JMS Property

Management
Stephen, Joseph, Matt

Executive Summary
Business Idea: College Style Apartment Housing
Problem: To have a designated housing area for Carthage
and UW Parkside Students
Feasible: Not in the initial years

Industry Analysis
Carthage College has 2,600 undergrad students with 30%
already living off campus
University of Wisconsin Parkside has 4,489 undergrad
students and the campus only houses 1050 whose campus
Between the two colleges there is roughly 7,089
students/potential customers

Industry Analysis Cont.

Prices Carthage:
Carthage College room and board is $10,000 per year
$833.33 per month

The Villa Apartment complex will be charging $1,250 per

room/month for a 3-bedroom unit,
$416.66 per month per tenant.

Living in The Villa gives $400.00 to spend on food and

beverages for a month.
$1891.40 per year potentially can be saved

Industry Analysis Cont.

Prices UW Parkside:
UW Parkside room and board is $8808 per year
$734 per month

The Villa Apartment $1,250 per room/month

$416.66 per month per tenant.

$318 per month to purchase food and beverage per month

A potential of $700 per year can be saved from living in
The Villa

Industry Analysis Cont.

By the third year we would expect more than a 60 percent
gross profit margin.
Bayside apartments would be considered the primary
competition because of many reasons.
College students that attend either Carthage College or
UW Parkside.
Between the ages of 19-22 years.
Luxurious apartment at an affordable price and ONLY for
College Students

Marketing Plan
College only apartments
Market Penetration
First couple years $1250/unit/month
Raise prices to $1300 once we have tenants
New/Young Management team
Location, Location, Location (1771 30th Ave)
Business Hotspot

Marketing Cont.
Strategies
Put up a sign during construction about reserving a room
Mostly word of mouth
Differentiation
Sporting event promotions
E-mail
Posters/flyers

Balance Sheet
1771 30th Avenue
1.5 Acres

Building cost estimation

Gym and lobby estimation
Negative owners equity

JMS Property Management

Balance Sheet
December 31st, 2015
Assets

Cash

$-

Accounts Receivables

$-

Prepaid Insurance

$-

Property, Plant, and Equipment

Building

$3,500,000.00
Less: Accumulated
Depreciation of
Building over 40
Years

Land

$-

$300,000.00

Gym Equipment

$20,000.00

Lobby Furnishing

$10,000.00

Total Property, Plant, and Equipment

$3,830,000.00

Total Assets

$3,830,000.00

Liabilities

Accounts Payable
Salaries and Wages Payable
Mortgage

$30,000.00
$-

$3,953,140.00

Year 1 Income Statement

Negative gross profit margin
Property tax estimation
Start up fees
L.L.C. etc

Negative net income

JMS Property Management

Income Statement
December 31st, 2015
Revenue

Rent Revenue

$576,000.00

15 Year Mortgage Expense

$263,542.67

Potential Gross Profit Margin

$312,457.33

Less: Vacancy

-$263,542.67

Effective Gross Profit Margin

-$263,542.67

Expenses

Operating Expenses

Accounting

$1,000.00

Advertising

$1,000.00

Depreciation

$-

Insurance

$-

Labor

$-

Legal

Property Taxes

Utilities

Total Operating Expenses

$1,000.00
$76,000.00
$1,000.00
$80,000.00

Year 1 Cash Flow

Statement
Monthly and quarterly expenses
Tax season
Entertainment equipment and marketing expenses
backloaded

January

Beginning Balance

$-

Rented Units

$-

Other Income: Rented

Space

$-

$-

$-

$-

$-

$-

$-

$-

$-

$-

$-

Total Cash In

JMS Property Management

Cash Flow Statement
December 31st, 2015
February March
April
May
June
July
August
September October
November December
$22,225.2 $66,645.4
- $186,735.8 $231,156.1 $253,201.3 $275,246.5 $334,666.7 $356,712.0 $378,757.2 $423,177.4
2
4 $88,690.67
9
1
3
6
8
0
2
4

$-

$-

$-

$-

$-

$-

$-

$-

$-

$-

$-

$-

$22,225.2 $66,645.4
- $186,735.8 $231,156.1 $253,201.3 $275,246.5 $334,666.7 $356,712.0 $378,757.2 $423,177.4
2
4 $88,690.67
9
1
3
6
8
0
2
4

Total Cash Out

Operations
Mortgage

$21,961.8 $21,961.8 $21,961.8

9
9
9 $21,961.89 $21,961.89 $21,961.89 $21,961.89 $21,961.89 $21,961.89 $21,961.89 $21,961.89 $21,961.89

Marketing

$1,000.00

Gym Equipment

$10,000.00

$10,000.00

Lobby Furnishing

$5,000.00

$5,000.00

LLC Fees

$180.00

Overhead

Year 2 Income Statement

Minimal vacancy
Rented space
Depreciation, insurance, labor, salaries and wages
Second year of negative net income

JMS Property Management

Income Statement
December 31st, 2016
Revenue

Rent Revenue

$600,000.00

15 Year Mortgage Expense

$263,542.67

Potential Gross Profit Margin

$336,457.33

Less: Vacancy

$166,457.33

Other Income: Rented Space

$12,000.00

Effective Gross Profit Margin

$182,000.00

Expenses

Operating Expenses

Accounting

$1,000.00

Advertising

$500.00

Depreciation

$87,500.00

Insurance

$15,000.00

Labor

$10,000.00

Legal

$1,000.00

Property Taxes

$76,000.00

Year 2 Cash Flow

Statement
Largest amount of cash outflows
More monthly expenses
Decreasing outflows towards the end of the year


