Strategic Relocation and Financial Planning for Infinity Real Estate Case Study

Strategic Relocation and Financial Planning for Infinity Real Estate

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Overview of the business

Infinity Real Estate is a real estate firm led by two senior executives and staffed by two individuals with 45 years of expertise in the field of property investment. The firm was founded to capitalize on the low quality and dissatisfaction of customers in property investment. Marketing efforts for Infinity Real Estate have been substantial so far in the industry. The company's founders have put a lot of their own money into it, and they're also planning to get a loan to help pay for relocations, operations, and expansion. Relocating to Central London will require changes in operational process and infrastructure which is a vital reason for applying of a loan. The business loan will be returned in installments to the bank. The organization will repay a part of their sales and revenue to the bank which is one of the process of returning the loan. There are offices for the owners, a warehouse for equipment and promotional materials, and a break room for the workers. The firm hopes to get short-term housing contracts by reaching out to the people it already knows from its previous Internet, direct mail, physical contact, and print advertising campaigns. Current commercial agreements with national estate services firms, as well as prospective commercial contracts established via smart partnerships and a thorough marketing effort, will ensure the company's long-term prosperity.

Services and products

The company provides assistance to clients and customers throughout the real estate transaction. Advertising properties of external clients and customers are one of the services that are offered by Infinity Real Estate. Providing permanent and temporary residences for individuals and families are other services that are provided by the firm. Maintenance and repairs are other services provided by the real estate firm (Burkeev et al., 2020). They will provide regular cleaning, security, and improvement services, including painting and remodeling. The firm also provides the most advanced infrastructure for building homes of the highest quality. Choosing the most affordable builders and contractors on the client's behalf, and then overseeing the project personally until the settlement is another service that is offered by Infinity Real Estate (Gibilaro and Mattarocci, 2021). Furthermore, the real estate firms provide their customers with access to mortgage financing options.

The management team for the business

Figure 1: Management structure of the company

The management team of the organization consists of the individual who is the primary owner of the business. Two senior executives are included under the primary owner of the business. Under each senior executive, the staff is allocated who will be responsible for the supervision and monitoring of the further operational process of the business (Aalbers, 2019). Staff A has been allocated with the responsibility of managing and monitoring warehouse staff and operations. The warehouse operation will include incoming and outgoing delivery of the products. On the other hand, Staff B has been given the responsibility of handling promotional units of the company which is responsible for promoting the products and services of the organization along with clients' information (Murfin and Spiegel, 2020). Senior executive A has been given the responsibility to handle the finance department which is responsible for preparing the balance sheets and cash flow statements of the organization.

The identified legal structure of the business

The legal structure of the business is developed as a real estate limited partnership that comprises multiple owners and investors. Partners' participation in the day-to-day operations of the firm is discretionary and subject to the LP's organizational framework. Partnership agreements spell out every facet of the company relationship, from initial capital requirements and ongoing expenses to management responsibilities and decision-making authority (Ratcliffe et al., 2021). Some partnerships use a forum structure for making investment choices, while others delegate most of the management to a small group of managers. Management often finds and evaluates potential investments itself. Investors in real estate limited partnership of the business are wise to operate thorough research because of the potential for both significant rewards and hazards. The limited partner's obligation to make contributions may be stated in terms of a flat payment, a contribution plan over time, or on an as-needed basis (AA Zaid et al., 2020).

One major benefit of a limited partnership is that limited partners' individual financial exposure is reduced. In the present scenario, Infinity Real Estate is focusing on relocating its location to Central London. In the initial stages, the organization may face challenges in gathering profitability and may face financial loss in the primary stage of the business. The financial loss can be overcome by partnering with other companies. Thus it can be assumed that a limited partnership is an appropriate legal structure for the business.

Sole traders have been excluded as the organization has multiple partners and investors. Trust have no legal identity and are incorporated due to which these legal structures has been excluded in the present scenario. Private limited company consists of complicated accounts which are one of the reasons for not considering the legal structure. Furthermore, the company and its partners are not in favor of following strict rules and administration while operating in the present sector. This is one of the reasons private limited company has not been accepted by the organization.

