Real Estate | How To
How to Write a Real Estate Investment Business Plan (+ Free Template)
Published September 22, 2023
Published Sep 22, 2023
REVIEWED BY: Gina Baker
WRITTEN BY: Jealie Dacanay
- 1 Write Your Mission & Vision Statement
- 2 Conduct a SWOT Analysis
- 3 Choose a Real Estate Business Investing Model
- 4 Set Specific & Measurable Goals
- 5 Write a Company Summary
- 6 Determine Your Financial Plan
- 7 Perform a Rental Market Analysis
- 8 Create a Marketing Plan
- 9 Build a Team & Implement Systems
- 10 Have an Exit Strategy
- 11 Bottom Line
A real estate investment business plan is a guide with actionable steps for determining how you’ll operate your real estate investing business. It also indicates how you’ll measure your business’ success. The plan outlines your mission and vision statement, lets you conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis, and sets goals in place. It’s similar to a business plan for any business, but the objectives are geared toward how you will manage the business, grow your investment, and secure funding.
We’ve created a free real estate investment business plan template for you to download and use as a guide as you read through the article and learn how to write a business plan for real estate investment:
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Free Real Estate Investment Business Plan Template
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1. write your mission & vision statement.
Every real estate investment business plan should begin with a concrete mission statement and vision. A mission statement declares actions and strategies the organization will use—serving as its North Star in achieving its business or investment objectives. A strong mission statement directs a real estate business, keeps teams accountable, inspires customers, and helps you measure success.
Before you compose your mission statement, you need to think about the following questions to do it effectively:
- What exactly is our business? The answer should encompass the essential functions of your real estate organization.
- How are we doing it? The response must explain your real estate goals and methods based on your core principles.
- Who are we doing it for? The response explains who your primary market is.
- What are our guiding principles? The “why” for your real estate company’s existence.
Mission statement example (Source: Oak Tree Capital )
The example above provides the mission statement of Oak Tree Capital. As a real estate investment business, it’s clear what its ultimate business objective is and how it will approach investing with integrity to maximize profit. Essentially, the investment company will drive monetary results—while maintaining its moral principles.
On the other hand, vision statements differ slightly from mission statements. They’re a bit more inspirational and provide some direction for future planning and execution of business investment strategies. Vision statements touch on a company’s desires and purpose beyond day-to-day operational activity. A vision statement outlines what the business desires to be once its mission statement is achieved.
For more mission statement examples, read our 16 Small Business Mission Statement Examples & Why They Inspire article and download our free mission statement template to get started.
If you want to write a vision statement that is truly aspirational and motivating, you should include your significant stakeholders as well as words that describe your products, services, values, initiatives, and goals. It would be best if you also answer the following questions:
- What is the primary goal of your organization?
- What are the key strengths of your business?
- What are the core values of your company?
- How do you aim to change the world as a business?
- What kind of global influence do you want your business to have?
- What needs and wants does your company have?
- How would the world be different if our organization achieved its goals?
In the example below from Aguila Real Estate, it hopes to be the preferred real estate company in its market.
Example of a vision statement (Source: Aguila Real Estate )
To make it easier, download our free template and follow our steps to create a vision statement for your small business. Take a look also at our 12 Inspiring Vision Statement Examples for Small Businesses in 2023 article to better understand how to create an impactful vision statement.
2. Conduct a SWOT Analysis
A SWOT analysis section of your real estate investing business plan template helps identify a business’ strengths, weaknesses, opportunities, and threats. This tool enables real estate investors to identify internal areas of improvement within their business through their strengths and weaknesses.
The opportunities and threats can assist with motivating a team to take actions that keep them ahead of an ever-changing real estate landscape. For a real estate business investor, the SWOT analysis is aimed at helping grow and protect investments over time.
Strengths & Weaknesses
Specifically for real estate investing, strengths and weaknesses correlate with the investment properties’ success and touch on items that will drive investment growth. The strengths can be the property’s location, condition, available amenities, and decreased vacancy. All of these items contribute to the success of a property.
On the contrary, the weaknesses include small unit sizes, excessive expenditures (finances to repair, upgrade, properties to acquire), low rents, and low cap rates. These weaknesses indicate less money is being collected and a lower overall return on investment (ROI). They are all factors that limit cash flow into the business and are internal factors that an investor can change.
See below for an example of strengths and weaknesses that could be included in a SWOT analysis:
Opportunities & Threats
Opportunities and threats are external factors that can affect an investment business. You don’t have control over these items, but you can maneuver your business to take advantage of the opportunities or mitigate any long-term effects of external threats. Opportunities relating to investment properties can be receiving certification with a city as a preferred development or having excess equity.
However, threats to an investment property do not need to be particularly connected to the property itself. They can be factors that affect your overall business. For example, interest rates may be high, which cuts your profits if you obtain a mortgage during that time frame.
An example of possible opportunities and threats for an investment business could be:
After creating your SWOT analysis, an investor can use these factors to develop business goals to support your strengths and opportunities while implementing change to combat the weaknesses and threats you anticipate. It also helps investors prioritize what items need to be addressed to succeed. These factors in a SWOT can change as the business grows, so don’t forget to revisit this portion and continuously reevaluate your SWOT.
3. Choose a Real Estate Business Investing Model
The core of real estate investing is to purchase and sell properties for a profit. How to make that profit is a factor in identifying your investment model. Different investing models are beneficial to an investor at different times.
For example, when interest rates are low, you may consider selling your property altogether. When interest rates are high and it is more difficult for people to obtain a mortgage, you may choose to rent out your properties instead. Sometimes, you must try a few models to see what works best for your business, given your area of expertise.
We’ve identified some investment business models to consider:
- Buy and hold: This strategy mainly involves renting out the property and earning regular rental income. This is also considered the BRRRR method : buy, rehab, rent, refinance, and repeat until you have increased your portfolio.
- Flipping properties : Flipping a property entails purchasing, adding value, and selling it higher than the investment costs. Many investors have a set profitability number they would like to hit but should consider market fluctuations on what they can realistically receive during the sale.
- Owner-occupied: Investors can live in the property while renting out extra units to reduce their housing costs and have rental income coming in simultaneously. This model is best if you own multifamily units, especially duplexes, triplexes, or fourplexes . It’s also a great way to understand the complexities of being a landlord. You can transition your unit to another renter when you want to move.
- Turnkey: Buying a turnkey property is the best option for investors who wish to enter the real estate market without having to deal with renovations or tenant management. It’s a practical way for seasoned investors to diversify their portfolios with fewer time commitments.
Investors don’t have to stick to one model, and they can have a few of these investment models within their portfolio, depending on how much effort they would like to put into each property. Before choosing an investment model, consider which will help you meet your investing goals most efficiently.
Read our Investing in Real Estate: The 14-Tip Guide for Beginners article to learn how real estate investment works and other investing business models. Also, if you’re new to real estate investing and are looking for foundational knowledge to get started or seeking information about the best online courses for real estate investing, look at our The 13 Best Real Estate Investing Courses Online 2023 article.
4. Set Specific & Measurable Goals
The next step to completing a real estate investment business plan for real estate investing is to set SMART goals. SMART is an acronym that stands for specific, measurable, achievable, relevant, and time-bound. Creating goals that contain all of the criteria of SMART goals results in extremely specific goals, provides focus, and sets an investor up for achieving the goals. The process of creating these goals takes some experience and continued practice.
An investor’s goals can consist of small short-term goals and more monumental long-term goals. Whether big or small, ideal goals will propel your business forward. For example, your end goal could be having a specific number of properties in your portfolio or setting a particular return on investment (ROI) you want to achieve annually.
Remember that your SMART goals don’t always have to be property-related just because you’re an investor. They can be goals that help you improve your networking or public speaking skills that can also add to a growing business.
Example of improving goals with SMART in mind:
Begin creating SMART goals with an initial goal. Then, take that initial goal and break it down into the different SMART components. SMART goals leave no room for error or confusion. The specific, measurable, and time-bound criteria identify the exact components for success.
