"We'll See About That"--Results of The Miami Herald's 2000 Business Plan
A number of you have asked to see what Wind & Rain actually submitted to The Miami Herald's Business Plan 2000 Contest, since our entry, which came in 5th out of 325 entries, was given just a one line summary by The Herald. After careful consideration of all the effort put into the Wind & Rain Business Plan, and after weighing our proprietary interest in it, I have decided to put the Overview--which is the brief summary of the full business plan that we submitted to the Contest--onto our website so that others can share the ideas contained therein. It just seems like the time to start rebuilding our inner cities is now, and there is plenty of room for all who are interested in helping. I'd love to hear any comments or email@example.com
Andy Parrish, President
This business plan is unusual in that it will ask you to consider political and social issues as well as economic ones. It will ask you to revisit the basics of Economics 101: risk and reward, supply and demand, and foundation building as the key to structure. It will ask you to put yourself in the shoes of Henry Ford, as he pondered the novel idea of transportation for Everyman; and fifty years later, of William J. Levitt, who created the concept of single family homeownership for that same Everyman. Fifty years later still, it will ask you to consider whether the principles that guided Ford and Levitt have been suspended, or merely forgotten, as applied to a huge segment of the American population: productive, "low end" wage earners striving to provide for their families through their own efforts. And over all, it will ask you to reconsider the building of personal human relationships as the fundamental basis of economic relations in a sustainable free market society.
The Company's objective is to create, direct and participate in the rapid real estate appreciation, both residential and commercial, that occurs when new homes for ownership are developed in selected urban infill communities which are stagnating due to social dysfunction and long-term government neglect.
A political shift is occurring nationwide. The recognition that subsidized rental projects have often contributed to the failure of lower income neighborhoods, together with a renewed focus on creating home ownership, has created a large new market of potential home buyers: working low-to-moderate income families.
New "Soft 2nd" Mortgage Programs offer compelling new opportunities for working renters to become home owners with fixed monthly payments that are close to their current rent. Miami's HOME (up to $35,000 at 1% to 3%, fixed, for 30 years), SHIP (up to $40,000 at 0%, with principal forgiven over 10 years), and the Miami-Dade Housing Finance Authority's "Deep Subsidy" (up to $145,000 at 4.43%) are examples of new civic thinking providing the necessary stimulus for financing development in lower income neighborhoods.
These innovative programs have provided the opportunity for the Company to expand upon its successful track record as the sole for-profit homebuilder in the historic Bahamian community of Florida's West Coconut Grove. Beginning in 1995, the Company has profitably developed and sold twelve new "spec" houses. These are the first to be built in this community in almost forty years. They have created both jobs and new home owners. A revitalizing West Grove has produced commercial as well as additional residential real estate opportunities for the Company.
What We Do
We create and direct "the rising tide that lifts all boats" in selected low income communities. The Company's primary business is the development and sale of new 3BR/2BA detached houses, on "scattered site" lots, for up to the current maximum allowed "SHIP" sales price of $119,439. We coordinate their purchase by first-time, low-to-moderate income home buyers by utilizing "soft 2nd" mortgage financing. The Company's secondary business is capitalizing on the rapid increase in value of the commercial real estate that directly results from the Company's leveraged infusion of new capital--and much higher "comparables"--into the residential market. The Company is not aware of any other "for-profit" company in Miami-Dade County that is pursuing this market at this time. The Company's only "competitors" are the various Community Development Corporations ("CDC's") and Habitat for Humanity.
The Company's experience has led to a strategy for profitability having a parallel focus: (i) tight control of every component of the renter-to-homeowner process on the residential side; and (ii) selective purchasing of undervalued properties on the commercial side.
Key Strategic Components
1. The selected target community must be "on the edge" of the depressed area with some of its social fabric--schools, churches, etc.--still intact.
2. The prospective purchasers who are allowed to participate are carefully pre-screened and evaluated by the Company as viable candidates for home ownership.
3. Residential lots purchased for development must ALL meet the Company's pricing criteria: Each house is its own profit center. Since the Company will be the sole buyer of commercial properties, they will be in key locations and will be negotiated at highly advantageous prices or they will be passed over.
4. Development costs will be strictly controlled through replication of Company proprietary "model" designs.
5. The Company will build into all sales contracts mechanisms it has developed and tested to protect the Company's profit margin on each house.
6. The creation of a Company directed "mutual association and fund" will give the Company the ability to control the prospective purchaser's finances--including expedited "credit repair," often at a discount--during the critical months leading to closing.
The Company is a licensed Florida Real Estate Broker and will "cooperate" with other residential brokers both in the buying of lots for development and in the selling of Company houses. However, the Company's experience is that "word of mouth" and signs on lots that ask "Why Rent When You Can Own?" are the most effective forms of marketing, along with close cooperation with local not-for-profit agencies and civic groups. They can be informed of housing prices, floor plans, etc., via the Web and the Company's existing website at "http://www.windandrain.com".
Anthony R. Parrish, Jr., Founder, President and CEO, was a tax lawyer before becoming in 1984 a founding partner of a commercial real estate brokerage company and later of his own real estate consulting practice. In 1995, he started Wind & Rain, Inc. in order to initiate the revitalization of the historic Bahamian community of West Coconut Grove.
David J. Alexander, VP and C00, with a degree in marketing and business administration, was the Executive Director and CEO of the Coconut Grove Local Development Corporation from 1983 to 1998 where he directed the development of over 40 new houses, and the rehab of 76 others. In 1999, he joined Wind & Rain, Inc.
Ysmael M. Benitez, VP for Construction and Development, is a Florida licensed general contractor who has built all of Wind & Rain's houses as well as its office headquarters. He has performed as general contractor or subcontractor on contracts in excess of $25 Million for all types of residential, industrial and commercial construction.
Dr. Richard Shepard, VP for Design, is currently the Director of the Center for Urban & Community Design at the University of Miami School of Architecture. A practicing architect since 1982, he is also a principal of Shepard Quareshi Associates, a multi-disciplinary consulting firm dedicated to improving the way people live through design.
Capital Requirements Wind & Rain has been capitalized to date by a $750,000 investment from its Founder. (Pro forma financial data has been purposely omitted here).
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