Busines Plan Real Estate Invest

Refurbish, Inc. A Real Estate S-Corporation

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 Company Revenues (projected)________________________________________________ 8

Financial Analysis _____________________________________________________ 13 Start-up Cost Estimates _____________________________________________________ 13 Income Statement __________________________________________________________ 13 Balance Sheet _____________________________________________________________ 13 Personal Financial Statements________________________________________________ 13 Company & Legal Documents________________________________________________ 13

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Refurbish, Inc.

Sample On-line Plans

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

Company History/Current Situation Refurbish originally started in 1996 when the principals Gadda Mooga and Edgar Pekin met. Each individual 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 with tenants, maintenance, etc. Over the years, the owners decided they enjoyed being a landlord and working with 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 refurbish them to market conditions and sell. Refurbish is currently in the process of arranging financing through a local lending institution and has obtained credit from MasterCard and American Express. The money will be used to purchase homes and buildings that are 'good buys'. Refurbish estimates that two or three monthly mortgage payments will be made in the time a contractor is hired, materials purchased, and job completed. The money will be used to pay 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 be concentrating on two types of properties, those that can be fixed and sold, and those that are attractive for rentals. Refurbish is particularly interested in buildings that are structurally sound, however need substantial work to make them habitable. These buildings can usually be found at low prices, and with modest 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 mitigate Refurbish's risk, initially they plan on pursuing homes that require less work and lower profits. This will allow them to further enhance their skills and experience.

Goals • •

Within three years, Refurbish will have bought and rehabilitated six properties. Annual net income of $14,000 - $21,000. Within five years, Refurbish will have experience with 10 properties and retain four as rental properties. Annual net income of $26,000 - $36,000 ($21,000-$38,000 for selling homes and $5,000 $8,000 for rental income)

Company Location and facilities Refurbish is being operated out of the owners' home. They have established a home office where they manage the paperwork and daily operations. The office is complete with computer, phone, printer, and desk.

Legal Form of Ownership/Profile of the Management Team Refurbish, Inc. has been organized as an S-Corporation with Gadda Mooga and Edgar Pekin splitting ownership 50/50. Edgar Pekin will be President and Gadda Mooga will be Secretary and Treasurer. Gadda Mooga will be primarily responsible for the finances. The S-Corporation was chose in order to protect the owners from liability. Refurbish's advisor is attorney Jeff Minor. copyright 2001 SmallBusinessPoint.com, Inc 4

Refurbish, Inc.

Sample On-line Plans

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 from individual investors to singles and families. The renters will be targeted in the lower middle to middle class. Refurbish is interested in maintaining a few single-family homes in middle class areas. Typically, these individuals rent due to the excessive costs of down payment, etc. These individuals are typically price sensitive but willing to buy on looks and functionality. 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 kitchen and bathroom to sway the decision-maker. The overall demographics of this market are families with combined 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 the mid-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 that almost any handyman can enter. As long as an individual has access to capital, he/she can purchase a home and fix it up.

Growth Opportunities Refurbish has two opportunities for growth; real estate sales and remodel for hire. Refurbish could increase annual revenues by executing real estate sales themselves. This would add an additional revenue source of 4-7% 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. As mentioned earlier, Refurbish will work with one real estate agent in selling each home and when looking for prospects. The exclusive agreement with the Real Estate agent is the manager of rental properties at Real Estate Company. He has multiple agreements with tradesmen and suppliers, and has his own general maintenance person, along with an extensive list of investors. The goal is that one real estate agent will completely understand what Refurbish's business is and find the right buyer for the home that meets specific revenue goals. Also, that agent will be familiar with Refurbish's business, etc. Refurbish will also locate foreclosed properties through various organizations; banks, SBA (Small Business Administration), Federal Deposit Insurance Corporation (FDIC), Housing and Urban Development (HUD), Veterans Administration (VA), Fannie Mae, Freddie Mac, General Service Administration (GSA), and Internal Revenue Service (IRS). Each of these organizations offers properties for sale that have been foreclosed.

Exit Strategy The only exit strategy Refurbish has is selling the last house or selling the existing rental properties.

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Refurbish, Inc.

Sample On-line Plans

Company Revenues (projected) 2001 Property Sales Sale of Property Property Revenue Rental Property Monthly Rent Rental Revenue Total Revenue

2002

2003

2004

2005

1 60,000 60,000

2 60,000 120,000

2 60,000 120,000

2 60,000 120,000

2 60,000 120,000

1 800 9,600

2 800 19,200

3 800 28,800

4 800 38,400

5 800 48,000

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

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Refurbish, Inc.

Sample On-line Plans

Name

Business Phone

Home Address

Home Phone

City

State

Zip Code

Business Name of Applicant Assets

Liabilities Accounts Payable Notes Payable to banks and others (Section 2) Installment Account (Auto) Mo. Payment $______ Installment Account (other) Mo. Payment $______ Loan on life insurance Mortgage on Real Estate (Section 4) Unpaid Taxes (Section 6) Other liabilities (Section 7)

Cash on hand & In banks Savings Accounts IRA or other retirement accounts Life Insurance - Cash Surrender Value Only (Section 8) Stocks & Bonds (Section 3) Real Estate (Section 4) Automobile-Present Value Other personal property (Section 5) Other assets (Section 5)

Total Liabilities Net Worth Total Liabilities & Net Worth Contingent Liabilities

Total Assets Section 1. Source of Income Salary Net Investment Income Real Estate Income Other Income (Describe below)* Description of Other Income in Section 1

As Endorser or Co-Maker Legal Claims & Judgements Provision for Federal Income Tax

*Alimony or child support payments need not be disclosed in "Other Income" unless it is desired to have such payments counted toward total income. Section 2. Notes Payable to Bank and Others (Use attachments if necessary. Each attachment must be identified as a part of this statement and signed)

Name and Address of Noteholder(s)

Original Balance

Current Balance

Payment Amount

Frequency (monthly, etc.)