However, the relevant and achievable parts of the goal require a little extra work to identify. The relevancy should align with your company’s mission, and extra research must be performed to ensure the goal is attainable.
Initial goal: Receive a 5% return on investment from the property
- Specific: I want to achieve a 5% return on the 99 Park Place property.
- Measurable: The goal is to sell it for greater than or equal to $499,000.
- Achievable: The current market value for a two-bedroom in Chicago is selling for $500,000 and growing by 1% yearly.
- Relevant: I aim to meet my overall portfolio returns by 20% annually.
- Time-bound: I want to offload this property in the next three years.
5. Write a Company Summary
The company summary section of a business plan for investors is a high-level overview, giving insight into your business, its services, goals, and mission, and how you differentiate yourself from your competition. Other items that can be included in this overview are business legal structure, business location, and business goals. The company summary is beneficial if you want to involve outside investors or partners in your business.
Example company profile from Choueri Real Estate
A company summary is customizable to your target audience. If you’re using this section to recruit high-level executives to your team, center it around business operations and corporate culture. However, if you’re looking to target funding and develop investor relationships for a new project, then you should include investor-specific topics relating to profitability, investment strategy, and company business structure.
Partners and outside investors will want to consider your company’s specific legal business structure to know what types of liabilities are at hand. Legal business structure determines how taxes are charged and paid and what legal entity owns the assets. This information helps determine how the liabilities are separated from personal assets. For example, if a tenant wants to seek legal damages against the landlord and the property is owned by an LLC, personal assets like your personal home will not be at risk.
6. Determine Your Financial Plan
The most essential part of creating a real estate investing business is the financial aspect since much of the business involves purchasing, managing, and selling real estate. To buy real estate initially, you’ll have to determine where funding will come from. Funding can come from your personal assets, a line of credit, or external investors.
A few options are available to real estate investors when obtaining a loan to purchase properties. The lending options available to most real estate investors include the following:
- Mortgage: This is one of the most common means of obtaining financing. A financial institution will provide money based on a borrower’s credit score and ability to repay the loan.
- Federal Housing Authority (FHA) loans : This loan is secured by the FHA to assist with getting you a low down payment or lower closing costs, and sometimes easily obtain credit. There are some restrictions to qualify for this loan—but it could be suitable for newer investors who want to begin investing starting with their primary home.
- Home equity line of credit (HELOC) : If you currently have property, obtain a HELOC by using your current property to secure the line of credit and borrow against the equity in your property. As you repay the loan, your available balance on the line of credit gets replenished.
- Private lenders : These are lenders who are not financial institutions. These individual lenders typically have fewer restrictions than traditional lenders and will lend money to individuals who can grow their investments.
- Hard-money loans : This loan requires a hard asset to be leveraged for money. For example, you can put up the home you want to purchase as the asset for cash upfront, and the hard-money loan will be paid back once the home is sold or other funding is secured. This is great for short-term deals due to quick approval and little upfront money.
After funding is obtained to purchase property, financial projections help investors understand their financial standing. These projections can tell you potential income, profits, and when you may need additional funding in the future. Similar to lending options, these calculations are specific to your investing model. If you’re not planning to rent out the property, then calculations like gross rent multiplier are not applicable.
For more information on what is needed to obtain financing, read our articles Investment Property Financing & Requirements and 5 Best Crowdfunding Sites for Investors 2023 .
Additional Investment Calculations
In a rental property business plan, it’s important to use a rental property calculator to determine a property’s potential return on investment. The calculator considers various factors, such as purchase price, operating expenses, monthly income, or vacancy rates, to determine whether a property is a good investment.
Click on the tabs below for the other important calculations all investors should be aware of when purchasing and managing rental properties :
- Gross Operating Income
- Gross Rent Multiplier
- Vacancy Rate
The gross operating income (GOI) calculates the amount of rent and income received from a property minus any vacancy. It doesn’t take into account other expenses. It tells an investor how much income they’ll make after some assumed losses with vacancy.
GOI = Total rent + Other income – Vacancy losses
The capitalization (cap) rate calculates the return on investment (ROI) of a property. This equation is used to compare the return of one building to another. The higher the cap rate, the better since the purchase price is low.
Cap Rate = Net operating income / Purchase price
The gross rent multiplier (GRM) is a factor that helps determine a property’s potential profitability. It can be used to compare perspective buildings to determine which one is the better deal.
GRM = Property price / Gross annual income
The vacancy rate calculates the vacancy percentage of all your investment properties during a specific period. Percentage helps an investor determine how their property performs given current market conditions. If you have a high vacancy rate, you must determine the cause. Perhaps your asking rents are too high for the current housing market.
Vacancy Rate Formula = # of Vacant Units x 100 / Total # of Units
Cash flow is the movement of money in and out of your business, also known as net operating income. In an ideal scenario, investors will bring in more income than expenses, thus showing profit and a positive cash flow. Positive cash flow allows investors to decide how to use that profit. They can invest it in growing their portfolio or increasing their cash reserves for unexpected expenses.
Cash Flow = Gross rental income – Total expenses
Investors can use their current cash flow to forecast future cash flows, which will give you an idea of how much profit you will see over a specific period. Use past cash flow information to determine if there are any trends. For example, during the summer, your water expenses increase, or possibly every few months, you see an increase in property repairs. Consider these trends when estimating future cash flows and compare actual numbers to determine if your forecasting is accurate.
Use the template below to forecast future cash flow for six months and determine how much cash flow reserves you will have:
Cash Flow Template
💡 Quick tip:
In addition to the template, investing in property management software like TenantCloud will set you up for success. The free plan from TenantCloud will help you list apartments, collect rent payments, and screen applicants to maximize profits and minimize vacancies.
7. Perform a Rental Market Analysis
While determining what properties to purchase, investors should perform a rental market analysis (RMA) to gauge the investment potential of a rental property. The RMA consists of running comparables against current units on the market and collecting data that may affect your rental rate to understand if the rental property in question is a solid long-term investment. The analysis helps determine the average rental rate and future rent if you want to make any property upgrades.
Investors can use resources like Zillow to pull comparable property information and gather information on unit layout, building amenities, rental concessions offered, or listing prices. Once the information is gathered, the spreadsheet itemizes the average, median, highest, and lowest rent. When such information is available, it also provides an average price per square foot compared to the subject property. With this information, investors can decide whether the subject property is worth the investment.
Read our 10 Best States to Invest in Real Estate (& 5 Worst) in 2023 article to better understand which states yield a positive cash flow, build equity, and have long-term profitability.
8. Create a Marketing Plan
Once you determine which property to invest in, investors should identify a marketing plan to list the vacant units. Some investors offload the marketing and advertising to real estate agents and brokerages, which will also collect a fee for renting out the property. Refer to some of the best real estate marketing materials to get started, or use our free real estate marketing plan template to lay out your objectives and tactics.
A real estate marketing plan should include your goals, budget, target market, competitors, feasible marketing strategies, and unique selling offers. In addition, it’s crucial to balance your strategy and split your potential marketing plans into categories, like print materials, online ads, email, and social media, so that you can be very specific with your goals and metrics.
Here are some of the real estate marketing mediums to include as you set your marketing goals:
- Real estate website and landing pages
- Email marketing
- SMS and text message marketing
- Real estate ads
- Social media marketing
- Print marketing materials
- Real estate signs
Download our marketing plan template by visiting our article Free Real Estate Marketing Plan Template & Strategy Guide .
9. Build a Team & Implement Systems
As a new investor, you may be unable to hire an entire team of employees to help perform research, run analysis, property management , and accounting duties. It is best to have a list of vendors you can rely on to assist you with purchasing, rehabilitating, and buying or selling your investment properties. Find vendors you trust so you can free yourself from having to micromanage them and know they have your best interest and the interest of your investments in mind.
