Business Property Location Description
The rental property business called “CitiVila” is located in a multifamily house situated in prime location of Katowice, Poland. Katowice is the largest city and the administrative center for metropolitan area with population of over 5 million. The city of about 400,000 is surrounded by 14 adjacent cities operating under one municipal administrative body called “Upper Silesia Metropolis”. The loan granted for remodeling and upgrading the building and the individual rental units is a very safe investment. With apartment rent prices ranging from $300 to $1000 per month, the subject property can easily generate a net monthly net profit sufficient to repay the construction loan.
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City of Katowice Market Square |
Business Property Services Provided
The rental property will provide three types of rental units and it will satisfy rental needs for variety of target groups. There total living area is about 3,200 square feet. There are 5 apartments that varied in size and located on 3 levels. There are two one-bedroom garden apartments (500 sq feet each), two two-bedroom apartments (800 sq feet each) and one three-bedroom apartment (1,100 sq feet). The real estate property has three detached car garages with water and electricity access that are available for the additional rental fee.
Business Property Target Market
The target market consists of four distinct customer segments. The largest segment is area students. There are 20 four-year colleges and universities in Katowice and additional 7 colleges within 50 miles from Katowice. The second segment consists of various income level short-term and long-term temporary employees that are often transferred to Upper Silesia Metropolis by different Polish and European companies which pursued EU long term and short term projects that require additional specialized labor. The third segment consists of newly developed Polish middle class that is looking for comfortable living arrangements before moving on to privately owned houses or condominiums. The fourth segment is senior citizens who receive reasonable high monthly pension and who are looking for partially furnished apartment unit located in safe neighborhood with easy access to public transportation, shopping and medical care facilities.
Business Property Management
The property management will be provided by the property owners with seasonal hired help. The property owners will always take care of the rental business accounting issues, administrative issues, marketing and advertising. There is also possibility for live-in on-site manager who will occupy one of the building units and overlook the property operational needs, managerial needs, maintenance and overall up-keeping.
The Financial Request
The property is paid in full and it is in fairly operational state. There are no debts against the property. I am requesting a loan for the term of 10 years. The loan funds will be used mostly for renovation and for improvement of all seven units that will be rented out after constructions are complete. The initial time estimate for the constructions is 6 months. There are also home inspection fees, licensing fees, real estate agent fees and legal fees.
The Repayment Proposal
The business owners are asking for the loan repayment extension until the unit remodeling is completed and they are willing to start repaying the loan by making equal monthly payments over the term of the loan or to make other repayment arrangements more suitable to the bank.
Why our business will succeed?
The large profit margin ensures the business great financial opportunity to expend and to succeed. The annual income was calculated based on the current rental fees charged for comparable units within the radius of 0-3 miles to the subject property. The rental income is estimated as follow:
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