Mundel Lufitha

Oak park, MI (USA)
Role(s):
Founder/Owner/Principal

Lufitha Construction SPRL

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Location: Oak park
Industry: Real Estate
Year Founded: 2008
Number Employees: 10-50 people
Description: Executive Summary Lufitha Construction SPRL, a limited liability company (Sociedade por Quotas de Responsabilidade Limited) is a residential construction business that focuses on building simple, quality comfortable and affordable single-family raised ranch or bungalow homes in Luanda, the capital of Angola. Lufitha Construction is planning to start a middle class single-family development and construction project in new suburb in south of Luanda (Luanda Sul), at 25 km from the Luanda down- town. Product Description A typical Lufitha Construction house will be a 1500 to 2800 square-foot, simple yet elegant, American (Florida) style comfortable and affordable raised ranch or bungalow home. The foundation is constructed with concrete and the wall elevated with brick. The Luanda market does not supply enough construction material, nor construction machine and equipment to support the increasingly demand of the construction companies. Due the possibility of importing construction material and large construction machine and equipment, Lufitha Construction wants to seize the opportunity to build single family houses at a price of $500,000 to $700,000 USD each. This home costs less to build and to operate than a typical Luanda “single- family house”, thus affording the owner more discretionary income for hobbies, sports, and vacations. The Middle Class-Residential Housing Development Project-in-Luanda- Angola consists of acquiring the land, developing the land, and then building residential bungalows or raised ranches within a gated community. Lufitha Construction is targeting middle class customers who can be defined as quite well educated individuals, who make up an under-served niche market for middle class and who may be: professionals, teachers, government employees or personnel of foreign companies/ embassies located in Angola Marketing and Sales There are a huge shortage and high demand of residential housing in Luanda. Most of the construction companies (Brazilian, Portuguese, Chinese, and Israelis) are building non residential and residential high rise buildings or edifices in Luanda down town and Luanda suburbs. The high rise residential buildings are either condominiums or apartment buildings. However, there is still a big demand on residential housing and on single- family Florida style bungalow or raised ranch house for the middle class due to the increase of local population, foreign personnel of oil companies located in Luanda and to the booming oil exploitation business. Lufitha Construction wants to capture and provide the customers with an American style single-family raised ranch or bungalow for the middle class. Our target customers can be defined as families who have more limited purchasing power and more vocal concern for their children with a desire to be surrounded by nature, respect the environment, and preserve it for their future. Promotion of Lufitha Construction will begin while the home is under construction, with the first customer acquired by the time the model home is complete. The first sale home is expected to be complete by July 2010, or earlier depending on the financing availability. Homes range from 1,500 to 2,800 square feet with builder models and floor plans. Lufitha construction designs houses for the way people live. Currently, the homes includes a 60 feet by 100 feet deep lot and the house will have 2 living rooms, 4-5 bedrooms, and office room, a kitchen, and 3-4 bathrooms. These homes are reasonably priced in the $500,000 to $700,000 USD price range and offer a six-month warranty and one-on-one follow up with the owners. All of the homes will be inspected by the Angolan government. The benefits in buying a new home from Lufitha Construction come down to three basic benefits: quality, comfort, and affordability. Our marketing strategy will focus on: o An aggressive cold targeted telephone calls to foreign oil companies operating in Angola, Luanda o An aggressive cold targeted telephone calls to diplomats/ Embassies located in Angola, Luanda o contact local citizens with flyers through government agency, university, school, other established companies o Lufitha private network with government employees and local representative of the company o After the construction of the first house, the model house, build a very aggressive marketing to increase the visibility of the model house, through flyer, TV advertisement and targeted telephone calls o Planning for “Open House” of the model House: potential buyer can come and visit the house in and out o TV advertisement of the model house o Realtor advertisement, seminar, friend network, , website Our identity will be one of integrity, honesty, standing by our product, and living by the principles on which the business is founded. Development Angola is forecasted to be the worlds fast growing economy due to the oil industry boom. Luanda, the capital and the biggest city of Angola has been undergoing a massive national construction infrastructure program. Lufitha Construction is actively seeking property in a nice suburb of Luanda on which to build a model singe family house. The choice of the suburb will based on the good accessibility to the city per highway since the most business activities/middle class jobs are located in Luanda down-town. Ground breaking is expected to begin in December 2009 or earlier. Promotion of Lufitha Construction will begin while the home is under construction, with the first customer acquired by the time the model home is complete. The first home built is expected to be complete by April 2010 and will used as “model house”. However, the first sale home is expected to be complete by July 2010. Operations Operations strategy will minimize cost through simple, functional home design and maximize quality through passive solar design, maximized energy efficiency, import of construction material and solid construction. To achieve this objective, Lufitha Construction