We buy large tracts for a certain price and put a certain dollar amount of improvements into them. Money is spent across the whole project as opposed to being spent on a per acre or per ranchette basis.

Let’s say we bought 100 acres that we went on to subdivide into 10 ranchettes. If we paid $1M total, you could say that we paid $10K per acre, which comes out to $100K per ranchette. If we spent a total of $250K on improvements, you could say that improvements cost us $25K per ranchette. That’s a simple way of looking at it, and it’s how we display the numbers in this report.

In reality, that $1M property could have cost us $5K per acre for some parts and $20K per acre for other parts. Then we could have spent $5K on improvements for some ranchettes and $35K on improvements for others. Assigning these values and doing these calculations would be complicated or even impossible. That’s why we keep it simple, even if it means that it looks like we lost money on certain ranchettes.