Doorgate Properties
Business Plan
Doorgate Properties Corporation Business Plan
Executive Summary
Doorgate Properties is designed to acquire condominiums in less than 30 minutes driving distance from downtown of major cities strictly for rentals, starting from Chicago city.
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Business Overview and Overall Strategy and Objectives
Doorgate Properties, doing buisness as Doorgate Corporation, is taking the advantage of the foreclosures and short sales to invest in condominiums for residential rentals.
As a result of the economy a lot of owners have given over their properties back to lenders and hence the need for rentals has increased drastically and values of properties have gone down .The strategy is to invest only in condominium in order to reduce the risk of high maintenance of roof, walls, etc. and rather pay the association dues to take care of those. Also to allow easy sale of each property when and as each property appreciates. The properties in scope strategy is look for condominium that have reduced in value between 70% to 80% since the recession period.
We buy condominiums not in the heart of downtown that are overpriced but within 15 -30 minutes’ drive and close to the highway which will still fairly maintain its high demand and hence gain equity value over short period of time.
The Business Begins
Doorgate Properties has purchased 5 properties. All units have been rented with average of $1050 monthly rent each. Both properties were valued over average $165,000 before the recession. Tenants are screened and background checks are done as prerequisite for yearly lease agreement.
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Management
Doorgate properties will be managed currently by the President on a part time basis. There is no plan to use property manager for now since the maintenance of the property is fairly minimal and has been transferred to the condo management in return for the monthly association fee. The plan is to grow the business and eventually resign by current job to fully manage the property business. The use of “handy-man” will be on contract basis until when the number of properties start ramping up to 15 units, when there will be the need to have a standing contract with a maintenance company.
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Joseph is a CPA with over eighteen years of accounting experience in various industries including financial services, manufacturing and, oil and gas. He concentrated on financial accounting & reporting, planning and forecasting, treasury, cash flow, project and process improvement. He has worked in Nigeria, Switzerland and currently in the U.S. Joseph has a degree in Accounting and got his MBA from prestigious University of Chicago where he majored in FInance, Strategy and Entrepreneurship. Joseph started real estate business in early 2006 and was still able to make money in real estate despite the recession.
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Revenue: Pricing & Growth Strategy
The price level of rental in these areas for the type of Condo investing in is in the average of $1050 per flat. This price level will generate sustained profitability while ensuring sufficient and long term lease. We will continue to be a a player in the market following the trends of of rent increases which has gone up 5% compared to previous year.
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Expenses: Unit Economics and Economies of Scale
Monthly Unit economic are shown in the chart below. There will be opportunities to reduce the maintenance and the home owners insurance cost as we have more properties.
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