Listing ID: 76919
This web-based property management company boasts full-online features that include over 80 cooperative pay-to-list website partners, market comparable reports, transparent online accounting with homeowner ACH payments, Matterport 3D modeling, as well as a wealth of documentation tools including online financial reporting, financial statements, photos, property marketing packages, inspection reports, 1099 reporting, work orders, invoices, monthly statements and more! The company has 75 single family home clients; 95% of which are foreign (Mainland China) owned. Of these, 5-6 homes were sold out of the portfolio last year, which offers a real estate agent an attractive additional income stream (commission income is not included on the financials).
- Asking Price: $500,000
- Cash Flow: $141,291
- Gross Revenue: $241,887
- EBITDA: $141,291
- FF&E: $5,000
- Inventory: N/A
- Inventory Included: N/A
- Established: 2018
- Property Owned or Leased:N/A
- Property Included:N/A
- Building Square Footage:N/A
- Lot Size:N/A
- Total Number of Employees:2
- Furniture, Fixtures and Equipment:N/A
This 3-year-old operation is managed by a full-time owner and a part-time administrative staffer, both of whom are fluent in Mandarin Chinese. The holds over $300k in tenant deposits that will transfer in the sale. All of the business’s furniture, fixtures, equipment and goodwill will be included in the sale. (Home Based)
Current owner will train for 2 weeks at 20 hours per week.
While the property management space is a competitive one, this firm has carved out a unique niche with its software, geographic and demographic / foreign client focus, and the residential real estate sale pipeline that the company has cultivate to provide its owner a significant long-term sustainable competitive advantage when it comes to obtaining new seller listings.
New operators will likely want to continue in the same vein that current management has but go deeper in terms of geographic concentration and wider in terms of demographic focus. While niche market specialization has proven advantageous, the firm’s model has provided it a competitive advantage that may be leveraged and scaled. The company’s financials do not indicate the 5-6 annual home sales that the owner enjoys sales commissions on, given that any real estate company associated with the property management firm tends to become the default option for home sale. Similarly, the company outsources maintenance and repair services, which could be taken in-house to become a substantial revenue generator.
This Business Is Home Based
The venture was founded in 2018, making the business 4 years old.
Why is the Current Owner Selling The Business?
There are all types of reasons people decide to sell companies. Nonetheless, the true reason and the one they tell you may be 2 absolutely different things. For instance, they may say "I have way too many other obligations" or "I am retiring". For numerous sellers, these factors are valid. But, for some, these might simply be excuses to try to hide the reality of transforming demographics, increased competitors, recent reduction in profits, or a range of various other factors. This is why it is really essential that you not rely absolutely on a seller's word, but instead, utilize the seller's solution along with your overall due diligence. This will paint a much more reasonable image of the business's current situation.
Existing Debts and Future Obligations
If the existing entity is in debt, which numerous businesses are, then you will have reason to consider this when valuating/preparing your deal. Lots of companies borrow money so as to cover things such as inventory, payroll, accounts payable, etc. Bear in mind that in some cases this can imply that revenue margins are too thin. Numerous companies fall under a revolving door of taking loans as a way to pay back various other loans. Along with debts, there may additionally be future commitments to consider. There may be an outstanding lease on equipment or the building where the business resides. The business may have existing agreements with vendors that must be fulfilled or may result in penalties if canceled early.
Understanding the Customer Base, Competition and Area Demographics
Just how do operating businesses in the location attract brand-new consumers? Often times, businesses have repeat clients, which develop the core of their everyday earnings. Particular aspects such as new competition sprouting up around the location, roadway building and construction, and personnel turnover can influence repeat consumers as well as adversely affect future earnings. One crucial point to consider is the area of the business. Is it in a very trafficked shopping mall, or is it hidden from the main road? Certainly, the more people that see the business often, the greater the possibility to construct a returning client base. A last idea is the basic location demographics. Is the business placed in a largely inhabited city, or is it located on the outskirts of town? Exactly how might the neighborhood median household earnings influence future revenue potential?