Busines Plan Real Estate Invest

8/14/2019 Busines Plan Real Estate Invest

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Refurbish, Inc.

A Real Estate S-Corporation


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Refurbish, Inc. Sample On-line Plans

Executive Summary_____________________________________________________ 3

Company Analysis ______________________________________________________ 4

Name _____________________________________________________________________ 4

Company History/Current Situation ___________________________________________ 4

Goals______________________________________________________________________ 4

Company Location and facilities_______________________________________________ 4

Legal Form of Ownership/Profile of the Management Team________________________ 4

Insurance __________________________________________________________________ 5

Market Analysis ________________________________________________________ 6

Product____________________________________________________________________ 6

Price ______________________________________________________________________ 6

Distribution ________________________________________________________________ 6

Promotion/Advertising_______________________________________________________ 6

Industry History/Trends _____________________________________________________ 6

Target Market and Customer Base_____________________________________________ 7

Barriers to Entry____________________________________________________________ 7

Growth Opportunities _______________________________________________________ 7

Trade Agreements __________________________________________________________ 7

Exit Strategy _______________________________________________________________ 7

C R ( j t d) 8
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Company Analysis

Name

The company's name is Refurbish, Incorporated which is descriptive in what the company does. It isspecifically inconspicuous due to financial institution requests.

Company History/Current Situation

Refurbish originally started in 1996 when the principals Gadda Mooga and Edgar Pekin met. Eachindividual owned a house, so they decided to rent one as rental income and as a tax deduction. The home

has been consistently rented since 1996 and the owners have learned a great deal about working withtenants, maintenance, etc. Over the years, the owners decided they enjoyed being a landlord and workingwith tenants, so they have decided to take the business to the next level.

In early 2001, Refurbish incorporated and is an S-Corporation in the buying and selling of real estate.Refurbish will buy homes and commercial buildings in need of repair below market value, and refurbishthem to market conditions and sell.

Refurbish is currently in the process of arranging financing through a local lending institution and hasobtained credit from MasterCard and American Express. The money will be used to purchase homes andbuildings that are 'good buys'. Refurbish estimates that two or three monthly mortgage payments will bemade in the time a contractor is hired, materials purchased, and job completed. The money will be used topay the monthly mortgage, fund materials, pay contractors, and for general cash flow.

Refurbish's goal is to buy and sell homes and single dwellings up to 6-plexes. Refurbish will beconcentrating on two types of properties, those that can be fixed and sold, and those that are attractive forrentals. Refurbish is particularly interested in buildings that are structurally sound, however needsubstantial work to make them habitable. These buildings can usually be found at low prices, and withmodest expenditures, can be rehabilitated into nice, sturdy, homes. Refurbish estimates buying two

buildings in calendar year 2001. This will depend on the properties that are available. To mitigateRefurbish's risk, initially they plan on pursuing homes that require less work and lower profits. This willallow them to further enhance their skills and experience.


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Target Market and Customer Base

Refurbish's target market will consist of two groups; investors wishing to buy renovated properties and

individual renters. The target market will be the Metropolitan area with demographics ranging fromindividual investors to singles and families.

The renters will be targeted in the lower middle to middle class. Refurbish is interested in maintaining afew single-family homes in middle class areas. Typically, these individuals rent due to the excessive costsof down payment, etc. These individuals are typically price sensitive but willing to buy on looks andfunctionality. Each home will be 'packaged' to appeal to the decision influencer, not the decision-maker.Refurbish believes that the decision influencer, typically female, will 'fall in love' with the updated kitchenand bathroom to sway the decision-maker. The overall demographics of this market are families withcombined household income of $40,000 to $75,000 and two kids.

This market is excellent for three and four-plexes, especially the smaller apartment properties located in themid-town and near downtown area.

Barriers to Entry

There are no barriers to entry within the real estate and housing industry. It is a very fragmented niche thatalmost any handyman can enter. As long as an individual has access to capital, he/she can purchase a homeand fix it up.

Growth Opportunities

Refurbish has two opportunities for growth; real estate sales and remodel for hire. Refurbish could increaseannual revenues by executing real estate sales themselves. This would add an additional revenue source of4-7% per house. Refurbish also has the opportunity to expand into other house remodels and repairs.Further investigation into this area is needed. This opportunity has the potential of adding $15,000 to$25,000 in annual revenue.

Trade Agreements

The key agreements Refurbish will have are with real estate agents and building supply companies. Asmentioned earlier, Refurbish will work with one real estate agent in selling each home and when lookingfor prospects. The exclusive agreement with the Real Estate agent is the manager of rental properties atReal Estate Company. He has multiple agreements with tradesmen and suppliers, and has his own general


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Company Revenues (projected)

2001 2002 2003 2004 2005Property Sales 1 2 2 2 2Sale of Property 60,000 60,000 60,000 60,000 60,000

Property Revenue 60,000 120,000 120,000 120,000 120,000

Rental Property 1 2 3 4 5Monthly Rent 800 800 800 800 800Rental Revenue 9,600 19,200 28,800 38,400 48,000

Total Revenue 69,600$ 139,200$ 148,800$ 158,400$ 168,000$


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Name Business Phone

Home Address Home Phone

City State Zip Code

Business Name of Applicant

Assets Liabilities

Cash on hand & In banks Accounts PayableSavings Accounts Notes Payable to banks and others (Section

2)IRA or other retirement accounts Installment Account (Auto)

