Large Real Estate Franchise. 50% Equity Partner Sought. Most Affluent and Largest Area in Gauteng sold

Asking Price

R2,200,000

for 50% of business

Monthly Profit

R78,186

being 50% of R 156,371

Asset Value

R 250,000

Stock Value

R 0

Yearly Net Profit

R 938,225

being 50% of R 1,876,450

Summary

This Real Estate Franchise is part of a very large group operating in the most affluent area in Gauteng. It also has a very large area in which it operates covering a multitude of dwellings from mansions to lock-up-and-go properties. a 50% partner is being sought by the current owner. Payback period is short!

Give me more information

Fully describe the business's activities?

Full Service Estate Agency - part of a very large real estate franchise group operating from lovely offices and covering the best and also the most affluent areas in Johannesburg. The owner is looking for a 50% equity partnership for R2.2 million. There is a possibility that not all of the money needs to be paid in one tranche and tranche amounts will be dependent on cash flow and business growth. This can be discussed in detail with the owner by qualified interested parties.

How long has the business been established?

This business has been set up to service the best area in Johannesburg. The owner is looking for a 50% equity partner to help the business flourish and grow quickly. All PPRA statutory paperwork is in place as well as a franchise agreement with a very large Real Estate Group.

How does the business operate on a daily basis?

The owner is involved in day-to-day operations and is currently employing new agents to ensure that the business grows quickly. The area is ripe for farming of leads.

How are the clients attracted to the business?

Besides the substantial marketing of the Group Franchisor and its website, the business also advertises on Property 24 and Private Property.

What competition exists?

Normal competition exists but the beauty of this business is that it covers a substantial area, probably larger than any of the opposition companies and within this very large area it has a nice mix of residential suburbs - From Ultra-High Net Worth, to Middle Class and from mansions to lock-up-and-go.

Are there up-to-date Management Accounts available?

The financial information provided is for the 2nd year of operations. The current owner is looking for a 50% equity share with another party at R2.2 million. All information is available to interested parties who qualify.

Do any receive special perks or incentives?

The agents will all be commission-based regarding earnings.

Are they on contract?

Yes, they have contracts. The Agents are appointed via an agreement and vetting and interview process.

Do any have management potential?

Yes, one of the six current agents has already shown ability for management.

How involved is the Owner in running the business?

The owner is 100% involved in the business and will remain so once an equity share has been sold.

When does the current lease end?

The current lease ends in May 2025 but is renewable.

Is there an option of renewal & what period?

The option for renewal is for two to three years.

What is the annual escalation %?

The current escalation is 6% per annum.

What are the trading hours?

Monday to Friday: 8.00 am to 5.00 pm.

What is the square meters of the business?

200 square meters plus use of the boardroom.

Is a copy of the lease available?

Yes, a copy of the lease is available.

Do you require a licence?

Yes, the industry is regulated but all PPRA required registrations and documents are in place including a Fidelity Fund Certificate.

What lease deposit and/or other surety is required?

Currently this consists of a personal surety in place of R85 000.

What are the main assets of the business?

Furniture and Fittings including work stations for agents.

Strengths?

One of the largest Real Estate companies in the country, operating in the largest and most potentially lucrative area in the whole of Gauteng if not South Africa as a whole. Perfect opportunity to get in at the ground level.

Weaknesses?

None really as the business is on a growth trajectory with everything in place to run a business such as this.

Opportunities?

HUGE, very quick growth. Payback period is very short.

Threats?

Normal economic conditions but the South African housing market tends to. be very resilient.

What is the reason for the sale?

This sale is for an investment of R2.2 million for a 50% equity stake to take it to being one of the largest franchises in the group over the next 18 to 24 months.