Refurbish, Inc.

A Real Estate S-Corporation

Refurbish, Inc. Sample On-line Plans

Executive Summary _____________________________________________________ 3

Company Analysis ______________________________________________________ 4
Name _____________________________________________________________________ 4
Company History/Current Situation ___________________________________________ 4
Goals______________________________________________________________________ 4
Company Location and facilities _______________________________________________ 4
Legal Form of Ownership/Profile of the Management Team________________________ 4
Insurance __________________________________________________________________ 5
Market Analysis ________________________________________________________ 6
Product____________________________________________________________________ 6
Price ______________________________________________________________________ 6
Distribution ________________________________________________________________ 6
Promotion/Advertising _______________________________________________________ 6
Industry History/Trends _____________________________________________________ 6
Target Market and Customer Base_____________________________________________ 7
Barriers to Entry____________________________________________________________ 7
Growth Opportunities _______________________________________________________ 7
Trade Agreements __________________________________________________________ 7
Exit Strategy _______________________________________________________________ 7
Company Revenues (projected)________________________________________________ 8
Financial Analysis _____________________________________________________ 13
Start-up Cost Estimates _____________________________________________________ 13
Income Statement __________________________________________________________ 13
Balance Sheet _____________________________________________________________ 13
Personal Financial Statements________________________________________________ 13
Company & Legal Documents________________________________________________ 13

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Refurbish, Inc. Sample On-line Plans

Company Analysis

Name
The company's name is Refurbish, Incorporated which is descriptive in what the company does. It is
specifically inconspicuous due to financial institution requests.

Company History/Current Situation

Refurbish originally started in 1996 when the principals Gadda Mooga and Edgar Pekin met. Each
individual owned a house, so they decided to rent one as rental income and as a tax deduction. The home
has been consistently rented since 1996 and the owners have learned a great deal about working with
tenants, maintenance, etc. Over the years, the owners decided they enjoyed being a landlord and working
with tenants, so they have decided to take the business to the next level.

In early 2001, Refurbish incorporated and is an S-Corporation in the buying and selling of real estate.
Refurbish will buy homes and commercial buildings in need of repair below market value, and refurbish
them to market conditions and sell.

Refurbish is currently in the process of arranging financing through a local lending institution and has
obtained credit from MasterCard and American Express. The money will be used to purchase homes and
buildings that are 'good buys'. Refurbish estimates that two or three monthly mortgage payments will be
made in the time a contractor is hired, materials purchased, and job completed. The money will be used to
pay the monthly mortgage, fund materials, pay contractors, and for general cash flow.

Refurbish's goal is to buy and sell homes and single dwellings up to 6-plexes. Refurbish will be
concentrating on two types of properties, those that can be fixed and sold, and those that are attractive for
rentals. Refurbish is particularly interested in buildings that are structurally sound, however need
substantial work to make them habitable. These buildings can usually be found at low prices, and with
modest expenditures, can be rehabilitated into nice, sturdy, homes. Refurbish estimates buying two
buildings in calendar year 2001. This will depend on the properties that are available. To mitigate
Refurbish's risk, initially they plan on pursuing homes that require less work and lower profits. This will
allow them to further enhance their skills and experience.

Goals
• Within three years, Refurbish will have bought and rehabilitated six properties. Annual net income of
$14,000 - $21,000.
• Within five years, Refurbish will have experience with 10 properties and retain four as rental
properties. Annual net income of $26,000 - $36,000 ($21,000-$38,000 for selling homes and $5,000 -
$8,000 for rental income)

Company Location and facilities

Refurbish is being operated out of the owners' home. They have established a home office where they
manage the paperwork and daily operations. The office is complete with computer, phone, printer, and
desk.

Legal Form of Ownership/Profile of the Management Team

Refurbish, Inc. has been organized as an S-Corporation with Gadda Mooga and Edgar Pekin splitting
ownership 50/50. Edgar Pekin will be President and Gadda Mooga will be Secretary and Treasurer. Gadda
Mooga will be primarily responsible for the finances.

The S-Corporation was chose in order to protect the owners from liability. Refurbish's advisor is attorney
Jeff Minor.
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Refurbish, Inc. Sample On-line Plans

Target Market and Customer Base

Refurbish's target market will consist of two groups; investors wishing to buy renovated properties and
individual renters. The target market will be the Metropolitan area with demographics ranging from
individual investors to singles and families.

