Overview
The Company founder Mr. Wood has worked in the building trades industry since 1977 when he graduated (second in his class) from a vocational trade school. His initial positions had him working with several experienced carpenters and contractors. In 1991, he began the Company as a sole proprietorship. and then shifted the Company to an LLC in 2001. Since its inception, the Company has built about 2 dozen homes ranging in size from 800 square feet to well over 14,000 square feet. In addition to the full home construction projects, the Company has also completed numerous smaller home renovation projects for clients. On the larger jobs, Mr. Wood has served as the General Contractor and has been responsible for overseeing the various contractors working on the site. The Company is registered in both Massachusetts and Colorado and is a member in good standing with the Better Business Bureau.
In March of 2015, Mr. Wood was able to purchase 5 premium view lots in Granby Ranch in Colorado. These lots are owned free and clear. The lots are within about 1,000 yards of each other and they all have extremely good views of the mountains across the valley. Three of the lots were purchased for $27,500 each and presently are valued at between $60 and $65,000 each. The other two lots were purchased for $44,500 each and are presently valued at $90,000 to $105,000.
Single family homes in the Granby Ranch area have sold on average for roughly $500,000 over the last three years. The market has seen significant growth and this is expected to continue for the next several years. For the most part, the market is made up of second home buyers. While the majority (70%) of the market will come from residents in and around Denver, a growing portion of the current market is being drawn from Texas, California and other regions of the country. The easy access to winter sports as well as year-round hiking, biking and other outdoor recreation makes the region a destination for many families.
All of the lots included in the Granby Ranch property include a variety of amenities including: a full ski area with multiple lifts and runs for beginners through expert; a clubhouse with an outdoor heated pool, outdoor hot tub, changing facilities, exercise room with a full range of weights and equipment, and a game room. Each property owner pays a one-time Granby Ranch Amenity fee of $10,000 to cover a portion of the development and upkeep costs. In warmer seasons, the Ranch offers many miles of mountain biking trails, hiking trails, an award winning 18 hole golf course and a catch and release sport fishing river.
The ski and mountain biking areas feature a 1,000 vertical drop. Granby Ranch residents receive several golf tee times, a family ski pass, 16 individual ski passes for friends and family, discounted fishing access, a family season pass for mountain biking, and discounts in the pro shop, the ski shop and the mountain bike shop as well as access to the clubhouse, pool and spa. No other neighborhood within 100 miles offers the extensive amenities that are found on Granby Ranch.
Goals
The Company has purchased several building lots in Granby, Colorado and they are seeking funding to help begin construction on these. There are an additional 22 lots available in the same area (Lone Eagle) and the Company will purchase these with a portion of the investor funding. The Company intends to build homes on the lots and then work with a local realtor to sell these. A portion of the sale proceeds will be retained to help cover future construction costs. Investors in the Company will benefit from a percentage of each sale.
Products and Services
The Company intends to build homes in Colorado on lots located in Granby Ranch and on nearby Lone Eagle Drive. At this time the Company owns five lots in the Granby Ranch development. Each home will conform to the Homeowners Association guidelines. The 22 additional lots on Lone Eagle Drive already have approved designs in place and construction could begin on these within a matter of weeks. The construction on the currently owned lots will still need to go through the approval process and soil testing before construction can begin. It is estimated that the approval process for these lots will take about two months to complete at which time construction can begin.
Each home will be somewhat different in order to avoid the “cookie-cutter” feel. The bones of the house will be in place before most of the houses are put on the market. Based on past experience, it is likely that the homes will be sold prior to the end of construction. This will enable the new owners to make some determinations as to lighting, colors, flooring and other aspects of the house. As an average, the Company is anticipating that each house will cost about $286,296 to build, plus the cost of the lot factored at an average of $36,481. In addition to the construction costs, it is estimated that there will be additional costs for; landscaping – $10,926, closing costs 6% – 28,926, and a contingency fund of $25,926 to cover any overages. The 22 additional lots will have an added $10,000 Granby Ranch Amenity fee which has already been paid on the five lots in the Ranch development. This brings the average cost for each home to approximately $396,704. Based on the current market, the Company intends to sell the homes for an average of $493,519, thus providing for a profit of $96,815 on each house sold. The actual costs and selling price will be determined once all costs have been calculated for that particular home.
Competition
Many of the current homes in the Granby Ranch development were built by a construction firm based in Denver. As the housing market has re-bounded, this firm finds that they have more than sufficient business in the immediate Denver area and they simply no longer have time to build in outlying areas such as Granby.
