Principle

Raymond Minardi

My first business was “Life Call”, you may know it by help I’ve fallen and can’t get up.  I created this product after my dad passed away at a Karate Dojo and help did not get to him fast enough.  At the time you had to dial zero to connect to an operator then they would connect you to the services needed.  My technology was a speed dialer direct to the services needed with a wireless button and a speaker phone.  This technology is common now but in 1987 this was high tech.   Cored phones and rotary dialing a phone number was the norm; my technology made the process of getting help much faster and has saved many lives. 

I was young and my only purpose was to get help to people faster.  I did not patent the product and sold the business.  You can view my first commercial that was used over five years prior to the product being patented.  Here is the link to the original video Raymond Minardi, Health Care Response Systems – YouTube  In the still shot below I’m the one in the upper right, in the chair is my grandmother, sitting on the floor is my brother the rest were friends and neighbors' kids.

 

My second business was Fetch, Fetch delivered food and groceries, about 25 years before grub hub, Instacart and many other common delivery services.  The cool thing about Fetch was we would deliver food from restaurants like Italian, Chinese or steaks just about whatever the customer wanted.  The driver would go from the restaurant to the delivery without ever coming back to the office.  The customer would call us, we would take the order on a computer with customized software written by me then we would fax the order to the restaurant and page the driver.  We serviced several areas in southern NH, including Manchester, Nashua Derry, and Londonderry.  I sold several franchises and sold the business.

 

"Prospect Creator," was an automated lead generation system. We marketed it across the country and quickly became the leader in the industry with over 80% market penetration.  We were calling everyone in America at least once a week.  The do not call list is greatly due to the success of my software. After extensive sales I retired and had money in the stock market prior to 9/11.

As with everyone I lost money due to 9/11.

 

I said there must be a better way, so I created an automated trading software that traded the forex markets. This was years prior to the massive use of automated trading software used by most major firms and individuals now.  My software would generate returns of between 180% to 360% a year.  Returns below were audited by 4 different major accounting firms, 2006 annual return of 360.88%,

2007 annual return of 188.97% and 2008 return of 227.13%.    

 

 

 

 

K and M Home Solutions rehab complete houses and flipped houses and built complete houses from the ground up.  Here is a list of properties I have worked on in the last few years.

3928 Lost Creek Dr, Plano TX

1011 E 15^th St Plano, TX

2400 Kelsey Dr, Plano TX

2900 Cascade Dr, Plano, TX

3013 Prinston Dr Plano TX

3208 Grantham Dr, Richardson TX

8401 Orchard Hill Dr, Plano TX

 

 

The Idea

Build prefabricated homes imported from China on affordable lots, in landlord friendly states, in counties that have long Section 8 waitlists, affordable taxes and insurance.   Which are mostly midwestern and southern states. 

 

Financial Pro-Forma 1 house 2 doors

Example Address 6435 E 16th St Kanas City MO 64126 as of 2/4/24.

Lot	$9,000
House	$35,000
Build House	$12,250
Engineering Fees	$5,000
Permits	$5,000
Running Utilities	$5,000
Misc	$5,000
Total Build cost	$76,250
Appraised value	$150,000
Long term loan (LTV)	75.00%
Cash Out	$112,500
Net cash out	$36,250
Monthly Cash Flow
Monthly Payment	$617.52
Insurance	$40.00
Taxes	$40.00
Management Fees	$300.00
Total Monthly Cost	$997.52
Section 8 Payment
4- bedroom House	$1,955.00
1 bedroom	$1,102.00
Gross Monthly Income	$3,057.00
Net Monthly Income	$2,059.48

 

 

Detailed description

Lot – Lot prices will range from $5,000 to $20,000.  Picking a lot to build in where the houses next door is appraised above $140,000.  Like the one at 6435 E 16^th St Kanas City, MO 64126.

 

House – Importing a prefabricated house from China that is built to USA building standards, built using innovative materials, and customizable.    The plan is to build a 4-bedroom house with a 1-bedroom apartment (converting the garage to a 1-bedroom apartment) to get section rents from both rental units using the same lot.  There are several supplies to get a house that will work best for different lots.  Here are some pictures of a completed house.

 

 

House Build – This house takes on average 5 workers 7 days working 10 hours a day, paying them $30 hour and reliable excellent general contractor assembly is simply skilled labor costs a total of $12,250.

