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Posted about 10 years ago

Biz plan

Using the BP getting started guide, here is my initial stab at a business plan. I'm currently letting it sit for a couple weeks while I browse BP and the interwebs. My chief concern initially is that there are not enough of the deals I'm looking for in the areas I'm looking in for the goals I've set. My job in the next couple of weeks is to learn the market and compare it to my plan. Will adjust my plan accordingly in a couple weeks.

Mission: Develop as a RE investor. Build long-term wealth and passive income. Create legacy wealth that will allow me to avoid the need for a wage job and something that I can pass along to my kids. Improve the quality of life for tenants and neighbors by providing beauty, quality landlord service, and participating in neighborhood development.

Goals:

By March 2014- Finish business plan

By April 2014- build contacts. Start talking to people I know who are involved in the RE market. (Eric C, Bruce V, Jonathan C, Matt D, Dominic A, Ryan H, Josh H) Tell them about my plans and listen. Build team.

Line up money/partner.

By December 2014- Buy first multi-family home.

2015 to 2020- Continue to acquire properties. Have 10-20 doors by 2020.

Cash flow at least 100/door/month

Once I’ve established a track record, confidence, and experience, I’ll expand into the apartment market. This may be before 2020.

Likewise I’ll start to include commercial properties into my portfolio. This will depend on developing my resources to the point at which I have the money and capacity to handle these types of deals.

Strategy and Criteria (within the next 3-5 years)

Fix and hold SFR and MFR in Tacoma area, focusing at first on neighborhoods that are close enough to easily bike to, that I can explore and learn. These include (but are not necessarily limited to) Hilltop, McKinley, Lincoln, Stadium, North Tacoma, Old Town, and UPS neighborhoods.

I enjoy the work of restoring/improving a home so will focus on distressed properties in lower-income neighborhoods. This doesn’t mean I would turn down a deal on a property in good condition in a nice neighborhood, just that I won’t focus my search energy there.

Target numbers

LtV: depends on what I can get in terms of financing or OPM

Cash flow: at least $100/mo/unit

Max purchase amount: depends on financing

Max rehab amount: none so long as the numbers work out.

Timeframe: None. These are intended to hold indefinitely, or so long as it’s the best place for my money.

Timeframe for rehab depends on the figures for the particular deal and the scope of the rehab.

Financing:

I’ll need to be creative. Especially at first when I have very little of my own money to put into a deal. Will initially look for private money. Would also consider lease-option, hard money, and conventional.

It might be worthwhile to fix and flip a home or two in order to build a cash pile to use as my own seed money.

How find deals:

MLS, explore neighborhoods for FSBOs, identify interesting properties and contact owner, keep in touch with broker friends and get leads from them.

How restore properties:

A lot is stuff I want to know how to do, so would do much of it myself. Would hire local help when extra hands or technical expertise is required. I already know enough handy people to tackle most projects from interior design to electrical to welding and metal construction. I’ve got a large base of willing hard workers who would jump at the chance to work.

Current equity:

Without getting too personal, I've got about 10k available as seed money. I'm considering getting my home re-appraised. I've done a lot of work in it since moving in and am sure I have raised the value significantly. Having done this I could then see about getting a HELOC.


Comments (3)

  1. Thanks for this post, Morgan. I found it very helpful as a starting point for drawing up my own business plan.


  2. HEy Morgan Blackmore I love it! Looks like you are off to a great start. A plan is so important when getting started, so congrats on getting this down on paper - and making it public to help others and yourself. I'm an hour south of you, in Montesano. If you are ever in the area, hit me up and we'll grab coffee!


  3. Morgan, you sound like Catalytic Landlord material. Please Google what I've written on the topic. It will shorten your learning curve. Also, I love to help people who are trying to improve a neighborhood from a landlord perspective. Feel free to fire questions directly at me.