Opportunities
Home Remodels, Additions & Interior Design for Houston Real Estate Investors
Owner works part-time and does no field work!
Specifications
The owner of this company works part-time and does no field work! With an infrastructure set up to support larger clients and maintain relationships, a highly skilled staff of 12 is already in place and continues to build solid client relationships. Employees include 1 PT Admin Assistant, 1 PT Office Manager, 1 PT Network IT, an Operations Manager, 1 Residential Estimator, 2 Superintendents, 1 Commercial Specialist, 2 Client Support staff, 1 Document Control staff, 1 Inside Salesperson and 6-12 field crew employees. Clients include corporate real estate investors, private entities, and some residential work, along with commercial and military when needed. The team works all over Texas, with 70% of their work being done in Houston, 20% in San Antonio, and 10% in Dallas. Services vary from complete home remodels and home additions, to maintenance, repair, and interior design. The owner’s position has been designed to be strictly part-time operations and financial work.
Assets include $261k worth of equipment, $124k in vehicles, $180k in A/R, and $210k in work-in-progress. The 4,200 sq. ft. warehouse, ½ acre equipment yard, and 2,500 sq. ft. office building currently used is available for sale or lease, separate from the sale of the business.
Priced at $990,000, a down payment of $123,750 returns $214,318 in the first year after debt payments – a 173% return on investment! The current owner is willing to stay on for 6 months to 1 year, if desired. Growth opportunities include expanding into business to consumer residential projects as well as taking on more governmental commercial contracts.
Business Highlights
- Year Established: 2004
- Location: Houston, TX
- Service Area: Houston (70%), San Antonio (20%) and occasionally Dallas (10%)
- Services: Light Remodeling and Renovating
- Clients: Large real estate investors, private entities, some residential, commercial and military
- Building: 4,200 sq. ft. warehouse; 1/2-acre equipment yard; 2,500 sq. ft office building (3 offices, 15 workstations, conference rooms, etc.)
- Reason for Selling: New non-competing endeavors
- Employees: 12: PT Admin Assistant, PT Office Manager, PT Network IT, Operations Manager, Estimator, (2) Superintendents, Commercial Specialist, (2) Client Support, Document Control, Inside Sales and field crew
- Hours: M-F 8-5
- Seller Training Period: 6-12 months
- Growth Opportunities: Take on more governmental commercial projects
- Current Owner’s Responsibilities: Part time operations and financials; no field work
Financial Highlights
List Price: $990,000
- 3-Year Average Cash Flow: $340,922
- A/R: $180,000
Cash Flow
| Description of Financial Statement | P&L Statement Jan-Dec 2020 | Tax Return Total | Tax Return Total | Tax Return Total | Tax Return Total | Notes |
| 2020 | 2019 | 2018 | 2017 | 2016 | ||
| GROSS SALES | $2,138,675 | $2,442,221 | $2,115,793 | $1,804,951 | $2,405,220 | |
| Net Income Shown on Financial Statement | $-13,035 | $29,868 | $-235,826 | $-18,837 | $14,653 | |
| ADDBACKS | ||||||
| Compensation to Owner | $91,423 | $97,000 | $97,000 | $97,000 | $97,000 | |
| Other unrelated Salaries | $0 | $12,000 | $18,000 | $18,000 | $18,000 | Family members - don't actually work in the business |
| 11% Tax on total W2 Salaries | $10,057 | $11,990 | $12,650 | $12,650 | $12,650 | |
| Depreciation | $0 | $7,474 | $97,457 | $7,657 | $11,940 | |
| Interest | $9,487 | $42,778 | $11,251 | $8,848 | $6,969 | |
| Auto-Personal Use | $15,000 | $40,129 | $8,508 | $8,508 | $8,508 | |
| Meals & Entertainment | $2,118 | $1,503 | $2,032 | $788 | $1,485 | 70% personal |
| Cell Phones | $4,200 | $4,200 | $4,200 | $4,200 | $4,200 | Cell Phones- $350/month for 4 personal lines |
| Travel | $18,000 | $21,791 | $23,920 | $4,055 | $14,732 | 90% personal |
| Insurance | $15,622 | $8,343 | $11,644 | $11,644 | $11,644 | |
| Amortization | $0 | $31,656 | $31,658 | $31,657 | $31,656 | |
| Contributions/Donations | $1,825 | $3,193 | $1,606 | $1,584 | $0 | |
| Employee Benefit Plan | $3,718 | $5,881 | $18,149 | $11,454 | $0 | Paid for owner & family |
| Management fees | $0 | $116,966 | $251,972 | $194,242 | $140,302 | |
| MBA Program | $0 | $0 | $4,728 | $0 | $0 | |
| FR Assoc Deferred Payments | $0 | $0 | $24,285 | $25,790 | $10,643 | |
| Training & Education | $40,000 | $0 | $0 | $0 | $0 | |
| Medical | $4,006 | $0 | $0 | $0 | $0 | |
| Retirement Expense | $2,339 | $0 | $0 | $0 | $0 | |
| TOTAL ADDBACKS | $217,795 | $404,904 | $619,060 | $438,077 | $369,729 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $204,760 | $434,772 | $383,234 | $419,240 | $384,382 | |
| Profit Margin | 9.57 % | 17.80 % | 18.11 % | 23.23 % | 15.98 % |
Typical Clients
- Real estate investors
- REITs
- Private entities
- Residential projects
- Governmental commercial contracts
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
- Complete home remodels
- Home additions
- Roofing
- Concrete projects including foundations, driveways, flat work, etc.
- Interior design
- Maintenance and repairs
Service Area
Employees
- PT Admin Assistant
- PT Office Manager
- PT Network IT
- Operations Manager
- 1 Estimator
- (2) Superintendents
- Commercial Specialist
- (2) Client Support
- Document Control
- Inside Sales
- Field crew
Growth Opportunities
- Expand into business to consumer residential projects
- Take on more governmental commercial contracts
Valuation
Funding Example
Funding Details
Business:
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
Loan Payments
| Monthly Payment to Bank: | $ |
| Yearly Payment to Bank: | $ |
| Monthly Payment to Seller: | $ |
| Yearly Payment to Seller: | $ |
| Total Monthly Debt Service: | $ |
| Total Yearly Debt Service: | $ |
Conclusions
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
|
Cash Flow: 3-year average cash flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 3-year average cash flow |
$ |
| Annual Debt Service: | -$ |
| NOI: |
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
| Down Payment: | $ |
| NOI: | |
| ROI: | % |
Attachments
| Document Title / Description |
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210 N 78th St. 2nd FloorOmaha, NE 68114
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