BUSINESS CORE PLAN

Business associates, Ruben Ebanks and Rudy Cattuse, are starting a consulting venture on property flipping

(DBA R&R CONSULTING).

Ruben has an extensive background as a project manager for the American Red Cross. He also developed, distributed and managed an online consulting business. In addition to having knowledge, skills and abilities in public relations and building maintenance, Ruben owns and manages two residential properties in the Miami area, which makes him a qualified person on every segment of the process from property acquisition, to project management and transaction coordination.

Web: www.rubenebanks.com

Rudy has a background in real estate managing, purchasing, selling and mortgage financing, going back three decades. He started as a sales associate with Century 21 between 1993 and 1998, became a mortgage broker with Allied Mortgage Inc., from 1998 to 2006. He made a good valume of fix and flip transactions, netting 1.8M in revenue, prior to the real estate collapse of 2008, in the Miam-Dade county municipalities.

Rudy is presently licensed, active and engaged in real estate sales with eXp Realty Inc. and mortgage lending with Reliable Mortgages Inc. based in Central Florida, which makes sources more accessible to expedite processes throughout.

Web: www.rudycattuse.net

Project Scope

Our project involves access to purchasing distressed properties at discount pricing from different sources: court records on probate, foreclosure files and divorce cases, property listings on the MLS, REO, Short Sales and various auction publications.

Properties acquired will be refurbished and brought up to code and move in condition to provide safe, affordable housing and investment opportunities through dedicated services to individuals, families and communities, on competitive average sales price of $375,000.00, for a minimum net profit range between 10 to 15%, after expenses and operating costs, based on analyzed margins.

Our goal is to get inhabitable homes, from stand still conditions to renew, upgrade and make available to ready, pre-qualified, and able home buyers, waiting on these opportunities to become suitable and within their ownership purpose.

Our target markets are major municipalities between Metro Central and South Florida.

We shall be focused on residential properties located in these areas of high resale turnaround, on average-priced single family and multifamily homes, duplexes, triplexes and up to 4 units, or fourplexes.

Aquisition equity rate shall be 35% or greater, compares to market values. These parameters are to be considered on every transactionto take place. Before a decision is made to move forw ard with acquisitions, we shall evaluate in detail and proven principles of comparative market analysis to maximize on the proposed margins of profits and accomplish best results.

Plan Overview

The system in place includes the following:

Information resources to target market research specific to geographic areas, on property and owner public records involving sales and legal process of probate, foreclosure files and divorce proceedings, to analyze equity, physical functionality and marketability
Structure resources to expedite and focus research, reach out to prospects through different channels of communications, circles of influence, networks, social media, methods of advertising, marketing and engagement, utilizing most effective, up to date platforms, to meet purchase, repair and sale of deireble amount of property transactions and closings.
Coordinating resources to expand access to information on proposed and potential geographic areas, develop client base and organize transactions, by recruitment, training and utilization of skillful, readily available profesionals and existing automated systems.

R & R CONSULTING

PROJECTIONS

1.1 Revenue Projections:

Potential sales the business will achieve in the coming 5 years.

Customer base: Single and married homebuyers and sellers, whose incomes, assets and liabilities are in middle to upper variations.

Pricing strategy: Single Family and Multifamily Homes across South and Central Florida, valued between 250k and 500k.

Florida’s real estate markets vary from more developed areas in the southern cities, around Miami-Dade county to the steadfast central municipalities around Orange county. Since 2008, the recovery of home markets have improved significantly, appraised values and prices have gone up, and sales have been steady, allowing for business potential and revenue growth between 25% to 40% annually, around major metro areas.

Business structure shall improve and evolve into a full service brokerage, adding and increasing channels of revenue through wholesale vendors.

1.2 Revenue Projections

Based on the previuos description, target market and pricing strategy account for generating revenue through both single and multifamily home sales. Given the basic yearly growth rate of 25% mentioned:

Year 1 Revenue: Estimate based on the sale of homes and using given average sales prices, multiplied by expected 10 to 12 units sold.
Year 2 to Year 5 Revenue: Increase Year 1 revenue by 25% annually.

2. Cost of Homes Sold

Our properties are bought in (distressed to be fixed at an estimate rate of 10% of market value) with equity greater than 35% and sold at discounted rates between 10% to 20%, generating a minimum average net income of 10% ($37,500) of market value.

Services: Consulting, Advertising and Marketing of Resale of Discounted Homes, $375,000.00 End Product Average Sales Price.

Information on our services and products is available online and through other relevant property publications.

Direct costs of purchasing and renovating properties:

Property Acquisition & Renovation: Estimate at 35% below market value plus 10% renovation costs.
Calculate the total cost per property and use this to determine total cost of homes sold based on the number of units sold.

3. Operating Expenses Estimate

These include regular annual costs such as:

Rent and Utilities: $36,000 annually.
Marketing: $24,000 annually.
General Contracting and Operating Costs: $240,000 annually plus a 25% increase to support projection on yearly gross.
Salary Reinvestment: 80% of gross earnings in the first two years.

4. Capital Expenditures

Include initial setup and ongoing technology investments:

Year 1: $120,000 for vehicle, setting up office, facility supplies, computers, softwares and networks.
Year 2 to Year 5: $12,000 yearly for maintenance and updates.
New Technology: $6,000 annually.

5. Financing Activities

Wholesale Mortgages and Business Loans Estimated at 2.5M 1st Year

Equity investments: Proposed Resale Homes Netting 250k on 1st Year.

Financing Sources: Mortgage Bankers and Business Brokers

Begin with planned loans and equity investments:

Initial Loans: Total of $2.5M in the first year.
Equity Investments: Projected Net Income = $250,000 on 1st Year.

6.1 Assumptions & Growth Rate

Maintain a consistent annual revenue growth rate of 25%.
Consider potential shifts in market conditions that could impact growth projections based on migration trends and housing demands.

Example Projection Model:

Short-form example for Year 1 revenue and cost of homes sold:

Projected Gross Revenues: E.g., 10 homes sold at an average price of $250,000 = $2,500,000
Cost of homes sold Calculation: Cost per home is 65% of $250,000 (distressed value) + 10% renovations = $187,500.

Total COHS: 10 homes x $187,500 = $1,875,000
Projected Net Revenues: E.g., 10 homes sold at a low end average price of $2,500,000 - $1,875,000(COHS) = $625,000

6.2 Assumptions and Growth Rate:

Assumptions on trends, data relevant to Americans moving to south states and metropolitan areas. Individuals and families changing employment, choices, skills and abilities. There has been a great number moving within the US over the past decade.

Southern states such as Florida, Texas, and the Carolinas have been big winners in these domestic migration patterns, largely led by more affordable housing conditions in retirement communities, resale properties, new construction homes and better economic opportunities. According to U.S. Census Bureau data: 42 percent of these transfers were driven by housing reasons, 26 percent for family reasons, 16 percent for employment reasons, and only one percent moved due to climate-related reasons.

The available Census Bureau data provides information surrounding where Americans move and in what volumes.

2024 Migration Trends By National Association of Realtors - Please See Attached Report.