- Phase I ESA
- Wetland delineation; jurisdictional determination
- Listed-species survey (gopher tortoise and others)
- Geotechnical borings; percolation
- Flood zone, access, zoning verification, utility availability
2Land use and zoning
4–12 months
- Pre-application conference
- Small-scale plan amendment, where use or density requires it
- Rezoning, conditional use or PUD; public hearings
- Traffic and school concurrency
3Environmental permitting
6–12 months, in parallel
- Water management district ERP (stormwater and wetlands)
- Federal Section 404 authorization where wetland impacts are proposed
- Mitigation-bank credits (UMAM)
- Gopher tortoise relocation; tree and vegetation permits
4Site plan, plat and utilities
3–6 months
- Engineering: grading, drainage, access
- DOH septic and well permits, or utility agreements
- Plat and improvement bonding, if divided
5Site development
4–6 months
- Clearing, grading and fill to elevation
- Stormwater management
- Access, culverts and fire access
- Well, septic and power
| Schedule of values | Scheduled value |
|---|---|
| Due diligence: survey, title, ESA, wetlands, species, geotechnical | $66,250 |
| Land planning, land-use counsel and traffic | $90,000 |
| Civil engineering through permitting | $106,250 |
| Application, hearing and permit fees | $18,750 |
| Environmental permitting | $43,750 |
| Wetland mitigation credits | $93,750 |
| Gopher tortoise relocation; tree mitigation | $37,500 |
| Clearing, grading and fill | $150,000 |
| Stormwater management | $112,500 |
| Access, culverts and fire access | $168,750 |
| Well, septic and power | $118,750 |
| General conditions and improvement bonds | $56,250 |
| Contingency for agency conditions | $100,000 |
| Contract sum | $1,162,500 |
Schedule
Twelve to twenty-four months from diligence to a permitted, developed site, governed by hearings and environmental permits. Vertical construction follows under its own agreement.
- Wetland boundaries, species findings and hearing outcomes move cost and schedule more than construction does. They are resolved before the building budget is fixed.
- Alternatively, the parcel itself may be the asset, applied toward a project elsewhere at a price agreed on the land as it stands, unentitled.
Example 3 · Commercial
A 25,000-square-foot flex warehouse on the owner’s commercial site
A tilt-wall flex building with 3,000 square feet of office on the owner’s commercially zoned site. The owner applies a Porsche 964 RS.
≈2.5 acres · commercial zoning · utilities at the property line · site acquisition, where needed, through Barefoot Realty (affiliation disclosed)
| Schedule of values | Scheduled value |
|---|---|
| Architecture and engineering | $225,000 |
| Permits and impact fees | $275,000 |
| Site work: grading, stormwater, paving, utilities | $1,125,000 |
| Building shell: slab, tilt-wall, roof, storefront, dock doors | $2,968,750 |
| Office build-out, 3,000 sq ft | $450,000 |
| Fire sprinkler and alarm | $218,750 |
| Shell mechanical, electrical and plumbing | $312,500 |
| Landscape and irrigation | $112,500 |
| General conditions | $275,000 |
| Contingency | $300,000 |
| Contract sum | $6,262,500 |
Asset applied
- Asset
- Porsche 964 RS
- Agreed purchase price
- $300,000
- Secured
- Purchase agreement executed with the construction agreement; lienholder noted on title, or the car held in third-party storage until closing.
- Closes
- Dry-in of the shell, credited against that pay application.
Billing
| Pay application | Work completed | Retainage | Amount due | Asset credit | Cash |
|---|---|---|---|---|---|
| Site work and slab | $1,565,625 | ($156,563) | $1,409,062 | — | $1,409,062 |
| Shell erected and dried in | $1,878,750 | ($187,875) | $1,690,875 | $300,000 | $1,390,875 |
| MEP, sprinkler and office build-out | $1,565,625 | ($156,563) | $1,409,062 | — | $1,409,062 |
| Substantial completion and CO | $626,250 | ($62,625) | $563,625 | — | $563,625 |
| Retainage reduction at 90% complete | — | $281,813 | $281,813 | — | $281,813 |
| Final completion | $626,250 | $281,813 | $908,063 | — | $908,063 |
| Total | $6,262,500 | — | $6,262,500 | $300,000 | $5,962,500 |
10% retainage until 90% complete; half released at 90%, the balance at final completion.
- Same sequence as a residence: price agreed and secured at signing, closing at dry-in, retainage afterward.
Example 4 · Waterfront rebuild
A teardown past the 50% threshold, rebuilt as a luxury spec.
A 1970s house on the Intracoastal, where any meaningful renovation would exceed half the structure’s value and trigger a full rebuild to current flood standards. Rather than renovate into that constraint, the owner contributes the lot, Hoadley Construction builds a 6,000-square-foot residence at cost, Barefoot Realty lists and sells it, and the net profit is split equally.
Palm Beach County · 100 ft of frontage · rebuilt to current flood elevation · new seawall and dock
Structure
- Owner
- Contributes the lot at an agreed value of $3,500,000 and funds construction at cost.
- Hoadley Construction
- Builds at the cost of the work, general conditions included, billed monthly with standard retainage. No fee; its compensation is the profit participation.
- Barefoot Realty
- Retained as exclusive listing broker; earns the listing and sale commission. The affiliation is disclosed in writing.
- At sale
- Commission and closing costs first, then the owner’s capital returned in full, then net profit divided equally.
- Security
- The participation is recorded against the property. Pricing, timing and the owner’s option to keep the house at an appraised buyout are fixed at signing.
Cost of the work
| Design, engineering and permits | $300,000 |
| Demolition and site preparation | $120,000 |
| Foundation and elevation to current flood standard | $420,000 |
| Structure and envelope: impact openings, roofing | $1,650,000 |
| Mechanical, electrical, plumbing and smart-home systems | $720,000 |
| Interiors: kitchen, baths, millwork and finishes | $1,300,000 |
| Seawall, dock and lift | $380,000 |
| Pool, hardscape and landscape | $420,000 |
| General conditions: supervision, insurance, site | $380,000 |
| Cost of the work, at cost | $5,690,000 |
At sale: $13,000,000
| Sale price | $13,000,000 |
| Listing and sale commission: Barefoot Realty & Investments (5%) | ($650,000) |
| Documentary stamps, title and closing | ($156,000) |
| Return of owner capital: lot, at the agreed value | ($3,500,000) |
| Return of owner capital: cost of the work | ($5,690,000) |
| Return of owner capital: carry (taxes, insurance, utilities) | ($200,000) |
| Net profit | $2,804,000 |
| Owner, 50% | $1,402,000 |
| Hoadley Construction, 50% | $1,402,000 |
Sensitivity
| Sale price | Net profit | Owner | Hoadley |
|---|---|---|---|
| $11,500,000 | $1,397,000 | $698,500 | $698,500 |
| $13,000,000 | $2,804,000 | $1,402,000 | $1,402,000 |
| $14,500,000 | $4,211,000 | $2,105,500 | $2,105,500 |
Break-even sale price: about $10,020,000. The owner’s capital of $9,390,000 comes back before any profit is divided, and the cost of the work has already been paid as it was built.
- The construction company is paid at cost throughout; its profit is earned at sale, alongside the owner’s.
- If the owner elects to keep the house, Hoadley Construction’s share is purchased at an independent appraisal under the same waterfall.
Illustrative only. These are not offers, estimates or quotes; budgets, schedules, entitlement outcomes and asset values vary by property, jurisdiction and market.