Real Estate Management Business Plan
MSN Real Estate (MSN) is an Oregon-based real estate company that will offer benchmarked rental units for the Eugene, Oregon community. MSN’s units will balance safety, cutting edge features, and a positive atmosphere for all tenants. These rentals will be provided with unmatched levels of customer service and attention. Sales are projected to be substantial in year one growing moderately by year three.
MSN will target three distinct customer segments. The largest segment that they will service is University of Oregon students. This segment is growing at 7% a year with 18,000 prospective customers. This segment is especially attractive since most of the local rental properties that are geared toward students are run down, poor quality units. The second market segment is local professionals who are increasing at 4% and have 12,000 potential members. The last segment is faculty and staff of the University. This section has a 5% growth rate and 6,000 potential customers.
MSN will initially focus their efforts on buying and developing existing properties. Once the properties are purchased, each unit will be hard wired with Internet access, state-of-the-art amenities will be installed, and safety measures will be implemented ensuring a cutting edge, safe environment. This course of action will be initially pursued as a way to efficiently utilize capital and establish a reputation within the community. Future projects may include custom build outs.
MSN will be led by Shawn Menashe and Nathan Koach. Shawn has a bachelors degree in Economics and received his MBA from the University of Oregon. Following school, Shawn went to work for one of the largest property management companies in the area. After seven years with [name omitted], Shawn had risen up to Vice President of Operations. It was his time at [name omitted] that provided Shawn with valuable industry insight and experience. Nathan brings different skills sets to the company, coming from a customer service background. At the young age of 21, Nathan had already completed his undergraduate degree and went to work for Voice Stream Wireless. After six years at Voice Stream, Nathan had been promoted to the Director of Customer Service for the Salem, Oregon center. In this position Nathan managed Voice Stream’s 200 person customer service department. This experience provided Nathan with incredible customer attention skills that he will leverage for MSN.
- Encouragingly substantial sales in year one and growing steadily through year three.
- Gross margin moderate and improving over the span of the plan.
- Net profit/sales to be positive by the second year.
- Have a crime rate of 0.
MSN Real Estate provides high-quality, comfortable rental units in Eugene and other areas of Oregon. MSN’s apartment units offer state-of-the-art living conditions reflective of the rapid advancements in technology and a growing need for quality housing. Our company is dedicated to a hassle free living environment in which our tenants can enjoy all of the benefits of safe, attractive, and inviting units. Unlike many other realty companies that are solely concerned with turning profits, our primary objective at MSN is to maintain the highest level of customer satisfaction that is achievable. Tenant safety, happiness, and comfort are our main goals. MSN maintains competitive market prices, while working toward expanding the number of units owned, and increasing total profits earned. Within the company we will strive to work as a cohesive, harmonious unit focused on exemplifying our mission. Just as customer satisfaction is an intricate part of MSN’s success, so is employee satisfaction. That is why the founders of MSN Real Estate believe that employee satisfaction will make the company a success and will be the key to their longevity.
Initial focus will be to buy and develop existing apartment complexes. We will modify and remodel the acquired real estate so as to meet MSN standards and increase long-term assets and income. Housing units will predominantly be located in the University neighborhood targeting both students and professionals. MSN fosters the ideals of the importance of tenant needs along with healthy and understanding relationships and a professional commitment to satisfaction.
1.3 Keys to Success
- Safe, quality housing that provides state-of-the-art amenities at competitive prices.
- Maintaining open communication between MSN and its customers in order to ensure the highest level of customer satisfaction and long lasting reputation within the community.
- To continue to expand the number of units owned and maintained, while also increasing the level of profits for both MSN and its investors.
MSN Real Estate is an enterprise that is involved in numerous aspects of the industry. Primary experience and expertise is in the development of high-quality, lower cost living for students and professionals seeking the most up-to-date technologically advanced living environment. An area of intense training and attention is the importance of strong customer service.
The first property purchased by the company is a 40-unit apartment building on the corner of Hilyard and 14th in Eugene. It is relatively close to the University, so will be easily rented to capacity nine months out of the year. For the remaining three months, the price of rent will be reduced and we will aim to remain at 60% capacity.
2.1 Start-up Summary
The total start-up expenses include legal, stationery, architect, brochures, consultants, insurance, rent, construction, expensed equipment, etc. Start-up assets required include short-term assets (truck, cell phone, etc.), and initial cash to handle the architect and contractor fees prior to opening. Additional cash is needed to pay all zoning fees and governmental regulations.
Long-term asset purchases and the assumption of long-term liabilities are anticipated.
2.2 Company Ownership
MSN Real Estate will be created as a Limited Liability Corporation based out of Portland, Oregon. It will be owned by its principal investors, Shawn Menashe and Nathan Koach. Shawn Menashe is the acting CEO and holds a 40% stake in the company. Nathan Koach is the acting CFO and holds a 40% share of the company as well. The other 20% is held by silent investors.
2.3 Company Locations and Facilities
MSN headquarters will be established in A-quality office space in the downtown area of Portland, Oregon. This will be the heart of our company, with satellite locations in Beaverton and Eugene, Oregon. We are also installing an in-house Internet server and 24-hour answering service so that all customer or business communications are dealt with in an expedient and fluid manner. Within any living development with more than 32 units a representative of the company will be located.
The company is currently in the final stages of purchasing its first building, a 40-unit apartment building on the corner of Hilyard and 14th in Eugene. The price of this building is $1.2 million. The company will make a down payment $120,000 and spend an additional $75,000 on renovation. This building houses mostly 2-bedroom units with average per unit price of $775 per month.