Here are a few people you want to include on your team:
- Property managers
You should also utilize real estate investing apps and property intelligence software like Baselane that relieve you of manually performing daily duties to keep your investments profitable.
Automated rent collection feature (Source: Baselane )
Baselane is an all-in-one solution—from banking to rent collection, bookkeeping, reporting, and analytics. This software will help you efficiently manage your portfolio and eliminate the need for manual tasks. Learn more about how Baselane can make you a better property owner.
If you’re looking for more tools to help you get started, improve your portfolio management, and streamline your operations, read our 6 Best Real Estate Software for Investors 2023 article. We listed the six best software tools available for real estate investing based on affordability, customer reviews, features, and support to assist you in finding the best software that suits your needs.
10. Have an Exit Strategy
Since an investor’s money is tied up in the properties they own until they choose to sell, deciding when to sell or liquidate to get access to your money is part of an investor’s overall real estate exit strategy . The exit strategy for a real estate investment business is a plan for when an investor would like to remove themself from a deal or the business altogether. It helps weigh the different scenarios to minimize business risks and maximize the total return on investments.
A few exit strategy examples are:
The factors that an investor should consider when devising an exit strategy are minimizing financial loss, recouping as much of their original investment as possible, and avoiding any unseen fees that will cut into profits like tax consequences. An investor’s plan should always be to grow their original investment, but unforeseen circumstances may occur that will require you to plan on when to cut your losses as well.
Before launching a successful real estate investment business, you must have an efficient business plan, aligning your strategies with your business objectives. Our real estate investment business plan template can help get you started. These plans act as a roadmap so you can focus on the steps required to grow your business. Business plans evolve, so continuously revisit and improve your strategies. There is no right or wrong way to write a real estate investor business plan as long as it is used to achieve your goals.
About the Author
Find Jealie On LinkedIn
Jealie is a highly creative individual who loves reading. She has always seen writing as an opportunity to apply her knowledge and express her ideas. Over the years and through her internship at a real estate developer in the Philippines, Camella, she developed and discovered essential skills for producing high-quality online content.
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How To Write A Real Estate Business Plan
What is a real estate business plan?
8 must-haves in a business plan
How to write a business plan
Real estate business plan tips
Success in the real estate investing industry won’t happen overnight, and it definitely won’t happen without proper planning or implementation. For entrepreneurs, a real estate development business plan can serve as a road map to all of your business operations. Simply put, a real estate business plan will serve an essential role in forming your investing career.
Investors will need to strategize several key elements to create a successful business plan. These include future goals, company values, financing strategies, and more. Once complete, a business plan can create the foundation for smooth operations and outline a future with unlimited potential for your investing career. Keep reading to learn how to create a real estate investment business plan today.
What Is A Real Estate Investing Business Plan?
A real estate business plan is a living document that provides the framework for business operations and goals. A business plan will include future goals for the company and organized steps to get there. While business plans can vary from investor to investor, they will typically include planning for one to five years at a time.
Drafting a business plan for real estate investing purposes is, without a doubt, one of the single most important steps a new investor can take. An REI business plan will help you avoid potential obstacles while simultaneously placing you in a position to succeed. It is a blueprint to follow when things are going according to plan and even when they veer off course. If for nothing else, a real estate company’s business plan will ensure that investors know which steps to follow to achieve their goals. In many ways, nothing is more valuable to today’s investors. It is the plan, after all, to follow the most direct path to success.
8 Must-Haves In A Real Estate Business Plan
As a whole, a real estate business plan should address a company’s short and long-term goals. To accurately portray a company’s vision, the right business plan will require more information than a future vision. A strong real estate investing business plan will provide a detailed look at its ins and outs. This can include the organizational structure, financial information, marketing outline, and more. When done right, it will serve as a comprehensive overview for anyone who interacts with your business, whether internally or externally.
That said, creating an REI business plan will require a persistent attention to detail. For new investors drafting a real estate company business plan may seem like a daunting task, and quite honestly it is. The secret is knowing which ingredients must be added (and when). Below are seven must-haves for a well executed business plan:
Outline the company values and mission statement.
Break down future goals into short and long term.
Strategize the strengths and weaknesses of the company.
Formulate the best investment strategy for each property and your respective goals.
Include potential marketing and branding efforts.
State how the company will be financed (and by whom).
Explain who is working for the business.
Answer any “what ifs” with backup plans and exit strategies.
These components matter the most, and a quality real estate business plan will delve into each category to ensure maximum optimization.
A company vision statement is essentially your mission statement and values. While these may not be the first step in planning your company, a vision will be crucial to the success of your business. Company values will guide you through investment decisions and inspire others to work with your business time and time again. They should align potential employees, lenders, and possible tenants with the motivations behind your company.
Before writing your company vision, think through examples you like both in and out of the real estate industry. Is there a company whose values you identify with? Or, are there mission statements you dislike? Use other companies as a starting point when creating your own set of values. Feel free to reach out to your mentor or other network connections for feedback as you plan. Most importantly, think about the qualities you value and how they can fit into your business plan.
Goals are one of the most important elements in a successful business plan. This is because not only do goals provide an end goal for your company, but they also outline the steps required to get there. It can be helpful to think about goals in two categories: short-term and long-term. Long-term goals will typically outline your plans for the company. These can include ideal investment types, profit numbers, and company size. Short-term goals are the smaller, actionable steps required to get there.
For example, one long-term business goal could be to land four wholesale deals by the end of the year. Short-term goals will make this more achievable by breaking it into smaller steps. A few short-term goals that might help you land those four wholesale deals could be to create a direct mail campaign for your market area, establish a buyers list with 50 contacts, and secure your first property under contract. Breaking down long-term goals is a great way to hold yourself accountable, create deadlines and accomplish what you set out to.
3. SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis involves thinking through each of these areas as you evaluate your company and potential competitors. This framework allows business owners to better understand what is working for the company and identify potential areas for improvement. SWOT analyses are used across industries as a way to create more actionable solutions to potential issues.
To think through a SWOT analysis for your real estate business plan, first, identify your company’s potential strengths and weaknesses. Do you have high-quality tenants? Are you struggling to raise capital? Be honest with yourself as you write out each category. Then, take a step back and look at your market area and competitors to identify threats and opportunities. A potential threat could be whether or not your rental prices are in line with comparable properties. On the other hand, a potential opportunity could boost your property’s amenities to be more competitive in the area.
4. Investment Strategy
Any good real estate investment business plan requires the ability to implement a sound investment strategy. If for nothing else, there are several exit strategies a business may execute to secure profits: rehabbing, wholesaling, and renting — to name a few. Investors will want to analyze their market and determine which strategy will best suit their goals. Those with long-term retirement goals may want to consider leaning heavily into rental properties. However, those without the funds to build a rental portfolio may want to consider getting started by wholesaling. Whatever the case may be, now is the time to figure out what you want to do with each property you come across. It is important to note, however, that this strategy will change from property to property. Therefore, investors need to determine their exit strategy based on the asset and their current goals. This section needs to be added to a real estate investment business plan because it will come in handy once a prospective deal is found.
5. Marketing Plan
While marketing may seem like the cherry on top of a sound business plan, marketing efforts will actually play an integral role in your business’s foundation. A marketing plan should include your business logo, website, social media outlets, and advertising efforts. Together these elements can build a solid brand for your business, which will help you build a strong business reputation and ultimately build trust with investors, clients, and more.
First, to plan your marketing, think about how your brand can illustrate the company values and mission statement you have created. Consider the ways you can incorporate your vision into your logo or website. Remember, in addition to attracting new clients, marketing efforts can also help maintain relationships with existing connections. For a step by step guide to drafting a real estate marketing plan , be sure to read this guide.
6. Financing Plan
Writing the financial portion of a business plan can be tricky, especially if you are starting your business. As a general rule, a financial plan will include the income statement, cash flow, and balance sheet for a business. A financial plan should also include short and long-term goals regarding the profits and losses of a company. Together, this information will help make business decisions, raise capital, and report on business performance.