will utilize the model design approach to construction the single family houses. By The model design approach, Lufitha construction will have several house models with floor plans from where the single family houses will be built. He will have several house models with floor plans from where the customers/ potential owners will have to choose the house he will want built. In addition, Lufitha Construction will also offer the pre-sold houses option where the potential owner will pay upfront before the house is built. In this case, the customers/ potential owners have to choose his future house from the house model and floor plans available. The customer can request some change to the proposed model and floor plan. With the model design approach, we facilitate the decision process of the customer and we can better control the material cost and material inventory. Lufitha Construction requires continual, open communication with the customer. Thus communication and trust is the basis for our operations. Renting equipment is not an option due to scarce of the heavy construction machines and equipment in Luanda. Further the dependency on lien heavy construction machines and equipment can delay the project and increase the project cost. Since the Angolan material supply is not sufficient to support the rising demand, Lufitha Construction will import some principal material construction from USA or Canada and build up a stock of them. This will avoid the construction being delayed due to the lack of the material on the Angolan market, thus giving us a competitive edge against our competition. Management Lufitha Construction Inc., will be registered as an SPRL, a limited liability company (Sociedade por Quotas de Responsabilidade Limited), charted in Luanda. This is similar to an LLC in USA. Thus, He will be privately owned by Mundel Lufitha and open to other investor participations. He is also listed as CEO of Lufitha Construction. Lufitha Construction SPRL will be a subsidiary company of the Lufitha Transportation Engineering & Management Inc. based in Canada. Mundel Lufitha is an entrepreneur, and CEO of Lufitha Transportation Engineering & Management, a small Engineering consulting company in urban and regional transportation system. As asset, he has a rental property in Michigan, USA. Mundel Lufitha is currently Canadian citizen residing in USA. Originally, his parents came from Angola and he grew up in Democratic Republic of Congo. He is working full time as Program Manager/Mechanical Engineer with more than 15 years of engineering experience for a big automotive manufacturing in Michigan, USA. He has extensive mechanical engineering project management experience, a Dipl-Ing degree in mechanical engineering from RWTH Aachen, Germany, a Master of Applied Sciences degree in mechanical engineering and management from the University of Toronto, Canada. He has extensive experience in real estate and residential house renovation. In addition, Lufitha Construction has a local representative and Mundel Lufitha has also a small network in Angola. Financial Summary and opportunity Our business projections indicate that we will become profitable at the end of the first year (2010). We want to start the business with a reasonable cash cushion for the acquisition of the land, construction material and heavy construction machines and equipment and salary of the staff. Since we are planning to build 4 houses (3 houses for sale and one mode house) in the first year (2010), we project our net profit reported on four built house to be about $462,449. By building and selling 16 houses/ year, at the end of the second year (2011), our net profit will be $4.4 millions and the same or higher at the end of year three (2012) and year four (2013). Thus Lufitha Construction will have at the end of the first year a return on investment of 27% and 82% in the second and 85% in third year. The return on investment in the second year reached 82% because the company has increased the staff to 4 crews, so that the company can build 16 houses/ year. Lufitha Construction does believe that a company can start with one owner, but only few great companies are built alone. Thus, we seek the support of lenders/ Investors who will recognize a solid business plan, and who will understand the value that affordable homes will add to the life standing of the population of Luanda. We are also interested in potential investors, or ventures. Profit-sharing arrangements can be negotiated. Certainly, the right investors would help us, and could have a huge impact on making a family's dreams come true. Lufitha Construction is interested in obtaining a $1.7 millions USD credit line to assist with the cost of: o lots or land where houses will be built, o cost of land development in case the Angolan municipality is not required to do it and the cost of building at least four houses simultaneously o cost of the acquisition of heavy duty construction machine and equipment o cost of construction material o salary payment of the employee in the first 6 months o Advertisement cost in the first 6 months o Cost of shelter for Mundel Lufitha for the first six months o Cost of construction material and other equipment o Cost of house model and floor plans designs (5) Due the above mentioned expenses, the $1.7 millions do not need to be available at the beginning of the operations, rather a line of credit to pay the above mention expenses in the first 8 months in the first year (2010) and 5.3 millions are needed in the subsequent years to pay for the construction material and salaries for increased crews (4 crews) and material cost to meet the target of building 16-20 houses/ year. At the end of the first year, principal and interest will be repaid to the investors. For the subsequent years, the principal will be repaid at the end of the year and the interest will be repaid quarterly. However, Lufitha construction is open to other repayment schedules or terms which suit better our investors. The maximal operation cycle time is 4 month, thus allowing more flexibility with the fund and the money is not stuck in the business for years. We plan to obtain funding through investors.