HELPFUL DEFINITIONS:

Acquisition costs - purchase cost of the land

Soft costs - architectural plans, building permits, etc.

Hard costs - actual costs associated with the materials & physical labor.

Closing costs - construction loan, title insurance, escrow, real estate taxes, & per diem interest.

Interest reserves - reserve account that will make the payments on the construction loan during construction.

Contingency reserves - reserve account that will pay unexpected cost overruns.