Engineering fees – The costs to build the house on the lots, which includes where the utilities are to go and where to place the house on the lot.  This number is very high considering the house is fully engineered to USA standards already.

Permits – City permits to build houses.

Running Utilities – The cost to run, electrical sewer and water to house.

Appraised value – Is a highly educated assumption based on the surrounding houses, as explained above.

 

 

 

Long Term Loan – A conventual 30-year loan at current rates, we will either use a DSCR loan, which requires a credit score above 600, max loan to value of 80% and an income to loan rate of 1.25, our income to loan rate is $3057.00 / $617.52 = 4.95.

Cash out – The $112,500 will be used to pay the short-term loans of $71,000 and to build additional rental houses.  75% LTV is low, this amount could be upwards of 85% or $127,500 from many lenders.

Monthly Payment – 30-year conventional loan or a commercial loan, the rates will change and maybe higher but there is plenty of cash flow to cover the possible higher interest rates.  The 5.2% interest rate is as of 1/27/24.

Insurance – $40 a month or $480 a year is higher than the current costs. The building area of southern states insurance costs are low.

Taxes – $40 a month or $480 a year are higher than the current costs. The building area of southern states taxes costs are low.

Management Fee – A management company that takes care of everything 10% of rents $3,057 = $300.  For the first several months if not years I will manage the units myself.

Total Monthly Costs – Under $1,000 or around that number would be ideal.

Section 8 payments – These are the rates that Section 8 pays monthly here is the web site based on the proposed address: (hakc.org). 

The housing choice voucher program, also known as Section 8, is the federal government’s program for assisting low-income families, the disabled, and the elderly to afford housing. Participants can choose housing that meets the requirements of the program and receive housing vouchers to help with their rental costs. 

Section 8 housing assistance makes monthly payments, even though covid and government shutdowns, with payments sent directly to the rental house owner’s account.

The waiting list is long and qualifying difficulty.  With proper screening you can choose a quality long-term tenant and if the recipient violates the lease agreement or is not taking care of the property, they can have their housing voucher taken away from them and being evicted.  Motivating the tenant to abide by the rules and take care of the rental house.

 

 

The housing choice voucher program pays higher than the market rates and includes annual increases.  The property must meet several standards that any good landlord would require. 

There are different benefit levels of the Section 8 housing program, my plan is accepting tenants that qualify for 100% of monthly rental payments.

Action Plan

Step 1 – The fifty thousand dollars ($50,000) raised will be used to buy a shelf corporation with unsecured credit lines of five hundred thousand dollars ($500,000).  A shelf corporation is an aged business with at least 3 years of time in business and established credit lines. When you purchase a shelf corporation, you are added as a member of the LLC while also being added as an authorized user on the credit lines.  Making funding fast and easy.  Major companies have been using this method to grow their business for years and I’ve used this type of funding and this company for successfully funding in the past.

Step 2 - Purchase 1 lot, time frame 30 days.

Step 3 – Fly to China to design and preassemble house, time frame 30 days.

Step 4 – Import house, time frame 30 days.

Step 5 – Prepare lot for build, grading, run electrical, sewer and water, time frame 14 days.

Step 6 – Build house, time frame 14 days.

Step 7 – Rent house to section 8 tenant screened and ready to go prior to house completion.

Total time for completion 120 days or 4 months for first property after the first property the lots will be already purchased, no need to travel to China again all houses can be import at once while running utilities.  Completion of 10 houses will take less than 9 months.

 

 

 

Financial Pro-Forma 1 house 2 doors to 200 houses 400 doors

Example Address 6435 E 16th St Kanas City MO 64126 as of 2/4/24.

		10	40	100	200
Lot	$9,000	$90,000	$360,000	$900,000	$1,800,000
House	$35,000	$350,000	$1,400,000	$3,500,000	$7,000,000
Build House	$12,250	$122,500	$490,000	$1,225,000	$2,450,000
Engineering Fees	$5,000	$50,000	$200,000	$500,000	$1,000,000
Permits	$5,000	$50,000	$200,000	$500,000	$1,000,000
Running Utilities	$5,000	$50,000	$200,000	$500,000	$1,000,000
Misc	$5,000	$50,000	$200,000	$500,000	$1,000,000
Total Build cost	$76,250	$762,500	$3,050,000	$7,625,000	$15,250,000
Appraised value	$150,000	$1,500,000	$6,000,000	$15,000,000	$30,000,000
Long term loan (LTV)	75.00%	75.00%	75.00%	75.00%	75.00%
Cash Out	$112,500	$1,125,000	$4,500,000	$11,250,000	$22,500,000
Net cash out	$36,250	$362,500	$1,450,000	$3,625,000	$7,250,000
Monthly Cash Flow
Monthly Payment	$617.52	$6,175.20	$24,700.80	$61,752.00	$123,504.00
Insurance	$40.00	$400.00	$1,600.00	$4,000.00	$8,000.00
Taxes	$40.00	$400.00	$1,600.00	$4,000.00	$8,000.00
Management Fees	$300.00	$3,000.00	$12,000.00	$30,000.00	$60,000.00
Total Monthly Cost	$997.52	$9,975.20	$39,900.80	$99,752.00	$199,504.00
Section 8 Payment
4- bedroom House	$1,955.00	$19,550.00	$78,200.00	$195,500.00	$391,000.00
1 bedroom	$1,102.00	$11,020.00	$44,080.00	$110,200.00	$220,400.00
Gross Monthly Income	$3,057.00	$30,570.00	$122,280.00	$305,700.00	$611,400.00
Net Monthly Income	$2,059.48	$20,594.80	$82,379.20	$205,948.00	$411,896.00

 

 

Prefabricated House                                                                                                                  

China is the world’s largest importer of goods hold significant influence over the U.S. economy and lives of everyday Americans. In 2022, the total value of international U.S. imports of goods and services amounted to 3.96 trillion U.S. dollars making the highest figure observed since the turn of the millennium. While this substantial number of imports helps to keep consumer costs low, there is a long-standing debate in the U.S. around free trade. 

China businesses and people do not represent and agree with the government and the government discissions much like as in the USA.  I know most of the time I don’t agree with the stupid things our government does. Data published by Statista Research Department, Dec 19, 2023.

There will be a learning curve into the fee’s the process etc., I have an expert in the field that will help me to make this process as smooth and cost effective as possible.

Buy and remodel.

There are four major reasons why building is a better option.  In most of these areas you can buy a 4 bedroom for $10,000 and spend $50,000 or more to remodel or purchase a better-quality house for $60,000 - $80,000.

1. The problem is that the remodeled house will not appraise for above $60,000 plus or minus because of surrounding houses are valued at the $60,000 plus or minus.
2. Remodeling will take as long if not longer than building a prefabricated house. 
3. Maintenance while remodeling will take care of a lot of the ongoing maintenance issues there will still be a lot more maintenance issues with a remodel house versus a new house.
4. Adding the second unit will be much more expensive and sometime not possible with the property.

Holding Cost

Buying a shelf corporation will provide zero interest loans for twelve to eighteen months of zero interest loans, then after refinancing the interest expense will be very low because we are reinvesting our cash out capital. 

Unexpected expenses

With any projected there will always be unexpected expensed but having access to credit lines of five hundred thousand and building one at a time or just a few at a time and attaining permanent financing will provide new cash to continue to grow and cover on going expenses.

Real Estate Market

Some experts predict a real estate market crash, and some do not predict a real estate market crash. There are several factors in predicting the real estate market’s future, only the future will be the real market predictor.  Building affordable housing with payments guaranteed from the government makes what’s happens in real estate market prices almost nonconsequential.  Appraised values for commercial/income producing real estate are mainly based on the income received not just what the neighboring houses are worth.  In the long term real estate has been an extremely good long-term investment. 

Politics

Predicting or talking about the ongoing USA political situation is difficult to predict and no matter what happens real estate has been a good long-term investment for hundreds of years.  The short-term political implementation is non-consequential in the grand scheme of things. 

House vs apartment building

It is not in anyone’s best interest to build a housing project.  A housing project does not benefit the community or the neighborhood.  In addition, selling an apartment building is a much harder and longer process than selling an individual house.

Limited offering

This is a limited time offer and the first acceptable fifty thousand is received this investment is closed there will no other rounds of funding. This investment is for one or maybe two investors maximize for a total of fifty thousand dollars ($50,000).