Reasons and choice for relocation

Infinity Real Estate has focused on relocating its office and operation to Central London. One of the reasons for relocating the business is to lower the operating cost of transportation and logistics and connect to a diverse client segment which is not possible while operating in the present location (Balbontin and Hensher, 2019). On the other hand, the firm is also focused on applying for a business loan to expand its business. However, in applying for a business loan the organization needs to present a well-structured and strong presentation of its company's operations and management to gather a loan.

Relocating to a big financial center such as Central London will allow the firm to enhance its influence among the clients and other firms located in the specific area (Rupasingha and Marré, 2020). Businesses could be prompted to do so by the availability of more lucrative avenues for raising finance and attracting top-tier specialists. Companies in developing economies tend to choose this kind of action since it demonstrates a dedication to rigorous legal standards and business procedures. Furthermore, the organza has a warehouse and promotional team located nearby Central London. This will allow the business to communicate and interact with the team and units with ease (Cremen et al., 2020).

Process of managing the organization

There are numerous processes that are involved while managing a real estate business. The real estate holdings plan for the organization should be thought out in advance of any property purchases or leases. To take this into account is to depict the real estate strategy that comes before the administration of the real estate contract.

Figure 2: Phases in managing the retail business

Planning the strategy and objectives of the real estate portfolio is the first step in real estate management. The second step is to analyze the portfolio for potential transaction scenarios, then to use those scenarios to guide the real estate transaction planning process, and finally to acquire or dispose of the properties (Battisti et al., 2020). The third step, after preparation, is entering into the application the details of the lease or purchase, including any choices or stipulations that may apply. At the last stage, updates are made to each contract via suggested adjustments and amendments, and reminders of forthcoming dates are sent out and received. At the last stage, the organization will handle things like accounts payable and receivable, as well as any ad hoc or recurring payments, changes to payments, or pass-through payments. The first two stages are dedicated to real estate deals and project schedules, while the latter three are dedicated to real estate construction contracts and lease bookkeeping.

The company may use the terms and conditions of a property to help the company decide whether to buy or rent it. Then, they might evaluate the stipulations in light of the real estate portfolio's overarching objectives and strategy. Infinity Real Estate may make a set of specific action plans to carry out each portfolio strategy (Ullah and Al-Turjman, 2021). Depending on the specifics of the strategy being implemented, a number of distinct transaction plans may be established. The enterprise may create a collection of potential outcomes, or scenarios, for each transaction plan. To depict a real estate solution for each case, they may piece together one or more project transactions. Specifically, the nature of each property's transaction is what drives these exchanges. The organization is free to choose the form of the transaction that best suits its needs, both monetarily and otherwise. Acquisition, sale, expiry, cancellation, lease, and sublease are all examples of possible transactions.

In handling the phases and operation of the business the organization needs to gather a workforce. In gathering the workforce it is essential for the firm to focus on developing and implementing structured human resource management. In implementing an effective human resource management the firm needs to hire a human resource manager and staff who will be responsible for handling the policies and procedures along with corporate governance in the firm (Munawar et al., 2020). The business can gather skilled and experienced workers in Central London with the assistance of human resource management.

An external audit team needs to be incorporated to monitor the process and activities of the human resource team. On the other hand, the administration is one of the units that need to be implemented. With administration departments, the firm will be able to manage the procurement of the products and services that are necessary for the day-to-day operations of the business (Ullah and Al-Turjman, 2021). In handling administration, human resources, and operation distinct technologies are needed that will accelerate the operational process of the units. Hence, it can be assumed that an IT team will also be significant in handling business operations. With the IT team cyber security and data breaching issues such as misplacement and manipulation of client data and information can be handled in the business.

Financial information and data

The first element that has been described in the financial information of the organization is the ways through which Infinity Real Estate can gather finance and funds for its business. According to the table stated below it can be analyzed that private money lenders are one of the primary sources of funding. The organization has several networks and connections within the industry through which it can connect with private lenders to gather funds for its business.