In Year 2 the company will purchase its second facility. It is currently in discussions with the owners of a 20-unit apartment building in downtown Portland, OR. It is difficult to predict changes in the building values over the long term, but it is estimated that we will be able to purchase this building for $570,000.
MSN offers on-site security guards who patrol the grounds during evenings, nights, and early mornings. We also offer an on-site repair service. There will always be an open line of communication between the renters and the management via an MSN Web page and a 24-hour, call-in answering service.
3.2 Competitive Comparison
MSN’s competitive advantage is as follows:
- We offer a higher level of quality in our units than the average unit on campus. This allows for those residents who do not want their living situations to inhibit their studies, comfort or enjoyment of campus life.
- Each unit will be fully wired to the Internet via available modem jacks and/or ethernet access. If the residents desire to have the best Internet access, we will give them that option.
- Our marketing and advertising costs will be low due to simple marketing strategies. However, the owner’s expertise in visual layout and communications will help create a unique and aesthetic product for the customer.
- The main competition MSN will encounter will be average lower cost apartment units.
3.3 Sales Literature
MSN will have brochures available at all offices. These will give the customer a general outline of our units and will explain the benefits of our units. We will also have a monthly newsletter that we will send out to our clients. This newsletter will inform the clients as to the growth and outreach of MSN. It will also contain some human interest stories about our complexes and the residents.
Will also advertise in the local newspapers including The Daily Emerald, The Register-Guard, and The Oregonian. Our marketing strategies are simple but aim to reach a large amount of people. The layout of our publications and advertisements will have a sophisticated and contemporary look without being overly formatted.
MSN’s key fulfillment will be provided by management’s dedication to a higher quality product. This is achieved through the solid network of contractors, and cutting edge architects who are all dedicated to helping MSN. We are hard workers who have a solid backing from our developers.
We will maintain a pool of professionals in which to pull from for our needed services. This will help us develop a rapport with our contractors as well maintaining our high expectations.
MSN real estate will have the most up-to-date technology provided both to the customers and to the subcontractors and other clients.
Ethernet ports and/or modem jacks will be installed in each unit developed by MSN.
Access to a 24-hour copy/fax center located on the premises.
Each unit will contain an emergency panic alert that will automatically go through to the manager and the local police department.
3.6 Future Services
In the future, MSN will look to give each department within the company the opportunity to become a more independent entity. This will make expansion efforts more efficient, and will provide specialists in their departments the chance to become more focused in their field.
We are in the process of conducting surveys in order to determine the best possible markets for MSN expansion.
Market Analysis Summary
MSN Real Estate’s main consumer base will be primarily students at the University of Oregon who will benefit from the apartment’s unparalleled level of quality, location, and technological amenities. We will also be marketing to local area professionals and recent graduates, along with faculty and staff at the University. These customers will be looking for safe, high-quality environments that can foster the type of atmosphere needed for scholastic and professional success.
4.1 Market Segmentation
MSN’s largest market segment in the Eugene area will be students of the local universities. These students will be the most likely to desire the technological amenities that our company offers. We expect this to be the largest growing segment with a growth rate of about 7%. Local professionals are another large segment. They will be attracted to the units because of the same technological needs, but will also be attracted to the comfortable, well maintained living environment. MSN offers units that provide a quality “hub” between college graduation and home ownership. We expect this segment to grow at a rate of about 4% with a more frequent turn over.
Local university faculty and staff represent the third and smallest identifiable segment, but contain the second highest growth rate. Proximity and quality will entice this segment which we expect to grow at a rate of 5%.
4.2 Target Market Segment Strategy
We believe that our unparalleled level of quality and technological amenities put MSN into a niche of its own. This will be the focal point of all our marketing and advertising efforts. These segments are also easily reached through local newspapers and publications, as well frequent open house displays.
It is essential for MSN patrons to understand that their needs are our priority.
4.2.1 Market Trends
This industry is constantly evolving and leaving many inflexible companies stagnant. One of the major trends is the need to adapt to technological advancements as well as maintaining the overall appearance and condition of the complexes.
Another important trend is adapting to higher density housing in smaller areas due to urban growth boundaries, etc. MSN is dedicated to following these trends while maintaining the level of comfortable livability that sets us apart from our competitors.
4.2.2 Market Growth
The market for high quality, reasonably priced apartment units has been growing at a rate of 6.7% since 1996. Oregon’s rental rates have remained even, averaging $697, or $.79 per square foot, during the fourth quarter of 1997. The Oregon market is experiencing rapid employment growth that is fueling demand for apartments, but not many new units are emerging. Not only is MSN pioneering this particular niche of affordable quality living, but it is capitalizing on the strength of the current economic growth in Oregon.
4.2.3 Market Needs
Each of our targets need the quality, convenience, service, safety, comfort and technological amenities that can only be found at our living complexes.
The student segment needs a quiet safe atmosphere that fosters a quality learning environment. They also need the convenience of location and on-site amenities.
The professional segment needs a living environment that separates them from the noisy, dirty inconvenience of average apartment living. Most professionals are on their way to home ownership or movement to a larger city, so they need housing that will let them feel like they are getting the quality that they need.
The faculty/staff segment also has similar needs. They need to feel separation from the noise and unkept conditions of most near-campus housing. Along with the students, they also need a place to feel safe and one that fosters convenience.