Perhaps the most important factor when creating a financial plan is accuracy. While many investors want to report on high profits or low losses, manipulating data will not boost your business performance in any way. Come up with a system of organization that works for you and always ensure your financial statements are authentic. As a whole, a financial plan should help you identify what is and isn’t working for your business.
7. Teams & Small Business Systems
No successful business plan is complete without an outline of the operations and management. Think: how your business is being run and by whom. This information will include the organizational structure, office management (if any), and an outline of any ongoing projects or properties. Investors can even include future goals for team growth and operational changes when planning this information.
Even if you are just starting or have yet to launch your business, it is still necessary to plan your business structure. Start by planning what tasks you will be responsible for, and look for areas you will need help with. If you have a business partner, think through your strengths and weaknesses and look for areas you can best complement each other. For additional guidance, set up a meeting with your real estate mentor. They can provide valuable insights into their own business structure, which can serve as a jumping-off point for your planning.
8. Exit Strategies & Back Up Plans
Believe it or not, every successful company out there has a backup plan. Businesses fail every day, but investors can position themselves to survive even the worst-case scenario by creating a backup plan. That’s why it’s crucial to strategize alternative exit strategies and backup plans for your investment business. These will help you create a plan of action if something goes wrong and help you address any potential problems before they happen.
This section of a business plan should answer all of the “what if” questions a potential lender, employee, or client might have. What if a property remains on the market for longer than expected? What if a seller backs out before closing? What if a property has a higher than average vacancy rate? These questions (and many more) are worth thinking through as you create your business plan.
How To Write A Real Estate Investment Business Plan: Template
The impact of a truly great real estate investment business plan can last for the duration of your entire career, whereas a poor plan can get in the way of your future goals. The truth is: a real estate business plan is of the utmost importance, and as a new investor it deserves your undivided attention. Again, writing a business plan for real estate investing is no simple task, but it can be done correctly. Follow our real estate investment business plan template to ensure you get it right the first time around:
Write an executive summary that provides a birds eye view of the company.
Include a description of company goals and how you plan to achieve them.
Demonstrate your expertise with a thorough market analysis.
Specify who is working at your company and their qualifications.
Summarize what products and services your business has to offer.
Outline the intended marketing strategy for each aspect of your business.
1. Executive Summary
The first step is to define your mission and vision. In a nutshell, your executive summary is a snapshot of your business as a whole, and it will generally include a mission statement, company description, growth data, products and services, financial strategy, and future aspirations. This is the “why” of your business plan, and it should be clearly defined.
2. Company Description
The next step is to examine your business and provide a high-level review of the various elements, including goals and how you intend to achieve them. Investors should describe the nature of their business, as well as their targeted marketplace. Explain how services or products will meet said needs, address specific customers, organizations, or businesses the company will serve, and explain the competitive advantage the business offers.
3. Market Analysis
This section will identify and illustrate your knowledge of the industry. It will generally consist of information about your target market, including distinguishing characteristics, size, market shares, and pricing and gross margin targets. A thorough market outline will also include your SWOT analysis.
4. Organization & Management
This is where you explain who does what in your business. This section should include your company’s organizational structure, details of the ownership, profiles on the management team, and qualifications. While this may seem unnecessary as a real estate investor, the people reading your business plan may want to know who’s in charge. Make sure you leave no stone unturned.
5. Services Or Products
What are you selling? How will it benefit your customers? This is the part of your real estate business plan where you provide information on your product or service, including its benefits over competitors. In essence, it will offer a description of your product/service, details on its life cycle, information on intellectual property, as well as research and development activities, which could include future R&D activities and efforts. Since real estate investment is more of a service, beginner investors must identify why their service is better than others in the industry. It could include experience.
6. Marketing Strategy
A marketing strategy will generally encompass how a business owner intends to market or sell their product and service. This includes a market penetration strategy, a plan for future growth, distribution channels, and a comprehensive communication strategy. When creating a marketing strategy for a real estate business plan, investors should think about how they plan to identify and contact new leads. They should then think about the various communication options: social media, direct mail, a company website, etc. Your business plan’s marketing portion should essentially cover the practical steps of operating and growing your business.
Additional Real Estate Business Plan Tips
A successful business plan is no impossible to create; however, it will take time to get it right. Here are a few extra tips to keep in mind as you develop a plan for your real estate investing business:
Tailor Your Executive Summary To Different Audiences: An executive summary will open your business plan and introduce the company. Though the bulk of your business plan will remain consistent, the executive summary should be tailored to the specific audience at hand. A business plan is not only for you but potential investors, lenders, and clients. Keep your intended audience in mind when drafting the executive summary and answer any potential questions they may have.
Articulate What You Want: Too often, investors working on their business plan will hide what they are looking for, whether it be funding or a joint venture. Do not bury the lede when trying to get your point across. Be clear about your goals up front in a business plan, and get your point across early.
Prove You Know The Market: When you write the company description, it is crucial to include information about your market area. This could include average sale prices, median income, vacancy rates, and more. If you intend to acquire rental properties, you may even want to go a step further and answer questions about new developments and housing trends. Show that you have your finger on the pulse of a market, and your business plan will be much more compelling for those who read it.
Do Homework On The Competition: Many real estate business plans fail to fully analyze the competition. This may be partly because it can be difficult to see what your competitors are doing, unlike a business with tangible products. While you won’t get a tour of a competitor’s company, you can play prospect and see what they offer. Subscribe to their newsletter, check out their website, or visit their open house. Getting a first-hand look at what others are doing in your market can greatly help create a business plan.
Be Realistic With Your Operations & Management: It can be easy to overestimate your projections when creating a business plan, specifically when it comes to the organization and management section. Some investors will claim they do everything themselves, while others predict hiring a much larger team than they do. It is important to really think through how your business will operate regularly. When writing your business plan, be realistic about what needs to be done and who will be doing it.
Create Example Deals: At this point, investors will want to find a way to illustrate their plans moving forward. Literally or figuratively, illustrate the steps involved in future deals: purchases, cash flow, appreciation, sales, trades, 1031 exchanges, cash-on-cash return, and more. Doing so should give investors a good idea of what their deals will look like in the future. While it’s not guaranteed to happen, envisioning things has a way of making them easier in the future.
Schedule Business Update Sessions: Your real estate business plan is not an ironclad document that you complete and then never look at again. It’s an evolving outline that should continually be reviewed and tweaked. One good technique is to schedule regular review sessions to go over your business plan. Look for ways to improve and streamline your business plan so it’s as clear and persuasive as you want it to be.
Reevauating Your Real Estate Business Plan
A business plan will serve as a guide for every decision you make in your company, which is exactly why it should be reevaluated regularly. It is recommended to reassess your business plan each year to account for growth and changes. This will allow you to update your business goals, accounting books, and organizational structures. While you want to avoid changing things like your logo or branding too frequently, it can be helpful to update department budgets or business procedures each year.
The size of your business is crucial to keep in mind as you reevaluate annually. Not only in terms of employees and management structures but also in terms of marketing plans and business activities. Always incorporate new expenses and income into your business plan to help ensure you make the most of your resources. This will help your business stay on an upward trajectory over time and allow you to stay focused on your end goals.
Above all else, a real estate development business plan will be inspiring and informative. It should reveal why your business is more than just a dream and include actionable steps to make your vision a reality. No matter where you are with your investing career, a detailed business plan can guide your future in more ways than one. After all, a thorough plan will anticipate the best path to success. Follow the template above as you plan your real estate business, and make sure it’s a good one.
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Real Estate Investment Business Plan
Real estate has been one of the fastest-growing industries in recent times. So, if considering starting a real estate investment business—this is the right time.
Whether you’re a seasoned investor to get into real estate or a rookie aiming to set your foot in this rapidly growing market, you need a solid business plan to make your real estate investing business a runaway success.