Mo. Payment $______Life Insurance - Cash Surrender Value Only(Section 8)

Installment Account (other)Mo. Payment $______

Stocks & Bonds (Section 3) Loan on life insuranceReal Estate (Section 4) Mortgage on Real Estate

(Section 4)Automobile-Present Value Unpaid Taxes (Section 6)Other personal property (Section 5) Other liabilities (Section 7)

Other assets (Section 5)

Total LiabilitiesNet Worth

Total Assets Total Liabilities & Net WorthSection 1. Source of Income Contingent Liabilities

Salary As Endorser or Co-MakerNet Investment Income Legal Claims & JudgementsReal Estate Income Provision for Federal Income Tax

Other Income (Describe below)*Description of Other Income in Section 1


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Schedule of Collateral

Section I - Real Estate

Attach a copy of the deed(s) containing a full legal description of the land and show the location (street address) andcity where the deed(s) is recorded. Following the address below, give a brief description of the improvements, such assize, type of construction, use, number of stories, and present condition (use additional sheet if more space is required).

List Parcels of Real Estate

Address Year Acquired Original Cost Market Value Amount of Lien Name of Lienholder

Description(s)


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Section II - Personal Property

All items listed herein must show manufacturer or make, model, year, and serial number. Items with no serial numbermust be clearly identified (use additional sheet if more space is required).

Description - Manufacturer,Model, Serial Number

Year Acquired Original Cost MarketValue

Current LienBalance

Name ofLienholder


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Financial Analysis

Start-up Cost Estimates

Appendix B

Income Statement

Appendix D, 12-months ending December 31, 2001 - 2005

Balance Sheet

Appendix E, 12-months ending December 31, 2001 - 2005

Personal Financial Statements

Appendix F

Company & Legal Documents

Appendix G


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Appendix D Refurbish, Inc.Income Statement

For the 12-Months Ending

31-Dec-01 31-Dec-02 31-Dec-03 31-Dec-04 31-Dec-05 31-Dec-06

Properties Sold 1 2 2 2 2 2

Property Ave. Value 60,000$ 60,000$ 60,000$ 60,000$ 60,000$ 60,000$Sales Revenue

Property Sales 60,000$ 87% 120,000$ 87% 120,000$ 82% 120,000$ 77% 120,000$ 73% 120,000$ 69%

Rental Income 9,000$ 13% 18,024$ 13% 27,048$ 18% 36,072$ 23% 45,096$ 27% 54,096$ 31%

Total Revenue 69,000$ 138,024$ 147,048$ 156,072$ 165,096$ 174,096$

Cost of Sales

Cost of Rentals 630$ 7% 1,262$ 7% 1,893$ 7% 2,525$ 7% 3,157$ 7% 3,787$ 7%

Cost of Sales 40,000$ 67% 80,000$ 67% 80,000$ 67% 80,000$ 67% 80,000$ 67% 80,000$ 67%

Total Cost of Sales 40,630$ 81,262$ 81,893$ 82,525$ 83,157$ 83,787$

Gross Profit 28,370$ 41% 56,762$ 41% 65,155$ 44% 73,547$ 47% 81,939$ 50% 90,309$ 52%

Operating Expenses

Contractor repairs 10,000$ 43% 20,000$ 44% 20,000$ 38% 20,000$ 34% 20,000$ 30% 20,000$ 27%

Accounting/Bookkeeping 250$ 1% 250$ 1% 250$ 0% 250$ 0% 250$ 0% 250$ 0%

Postage 100$ 0% 100$ 0% 100$ 0% 100$ 0% 100$ 0% 100$ 0%

Insurance 800$ 3% 1,700$ 4% 2,400$ 5% 3,100$ 5% 3,800$ 6% 4,400$ 6%

Bank Fees 500$ 2% 500$ 1% 500$ 1% 500$ 1% 500$ 1% 500$ 1%

Trash Service 500$ 2% 1,000$ 2% 1,000$ 2% 1,000$ 2% 1,000$ 2% 1,000$ 1%

Utilities 400$ 2% 800$ 2% 800$ 2% 800$ 1% 800$ 1% 800$ 1%

Rental Vacancy Updates -$ 0% -$ 0% 500$ 1% 1,000$ 2% 1,000$ 2% 1,000$ 1%

Professional fees(realtor) 4,200$ 18% 8,400$ 19% 8,400$ 16% 8,400$ 14% 8,400$ 13% 8,400$ 12%

Mortgage Payments (rental) 6,288$ 27% 12,288$ 27% 18,288$ 35% 24,288$ 41% 30,288$ 46% 36,288$ 50%

Total Operating expenses 23,038$ 33% 45,038$ 33% 52,238$ 36% 59,438$ 38% 66,138$ 40% 72,738$ 42%

EBIT 5,332$ 8% 11,724$ 8% 12,917$ 9% 14,109$ 9% 15,801$ 10% 17,571$ 10%

Other Income(Expense)

Interest Expense 500$ 1,500$ 2,200$ 3,300$ 4,400$ -$Depreciation -$ -$ -$ -$ -$ -$

Income Taxes -$ 2,500$ 3,000$ 4,000$ 5,000$ 6,000$

Amortization -$ -$ -$ -$ -$ -$

Total Other 500$ 4,000$ 5,200$ 7,300$ 9,400$ 6,000$

Net Income (Loss) 4,832$ 7% 7,724$ 6% 7,717$ 5% 6,809$ 4% 6,401$ 4% 11,571$ 7%

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