Free Property Management Firm Business Plan
For Raising Capital from Investors, Banks, or Grant Companies!
Please note that the financials
in this complete free business plan are completely fictitious and may not
match the text of the business plan below. This free business plan demonstration
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and Excel documents for this business plan, please click the button below! Also,
the text of the business plan is formatted with a fully automated
table of contents.
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templates. All business plans come in Microsoft Word and Microsoft Excel format.
Each business plan features:
- Excecutive Summary
- Company and Financing Summary
- Products and Services Overview
- Strategic Analysis with current research!
- Marketing Plan
- Personnel Plan
- 3 Year Advanced Financial Plan
- Expanded Financial Plan with Monthly Financials
- FREE 30 Page Sample Private Placement Memorandum
- FREE PowerPoint Presentation for Banks, Investors,
or Grant Companies!
1.0 Executive Summary
The purpose of this business plan is to raise $100,000 for the development of a property management firm while showcasing the expected financials and operations over the next three years. The Property Management Firm, Inc. (“the Company”) is a New York based corporation that will provide management of residential properties to real estate investors in its targeted market. The Company was founded by John Doe.
1.1 Products and Services
The Company will offer residential property management services to its clients. For this service, the business will generate fees equal to nine or ten percent of the aggregate rent collected. The benefits for using the Company’s services include: • Fees commensurate with the market • Zero involvement in the day to day operations of their properties • A reliable firm that will handle almost every aspect of the clients’ property. • A monthly check sent to clients for the monthly cash flow generated from rental. The third section of the business plan will further describe the services offered by the Property Management Firm.
1.2 The Financing
Mr. Doe is seeking to raise $100,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate.
1.3 Mission Statement
The Property Management Firm’s mission is to become the recognized local leader in its targeted market for property management services.
1.4 Mangement Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the real estate industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
Management intends to start its operations by calling on relationships that Mr. Doe has developed during the course of his real estate career. As the business develops its operations, and the business becomes profitable, the Company may seek to expand by acquisition and through the development of additional property management offices throughout the state.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Property Management Firm, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Property Management Firm requires $100,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of the Property Management Firm, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Property Management Firm. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.
3.0 Products and Services
Below is a description of the services offered by the Company
3.1 Property Management Services
The primary service offered by the Company is the management of single family units and multifamily unit real estate. On the behalf of clients, the Company will collect rent, place new tenants in clients’ property, act as an owner-tenant liaison, ensure legal and tax compliance, manage the accounting records of the property, and offer lawn care and building maintenance services (outsourced). For these services the Company will charge the owner nine to ten percent of the aggregate rent collected, with monthly fees of $100 at minimum. Management expects that its average property will collect approximately $1,250 per month in rent. The Property Management Firm expects that the value of the average managed property to be $130,000 to $160,000.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the property management industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue until mid-2010, at which point the economy will begin a prolonged recovery period.
4.2 Industry Analysis
Residential property management in the United States is $22 billion dollar per year industry. These businesses aggregately employ more than 250,000 people and provide gross annual payrolls exceeding $10 billion dollars. The growth rate of this industry has been tremendous in the last ten years as housing prices and the number of real estate investors in the housing market has increased three fold during this time. Management expects that as the market for housing continues to slow, the number of agents operating within the industry will begin to decrease. Revenues generated by these businesses have increased more than 65% in the last five years, while the number of new establishments entering the market has grown 31%. However, unlike real estate brokerages, property management firms tend to operate with a greater level of economic stability as the fees generated from the management of rental properties are recurring. As such, the Property Management Firm will be able to remain profitable despite the current housing market situation.
4.3 Customer Profile
In this section of the analysis, you should describe the type of customer you are seeking to acquire. These traits include income size, type of business/occupation; how far away from your business is to your customer, and what the customer is looking for. In this section, you can also put demographic information about your target market including population size, income demographics, level of education, etc.
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
The Property Management Firm intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.
5.1 Marketing Objectives
• Establish relationships with real estate brokerages within the targeted market.
• Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising.
• Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
5.2 Marketing Strategies
Mr. Doe intends on using a number of marketing strategies that will allow the Property Management Firm to easily homeowners (who are seeking to rent their homes) and real estate investors within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Below is a description of how the business intends to market its services to the general public. The Property Management Firm will also use an internet based strategy. This is very important as many people seeking local services, such as property managers, now the Internet to conduct their preliminary searches. Mr. Doe will register the Property Management Firm with online portals so that potential customers can easily reach the business. The Company will also develop its own online website showcasing the business’ operations, its pricing information, contact information, and Mr. Doe’s experience and a property manager. Finally, the Company will develop referral relationships with real estate brokerages within the target market that do not have property management operations. The company will provide revenue shares with local real estate brokerages that provide the business with ongoing referrals (of real estate investors) that are seeking property management services.
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
6.3 Management Biographies
In this section of the business plan, you should write a two to four paragraph biography
about your work experience, your education, and your skill set. For each owner or
key employee, you should provide a brief biography in this section.
7.0 Financial Plan
7.1 Underlying Assumptions
• The Property Management Firm will have an annual revenue growth rate of 10% per year.
• The Owner will acquire $100,000 of debt funds to develop the business.
• The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
The Company’s revenues are sensitive to the overall condition of the financial markets. As stated before, a sudden and dramatic increase in the rate of inflation or real interest rates can have a significant impact on the overall revenue of the business. Additionally, the business will generate ongoing streams of revenue from the rents collected on behalf of clients, and as such, in times of economic recession, the business will be able to maintain its revenue base despite declines in home values and rental rolls.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statements
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 General Assumptions
7.9 Business Ratios
Expanded Profit and Loss Statements
Expanded Cash Flow Analysis