Beginning Balance

Rented Units

Other Income: Rented

Space

Total Cash In

JMS Property Management

Cash Flow Statement
December 31st, 2016
January
February
March
April
May
June
July
August
September
October
November
December
-$461,222.67 -$448,117.89 -$457,513.11 -$444,408.33 -$507,303.56 -$516,698.78 -$503,594.00 -$490,489.22 -$499,884.44 -$486,779.67 -$473,674.89 -$483,070.11

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$37,500.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

$1,000.00

-$422,722.67 -$409,617.89 -$419,013.11 -$405,908.33 -$468,803.56 -$478,198.78 -$465,094.00 -$451,989.22 -$461,384.44 -$448,279.67 -$435,174.89 -$444,570.11

Total Cash Out

Operations

Advertising
Mortgage

$21,961.89

125
$21,961.89

$21,961.89

$21,961.89

125
$21,961.89

$21,961.89

$21,961.89

125
$21,961.89

$21,961.89

$21,961.89

125
$21,961.89 $21,961.89

Overhead

Accounting

Depreciation
Insurance
Labor

$250.00

$1,250.00
$833.33

Legal

Property Taxes
Salaries and Wages
Utilities
Total Expenses

Ending Cash Balance

$21,875.00
$1,250.00
$833.33

$250.00

$1,250.00
$833.33

$1,250.00
$833.33

$250.00

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$47,895.22

$21,875.00
$1,250.00
$833.33

$250.00

$1,250.00
$833.33

$1,250.00
$833.33

$250.00

$76,000.00
$1,266.67
$1,266.67
$83.33
$83.33
$25,395.22 $101,395.22

$21,875.00
$1,250.00
$833.33

$250.00

$1,250.00
$833.33

$1,250.00
$833.33

$250.00

$21,875.00
$1,250.00
$833.33

$1,250.00
$833.33

$250.00

$1,266.67
$83.33
$47,895.22

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$47,895.22

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$47,895.22

$1,266.67
$83.33
$25,395.22

-$448,117.89 -$457,513.11 -$444,408.33 -$507,303.56 -$516,698.78 -$503,594.00 -$490,489.22 -$499,884.44 -$486,779.67 -$473,674.89 -$483,070.11 -$469,965.33

Year 3 Income Statement

No vacancy expectation
Increased rent for both units and bar
L.L.C. Taxation
28 percent

First year of profitability

JMS Property Management

Income Statement
December 31st, 2017
Revenue

Rent Revenue

$624,000.00

15 Year Mortgage Expense

$263,542.67

Potential Gross Profit Margin

$360,457.33

Less: Vacancy

$-

Other Income: Rented Space

$18,000.00

Effective Gross Profit Margin

$378,457.33

Expenses

Operating Expenses

Accounting

$1,000.00

Advertising

$250.00

Depreciation

$87,500.00

Insurance

$15,000.00

Labor

$10,000.00

Legal

$1,000.00

Property Taxes

$76,000.00

Year 3 Cash Flow

Statement
Largest expense during tax season
Property and Income Taxes

Cash outflows decrease by over 150 thousand in a year

and a half
Should have positive inflows within 3 years at the
continued rate


Beginning Balance

Rented Units

Other Income: Rented

Space

Total Cash In

JMS Property Management

Cash Flow Statement
December 31st, 2017
January
February
March
April
May
June
July
August
September
October
November
December
-$469,965.33 -$441,860.56 -$436,193.28 -$408,088.50 -$503,585.78 -$497,918.50 -$469,813.72 -$441,708.94 -$436,041.66 -$407,936.89 -$379,832.11 -$374,164.83

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$52,000.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

$1,500.00

-$416,465.33 -$388,360.56 -$382,693.28 -$354,588.50 -$450,085.78 -$444,418.50 -$416,313.72 -$388,208.94 -$382,541.66 -$354,436.89 -$326,332.11 -$320,664.83

Total Cash Out

Operations

Advertising
Mortgage

$21,961.89

$62.50
$21,961.89

$21,961.89

$21,961.89

$62.50
$21,961.89

$21,961.89

$21,961.89

$62.50
$21,961.89

$21,961.89

$21,961.89

$62.50
$21,961.89 $21,961.89

Overhead

Accounting

Depreciation
Insurance

Income Tax
Labor

$250.00

$250.00

$250.00

$1,250.00

$21,875.00
$1,250.00

$1,250.00

$1,250.00

$21,875.00
$1,250.00

$1,250.00

$1,250.00

$21,875.00
$1,250.00

$1,250.00

$1,250.00

$833.33

$833.33

$833.33

$47,602.05
$833.33

$833.33

$833.33

$833.33

$833.33

$833.33

$833.33

Legal

Property Taxes
Salaries and Wages
Utilities
Total Expenses

$250.00

$250.00

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$47,832.72

$250.00

$76,000.00
$1,266.67
$1,266.67
$83.33
$83.33
$25,395.22 $148,997.28

$250.00

$21,875.00
$1,250.00

$833.33

$1,250.00

$833.33

$250.00

$1,266.67
$83.33
$47,832.72

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$47,832.72

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$25,395.22

$1,266.67
$83.33
$47,832.72

$1,266.67
$83.33
$25,395.22

Final Selling Pitch

Consistent Revenue Stream
Additional building
Utilities included

Overall Summary
Future changes to business plans
Need of excess capital, flexibility, and collateral
Currently not feasible