Need assistance writing your business plan? Worry not.
We have prepared a real estate investment business plan template to help you get started.
Let’s cut to the chase: download this template, follow step-by-step instructions, and finish the first draft of your plan.
recognize opportunities and deal with challenges in an effective way. It’ll also help you devise an investment strategy that brings you maximum returns.
Real Estate Industry Overview 2023
Here is an overview of the current state of the real estate industry in 2023:
Market size and growth potential:
Employment scenario:, key players:.
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Things to Consider Before Writing a Real Estate Investment Business Plan
Select the right property location.
Selecting the right location to invest in is one of the primary requirements for a real estate business’s success. You should select the location based on what is the potential of infrastructural development in the area. Is it a preferable location for commercialization and urbanization or not? You should always keep these things in mind to ensure the maximum possible returns on your investment.
Know the purpose of your investment
Do your research, know all of your options, how can a real estate investment business plan help you.
You may want to start investing as soon as possible, after all, investments take time to grow, right? But just like a stitch in time saves nine, a real estate investment business plan can help your investment business prosper in the future even if it seems time-consuming at the moment.
It can help you design a proper business model and formulate a great business growth strategy. Moreover, it can also help you track your progress along the way.
All in all, it can make your investments way smoother than going about without a business plan.
Chalking out Your Business Plan
The real estate sector is one of the most profitable sectors to invest in. Many investors swear by it as a bankable source of secondary income.
Not just that, the real estate investment market increased from 9.6 trillion dollars in 2019 to 10.5 trillion dollars in 2020. Although it may take time, investment in the housing market can help your money grow.
And though the above information invests in the real estate sector as a rosy prospect, it can go horribly wrong without a proper business plan and investment strategy.
Read on to find out what a business plan can do for your investment business.
Real estate investment business plan outline
This is the standard real estate investment business plan outline which will cover all important sections that you should include in your business plan.
- Purpose of the Plan
- The Problem
- The Solution
- A fundamental change in the US housing market
- All three legs of the apartment investment stool are in place
- Weak Housing Market
- Competitive Advantage
- Business Model
- Growth Opportunity
- Corporate Structure Overview
- Source and Use of Funds
- Return on Investment
- Mission Statement
- Business Objectives
- Legal Structure
- Company Ownership
- Location and Premises
- Intellectual Property
- CREI Business Model
- Revenue Projections
- The Amount of Investment Funds Requested
- Business Benefits
- Investment Repayments
- Good Investment Trends in Apartment Rentals
- Rent Spikes Coming For a Good Investment in Apartment Buildings
- Apartments Continue as Good Investment Through 2012 and Beyond
- Apartment Buildings Going From Good Investment to Great
- Filling Basic Needs Makes for a Good Investment
- More Americans renting by choice
- The Apartment Building Investment Triple Opportunity Is Right Now
- Internet Growth Allows Renters to Locate Good Apartments
- Industry Participants
- Competitive Advantages
- Strategic Initiatives?
- Brand Strategy
- Provide Individuals, Families, and Businesses with Quality Rental Properties at an Affordable Price.
- Positioning Statement
- Pricing Strategy
- Sales Strategy
- Sales Forecast
- Sales Programs
- Strategic Alliances
- Social networking websites
- Email campaigns
- SEO (Search Engine Optimization) PPC
- Banner advertisements
- Search Engine Optimization
- Organizational Structure
- SWOT Analysis
- Key Assumptions
- Key Financial Indicators
- Explanation of Break-even Analysis
- Business Ratios
- Long-term Plan and Financial Highlights
- Projected Income Statement
- Projected Cash Flow
- Projected Balance Sheet
How to Write a Real Estate Investment Business Plan?
A real estate investment business plan consists of several key areas that must be included in it and add things that would be unique to you and your business.
Also, there are several ways in which you can write a business plan including online business plan software and pre-designed templates. You can choose the method that works best for your individual needs.
What to Include in a Real Estate Investment Business Plan?
Although a business plan should be customized as per the needs of an individual and market situation, there are certain areas that every real estate investment business plan must include. They are as follows:
1. Executive Summary
The executive summary section is the first and foremost section of your business plan. It consists of what your entire business stands for. It focuses on everything ranging from opportunities and threats, competitive advantages your business has, the structure of the current market as well as the financial needs of the business.
Most importantly for a real estate investment business plan, it would also consist of the prospective return of investment one can expect from the business as well as the expected duration of time for that growth to happen.
2. Business Concept and Revenue Model
This section would include the type of investment concept and revenue model you plan on following with your business. So, before writing this section it is a good practice to analyze the current trends in the market as well as your own finances, to find the concept that fits the best for you in the current market situation.
In this section, you can also include methods of tracking the progress of your investments.
3. Market Analysis
Whenever one starts a new business it is mandatory to carry out market analysis to flourish in it. It not only helps you in understanding the market, but it also helps you in choosing the right strategy for your own business.
For example, in the US rent spikes and increasing demand for rental accommodations make the rent department an extremely profitable segment in the real estate market. A thorough analysis of the market can thus help you choose the most favorable market segment as well as the best locality to invest in.
4. Growth Strategy
In this section, you should include the milestones you plan on having for your investment business. It helps you set well-defined tasks to achieve those milestones and keeps you motivated while doing the same. Also, with the help of milestones, you can always pinpoint when and where you are going wrong and need a shift in direction.
5. Web Plan
Having a web presence can be immensely helpful in building your network and reaching out to potential partners and organizations that can help you grow.
For building an online presence you can use various tools like social media, email marketing, optimized web pages, etc.
6. Management Summary
This segment includes information regarding the roles and responsibilities of the people in your business. The people in your business are a major aspect that decides its success or downfall, therefore a thorough detail of their work and progress is an essential part of your business plan.
7. SWOT Analysis
Carrying out a SWOT analysis before writing your business plan can make the process faster, easier, and way more well-defined. Hence, including it in your business plan is always a good idea.
8. Financial analysis
Even though financial analysis is crucial for any business, it is especially important for investment businesses. In this section, you can include the time required to reach the break-even point, the projected growth of your business, long-term finances as well and strategies to deal with potential changes in the market.
Download a sample real estate investment business plan
Need help writing your business plan from scratch? Here you go; download our free real estate investment business plan pdf to start.
It’s a modern business plan template specifically designed for your real estate investment. Use the example business plan as a guide for writing your own.
The Quickest Way to turn a Business Idea into a Business Plan
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Real Estate Development Business Plan
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Small Business Plan Writers
Frequently asked questions, do you need a business plan for real estate investing.
Indeed. Whether you plan to start a real estate investing, development, or mortgage broker business—you need a solid business plan to make your real estate business a runaway success. You can use Upmetrics’ real estate & rental business plan templates to get started writing your plan.
What's the importance of a marketing strategy in a real estate investment business plan?
Marketing strategy is a key component of your real estate investment business plan. Whether it is about achieving certain business goals or helping your investors understand your plan to maximize their return on investment—an impactful marketing strategy is the way to do it!
Here are a few pointers to help you understand the importance of having an impactful marketing strategy:
- It provides your business an edge over your competitors.
- It helps investors better understand your business and growth potential.
- It helps you develop products with the best profit potential.
- It helps you set accurate pricing for your products or services.
What is the easiest way to write your real estate investment business plan?
A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any real estate investment business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business planning tool .
How do I write a good market analysis in a real estate investment business plan?
Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry.
We can categorize the process of writing a good market analysis section into the following steps:
- Stating the objective of your market analysis—e.g., investor funding.
- Industry study—market size, growth potential, market trends, etc.
- Identifying target market—based on user behavior and demographics.
- Analyzing direct and indirect competitors.
- Calculating market share—understanding TAM, SAM, and SOM.
- Knowing regulations and restrictions
- Organizing data and writing the first draft.
Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.
