Professional Renovations for Multi-Family Housing
Client base is predominantly professional portfolio real estate holders!
The client base is predominantly professional portfolio real estate holders for this company! Based in Texas, this business focuses on complete home remodels (70%), home additions, and some roofing while also providing maintenance and repairs, making them a versatile one stop shop in the industry. Providing services to half of Texas including Houston over to San Antonio and up to Dallas, clients include large real estate investors, private entities, and some residential. A small amount of commercial work includes strip mall centers, government contracts and housing authority projects. The current owner does not do field work and oversees operations only part time.
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. Assets include 8 vehicles, 9 trailers, 2 portable pressure washing rigs, manlift, fans, dehumidifiers, water extractors, excavator, 5 commercial mowers, landscaping equipment, computers, office equipment and scanning camera.
With an infrastructure set up to support larger clients and maintain relationships, this experienced staff of 12 continues to build solid relationships with their clients. Employees include PT Admin Assistant, PT Office Manager, PT Network IT, Operations Manager, Residential Estimator, (2) Superintendents, Commercial Specialist, (2) Client Support, Document Control, Inside Sales and field crew. Work flow controlled with integrated order management system, maintains A/R and contractor A/P.
The current owner is willing to stay on up to 6 months, if needed. Responsibilities include operations, financials, sales and client relations. Growth opportunities include expanding into business to consumer residential projects as well as taking on more governmental commercial contracts.
- Year Established: 2004
- Location: Houston, TX
- Service Area: Houston (70%), San Antonio (20%) and occasionally Dallas (10%)
- Services: Complete home remodels (70%), home additions, roofing, concrete, maintenance, repairs, interior design and engineering
- 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, Residential Estimator, (2) Superintendents, Commercial Specialist, (2) Client Support, Document Control, Inside Sales and field crew
- Hours: M-F 8-5
- Seller Training Period: Up to 6 months if needed
- Growth Opportunities: Take on more governmental commercial projects
- Current Owner’s Responsibilities: Part time operations and financials. No field work
- List Price: $1,400,000
- Gross Sales:
- 2019: $2,744,636
- 2018: $2,115,793
- 2017: $1,804,951
- Cash Flow:
- 2019: $454,327
- 2018: $383,233
- 2017: $393,450
- Assets Included in Purchase*
- Equipment: $261,120; 9 trailers, 2 portable pressure washing rigs, manlift, fans, dehumidifiers, water extractors, excavator, 5 commercial mowers and landscaping equipment, computers, office equipment, scanning camera etc.
- Vehicles: $123,902 6 Crew Vans, (2) Ford Explorers
- A/R: $175,000
- WIP: $185,000
- Prospective Projects: $1,500,000
- Intangible Assets: Solid relationships and communication with clients, adaptability working with larger businesses and corporate entities
*amounts may vary
|Description of Financial Statement||P&L Statement|
|Net Income Shown on Financial Statement||$140,169||$-235,826||$-18,837||$14,653|
|Compensation to Owner||$97,000||$97,000||$97,000||$97,000|
|Other unrelated Salaries||$12,000||$18,000||$18,000||$18,000||Family members - don't actually work in the business|
|11% Tax on total W2 Salaries||$11,990||$12,650||$12,650||$12,650|
|Meals & Entertainment||$1,479||$2,032||$788||$1,485||70% personal|
|Other||$4,200||$4,200||$4,200||$4,200||Cell Phones- $350/month for 4 personal lines|
|Insurance Premiums for Owners: Health, Life, Auto||$12,386||$11,644||$11,644||$11,644|
|Employee Benefit Plan||$7,760||$18,149||$11,454||$0||Paid for owner & family|
|FR Assoc Deferred Payments||$0||$24,285||$25,790||$10,643|
|Seller's Cash Flow = Total Addbacks + Net Income||$454,327||$323,234||$359,240||$327,882|
|Profit Margin||16.55 %||15.28 %||19.89 %||13.63 %|
- Real estate investors
- Private entities
- Residential projects
- Governmental commercial contracts
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Complete home remodels
- Home additions
- Concrete projects including foundations, driveways, flat work, etc.
- Interior design
- Maintenance and repairs
- PT Admin Assistant
- PT Office Manager
- PT Network IT
- Operations Manager
- Residential Estimator
- (2) Superintendents
- Commercial Specialist
- (2) Client Support
- Document Control
- Inside Sales
- Field crew
- Expand into business to consumer residential projects
- Take on more governmental commercial contracts
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, the 2019 cash flow was used with a prescribed multiple is 3.1. With this information, the computation is as follows:
$454,327 x 3.1 = $1,408,414
The fair market value found above positions the business list price at $1,400,000.
12.5%Buyer Down Payment: $175,000
12.5%Seller Financing: $175,000
75%Bank Loan: $1,050,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $3,263.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $13,799.
After business expenses and loan payments, a buyer with a 12.5% down payment of $175,000 would retain a profit of $249,595, which results in a 143% return on investment in the first year.
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $1,400,000 with the terms listed above, the coverage ratio is 2.22.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
*The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.
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: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2019 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2019 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
This folder is empty.
Access to this Deal Room is restricted
Would you like to access the deal room?Yes, please
Already have an account? Log in here.
Print, sign and send to:210 N 78th St. 2nd Floor
Omaha, NE 68114
Or fax to: