Start-Up Real Estate Business Plan

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Golden Valley Real Estate LLC

Opportunity

Problem & Solution

Problem Worth Solving

With the advances of modern medicine, people are living longer. Once they raise children and retire from work they have a new stage of their life where they find themselves enjoying their spouse and free from other responsibilities. They get a second try at being a carefree youth. They need to find a place within their budget that helps them with that. 

Our Solution

Golden Valley Real Estate, LLC (GVRE) is a start-up company in the Tucson area. It is the mission of GVRE to provide real estate services in the newly established Golden Valley Retirement Community, located to the Northwest of scenic Tucson, Arizona. GVRE is a full-service real estate, mortgage, and title company.

The company’s main clients will be retirement age couples looking for a community that can offer significant services for their age group and income levels. Since Mrs. Egan is within this demographic group and knows and understands this market’s needs, she believes that she can appeal to such clients far more than most other competitors.

Target Market

Market Size & Segments

GVRE will be concentrating on only one market segment. This will be the retirement market consisting of those individuals and couples seeking to retire to the Tucson area. As a retiree, herself, Mrs. Egan deals with the very issues that her clients do, thus providing insight and opportunities to better assist her clients.

The retirement industry has been steadily growing over the past twenty years. The percentage of the U.S. population over the age of 55 is at an all time high of 21% and is growing at an average rate of 3% each year. It is estimated by the U.S. Census Bureau that the retirement industry, that includes homes, medical facilities, specialty equipment, retirement entertainment services, etc., accounts for 4.8 billion dollars each year.

The retirement home industry consists of thousands of small housing communities. These communities range from those owned by major name-brand firms to tens of thousands of small, one-location firms.

GVRE believes that the greatest threat at the moment is in new entrants to the market who will want to capitalize on this high growth industry. The most likely entrants will be new, small real estate companies with fewer than ten employees. However, the one major advantage GVRE has is its exclusive rights to act as the agent for Golden Valley Retirement Community. However, due to the high number of competitors and the overall low profitability of each firm, competition is quite intense.

Our most serious competitors are Bowditch Realty and RE/MAX. These companies affect us most because of their higher capitalization or geographical proximity.

Market Segmentation

GVRE will be concentrating exclusively on the retirement market segment. This means the company will be focused on buying and selling real estate to those seeking to retire in the Tucson area. This market segment has special needs and is almost always looking to find homes in specially constructed communities that serve those special needs such as medical, dining, entertainment, shopping, and other such facilities. Being the dominant broker for the new Quadrant Homes retirement community of Golden Valley will allow GVRE to fulfill those needs.

The market analysis table and graph which follows shows the number of potential retirees that move into the Tucson area each year. We have also included a small number of other clients that may wish to use our services despite our strong market segment focus.

Competition

Current Alternatives

The retirement industry has been steadily growing over the past twenty years. The percentage of the U.S. population over the age of 55 is at an all time high of 21% and is growing at an average rate of 3% each year. In certain parts of the country like the American Southwest, which has a high concentration of retirement communities, the growth rate is about 8%. This percentage is also expected to grow as the first of the "baby boomer" generation begins to reach retirement age in the next decade. It is estimated by the U.S. Census Bureau that the retirement industry, which includes homes, medical facilities, specialty equipment, retirement entertainment services, etc., accounts for 4.8 billion dollars each year.

The retirement home industry consists of thousands of small housing communities. These communities range from those owned by major name-brand firms to tens of thousands of small, one-location firms.

GVRE believes that the greatest threat at the moment is in new entrants to the market who will want to capitalize on this high growth industry. The most likely entrants will be new, small real estate companies with fewer than ten employees. However, the one major advantage GVRE has is its exclusive rights to act as the agent for Golden Valley Retirement Community. However, due to the high number of competitors and the overall low profitability of each firm, competition is quite intense.

The power of potential clients is very great in this industry because most clients are very concentrated in our geographical area. Furthermore, clients tend to "shop around" for the best package of services and cost.

Competition and Buying Patterns

Competition
The real estate industry is highly fragmented, with a large number of potential rivals. Our most serious competitors are Bowditch Realty and RE/MAX. Bowditch is an established company that has been in operation for the past ten years, with a fine track record of quality service. It currently employees twelve agents and has long-term contracts with various home building companies. This company is slightly larger than GVRE in size and market capitalization.

RE/MAX is one of the largest and best known real estate firms in the country. It has hundreds of agents and very deep pockets that can be used to counter any sort of competitive move.

Buying patterns and needs
Clients usually deal with real estate companies based on their reputation of professionalism and quality of services rendered in the past. This reputation is difficult to obtain by new firms unless its personnel brings it with them from previous companies, such as ours. Price and scope are also important reasons for acceptance, especially if the company is small.

Our Advantages

GVRE offers comprehensive real estate, mortgage, and title services to our diverse clients. With Quadrant Homes, Inc. as our sponsor in the newly finished Golden Valley Retirement Community, we will have a premier position as the dominant seller of these new homes, condos, and retirement apartments. In addition, we will offer a full range of services to facilitate the purchasing and selling of real estate including the following:

  • Home search database.
  • Moving consulting, quotes, planning, etc.
  • Mortgage consulting and loan preapproval.
  • Community information.
  • Title transfer.
  • Obtaining a comparative market analysis for potential sellers.
  • Appraising.
  • Property preparation.

Keys to Success

Keys to Success

GVRE’s keys to long-term survivability and profitability are as follows:

  • Establish and maintain close contacts with residential real estate listing services, and all other service organizations that GVRE uses, such as Artco mortgage service company.
  • Keeping close contact with clients and establishing a well functioning long-term relationship with them to generate repeat business and obtain a top notch reputation.
  • Establish a comprehensive service experience for our clients that includes consultation, appraisal, sale preparation, community information, moving consultation, etc.
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