Victorian Renovations (VR) is a start-up company that is being formed to meet the growing need for unique restored vintage homes in downtown Portland, Oregon. The company is initially focused on one building, located on Fifth and Pearl, which it is in the process of purchasing. The house will be renovated by the two owners of the business, Doug Machen and Sarah Renner, both of whom are experienced in house renovation and both of whom have graduated from the MBA program at the University of Portland. External contractors will also be used for the larger jobs, but most of the work will be completed by Doug and Sarah.
After completion, the house will be rented out, and the income stream will be used to pay the mortgage on the house and to finance the purchase of another property in downtown Portland. Due to the rising demand of unique homes in this area, it is believed that the property at Fifth and Pearl will be rented out for a high price and will produce substantial cash flow to finance future projects.
The mission of VR is to develop rundown houses in the Portland area, to improve the look and financial viability of downtown Portland, and rent those properties out to provide a stream of income for future investments. The company will develop unique homes targeting the discriminating renter who is willing to pay more for a top quality home. VR seeks to be viewed as a highly visible company in the property development market.
The following are the main objectives for VR:
- To obtain investor funding to purchase and renovate a four bedroom residence on Pearl and Fifth in the Hawthorne District of Portland, Oregon.
- To complete renovations on the four bedroom victorian residence, to convert it into two 2-bedroom units by October 2001.
- To rent out that residence to provide an income stream enough to pay the mortgage and provide additional income for future projects.
- To purchase another residence for renovation immediately thereafter.
1.3 Keys to Success
The keys to success for this project will be:
- To complete the renovation work within the scheduled time and within the budgeted amount.
- To find rental occupants for the building before renovations are completed or as soon as possible after completion.
- To maintain an average 80% occupancy rate each year.