2021 Business Plan Introduction (Feedback Please)

[Dan Amaro]

Introduction Draft

TCI is a Real Estate Investment Group that began 2020 with the explosion of the housing market in Columbus, OH. As a Field Representative conducting Home Inspections for Insurance Companies, I experienced multiple occasions where properties on the same street were bought by the same owner.  When I would return to these areas weeks later, 9 out of 10 times the property would be rented or sold and I was inspecting the same policyholders new rental property.  Upon conducting research on Real Estate Markets I learned that Columbus, OH was in the top 5 housing Markets in the country and that I was correct; investors were buying properties to rent and at a great profit

As I dug deeper into data research on the Columbus market, I saw that Cleveland was following similar trends to Columbus in 2018 which led to analyzing the market.  What I found from multiple of my own data analysis and trusted sources like Forbes, RE Communities, Zillow, and Redfin, is that the Cleveland and Mid Ohio market is appreciating similar to how Columbus did 2018.

Reasons I think investors are investing in Cleveland and Mid-Ohio is because it’s an affordable market for first time home buyers, market rent median produces great cash flow (1.1%) , and in 2020 the market is appreciated 18% and is predicted to increase another 13%.

A reason Ohio is attractive to out of state investors is because compared to other states, property is cheap and there is room for fixing adding forced appreciation value into their investments. The price range is lower with potential upside of fast property appreciation which makes these markets attractive.

An investor could purchase a 3 bedroom/1.5 bath , 1,200 SF “move in ready” property in Cleveland around $55,000 (off market) but in Columbus the starting point for a comparable property is nearly 2.5x due to market appreciation with much more competition.

Other potential factors that could play into market appreciation in the future is the new MLB Baseball Team, the progression of The Cleveland Browns Football Team, and The Cleveland Cavaliers NBA Team.

The first year market goal is to own ten rental property units providing safe homes for good tenants in an up and coming area with greater potential than standard appreciation, which is 2% per year.

TCI’s first year financial goal is to create as much cash flow as possible for 20 years earning at least a total cash flow of at least $350/mo per unit ($84,000/ 20 yr);
$84,000/per unit/20 years x 10 units = $840,000 Total Cash Flow Over 20 Years.

The risks associated with Real Estate Investments are buying bad deals that don’t make sense no matter what improvements are done to the property, bad tenants that lead to eviction and property damage. The collateral for the capital partner in this investment is the property.

Cash Flow is the monthly profits from rent after total expenses. Cash flow will be split 50/50 between partners. When the property is sold, depending on the timeline and exit strategy exit will determine the split of property when sold.

To spread and address risk we will have a team of licensed specialists. The team will consist of a Home Inspector and Appraiser who will inspect and give a written report within 8 days so we can close within 10 days. The Property Management company will thoroughly screen quality tenants, collect rent, evict if needed, update routinely on repairs and needed expenses, and handle property utility bills. They will handle contact with the tenant, we should never need to speak with the tenant. A licensed contractor for any and all residential renovations through referral and reviews.

Thank you for reading this far, I really appreciate it.