About the Author
Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more
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Sample Real Estate Investing Business Plan
If you’ve been scouring the web trying to find a sample business plan so you can get your real estate investing business off the ground, look no further.
On this page, I will provide you a real, sample real estate investing business plan.
I will also give you step-by-step instructions to help you create your own business plan so you can stop sitting around and start investing in real estate.
Need a Business Plan Before Investing in Real Estate?
Real estate financial projections, real estate is predictable, and your numbers should be too, business financial plan, how to write a real estate investing business plan..
I put together this infographic which will help break down the elements of planning (and backward planning), then we’ll pick it up on the other side with more information about crafting your sample business plan.
There are a lot of paths to go down in our quest to achieve financial independence and create a long-term residual income. With a business plan, you are: ** Nearly 2x more likely to succeed than those without a plan ** **49% more likely to grow than those without a plan** ** 2x as likely to get investment capital ** ** 30% more growth potential than those without a plan **
Writing Your Business Plan
Before you even start typing, you need to know your goals and write them down. The infographic above has an example of how to backward plan and fill in the blanks.
Alright, now that you have a general idea of where you are going and how you will get there, you are ready to start writing your business plan.
What You Need Before Starting Your Investing Business Plan
Before you get started writing your business plan, you need to put together a few pieces of information:
- Business plan writing software (I use LivePlan )
- Your target market
- Your analysis criteria
- How you will find real estate deals
- How you plan to finance your properties
- How you plan to rent/sell your properties (exit strategy).
1) Start Writing the Pitch
The first thing I like to do is write the pitch. Imagine yourself on a 30-second elevator ride to the 10th floor of some building, and you happen to be riding along with the CEO, or finance manager of some investing firm. What could you say to that person in 30 seconds to make them want to sit down and hear more?
That’s your pitch.
Click on the image to see an example of a “pitch” (it’s just a fictitious company I made up for this example).
The business plan writing software that I use puts this all together for me and even hosts it on a unique webpage so I can email the pitch if I want. Obviously, you don’t have to get that fancy – you could even put something together in PowerPoint if you want.
Writing this pitch is going to help you start working on a few important details:
The Real Estate Problem You are Solving (and Your Solution)
This is how you will position yourself and be better than everybody else…and fully expect it to change over time.
- When we first started investing, we focused on student rentals. More specifically, we realized that foreign students had a hard time finding good apartments and trusting their rent and security deposit wouldn’t be stolen before they arrived in the United States.
- Though that was our focus, we also bought other buildings if the numbers made sense…and our mission changed to acquiring under-valued properties and using my expertise to renovate them cheaply.
- Finally, as we grew, we have incorporated those other things into our target investments but now we are focused on building systems that other smaller landlords couldn’t have in place.
The great thing about real estate, when compared to other startup businesses, is the financials are already out there for you. You can easily look at any property and get the current owner’s proforma rent (rent and expenses on paper under ideal circumstances).
In other industries, you may be stuck guessing what your retail demand will be, what your advertising, marketing, and other overhead might be.
In real estate, it’s easy to find and easy to estimate in the absence of actual numbers. My point is, there is no reason why your financials section shouldn’t be amazing . It should be spot on so you can impress whoever your lender will be.
Since the financial section should be easy to figure out, it’s what I like to work on second.
2) Create an Amazing Financial Forecast
The financial forecast should be pretty boring and not hard for you to determine.
There is nothing terribly exciting about the financial section of a business plan. There is even less excitement with real estate financials. If you aren’t actively buying more property, then your revenue and expenses should literally never change.
And in this example, you can see how I plan for absolutely no change throughout most of 2016 for this made-up company.
But then something happens – I plan to buy more property!
But then it flatlines again.
Your banker, financier, or private lender will know real estate inside and out. They will know how much people spend on maintenance, collections, etc.
So, if the numbers in your plan are out of line, they will see it.
If you’re lucky, they will assume it’s a simple mistake, let you amend the numbers and move on… or they may think you’re a novice and it could jeopardize your financing. So spend more time on this section than any other
Honestly, I probably spend 3 or 4 hours just making up numbers for this example. It would take me a few days to get everything perfect if I were using this for funding.
3) The Rest of the Business Plan
Maybe it seems weird that I just throw it all together at the end, but in real estate, it’s pretty true. If you’ve created a solid plan utilizing the backward planning method, then created a pitch and did a solid job on your financials, the rest of the plan will fill itself in.
Sure, there may be a few areas that you haven’t put thought into yet, but that’s the purpose of the business plan.
The great thing is, the pitch uses these categories as well, so it gives you a great starting place.
Here is a quick breakdown of the real estate business plan categories
The Executive Summary is a brief outline of the company’s purpose and goals and should include:
- A brief description of products and services. For real estate, this could mean single family vs multi-family, self-storage, commercial, etc.
- A summary of objectives.
- A solid description of the market. How is your niche growing and what does the future look like in your particular market?
- Financial justification. What your profit margins look like and how you plan to make money. Include growth potential
- An overview of funding requirements.
Find your Business Opportunity
Every business finds an Opportunity to exploit. Essentially, opportunities are created by problems which you will solve. There may be a lack of low-income housing, or on the opposite side, a lack of luxury apartments. Other problems may be poor management, high eviction rates, or a lack/excess of a particular type of real estate.
It may be helpful to answer these four questions to help you define your opportunity:
- Where do you make your money? – What niche of the market will you operate in?
- How do you spend your time? – Will you focus on management, maintenance, finding investments, etc.
- Who do you sell? – Are your target tenants businesses, low-income, high-income, students, or something else.
- What do you sell them? – Are you selling tiny (green) homes to high-income individuals or large homes to middle-income people with families?
Execution of your Business Plan
Writing the execution part of your business plan isn’t always easy because it includes some big sections. In the execution section, you will have Operations, Marketing & Sales, Milestones, Metrics, and anything else that will affect your investments on a day-to-day basis.
Operations – This includes technology you may use (property management software), locations, management plan, and anything else that affects the day-to-day operations of your business and investments.
Marketing & Sales – This may include how you plan to stage and rent properties or to sell your real estate. From online listings all the way down to your concept for showings.
Milestones – How fast do you want to grow, when will you raise rents, when do you want to hire your first employee… anything can be a milestone and it’s unique to your particular investing strategy.
Metrics – It’s important to determine how you measure success. There are many ways to measure this, but in real estate, it could be the number of units, yearly income, or net worth among other things.
The company profile section is where you “sell” the management team and history of the company. If you have a lot of experience in real estate, then really highlight it in this section.
If you don’t have a strong real estate background (a lot of new investors have very little experience) then focus on talking about your “team” such as your real estate agent, accountant, attorney, contractors, and other professionals
Remember all the numbers you worked on before? Well, this is the where they go.
Try not to create pages and pages of useless graphs, charts, or spreadsheets. Try to put the important information up front, and tuck supporting spreadsheets in the back as a reference.
Another note – profit is really important in business, but cash-flow is more important. In real estate, it’s quite possible that a company can be profitable but cash-flow negative. It’s also possible to exhaust cash reserves and fail to meet debt obligations, even if you planned on earning a fortune in just a few months.
Your financial section should show your solid cash-flow management plan.
Don’t forget to download your free sample real estate investing business plan
Wrapping up Your Real Estate Investment Business Plan
The design is an important last step. People are more likely to read through your business plan and judge it’s content if it has a beautiful and easy to read design. Spend plenty of time making it colorful, make the headings pop, and work hard to draw attention to the areas you want to highlight.
With that last piece of advice, I hope I’ve been able to give you some specific advice about real estate investing and your business plan.
Check out LivePlan and give it a shot. It’s an amazing product!
And if you haven’t already yet, get a copy of the free business plan for real estate investors
About Eric Bowlin
investor that achieved financial independence at the age of 30. He started in 2009 with the purchase of his first triplex and now owns over 470 units.
He spends his time with his family, growing his businesses, diversifying his income, and teaching others how to achieve financial independence through real estate.
