Free Property Rehabber 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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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 $300,000 for the development of a property rehabilitation firm while showcasing the expected financials and operations over the next three years. The Property Rehabber, Inc. (“the Company”) is a New York based corporation that will acquire residential/commercial properties with the intent to fix them and resell them into the open market. The business will also acquire properties for rental income purposes. The Company was founded in 2009 by John Doe.
1.1 Products and Services
The Company will engage a program that seeks to purchase properties that are in needed of work. Management will then fix the properties using debt capital with the intent to sell or rent the building or unit at its fair market price once the work is completed. This is one of the strategies that will allow the Company to operate under any economic climate. The profits realized from these building improvements are generally recognized within a year’s time frame. The third section of the business plan will further describe the services offered by the Property Rehabber.
1.2 The Financing
Mr. Doe is seeking to raise $300,000 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 30 year loan with a 7% fixed interest rate
1.3 Mission Statement
Management’s mission is to develop Property Rehabber into a firm that provides affordable housing vis-à-vis the renovation of properties that are in need of repairs.
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
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to complete a number of property rehabilitations during the next three years while heavily reinvesting the Company’s positive cash flow into new projects.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Property Rehabber, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Property Rehabber requires $300,000 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 Rehabber, Inc.
2.5 Exit Strategy
As each real estate deal is completed separately, Management has not outlined a concrete exit strategy. In the event Mr. Doe wishes to retire or cease business operations, he will most likely contract a real estate brokerage to divest the Company’s current assets and the Property Rehabber entity will dissolve.
3.0 Products and Services
Below is a description of the real estate services offered by the Property Rehabber.
3.1 Rehabilitation of Properties
The Property Rehabber will primarily engage the business of rehabbing residential properties with the intent to sell or rent the property once the project is completed. If the real estate market does not provide a fair and reasonable market value for the property, then Management will aggressively rent the units until such time when the building can be divested at a fair market value.
3.2 Acquisition of Residential Properties
The direct finance and purchase of residential property is the secondary business of the Company. Residential real estate will provide a continuous stream of rental income that the Management will use for reinvestment and profit stability for the Company. Management is developing a complex economic pricing strategy that will determine the fair market rate of a property based on its capitalization rate in conjunction with the market values of residential property. Residential real estate is the least risky form of real estate investing because the service offered is a necessity.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the real estate 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-2009, at which point the economy will begin a prolonged recovery period. However, the Company intends to acquire properties that are in need of substantial repair and are valued significantly below their proper market rates. As such, the Property Rehabber will be able to recognize immediate equity after every property rehabilitation is complete. Finally, many economic indicators now show that the housing market is hitting its bottom, and sales are expected to resume at a more normalized rate starting in 2009.
4.2 Industry Analysis
The U.S. Economic Census estimates that there are 7,400 firms that specialize in the purchase, development, and renovation of existing real estate units in the United States. Each year, this industry generates in excess of $14 billion dollars in aggregate gross incomes. Additionally, the business employs over 58,000 employees (does not include independent construction workers) and generates gross annual payrolls of $1.7 billion dollars. This industry is expected to continue to grow as the demand for housing increases with the growth of the general population. However, with the current real estate market, it is expected that a number of these firms will scale down or eliminate their new construction operations due to a lack of economic viability.
4.3 Customer Profile
As the Company intends to operate among several different investment and operating units, it is hard to characterize any specific tenant that will occupy the Company’s properties. However, Management will enact strict tenant quality and credit review procedures to ensure the Company’s revenues will not be interrupted by tenant default.
4.4 Competitive Analysis
Since real estate is effectually one of the most free market oriented businesses in the country, competition can not be accurately categorized. Management anticipates that there will be a sizable amount of competition from both single owner investment firms to large construction companies that are seeking to gain from the unusually low real estate prices throughout the country.
5.0 Marketing Plan
The Property Rehabber intends to maintain an extensive marketing campaign that will ensure maximum visibility for its completed units in its targeted market. Below is an overview of the marketing strategies and objectives of the Property Rehabber.
5.1 Marketing Objectives
• Develop an online presence by acquiring accounts for major online real estate portals.
• Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth.
• Establish relationships with other real estate brokers and agents within the targeted market.
5.2 Marketing Strategies
Property renter and buyer marketing will be the most difficult portion of the marketing strategy. This task will be accomplished through the business’s broad marketing campaign throughout its targeted market. Primarily, Mr. Doe intends to use local real estate brokerage firms to place tenants (and attract buyers during property sales) with the Company’s residential properties. In addition to using a real estate broker, Mr. Doe intends to develop his own marketing strategies that will further increase the visibility of the business’s completed real estate units. This is especially important with the current real estate market environment. The Property Rehabber will also use an internet based strategy. This is very important as many people seeking real estate for purchase or rent use the Internet to conduct their preliminary searches. Mr. Doe will register Company and its properties with these online portals so that potential buyers/renters can easily reach the business. The Company will also develop its own online website. The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the homes and properties that the Company is selling.
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 Rehabber will have an annual revenue growth rate of 16% per year.
• The Owner will acquire $300,000 of debt funds to develop the business.
• The loan will have a 30 year term with a 6% 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. However, should the economic environment remain stable then Management does not foresee that the Company should have issues regarding top line income. Additionally, the Company will be able to control its rate of renovation and acquisition, and in times of economic recession, the Property Rehabber can scale down its new building operations very quickly.
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