The renters will be targeted in the lower middle to middle class. Refurbish is interested in maintaining a
few single-family homes in middle class areas. Typically, these individuals rent due to the excessive costs
of down payment, etc. These individuals are typically price sensitive but willing to buy on looks and
functionality. Each home will be 'packaged' to appeal to the decision influencer, not the decision-maker.
Refurbish believes that the decision influencer, typically female, will 'fall in love' with the updated kitchen
and bathroom to sway the decision-maker. The overall demographics of this market are families with
combined household income of $40,000 to $75,000 and two kids.

This market is excellent for three and four-plexes, especially the smaller apartment properties located in the
mid-town and near downtown area.

Barriers to Entry
There are no barriers to entry within the real estate and housing industry. It is a very fragmented niche that
almost any handyman can enter. As long as an individual has access to capital, he/she can purchase a home
and fix it up.

Growth Opportunities
Refurbish has two opportunities for growth; real estate sales and remodel for hire. Refurbish could increase
annual revenues by executing real estate sales themselves. This would add an additional revenue source of
4-7% per house. Refurbish also has the opportunity to expand into other house remodels and repairs.
Further investigation into this area is needed. This opportunity has the potential of adding $15,000 to
$25,000 in annual revenue.

Trade Agreements
The key agreements Refurbish will have are with real estate agents and building supply companies. As
mentioned earlier, Refurbish will work with one real estate agent in selling each home and when looking
for prospects. The exclusive agreement with the Real Estate agent is the manager of rental properties at
Real Estate Company. He has multiple agreements with tradesmen and suppliers, and has his own general
maintenance person, along with an extensive list of investors. The goal is that one real estate agent will
completely understand what Refurbish's business is and find the right buyer for the home that meets
specific revenue goals. Also, that agent will be familiar with Refurbish's business, etc.

Refurbish will also locate foreclosed properties through various organizations; banks, SBA (Small Business
Administration), Federal Deposit Insurance Corporation (FDIC), Housing and Urban Development (HUD),
Veterans Administration (VA), Fannie Mae, Freddie Mac, General Service Administration (GSA), and
Internal Revenue Service (IRS). Each of these organizations offers properties for sale that have been
foreclosed.

Exit Strategy
The only exit strategy Refurbish has is selling the last house or selling the existing rental properties.

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Refurbish, Inc. Sample On-line Plans

Company Revenues (projected)

2001 2002 2003 2004 2005

Property Sales 1 2 2 2 2
Sale of Property 60,000 60,000 60,000 60,000 60,000
Property Revenue 60,000 120,000 120,000 120,000 120,000

Rental Property 1 2 3 4 5
Monthly Rent 800 800 800 800 800
Rental Revenue 9,600 19,200 28,800 38,400 48,000

Total Revenue $ 69,600 $ 139,200 $ 148,800 $ 158,400 $ 168,000

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Refurbish, Inc. Sample On-line Plans

Name Business Phone

Home Address Home Phone

City State Zip Code

Business Name of Applicant

Assets Liabilities
Cash on hand & In banks Accounts Payable
Savings Accounts Notes Payable to banks and others (Section
2)
IRA or other retirement accounts Installment Account (Auto)
Mo. Payment $______
Life Insurance - Cash Surrender Value Only Installment Account (other)
(Section 8) Mo. Payment $______
Stocks & Bonds (Section 3) Loan on life insurance
Real Estate (Section 4) Mortgage on Real Estate
(Section 4)
Automobile-Present Value Unpaid Taxes (Section 6)
Other personal property (Section 5) Other liabilities (Section 7)
Other assets (Section 5)

Total Liabilities
Net Worth
Total Assets Total Liabilities & Net Worth
Section 1. Source of Income Contingent Liabilities

Salary As Endorser or Co-Maker

Net Investment Income Legal Claims & Judgements
Real Estate Income Provision for Federal Income Tax
Other Income (Describe below)*
Description of Other Income in Section 1

*Alimony or child support payments need not be disclosed in "Other Income" unless it is desired to have such payments counted
toward total income.
Section 2. Notes Payable to Bank and Others (Use attachments if necessary. Each attachment must be identified as a part
of this statement and signed)

Name and Address of Noteholder(s) Original Current Payment Frequency How secured or Endorsed
Balance Balance Amount (monthly, etc.) Type of Collateral

Section 3. Stocks and Bonds. (Use attachments if necessary. Each attachment must be identified as a part of this
statement and signed)
Number of Shares Name of Securities Cost Market Value Date of Total
Quotation/Exchange Quotation/Exchange Value

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Refurbish, Inc. Sample On-line Plans

Schedule of Collateral

Section I - Real Estate

Attach a copy of the deed(s) containing a full legal description of the land and show the location (street address) and
city where the deed(s) is recorded. Following the address below, give a brief description of the improvements, such as
size, type of construction, use, number of stories, and present condition (use additional sheet if more space is required).

