Business Plan from newbie FLORIDA

[Angela Kriv]

Dear BP Community! First of all Happy 4th of July! In case somebody has a minute please take a look at the plan I came up with.

Real Estate Investment Business Plan

Mission Statement:

Invest into Real estate to earn enough money to retire in 5-10 years; build wealth to pass on to kids and grandkids

Goals:

Short Term – acquire 10 properties by year 2018; Get RE License to get access to MLS

Long Term - get 10K in net monthly income

Strategy:

Combination of rental properties and flipping in Delray Beach 55+ communities. Eventually buying a multi unit rental unit.

Time Frame:

Short Term – 2018

Long Term – 10 years

Market:

Florida, Condos; 55+ Communities. Starting in Delray Beach with possibility to extend to other communities

Criteria:

25-35K for a 1-bedroom condo foreclosed; 5-7K renovation

35-40K for a condo that has live-in tenants

Marketing Plan:

RE Agents; Palm Beach Court Auctions; other online resources

Financing Deals:

Hard cash; possibility of equity line; investing profit into new deals

Teams and Systems:

Angela & my sister partners

Property Manager / HandyMan – Brother-in-Law

Contructor – xxxx

RE Agent – xxx

CPA – Angela’s CPA

Exit Strategy:

Flip and Rent and Hold

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Now, some history. I live in NYC, my sister is in Delray Beach, I already have one condo there that I bought from bank. I renovated it a little (just about 3k) and will start renting in August.

We decided to start in Delray beach since we know the area, there are lots of properties for sale. The prices are not high (but they start growing in the last year). The properties are renting pretty good. 

It is actually very easy to analyse the property since all condos are the same layout, we know immediately if the price is right. I think for the beginner it should be good. I am open in the future to open up the area to other places.

The only drawback I see is that you are allowed to rent the condo out only after a year, so I am adding first year hold to initial price for the analysis sake.

Example on a condo I bought:

Price paid $31,500

Closing       $1,200

Renovation $3,000

First year HOA $3900

Utilities 1st year $720

Taxes $700

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Total : $41,200

Rent s/b around 900-1000$

2% rule - 900 / 41200 = 2.1%

If (it happens once in awhile) the condo comes up without an initial wait time I am willing to pay a little extra to get it. 

I own an apartment in NYC and think will be able to get an equity line once the hard cash runs out.

I am open to any constructive suggestions/critique/questions.

Thanks in advance, Angela.

[Roger H.]

Welcome and hope you succeed with your plan.

Majority of the condo's down here 55+ and non 55+ have put plans in place to dissuade investors as they have a 1 - 2 yr no rent clause in their by-laws. So if you focus on condo's you will have your work cut out for you.  Additionally your not going to find anything in the better neighborhoods at $25-$40k and may not find anything. What you do find will probably not be the type of condo development you're going to be happy with (IE Lots of problems w/ neighborhood and tenants).  Would suggest you raise your target prices to $60-$75k or higher which would put you into better neighborhoods with better tenants. Or look at 3/2 single family homes that you can buy, rent or flip.