How to Write a Business Plan

252 | HOW TO WRITE A BUSINESS PLAN

•    Costs of the new loan of $30,000 secured by a second mortgage are assumed to

be two points, which amounts to a $600 loan origination fee.

•    Interest is assumed to be at a 12% annual rate, for a six-month total interest cost

of $1,800 for that loan.

•    Finally, I assume that I shall pay myself a salary of $1, 500   per month during the

time I actually work on the house.

Profit and Loss Forecast

for the Remodeling and Resale of Single-Family

Residential House at 2246½ Hamilton St., Chicago

item Amount

Sales Price $ 120,000

Less: 6% Commission 7,200

net proceeds 112,800

Less: Cost to Acquire House 60,000

Plumbing 12,998

Electrical 4,006

Roof 800

Flooring and Carpeting 4,958

Kitchen Cabinets 1,995

Range and Refrigerator 1,398

Miscellaneous Supplies 500

Building Permit, City Fees 500

Subtotal Costs 78,155

Carrying Costs 6 months—Interest on mortgage 3,300

Interest and loan fees on new loan, 6 months 2,400

Developer Overhead (3 months living expense at $1,500) 4,500

total project cost 88,355

project profit $ 24,445

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