Process	Amount
Private Money lenders	£ 10,000
Private placements	£ 5000
Wholesaling	£ 2000
Crowdfunding	£ 4000
Bank Loans	£ 20,000

Table 1: Ways of collecting funds

Wholesale and crowdfunding are some other ways of gathering funds. However, these funding techniques may be a time-consuming process with minimal results. The organization in the present scenario is also focusing on gathering funds through bank loans.

In gathering loans the organization needs to focus on the cash flows and the net amount as this will allow the business to acquire maximum loan units from the bank for its business.

According to the above figure, it can be analyzed that the company has been able to manage a higher cash balance in the month of June. In the upcoming years, the organization is planning to acquire business automobiles. In year two the company is anticipating revenue sharing as payouts to all owners and workers present in the firm. According to the above figure, it can be identified that the cash flows has been higher in the month of June and November. With the relocation to Central London, the firm will be transforming the operational process with the implementation of certain technologies. Human resource technologies are one of the technologies that will be implemented by the business while operating in Central London. In implementing the business in London the organization needs to strictly focus on its finances.

Years
Cash in flows	1 (in £ )	2 (in £ )	3 (in £ )	4 (in £ )	5 (in £ )
Sales and revenue	7,000	8,000	12,000	20,000	30,000
Land management	5,000	6,000	8,900	12,000	15,000
Finanace from members	8,000	21,000	25,000	30,000	34,000
Total cash in flows	20,000	35,000	45,900	62,000	79,000

Table 2: Cash inflows for next 5 years

Years
Cash out flows	1 (in £ )	2 (in £ )	3 (in £ )	4 (in £ )	5 (in £ )
Logistics	1,000	5,000	12,000	20,000	30,000
Cost of staffs and employees	1,000	6,700	8,900	13,000	15,000
Relocation	1,500	0	0	0	0
Utilities	1,000	7,000	8,000	11,000	13,000
Insurance	1,000	1000	1000	1000	1000
Internet	100	120	120	120	120
Monthly loan	10,500	10,500	10,500	10,500	10,500
Total cash out flows	16,100	30,320	40,520	55,620	69,620

Table 3: Cash outflows for next five years

Years
1	2	3	4	5
Net cash flow	3,900	4,680	5,380	6,380	9,380

Table 4: Net cash flow

According to the above table it can be identified that the organization is focusing on acquiring a loan of 50,000 from bank for relocating its office infrastructure in Central London.

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Conclusion

It can be concluded that the organization needs to focus on cash flow management to avoid unnecessary financial losses in relocating its business to Central London. It has been found that the organization will also consider private money lenders and crowd funding to gather finances for relocating its business to different regions. Advertising properties, temporary residences and repair and maintenance are some of the services that are offered by the business. The findings also illustrate that the enterprise is relocating to Central London to enhance its presence and increase the customers base in the defined region.

References

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Aalbers, M.B., (2019). Financial geography II: Financial geographies of housing and real estate. Progress in Human Geography, 43(2), pp.376-387.

Balbontin, C. and Hensher, D.A., (2019). Firm-specific and location-specific drivers of business location and relocation decisions. Transport Reviews, 39(5), pp.569-588.

Battisti, E., Shams, S.R., Sakka, G. and Miglietta, N., (2020). Big data and risk management in business processes: implications for corporate real estate. Business Process Management Journal, 26(5), pp.1141-1155.

Burkeev, D.O., Romanova, A.I., Murafa, A.A., Maksimchuk, O.V. and Voronin, A.V., (2020), March. Improving the efficiency and mobility of urban housing maintenance services. In IOP Conference Series: Materials Science and Engineering (Vol. 786, No. 1, p. 012028). IOP Publishing.

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Gibilaro, L. and Mattarocci, G., (2021). Crowdfunding REITs: a new asset class for the real estate industry?. Journal of Property Investment & Finance, 39(2), pp.84-96.

Munawar, H.S., Qayyum, S., Ullah, F. and Sepasgozar, S., (2020). Big data and its applications in smart real estate and the disaster management life cycle: A systematic analysis. Big Data and Cognitive Computing, 4(2), p.4.

Murfin, J. and Spiegel, M., (2020). Is the risk of sea level rise capitalized in residential real estate?. The Review of Financial Studies, 33(3), pp.1217-1255.

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