Eric has been seen Forbes, Bigger Pockets, Trulia, WiseBread, TheStreet, Inc, The Texan, Dallas Morning News, dozens of podcasts, and many others. Read More…
June 20, 2023 at 8:49 am
This is a great blog post! I’m a recent college graduate and I’m looking to get into real estate investing. This post has given me a lot of great information to work with.
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Guide to Creating a Real Estate Investing Business Plan
June 20, 2022 by Chad Ruppert
Table of Contents
Creating a business plan for real estate investing in today's market might seem exciting, but it can also be a little intimidating for those new to the game who haven't yet experienced the ups and downs of such a volatile industry.
But don't let that stop you — people invest in real estate every day, and those looking to make a career out of their wise investment strategy have to start somewhere.
By developing your real estate investment business plan now, you'll be expertly positioned to take advantage of what this year (and the next) has in store.
Why Should You Invest in Real Estate in Today's Climate?
Real estate in the U.S. is hot — really hot.
As we progress through the '20s and beyond, more experts are predicting that the rising interest rates will price many buyers (especially Millennials, who make up the largest share of the current buyer pool) out of the market, which will give the housing supply a chance to breathe with less demand.
As a leading real estate marketplace, Zillow also forecasts that prices will cool off as 2022 sees just a projected 11 percent price increase by the end of the year, down from the 20 percent year-over-year increase that we saw in 2021.
What this means is that despite current conditions, experts predict that more properties will become available with fewer buyers ready to snatch them up. This softens the market for savvy investors who can then leverage their investments to acquire additional properties.
What Is a Real Estate Investment Business Plan and Why Do I Need One?
To get started on your real estate investment journey, you'll need a real estate investment business plan that details all of the components of your business and helps you to strategize for success.
This is because having a business plan for real estate investing is like having a detailed roadmap that tells you how to get to your desired destination. By enabling you to clearly organize your investment goals, your plan can help you define the methods you'll use to achieve them and you'll be viewed as a more legitimate real estate business , as well.
How Do I Assemble a Real Estate Investment Plan?
A solid investment plan has nine steps that will enable you to outline your roadmap and begin your new business on the right path. Each of these steps is equally important — remember, the more detail you include, the more robust your plan will be and the more likely you are to avoid distractions en route towards success.
1. Establish Your Vision
Every company needs to have a statement that describes its overall mission, purpose and values. Above all else, this is what will drive your real estate business forward and keep it on course through the thick and thin, the ups and downs, the good times and bad. Your vision establishes the basis from which your company can grow, take on employees and motivate your team to achieve common goals.
A good place to start is by researching the vision of other real estate investment firms that you identify with and might want to emulate. From there, you can tailor your own vision to reflect the personal and business achievements that provoked you to start developing a real estate investing business plan in the first place.
2. Outline Your Short-Term Goals
Consider what you want your business to achieve in the next 1-2 years. Setting short-term goals that are reasonable and realistic — even if they're small — will help you stay motivated and on track towards smashing those long-term goals.
Achievable milestones such as saving for a downpayment, securing your first investment purchase and planning for expenses are good starting points and will help you focus on, and get used to, the concept of checking items off of your list.
3. Record Your Long-Term Goals
Long-term goals are an essential part of a real estate investment business plan and enable you to study the correct metrics to measure your success along the way. These are the sort of goals that are likely to require years of planning and determination, but they're still attainable.
Your long-term goals may be more personal, such as saving for family purchases or expenses (college tuition, for one), or they may be strictly business-related and comprise a large portfolio of investment properties.
4. Identify Your Strengths and Weaknesses (SWOT Analysis)
Understanding where you excel and where you could use improvement is essential for growth. By conducting a strengths, weaknesses, opportunities and threats (SWOT) analysis, you can establish a framework that enables you to evaluate your real estate business and identify ways to increase productivity, performance and efficiency.
Taking an honest approach to this step will uncover any issues or threats with your business which you can then solve or delegate to either your team or third-party service providers. It might also provide some insight into whether starting a real estate business is the right move for you.
5. Take Inventory of Your Current Finances
Are you starting out with a little or a lot? Will your current credit score and debt-to-income ratio be sufficient for achieving your short-term goals? In order to sufficiently assess your financial position, you'll need to take everything into account.
Starting a business with low capital is possible, but there may be challenges that you'll have to face in order to get it off the ground. Investing in real estate brings with it a number of costs — from closing fees, taxes and utilities to property management, repairs and maintenance. Once you fully understand your position, you can create a financing plan that outlines how you'll meet the requirements for each investment.
6. Conduct Market Research
Savvy investors are always watching the market to stay up-to-date on current trends, interest rates, vacancy rates, property prices and more — as well as which geographical areas are hot or cold.
Conducting market research enables you to stay on top of your business and anticipate changes based on outside factors. This will help you make better and more educated decisions with regard to your investments and grow your real estate investing business with more stability.
7. Develop Your Investment Strategy
Maybe you prefer the low-risk, slow-roll strategy of maintaining long-term investments. Or, perhaps you're interested in the fast world of house flipping to cash in on quick profits. You might even feel that investing in multi-family apartment buildings offers your business more than investing in single-family dwellings or commercial properties.
There's no right or wrong way to plan your investment strategy so long as you've done your research and remain committed to serving your short and long-term goals.
8. Draft Your Marketing Plan
Many business owners view marketing as a "nice-to-have" rather than a necessity, but the truth is that marketing can help you build the foundation for your business right from the start.
By investing in your business with strong branding elements, a social media presence and even a basic advertising outline you can increase trust in your business while spreading the word about the services you provide.
Remember, your brand is more than just a logo, and you can use it to determine who your target audience is, how you speak and relate to them and how you build strong relationships that will help you achieve your goals.
9. Compile an Exit Strategy or Backup Plan
A lot of businesses can be simple, but that doesn't mean they'll be easy to manage and grow. Developing a backup plan might seem like preparing for failure, but it's quite the opposite.
Investors have the ability to withstand harsh market conditions, recessions, housing bubbles and more by drafting either a backup plan or exit strategy that will enable them to pivot and reposition themselves if things don't go as planned.
What will you do if a listed property just isn't selling? What if you lose a sale at the last minute, or a seller backs out of a deal? It isn't about the "when" but the "what if" scenarios that you'll want to be prepared for in order to keep your business afloat through tough times.
Writing Your Real Estate Investing Business Plan and Bringing It to Fruition
Keeping up with reputable publications such as Zillow will help you stay on top of market trends as you progress through your business, which can lead to smarter, more educated decisions. But it can also help you create a robust business plan right now.
Once you've considered each of the nine steps above and gathered the appropriate information, it's time to construct your business plan for real estate investing and get to work.
Writing your business plan is an essential process that will boost your legitimacy and help you access any funding required to purchase properties, and there are seven key elements that you'll want to include.
You can also find business plan templates to provide some of the basic structure.
Compose an Executive Summary
Your executive summary provides a "10,000-foot view" of your company and includes your mission statement, any products or services, your goals and your financial and growth strategies.
Consider the executive summary as a place to explore and define the "why" of your business, and be sure to make it clear and concise.
Provide a Description of Your Company
A strong real estate investing business plan will include a company description that outlines which market you operate in, how your services meet the needs of your clients, the nature of those services and the advantages your business has over your competitors.
Essentially, this section should inform others about your business and give them a good snapshot of what you do and how you do it.
Detail Your Organizational Hierarchy and Management Plan
Here, you'll provide details with regards to how your business is structured and organized. If you're a solopreneur, how will you manage and stay on top of everything without sacrificing quality service? If you're building a team, who is responsible for what?
Put yourself in the position of anyone who might read your real estate investment business plan and consider that knowing who is in charge and what their responsibilities entail is a top priority.
Include Your Market Analysis
Compile information that you've gathered for the market in which you plan to operate and invest in and add it to your real estate investing business plan. This will demonstrate your knowledge and understanding of your target market and provide lenders or future business partners with a higher degree of certainty and justification for working with you.
