Multi-Family Business Plan Outline For Master Lease Properties (Put the plan together around the reason why you re buying the property)

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Lawrence Dean
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1 Multi-Family Business Plan Outline For Master Lease Properties (Put the plan together around the reason why you re buying the property) Prepare and show this to the prospective seller to impress him or her that you ve done your homework! This will greatly increase your credibility to get the job done and get the seller to say yes to a master lease if it s your first one. Summary Purpose of acquisition Current situation of the property/owner Key success factors Financial situation and needs 1. Vision a. What s my vision for the property? b. Milestones to be met 2. Market analysis a. The overall market b. Changes in the market c. Target market and tenants d. Tenant characteristics e. Tenant needs 3. Competitive analysis a. Nature of competition b. Changes in the industry c. Primary competitors d. Competitive services/amenities e. Opportunities f. Threats and risks 4. Strategy a. Key competitive strengths b. Key competitive weaknesses c. My strategy d. How I plan on implementing strategy 5. Marketing and sales a. Marketing strategy b. Sales tactics c. Advertising d. Promotions/incentives/concessions e. Future products/services f. Public relations/community

Summary Purpose of acquisition Current situation of the property/owner Key success factors Financial situation and needs 1. Vision a. What s my vision for the property? b. Milestones to be met 2.

2 6. Operations a. Cash control b. Key personnel c. Organizational structure d. Tenant service/support e. Facilities f. Maintenance 7. Creating the financial model of the business plan a. Assumptions and comments b. Starting balance sheet c. Profit-and-loss projection d. Cash flow projection e. Balance sheet projection f. Ratios and analyses g. Break-even analysis 8. Exit Strategies a. Make sure they are conservative b. Get a consensus c. Coincides with financial model NOTE: ON THE NEXT PAGE, I BRIEFLY EXPLAIN WHAT YOU SHOULD INCLUDE IN EACH CATEGORY.

Cash flow projection e. Balance sheet projection f. Ratios and analyses g. Break-even analysis 8. Exit Strategies a.

3 Multi-Family Business Plan Outline For Master Lease Properties (Put the plan together around the reason why you bought the property) Summary Purpose of acquisition cash flow and equity build-up Current situation of the property/owner property is slightly distressed with deferred maintenance and vacancy problems. Key success factors improve curb appeal, put in stronger marketing program, increase income, reduce operating expenses, net increase of net operating income, improve status in marketplace, stabilize infrastructure. Financial situation and needs approx $10-15K needed in repairs and upgrades, current loan expires in 29 months. 1. Vision a. What s my vision for the property? To have it be one of the top apartment communities on the block. Provide a safe place for residents and a solid workplace for employees, while making a stable monthly cash flow income. b. Milestones to be met complete exterior curb appeal items within 2 months, complete a tenant satisfaction survey within 3 weeks, re-train leasing team or replace each accordingly within 3 months of results, increase occupancy to 90% within 6 months, decrease expenses to market average within 6 months, be in a financial position to refinance before the master lease agreement expires. 2. Market analysis a. The overall market - decent, but good, some job losses, overall apartment occupancy is 91% for the area, rents are holding steady, not a lot of rent specials, no new construction currently. b. Changes in the market machinery plant had recent layoffs, rents have gone up by 1.5% since last year, but apartment turnover is higher than normal, talks at city hall concerning implementing rent control (mtg slated for next month), many people are downgrading from 2bed to 1bed apts. c. Target market and tenants target working class and Hispanics d. Tenant characteristics working class, 10% on govt. assistance, 25% work at Federal bldg, 60% have children, 50% have English as second language e. Tenant needs better communication between tenants and maintenance requests is obvious, will find out more needs once tenant survey results are in. 3. Competitive analysis a. Nature of competition most have greater curb appeal, higher rents, some landlords pay all utilities, all have parking with 1/3 of them covered spaces, and better marketing. b. Changes in the industry see changes in the market c. Primary competitors 3 main competitors and 2 semi-competitors, all within 5 miles distance, one of the main comps is a gated community. d. Competitive services/amenities laundry rooms, covered parking options, gated, security patrol, clubhouse, one has fitness center, one has business center. e. Opportunities upside in rent increases that match the market, increase in occupancy, stabilizing occupancy, reducing expenses, upgrading of tenant profile