How secured or Endorsed Type of Collateral

Section 3. Stocks and Bonds. (Use attachments if necessary. Each attachment must be identified as a part of this statement and signed)

Number of Shares

Name of Securities

copyright 2001 SmallBusinessPoint.com, Inc

Cost

Market Value Quotation/Exchange

Date of Quotation/Exchange

9

Total Value

Refurbish, Inc.

Sample On-line Plans

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) and city where the deed(s) is recorded. Following the address below, give a brief description of the improvements, such as size, 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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Refurbish, Inc.

Sample On-line Plans

Section II - Personal Property All items listed herein must show manufacturer or make, model, year, and serial number. Items with no serial number must be clearly identified (use additional sheet if more space is required). Description - Manufacturer, Model, Serial Number

Year Acquired

Original Cost

Market Value

Current Lien Balance

Name of Lienholder

Signature:

Date:

Social Security Number:

Signature:

Date:

Social Security Number:

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Refurbish, Inc.

Sample On-line Plans

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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Refurbish, Inc. Income Statement For the 12-Months Ending

Appendix D

Properties Sold Property Ave. Value Sales Revenue Property Sales Rental Income Total Revenue Cost of Sales Cost of Rentals Cost of Sales Total Cost of Sales Gross Profit Operating Expenses Contractor repairs Accounting/Bookkeeping Postage Insurance Bank Fees Trash Service Utilities Rental Vacancy Updates Professional fees(realtor) Mortgage Payments (rental) Total Operating expenses EBIT Other Income(Expense) Interest Expense Depreciation Income Taxes Amortization Total Other Net Income (Loss)

$

31-Dec-01 1 60,000

$ $ $

60,000 9,000 69,000

87% $ 13% $ $

120,000 18,024 138,024

87% $ 13% $ $

120,000 27,048 147,048

82% $ 18% $ $

120,000 36,072 156,072

77% $ 23% $ $

120,000 45,096 165,096

73% $ 27% $ $

120,000 54,096 174,096

69% 31%

$ $ $ $

630 40,000 40,630 28,370

7% $ 67% $ $ 41% $

1,262 80,000 81,262 56,762

7% $ 67% $ $ 41% $

1,893 80,000 81,893 65,155

7% $ 67% $ $ 44% $

2,525 80,000 82,525 73,547

7% $ 67% $ $ 47% $

3,157 80,000 83,157 81,939

7% $ 67% $ $ 50% $

3,787 80,000 83,787 90,309

7% 67%

$ $ $ $ $ $ $ $ $ $ $ $

10,000 250 100 800 500 500 400 4,200 6,288 23,038 5,332

43% 1% 0% 3% 2% 2% 2% 0% 18% 27% 33% 8%

$ $ $ $ $ $ $ $ $ $ $ $

20,000 250 100 1,700 500 1,000 800 8,400 12,288 45,038 11,724

44% 1% 0% 4% 1% 2% 2% 0% 19% 27% 33% 8%

$ $ $ $ $ $ $ $ $ $ $ $

20,000 250 100 2,400 500 1,000 800 500 8,400 18,288 52,238 12,917

38% 0% 0% 5% 1% 2% 2% 1% 16% 35% 36% 9%

$ $ $ $ $ $ $ $ $ $ $ $

20,000 250 100 3,100 500 1,000 800 1,000 8,400 24,288 59,438 14,109

34% 0% 0% 5% 1% 2% 1% 2% 14% 41% 38% 9%

$ $ $ $ $ $ $ $ $ $ $ $

20,000 250 100 3,800 500 1,000 800 1,000 8,400 30,288 66,138 15,801

30% 0% 0% 6% 1% 2% 1% 2% 13% 46% 40% 10%

$ $ $ $ $ $ $ $ $ $ $ $

20,000 250 100 4,400 500 1,000 800 1,000 8,400 36,288 72,738 17,571

27% 0% 0% 6% 1% 1% 1% 1% 12% 50% 42% 10%

$ $ $ $ $ $

500 500 4,832

$ $ $ $ $ 7% $

1,500 2,500 4,000 7,724

$ $ $ $ $ 6% $

2,200 3,000 5,200 7,717

$ $ $ $ $ 5% $

3,300 4,000 7,300 6,809

$ $ $ $ $ 4% $

4,400 5,000 9,400 6,401

$ $ $ $ $ 4% $

6,000 6,000 11,571

7%

copyright 2001 SmallBusinessPoint.com, Inc

$

31-Dec-02 2 60,000

$

31-Dec-03 2 60,000

$

31-Dec-04 2 60,000

$

31-Dec-05 2 60,000

$

31-Dec-06 2 60,000

52%

IncomeStatement