Rental Business Plan Draft

[Stephanie Bureau]

So I just made up my business plan to show to a real estate agent who I'm meeting with soon to get some ideas. Does it look good? I know it's not completely filled out and some things will change as we get further along (there's also a map of the area we want to work in, but it didn't paste). Anything I left out?

Mission Statement

We strive to provide rental properties in the San Antonio area that are clean, safe, and that creates a sense of community in the neighborhood.

Goals

Short Term (2-5 yrs)

Buy first rental property in 2016.

Second year add 3 more rental properties for a total of 4 rental units.

At least $4000/month of passive income by end of year 5.

Continue personal education

Seek additional mentors

Long Term (5+ yrs)

One partner obtain real estate license to aid in acquisitions.

Move into multifamily and apartment complexes for more cash flow.

At least $6000/month in cash flow for both partners to retire from regular work.

Move into flipping a few properties while maintaining concertation on buy and hold

Acquire enough buy and hold to comfortably supplement retirement.

Team Members

Partner: Stephanie - Office and paperwork, working with tenants, securing financing, finding and analyzing deals

Partner: Seth - Repair and rehab, working with tenants, securing financing, finding and analyzing deals

Mentor: *name and phone number omitted*

Mortgage Broker/Loan Officer: N/A

Real Estate Agent: N/A

Real Estate Attorney: N/A

General Attorney: *name and phone number omitted*

Escrow Officer or Title Rep: N/A

Accountant: N/A

Insurance Agent: *name and phone number omitted*

Contractor: *name and phone number omitted*

Landscaper: *name and phone number omitted*

Market

The main types of properties will be 2-4 bedroom single family residences in moderate to mid high-income areas in San Antonio, north of I-410, east of Bandera Rd and west of I-35 primarily but to include the Alamo Heights, Terrel Hills and Fort Sam Houston Areas to the North and to the West of I-35 but East of US 281. Our renters will primarily be professionals, single or small families. Dogs and cats with breed restrictions will allow for higher than average rent.

Zone 1 includes I-10 to 281, north of 1604. Zone 2 includes 281 to I-35 north of 1604. Zone 3 is between I-10 to 281 south of 1604 and north of 410. Zone 4 between the boundaries of 281, I-35, 1604 and 410. Zone 5 is east of Bandera Rd to I-10 and north of 410. Zone 6 is south of 410, between 281 and I-35.

Zone	Bedrooms	Median Rent	80% between
1	2	$1196	$821 - $1516
	3	$1358	$865 - $1947
	4	$1758	$1148 - $2495
2	2	$1133	$829 - $1383
	3	$1300	$924 - $1694
	4	$1618	$1226 - $2120
3	2	$955	$769 - $1174
	3	$1231	$804 - $1647
	4	$1451	$932 - $2169
4	2	$863	$704 - $1096
	3	$1139	$838 - $1425
	4	$1418	$953 - $1914
5	2	$1010	$711 - $1331
	3	$1277	$693 - $1816
	4	$1167	$541 - $2048
6	2	$982	$722 - $1316
	3	$1051	$648 - $1541
	4	$1067	$675 - $1646

Criteria

Criteria is generally listed from most important to less important/more flexible

Cash flow at least $100/month per door

Neighborhood: clean, low crime, good school district

Max purchase price: $100,000

Loan to Value:

Cap Rate (NOI/Property Asset Value): 10%

Max Rehab amount: $20,000

Max timeframe: 3 months

Property Size:

Lot Size:

Property Condition: basic repair

Bedrooms: 2-4 (unless area warrants 1 bedroom)

Number of Units: 1

C.L.U.E. Report of property

Screening process

Monthly income is at least 3x rent

Civil and criminal background check

Resident Research

Credit check

Check cleanliness of car

Submit questionnaire

Acquisition

Properties will be bought by, but not limited to private sales, listings on the MLS and foreclosures

Cash Flow Assessment

To Be Determined By Property

Initial Cost:

Loan:

Rent:

Mortgage:

Repairs:

Management:

Taxes:

CapEx repairs:

Vacancy:

Include your assessment of what could go wrong and how you would plan to handle problems?

Exit Strategies

If the property isn’t producing cash flow or is incurring too many expenses, the following exit strategies will be implemented.

Sell property either by using a realtor, doing a private sale though Facebook, wholesaler and/or network

Lease option

Seller financing (if property is owned outright with at least 20% down with preference for 30% down)

Upon a sale a 1031 exchange will be attempted to defer taxes

Financing

HomePath mortgages if purchasing bank repo owned by Frannie Mae, conventional mortgage, owner financing if home is owned outright, hard money, private money and bringing on an equity partner or joint venture partner who will help finance the deal. In the future HELOC may be an option when current properties build equity. In the beginning cash flow from properties will be saved to help fund additional deal.

3-6 months rent will be held in reserve fund per property

Marketing Plan

Buying:
Use agent to search MLS, search foreclosures, create ads for website

Renting:
Post on Craigslist, Facebook pages, create website, put signs in front yard

Management Plan

Leasing, Inspections, Maintenance and Repairs, Capital Improvements

Full exterior/interior inspections will be conducted semi-annually and per the Management SOP.

Tracking Performance

Analyze cash-flow of property annually and determine be course of action.