I. EXECUTIVE SUMMARY
A. Company Information
Humble Homz, LLC and Abair Real Solutions, LLC (hereafter called the company) are both divisions of Darque, Inc. The company was formed in June, 2005 to invest in properties that may require some rehabbing or may be distressed in other ways. These properties would be purchased to retail or provide rental units. The investment in these properties will be in the Houston metro, Humble, Atascocita, Kingwood, TX and surrounding communities. Darque, Inc is located in Kingwood, Tx with a mailing address of 4582 Kingwood Dr, Ste E 162, Kingwood, TX 77345-2640. The managing partner is Charles Gardner.
B. Company Objective
The company purchases residential real estate in the described area, targeting properties that can be acquired at 50% to 80% of the current fair market value (FMV) after any repairs. The resale value of these properties, after any repairs, will be in the range of $90,000 to $800,000. While the main objective is to make a minimum of 20% profit based on the After Repair Value (ARV), we are also aware of our responsibility to the communities we do business in, and our role in the betterment of these communities. Therefore, we always make every effort to provide products that are of good quality and will blend well with the neighborhood. The company's strategy is based solely on making the profit going in and not on speculative appreciation months or years down the road.
C. Market Analysis Summary
The main target areas will be those areas in high demand by first time home buyers and those looking to upgrade into modern renovated homes. The areas include Atascocita (Timber Forest. Trails, Oaks, Pinehurst), Humble (Deerwood Estates, Foxwood, Kenswick), Kingwood (Woodland Hills, Sherwood Trails, Mills Branch, Hunters Ridge). These areas have stable resale values, yet provide a sufficient amount of opportunity. Once the target property is acquired, it is renovated (If needed) to match or exceed current market standarda for retail or rental. These are affordable home in high demand communities and in our target retail price range.
D. Acquisition Strategy
The company locates properties through a variety of sources including the Multiple Listing Service (MLS), investor websites, and referrals. These properties are typically for sale by owner (FSBO), pre-foreclosures, and bank owned properties (REO's). The condition of these properties can be from badly in need of repair to ones only needing minor cosmetic repairs. The repair cost will range fro $2500 to $50,000 depending on the type of work required. Since some of these properties have been neglected, they almost always need landscaping as well as major systems checks. We pass on properties with odd floor plans and those that may require asbestors, lead paint, or randon abatement, which might create cost overruns.
The most critical factor in the company's success is buying the property at the right price. We determine the FMV after renovation by reviewing comparable sales for the area and by using several formulas.
E. Sales Strategy
The company works with realtors and investors to make sure the properties receive maximum exposure. Properties are marketed through various web sites and through classified ads. Properties are offered for sale to those buyers seeking new loans and those who may need some assistance. We work effectively with the broader segment of the market that may have bruised credit or may be credit challenged. We offer to this segment of the market excellent programs which will allow them to participate in the American Dream of Home Ownership. The company offers properties on lease option, purchase by new loan, and owner financing.
F. Financial Plan
The company purchases properties from distressed sellers by taking over debt (subject to), owner financing, lease with option, and new loans. The company seeks to work with investors and private lenders to expedite these transactions. We seek credit partners (those individuals or groups with excellent credit scores) and individuals or groups which have access to capital (funds) that can be used on a short term basis. All capital is secured by first liens on real estate. The return that can be expected range from 12% to 45% depending on whether it is secured through use of a credit partner or a private lender.
G. Summary
It is the goal of the company to establish a good name throughout the targeted communities and become known as the source for real estate solutions in good and distressed situation. We look to grow in the market and provide training for those who seek to become involved in real estate.
We plan to flip/resell an average of one house per month generating $180,000 per year in gross profits. We plan to generate an additional $200,000 in profits we take in the form of equity in rental properties that we buy at discounts (often taking over existing loans). We plan to make an additional $100,000 per year (tax free) in homestead sales that will occur every 3-5 years and our additional goal is to own a portfolio of approximately $5 million in properties over the next 5 years that are appreciating at the rate of $400,000 per year. We have developed substantial marketing programs and the network and power team necessary to sustain this business.