Key success factors improve curb appeal, put in stronger marketing program, increase income, reduce operating expenses, net increase of net operating income, improve status in marketplace, stabilize

4 after repairs are done, installing wifi for tenants. f. Threats and risks if market rents drop, if more companies have lay-offs, if rent control becomes law. 4. Strategy a. Key competitive strengths well-established neighborhood with great drive-by traffic visibility, attractive location, easy freeway access, property reputation has been solid historically, long-term tenants, units are large and very marketable, lots of storage, car port availability, large courtyards on grounds, 3bed apts have large patios facing views. b. Key competitive weaknesses poor curb appeal, older building, potential costs of upgrading, 3 floors of stairs (no elevator). c. My strategy fix poor curb appeal immediately, fire up strong marketing plan, reduce expenses, be involved more with prop. mgmt., put a system in place for tenant-customer satisfaction and tenant retention program, start tenant referral program, replace prop. mgmt. software to online version so I can track from home, put up security cameras for tenant safety and for me to watch when I m not there. d. How I plan on implementing strategy from day one, I ll be working and living onsite in a vacant unit for 2 months of repair work and re-training of staff. 5. Marketing and sales a. Marketing strategy currently not heavily using craigslist for marketing whereby the competition gets 80% of leads from, re-training of leasing staff or terminate untrainable personnel, quickly address poor curb appeal, remodel leasing office, give out cash bonuses for reaching leasing goals, aggressive flyer campaign, design a property website, start social networking for the property. b. Sales tactics offer a one-time and first time visit offer potential tenants can t turn down, many other tactics to be used as market knowledge is gained. c. Advertising craigslist and other free internet options, daily newspaper on Friday and weekend only, postcard campaign to local businesses, flyers on cars (if allowed), banners on bldgs. d. Promotions/incentives/concessions we ll know what these should be as market knowledge is learned. e. Future products/services tenant appreciation days such as bbqs, Friday parties, kids events, etc. f. Public relations/community TBD. 6. Operations a. Cash control put accounting basis into cash-accrual mode for more accurate cash position at all times, switch over to online property mgmt software, have person who makes bank deposits bonded. b. Key personnel - to be determined. c. Organizational structure an obvious change would be my day-to-day involvement starting from day one. From there, any other structural changes would be determined. d. Tenant service/support - a tenant satisfaction survey will be conducted to see where we can improve upon. e. Facilities - TBD f. Maintenance TBD after due diligence process is completed.

tenants, units are large and very marketable, lots of storage, car port availability, large courtyards on grounds, 3bed apts have large patios facing views. b.

5 7. Creating the financial model of the business plan a. Assumptions and comments see annual operating data spreadsheet b. Starting balance sheet - TBD c. Profit-and-loss projection - see annual operating data spreadsheet d. Cash flow projection - see annual operating data spreadsheet e. Balance sheet projection - see annual operating data spreadsheet f. Ratios and analyses - see annual operating data spreadsheet g. Break-even analysis - see annual operating data spreadsheet 8. Exit Strategies a. Make sure they are conservative hold and improve the property to certain levels of occupancy and net operating income, then upon the expiration of the master lease agreement, refinance property into my company s name. b. Get a consensus any exit strategy thought of will have a valid second opinion. c. Coincides with financial model yes, by all means!

Balance sheet projection - see annual operating data spreadsheet f. Ratios and analyses - see annual operating data spreadsheet g. Break-even analysis - see annual operating data spreadsheet 8.

Texas State Affordable Housing Corporation

Texas State Affordable Housing Corporation Owner: Dalcor Woodglen, Ltd. Management Company: Dalcor Management Inspection Date & Time: 10-09-2014 @ 8:00 am Woodglen Apartments 6800 Cockrell Hill Dr., Dallas TX 75236 Date Built: Property Manager: