We have a solid venture we are investing in by becoming local distributors for an award winning company specializing in green energy efficiency. We would prefer not to pull personal funds from business savings or retirement accounts. We have two separate business owners involved in this new business. D'Ette and I have been in the real estate business for the better part of 20 years as realtors. My wife, D'Ette, has been in it for 20 years and I for 12 years. My wife is the chief operating partner in the Huntley Owen Team here in Alaska. She and the team produce between 400 to 430 transactions a year with around 14 agents. With over $100 million typically in sales. I am one of those agents on the team and average between 28-36 transactions a year. Our partner in this new venture, Aaron, is a general contractor of about 4 years now with a solid business that has allowed his company to grow as well. Obviously, our current businesses make this venture a perfect fit as we will be dealing with builders (of which our real estate team represents 5) as well as flippers (which Aaron works with as well as us) and resale home owners.
We are figuring on a low first year of about 35 applications (of the product) in 2021. We already have interest in approximately 20 already. We have to wait until we secure the equipment (which is what the $100,000 would cover) to sign the contracts with those builders. Each application will bill out at approximately $2600 for the average 2000 sf home. The additional overhead costs are minimal which will allow for about a 50% return on investment per each home which would be applied to the monthly note. Our goal is to minimize the amount of time to pay back this initial loan so that we can expand to new areas and repeat the process. We are already in conversations for two other states that will actually produce at a much higher rate.
Currently, we have invested about $13,000 in research, shop acquisition, attorney fees, etc. We are able to set up the reserves for the first 4 months as well. We just need the loan to cover the equipment purchase. Fred and D'Ette's income annually is around $250k and Aaron's is $212k for this last year.
To date, we have always paid cash for our ventures so I want to be sure we are approaching this loan process correctly. Thank you so much for your assistance.
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