Tenants in place Income properties Available NOW, but not for long
by Luis Figueroa
Current listings and their prices
Surety Properties is a start-up company in the Tampa, Florida whose goal is to develop the basis for a real estate investment company, which will launch upon funding. The business model will be modest, yet detailed. It is my objective to create a business portfolio of income generating properties with tenants already in place. This is what I look to acquire and manage with the funding requested. This portfolio of rental residential property create an immediate source of income from which I will begin to repay borrowed money and further invest foreclosed properties directly from auctions, to rehab and resell retail.
This will be accomplished over the next 10-15 years, in two phases. The first is to acquire and hold section 8 income generating homes with tenants already in place. The second phase is to purchase undervalued residential properties from foreclosure auctions, improve them as necessary, and then resell them fully renovated and ready to occupy. From these retail sales lump sum payments will be made to lender.
Surety Properties will be a limited liability partnership registered in the state of Florida for tax and incentives purposes. I will run and manage the business. I am a former contract business owner who has worked improving real estate for 8 years and customer service industry for 23 years. The company plans to be leveraged through private investment and a limited number of loans and expects to begin operating in September of 2013.
Surety Properties will offer clean, renovated rental properties to our diverse clients, but will target maintaining its qualification to section 8 tenants as a priority. With proposed acquisition of 16 properties throughout central Florida and additional plans with prospective investors we will have a premier position managing of independently owned rental homes, condos, and apartments as well. In addition we will offer a full range of services to facilitate the purchasing of our select rehabbed inventory and selling of client’s real estate including the following:
• Home search database.
• Moving consulting, quotes, planning, etc.
• Mortgage consulting and loan preapproval.
• Community information.
• Title transfer.
• Obtaining a comparative market analysis for potential sellers.
• Property preparation.
The Real Estate industry had been steadily growing over thirty years before the sub-prime, foreclosure crisis. The percentage of the U.S. population is growing at an average rate of 3% each year. In certain parts of the country like the American Southwest, the growth rate is about 8%. This percentage is also expected to grow as this local economy begins its course of stabilization already attracting big companies.
A decade from now, this setback will have been gone and forgotten and so will this opportunity if not acted upon. It is estimated by the U.S. Census Bureau that the retirement industry, that includes homes, medical facilities, specialty equipment, retirement entertainment services, etc., accounts for 4.8 billion dollars each year.
Retirees are ideal tenants with no intention of moving any time soon.
Start-up funding required is modest when compared to other type of collateralized investments. Launch of operations begins in escrow and revenues reach an acceptable level thirty days thereafter. Most companies and startups get absorbed in liabilities before they take in a measurable amount of profit. This investment, however, we have
An action plan for and expect the down payment to be paid off in two years. A long-term loan through Valley National Bank will be paid off in ten years.
The company expects to reach profitability in the first year and does not anticipate any serious cash flow problems. We conservatively believe that during the first three years, average profitability per month per segment will be adequate. We expect that about one sale per month will guarantee a break-even point.
Plan of action
The acquisition strategy will be to purchase properties at a deep discount due to foreclosure, short sale, or homes whose values are depressed and can be significantly increased through renovation or rehabilitation. With use of Surety Properties expertise, the level of advantage will clearly be noticeable by the savings on labor and overall methodologies to achieve the repairs with minimal cost. The company will seek to identify and exploit opportunities to create value. Properties that can be purchased due to foreclosure or short sale may not require much more than cosmetic improvements in some cases, landscape and brush clean ups and maybe new paint can make all the difference.
The following spreadsheet illustrates a monthly budget allocation speculation based on actual rents from properties available for sale today. This group of ten properties total $647,000. This is the value basis for the mortgage payment at 4% interest over a 30 year mortgage, which comes to $3,052 as described in the mortgage column.