Sample Business Plan on Real Estate Investing, Renting & Flipping Business Plan
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EXECUTIVE SUMMARY
The Business Concept
YourName Housing Development, LLC (YourName Housing Development or the Company) specializes in developing and purchasing existing rural affordable housing for low to moderate income persons and families. The Company creates affordable and quality housing for rural families, elderly, and disabled persons to sustain themselves with a high quality of life. The business also provides growth opportunities for local area businesses. The Company is located in Bunkie, YourState.
The Company’s members have more than 20 years of management, development and investment experience in single and multi-unit real estate in both rural and urban markets. It provides the highest quality design and construction unmatched attention to detail.
The member’s experience serves as a foundation to drive the social and personal aspects of YourName Housing Development. Generations is committed to being a partner in the communities it serves. Developments are always planned in close collaboration with the community and neighbors. The designs maximize environmentally sensitive and sustainable design.
Unique Understanding
YourName Housing Development understanding of rural markets and its relationships with government and private organizations allows the Company to capitalize on many opportunities. The Company has expertise in utilizing all types of financial structures from private equity to the most complex government-sponsored programs. The Company has relationships with:
Ø USDA
Ø National and Local Rural Housing Organizations
Ø Multi Unit Funding Agents
Ø Private investors
These relationships, and the years of experience of its members, allow YourName Housing Development to consistently innovate and adapt financial tools to ever changing markets.
Local Commitment
YourName Housing Development is dedicated to investing back into the communities in which it initiates projects. The Company is committed to empowering rural families and communities through the development of the high quality living facilities.
Excellent Market Opportunity
YourName Housing Development will take advantage of several factors to drive its growth. The demand for rural housing is high as many baby boomers are selecting rural areas because of the lower cost of living. In addition, many people are choosing to migrate to smaller towns to raise their families.
According to the Census Bureau’s July, 2007 estimate, non-metro counties had 50 million residents. Growth from migration was much more geographically concentrated than growth from natural increase. The rate of non-metro growth has been on a modest upward trend since 2001.
However, many factors affect non-metro growth including proximity to large cities and/or availability of jobs.
Affordability is the single largest housing problem for both owners and renters in rural area. Most low-income housing units in rural areas are single-family units, but many of these units may be sub-standard because they do not meet current building codes
The need for senior housing is very critical in rural communities. A large majority of the rural population is over 65 and often they are disabled. Many seniors live in homes that need construction projects to accommodate their disability. Other seniors need assisted-living quarters or special rental units designed just for seniors, as well as the traditional long term care nursing home. Housing specifically designed for seniors is all too often not available in rural communities.
Traditionally, the rural areas have been underserved because larger developers cannot obtain the large margins they want for real estate projects. However, the Company is able to obtain low cost money through its relationship with the USDA.
Profitable Growth
YourName Housing Development expects to gain a profitable market share within a very short period of time. Determinations have been made for the size of the market, amounts of budgeted advertising and promotional dollars, the number and kinds of distribution channels and the competitive landscape.
Projections call for the Company to generate revenues of $3.0 million in its next twelve months. YourName Housing Development will achieve strong growth over the next several years, reaching $15 million in revenues and more than $5.2 million of net income by the fifth year.
The Opportunity
The Migration to Rural Housing
Baby Boomers (now 46 – 64 years old) are finding the move to rural areas and small towns more attractive and practical. There are many reasons for this migration. Some want a simpler, more relaxed lifestyle while others move because of financial necessity.
An analysis of age-specific, net migration during the 1990s reveals extensive shifts in migration patterns as Americans move through different life-cycle stages. Assuming similar age patterns of migration, an Economic Research Report (ERR-79) by the USDA identifies the types of non-metropolitan counties that are likely to experience the greatest surge in baby boom migration during 2000-2020 and projects the likely impact on the size and distribution of retirement-age populations in destination counties.1
As people reach their fifties and sixties they are finding that areas with high natural and urban amenities and lower housing costs more desirable. If this migration trend follows past trends, the USDA projects the non-metro population age 55-75 will increase by 30 percent between now and 2020.
The USDA also reports that nearly 50 million Americans live in non-metropolitan (non-metro) areas, as currently defined.2 The non-metro classification covers approximately 2,000 counties outside the primary daily commuting range of urbanized areas with 50,000 or more people, and is widely used to define "rural" for research and policymaking. The non-metro areas contain 17 percent of the U.S. population but extend across 80 percent of the land area.