Executive Summary

Breckenridge, Colorado provides a high demand for rental properties, specifically for our target markets (high income middle aged and young professionals). This area provides an escape from stressful work environments by offering leisurely activities including biking, golf, skiing, shopping, dining, museum tours and a plethora of other activities. Our rental property offers comparable prices to the competition while providing upscale amenities and the exclusivity of the Stonehaven Community. The Stonehaven area offers future opportunities with development along Highway 9. This area also has projected home value increases of 2% per year, which allows us to command a higher rental rate if we see fit.

The property at 28 The North Road, Breckenridge, CO 80424 offers 4 bedrooms, 2 full and 2 half bathrooms and sits on over 3,400 square feet. The home itself is approximately 2,385 square feet and offers scenic views of the Breck Golf Course and the accompanying mountainous region. 

Our research found that this project will be profitable whether it is financed or not. The unleveraged NPV of the project is $292,606 with an Internal Rate of Return of 15.17%. The leveraged NPV of the project $553,534 and the Internal Rate of Return is 49%. Our finance team recommends that we procure the property through debt financing, because it bolsters the most robust returns.

Company Profile

BTC Investments, LLC

BTC Investments was started in 2010 by three Texas A&M students who met in the school's Freshman Business Initiative (FBI) class where they came up with a strategy to buy and manage real estate properties. The company has invested in multiple real estate properties in several locations in the South and are currently planning to expand their operations to the Midwest Region. BTC Investments, hereafter known as "The Company," specializes in residential properties and most of the company's revenue is derived from rental income.


Briana Joiner
Briana is a Senior Finance Major in the Mays School of Business at Texas A&M. Ms. Joiner was born in Houston, TX and has a background that includes previous employment at a title company and a housing development company. She plans on using her degree and job experience as an accounts payable manager to help increase earnings for the company.






Chris Mullins
Chris Mullins is a Senior Finance Major in the Commercial Banking Program at Texas A&M's Mays Business School. He is a native of Dallas, TX and has a background in commercial banking and consulting from his previous employment at Bank of America, N.A. Mr. Mullins plans to use his knowledge of consulting and streamlining processes for companies to increase operations and functionality for BTC's investments.





Trevor Beam
Trevor Beam is a Senior Finance Major also in the Commercial Banking Program in Mays School of Business at Texas A&M. He was born and raised in Montgomery, TX and has a background in commercial banking, real estate, and law from his previous employment at American National Bank and Depew Law Firm. Mr. Beam plans to contribute to the company's understanding of vital laws and regulations surrounding the procurement and leasing of the company's holdings.

Market Analysis

Demographics

Primary Market: Middle aged, high income earning families

• High discretionary income
• These families like to travel often, but do not want to own/invest in a property at this time
• Great for highly active families because of skiing, golfing, hunting, hiking, horseback riding, mountain biking, etc.
• Good for families looking for relaxation because of proximity to shopping, spas, dining, scenic views, etc. 

Secondary Market: Young, high income earning professionals

• High discretionary income
• These individuals like to travel with groups of friends, and want to have financial flexibility to travel
• Great for groups of young couples looking for a week's escape

According to the graph below, our primary and secondary markets match the demographics of the area. This will allow our renters to become more easily acclimated to the area, increasing the marketability of the property to our target markets, therefore bolstering our earnings potential.

Population

Age

Total: 9,706               Households: 4,085               Median Age: 32.4

Economics
Based off of historical and current business trends, common industries represented in the area include:

• Tourism
• Dining
• Healthcare
• Shopping
• Hotels/Lodging
• Museums/Art
• Ski Resorts

Workforce

White Collar

Blue Collar

Number of Workers

The workforce in this area consists predominately of white collar professionals, who account for 76% of the population. These white collar professionals account for most of the area's revenue. Approximately half of the population is over 25 and hold a bachelor's or graduate degree, and more than three in four have attended college. This segment of the population are employed in various jobs, including management, finance, computer, sales, and office/administrative support. The Labor Force participation rate is above 73%.

 Income by dollar range (Median Income: $69,779)

 In Thousand of Dollars

 Households

Psychographics

They are young and mobile with growing consumer clout. Those who rent hold renter’s insurance policies. They rely on cell phones and e-mail to stay in touch. They go online
to download videos and music, track their investments, and shop for items, including personal computers and software. They own laptops, video game systems, and digital camcorders.

They love to travel abroad and in the United States often. They play video games, visit theme parks, jog, and swim. They read computer, science, and technology magazines and
listen to alternative, public-all-talk, and sports radio. They eat out at Cheesecake Factory and Chili’s Grill and Bar. They shop for groceries at stores such as Publix and Albertson’s.

Property Analysis

Comparable Property



This is our comparable property and it is within 2 miles of our rental property.  They both have the same amount of bedrooms, but ours has an additional half bath.  Our rental property was built 5 years after this comparable; with this and the additional half bath, we concluded that a rent price increase would be acceptable. We have laid out the comparable seasonal prices in the table below.

Vacancy Rate
BTC Investments, LLC. has calculated a 17.5% vacancy rate for this property type. Most of this vacancy will be during the off season, which is categorized as the summertime. Our team's research concluded that 64 days out of the year (365) is the average vacancy.  

VCL Rate = 64/365 ≈ .175 or 17.5%

SWOT Analysis

Below is the Strengths, Weaknesses, Opportunities and Threat (SWOT) Analysis that our research team conducted based on the area's statistics, local amenities and recent market analysis of rental properties in the area. 

Property Description

The map below shows the general area within a one mile radius from the rental property. 

This map shows part of the neighborhood of Stonehaven, the community in which the rental property is located.

Street Address: 28 The North Road, Breckenridge, CO 80424
Legal Description: LOT 9 STONEHAVEN AT BRECK GOLF
Bedrooms: 4
Bathrooms: 2 full, 2 half
Square Footage: 2,385
Year Built: 2007
Lot Size: 3,485 square feet (.08 Acres)
Zoning: Single Family
View from Home: Mountains, Golf Course


Below are several interior/exterior pictures of the rental property.

Financial Analysis

 This table shows the property's ten year Discounted Cash Flow.

This table shows the Unleveraged and Leveraged Cash Flows, along with IRR and NPV for each, and the Sales Price, Balloon Payment, and Before Tax Sales Revenue.

This table shows the different assumptions we used for our above calculations.