There are a number of individuals and contractors who are involved in the construction industry in the area; however none of them are equipped to handle full home construction projects at this time. This means that if Granby Ranch is to be completed they need to rely on contractors coming in from other areas to handle the General Contracting tasks.
The Company has met with some of the local sub- contractors and building suppliers. None of these contractors are willing or able to take on the task of overseeing multiple construction projects. These contractors are most willing to work with the Company on the project outlined in the full business plan.
Target Market
The target market for the Granby Ranch development is buyers who are seeking a second home for weekends and vacations. The individuals who are interested in purchasing a home in the area tend to be more active in winter sports such as skiing, snowboarding and snowmobiling. They also tend to enjoy other recreational activities throughout the year including boating, hiking, mountain biking and more. These individuals are more interested in purchasing a low maintenance property with significant amenities. While many of the region’s ski resorts do offer condos and single family homes, none of them can offer the diversity of amenities that are available at Granby Ranch.
Management Team
Mr. Wood is the managing partner of the Company. He has been in the building trades since 1977. Under his leadership, the Company has completed more than two dozen homes as well as countless other home improvement projects for clients. The homes have ranged from 800 square feet to over 14,000 square feet. A copy of Mr. Wood’s resume and partial listing of previous projects can be provided upon request.
Mr. Wood is working with an individual who has agreed to serve as the Project Manager for the the Company Projects in Granby. This individual oversaw most of the construction that has occurred in the Granby Ranch development and he is well aware of the needs of the site, the potential customers and he is well acquainted with the area contractors. Mr. Wood or his Project manager will be on-site throughout the construction phase on each project.
The Company has also been working with a local realtor who is well aware of the needs of potential homeowners. She worked as the Community Manager for Village Homes in the Granby Ranch development. Village Homes is a production builder and offered 9 floor plan options where buyers were able to select finish selections custom builder options. During her tenure at Village Homes she spent two years selling new homes for the Colorado Based Company, and in 2006 was asked to open the onsite sales office in Granby Ranch as a Community Manager. From 2006 through 2015, she sold more volume and dollar amount than any other new homes sales agent in the county.
Risk Factors
Any business that is moving into a new market should expect to find a few risks that could potentially divert their attention. Mr. Wood has taken the time to examine many of the risks associated with the Granby Ranch and Lone Eagle Drive. The full business plan outlines these risks and potential benefits much more fully. The key risk at this time is the need to secure the cost to purchase the additional lots and to begin construction on the initial homes as soon as possible.
Exit Strategy
The Company is seeking an investment of $3,000,000 to cover the purchase of the 22 additional lots and construction costs for the initial seven properties to be developed. The Company has already purchased five lots in the highly desirable Granby Ranch development. Once funding is in place the construction can begin within weeks (weather dependent). Given the construction schedule that is outlined in this plan, the Company intends to begin making ROI payments to investors once the first property has been sold. The Company will retain sufficient cash on hand to complete the other projects. All remaining funds will be provided to the investor until the principal and interest has been repaid. The Company anticipates being able to fully repay investors on or before the end of the fourth year of operation. The specific rate of return will be discussed at the time of investment.
Financial Need and Use of Proceeds
The Company has already secured a total of five building sites for initial development. The Company is seeking investors who can help cover the construction and development costs for these sites. The owner has invested a total of $300,000 into the Company to date (purchasing the initial lots that are presently valued at $500,000) and intends to create and maintain a contingency fund of $100,000 to cover unforeseen costs during the process. In addition to developing the initial five lots, the Company is seeking funds to purchase an additional 22 lots on Lone Eagle Drive at a cost of $500,000. The total investment being sought at this time is $3,000,000.
Investment Conclusion
The management team for the Company is well versed in every aspect of the construction and real estate industries. The CEO has been in the building trades for more than 25 years and has had experience as a General Contractor overseeing multiple projects. The Company has acquired five prime lots and they are ready to begin development of these. They have also acquired an option to purchase an additional 22 lots on Lone Eagle Drive. Once the homes are under construction, the Company’s Sales Manager will begin showing the homes. Given the strength of the market, it is anticipated that most of the homes will sell prior to the completion of the construction phase. For the Company to proceed, the first step is to raise the capital needed to purchase the additional lots and to obtain the construction permits. The second step is for the Company to implement its Business Plan, and the third step is to begin construction and sales efforts. Providing that all of these steps are achieved in a timely and orderly fashion, the Company should be in an excellent position to lay the foundation for a strong and healthy construction operation that will stand for many years to come.
For more information or to set up a call with the principals on project, please contact:
Anthony W. Licausi
Managing Partner
+1.646.930.4467
[email protected]
Chris Cicola
Partner
+1.646.578.8196
[email protected]