List Parcels of Real Estate

Address Year Acquired Original Cost Market Value Amount of Lien Name of
Lienholder

Description(s)

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Refurbish, Inc. Sample On-line Plans

Section II - Personal Property

All items listed herein must show manufacturer or make, model, year, and serial number. Items with no serial number
must be clearly identified (use additional sheet if more space is required).

Description - Manufacturer, Year Acquired Original Cost Market Current Lien Name of
Model, Serial Number Value Balance Lienholder

Signature: Date: Social Security Number:

Signature: Date: Social Security Number:

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Refurbish, Inc. Sample On-line Plans

Financial Analysis

Start-up Cost Estimates

Appendix B

Income Statement
Appendix D, 12-months ending December 31, 2001 - 2005

Balance Sheet
Appendix E, 12-months ending December 31, 2001 - 2005

Personal Financial Statements

Appendix F

Company & Legal Documents

Appendix G

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Appendix D Refurbish, Inc.
Income Statement
For the 12-Months Ending
31-Dec-01 31-Dec-02 31-Dec-03 31-Dec-04 31-Dec-05 31-Dec-06
Properties Sold 1 2 2 2 2 2
Property Ave. Value $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000
Sales Revenue
Property Sales $ 60,000 87% $ 120,000 87% $ 120,000 82% $ 120,000 77% $ 120,000 73% $ 120,000 69%
Rental Income $ 9,000 13% $ 18,024 13% $ 27,048 18% $ 36,072 23% $ 45,096 27% $ 54,096 31%
Total Revenue $ 69,000 $ 138,024 $ 147,048 $ 156,072 $ 165,096 $ 174,096
Cost of Sales
Cost of Rentals $ 630 7% $ 1,262 7% $ 1,893 7% $ 2,525 7% $ 3,157 7% $ 3,787 7%
Cost of Sales $ 40,000 67% $ 80,000 67% $ 80,000 67% $ 80,000 67% $ 80,000 67% $ 80,000 67%
Total Cost of Sales $ 40,630 $ 81,262 $ 81,893 $ 82,525 $ 83,157 $ 83,787
Gross Profit $ 28,370 41% $ 56,762 41% $ 65,155 44% $ 73,547 47% $ 81,939 50% $ 90,309 52%

Operating Expenses
Contractor repairs $ 10,000 43% $ 20,000 44% $ 20,000 38% $ 20,000 34% $ 20,000 30% $ 20,000 27%
Accounting/Bookkeeping $ 250 1% $ 250 1% $ 250 0% $ 250 0% $ 250 0% $ 250 0%
Postage $ 100 0% $ 100 0% $ 100 0% $ 100 0% $ 100 0% $ 100 0%
Insurance $ 800 3% $ 1,700 4% $ 2,400 5% $ 3,100 5% $ 3,800 6% $ 4,400 6%
Bank Fees $ 500 2% $ 500 1% $ 500 1% $ 500 1% $ 500 1% $ 500 1%
Trash Service $ 500 2% $ 1,000 2% $ 1,000 2% $ 1,000 2% $ 1,000 2% $ 1,000 1%
Utilities $ 400 2% $ 800 2% $ 800 2% $ 800 1% $ 800 1% $ 800 1%
Rental Vacancy Updates $ - 0% $ - 0% $ 500 1% $ 1,000 2% $ 1,000 2% $ 1,000 1%
Professional fees(realtor) $ 4,200 18% $ 8,400 19% $ 8,400 16% $ 8,400 14% $ 8,400 13% $ 8,400 12%
Mortgage Payments (rental) $ 6,288 27% $ 12,288 27% $ 18,288 35% $ 24,288 41% $ 30,288 46% $ 36,288 50%
Total Operating expenses $ 23,038 33% $ 45,038 33% $ 52,238 36% $ 59,438 38% $ 66,138 40% $ 72,738 42%
EBIT $ 5,332 8% $ 11,724 8% $ 12,917 9% $ 14,109 9% $ 15,801 10% $ 17,571 10%
Other Income(Expense)
Interest Expense $ 500 $ 1,500 $ 2,200 $ 3,300 $ 4,400 $ -
Depreciation $ - $ - $ - $ - $ - $ -
Income Taxes $ - $ 2,500 $ 3,000 $ 4,000 $ 5,000 $ 6,000
Amortization $ - $ - $ - $ - $ - $ -
Total Other $ 500 $ 4,000 $ 5,200 $ 7,300 $ 9,400 $ 6,000
Net Income (Loss) $ 4,832 7% $ 7,724 6% $ 7,717 5% $ 6,809 4% $ 6,401 4% $ 11,571 7%

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