Data that includes market size, shares, pricing and other attributes are important to include here, along with the details of your SWOT analysis.
Summarize Your Financial Projections
It may be impossible to know the future, but researching and compiling data surrounding your market, interest rates, investment capital and more can help you forecast and project revenue and other figures. These numbers are especially important to lenders and others who you plan to work with, as they'll want to know how you'll maintain commitments and achieve your financial goals.
These projections should include annual revenue, cash flow, equity and other calculations that represent attainable goals — shooting for the moon is great, but documenting your projections realistically will help you put actionable plans in motion to achieve them.
Share the Strategies You'll Use to Evaluate Deals
This is the place to showcase your business acumen. Putting in place a method for evaluating deals shows others that you understand what makes a good deal and what should be avoided (and why).
This section should also cover how you plan to find deals in the first place to feed your business right from the get-go. You can learn a lot from other investors who have been around the block and leverage their knowledge and experience to exact success in your own investing business.
Discuss Plans for Managing Multiple Properties
A large part of real estate investing is managing the properties that you acquire. Every investor should include a section describing their management principles and strategies in their real estate investment business plan along with who will take on specific responsibilities. I
f you plan to use a property management company, who are they, and how do they operate? If you plan to hire your own manager instead, how will they keep track of multiple properties as you grow?
These are questions to ask now as opposed to later when you're trying to juggle both sustainable growth and daily activities.
Tips for Success: How to Create a Strong Business Plan for Real Estate Investing
Your real estate investing business plan won't ever be perfect, but that's beside the point. Your goal should be to draft a plan that accurately reflects the passion you've put into your business.
That said, there are a few tips that can help you shape your plan so that it's as thorough and robust as possible.
Be Clear on What You Want to Achieve
- Include details on funding or desired partnerships
- Don't "fake it 'til you make it"
- Be open about the help you need
Prove That You Have a Firm Understanding of Your Market
- Include local market data and statistics
- List average income of tenants and residents in the area
- Point out vacancy rates and final sale prices
Research Your Competition
- Subscribe to their email list to keep tabs on their movements
- Purchase any real estate products they have for sale
- Visit their open houses to get a feel for how they operate
Simulate Deals to Nail Down Your Process
- Practice with example deals to navigate potential obstacles
- Record the process of overcoming roadblocks (method and resources used)
- Show lenders and partners that you're well prepared for whatever comes your way
Launch Your New Business with Incfile
As you work through the creation of your business plan for real estate investing, keep in mind that one day soon you'll want to incorporate in order to take advantage of various business incentives and tax write-offs. Your plan might just tell you which type of structure or business entity is right for the type of business you wish to form, but it isn't always that simple.
To help you choose the best structure that will provide you with correct protection and ease of operation, check out our Business Entity Comparison Guide. We'll help you determine which route to take to establish the real estate investing business that best matches your goals.
Chad is a freelance writer and former project manager focused on presenting information on SaaS, technology and business formation.
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Real Estate Investment Business Plan Template
Written by Dave Lavinsky
Real Estate Investment Business Plan
Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their real estate investment businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a real estate investing business plan template step-by-step so you can create your plan today.
Download our Real Estate Business Plan Template here
What Is a Business Plan?
A business plan provides a snapshot of your real estate investing business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
Source of Funding for Real Estate Investment Companies
With regards to funding, the main sources of funding for a real estate investment business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a real estate investment business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.
How to Write a Business Plan for a Real Estate Investment Company
Your business plan should include 10 sections as follows:
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of real estate investing business you are operating and the status; for example, are you a startup, do you have a business that you would like to grow, or are you operating a chain of real estate investment companies.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the real estate investment industry. Discuss the type of real estate investment business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
In your company analysis, you will detail the type of real estate investment business you are operating.
For example, you might operate one of the following types: Real estate investment companies do two basic things: invest in real estate and trade in real estate.
- Real estate investment is a long-term investment wherein you purchase real estate with the intent of keeping properties to rent out.
- Real estate trading is a short-term investment, wherein you buy a property that needs fixing up and flip it for a higher price soon after.
In addition to explaining the type of real estate investment company you operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
While this may seem unnecessary, it serves multiple purposes.
First, researching the real estate investment industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards increasing foreclosures in a particular city, it would be helpful to ensure your plan calls for an increased focus in this market.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your real estate investing business plan:
- How big is the real estate investment industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your real estate investment business. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The customer analysis section of your real estate investing business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: mortgage holders, home buyers, renters, etc.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of real estate investment business you operate. Clearly first-time home buyers would want different pricing and product options, and would respond to different marketing promotions than banks.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most real estate investment businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
Direct competitors are other real estate investment businesses.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes property management companies, realtors, and DIY home fixer-uppers. You need to mention such competition to show you understand that not everyone who purchases or leases real estate uses a real estate investment business to do so.
With regards to direct competition, you want to detail the other real estate investment businesses with which you compete. Most likely, your direct competitors will be real estate investment businesses located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What products do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you specialize in a particular real estate type or market?
- Will you provide services that your competitors don’t offer?
- Will you make it easier or faster for customers to acquire your real estate?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a real estate investment business plan, your marketing plan should include the following:
Product : in the product section you should reiterate the type of real estate investment company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, will you offer residential properties, or commercial properties?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the types of real estate you offer and the current price ranges.
Place : Place refers to the location of your business. Document your location and mention how the location will impact your success. For example, is your real estate investment business located in a market with a high foreclosure rate, or with a low inventory of office space. Discuss how your location might provide a steady stream of customers.
Promotions : the final part of your real estate investing marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local bloggers and websites
- Social media advertising
- Local radio advertising
- Banner ads at local venues
Everyday short-term processes include all of the tasks involved in running your real estate investment business such as finding properties to acquire, marketing completed properties, overseeing renovations, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to flip your 25th house, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch in a new market.
To demonstrate your real estate investment business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in real estate. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in real estate investment businesses and/or successfully running small businesses.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your real estate investment business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say you signed a commercial tenant that needs an extensive build out, that would cost you $50,000 to complete. Well, in most cases, you would have to pay that $50,000 now for materials, equipment rentals, employee salaries, etc. But rent will not cover build-out costs for 180 days. During that 180 day period, you could run out of money.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a real estate investment business:
- Location build-out including design fees, construction, etc.
- Cost of developing or refurbishing real estate assets
- Cost of depreciation
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.
Real Estate Investment Business Plan Summary
Putting together a business plan for your real estate investment company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the real estate investment market, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful real estate investment business.
How to Finish Your Real Estate Investment Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Real Estate Investment Business Plan Template you can finish your plan in just 8 hours or less!
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.
Click here to see how Growthink’s business plan consulting services can create your business plan for you.
Real Estate Investment FAQs
What is the easiest way to complete my real estate investment business plan.
Growthink's Ultimate Real Estate Business Plan Template allows you to quickly and easily complete a business plan for your real estate investing business.
What is the Goal of a Business Plan's Executive Summary?
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of real estate investment business you are operating and the status; for example, are you a startup, do you have a real estate investment business that you would like to grow, or are you operating a chain of real estate investment businesses.
Where Can I Download a Real Estate Investment Business Plan PDF?
You can download our real estate investment business plan PDF template here. This is a business plan template you can use in PDF format.
Other Helpful Business Plan Articles & Templates
How to Create a Real Estate Investment Business Plan
Starting a real estate investment business can be a great way to grow your wealth. However, it’s important to have a well-thought-out plan in place before you get started. In this article, we will discuss the steps you need to take to create a successful real estate investment business plan. We’ll talk about setting short-term and long-term goals, as well as how to financially plan for growing your real estate portfolio.
If you’re ready to start investing in real estate, let’s dive in!
Before creating your real estate investment plan, it’s important to know why you’re investing in the first place.
What is your motivation for wanting to invest? Are you getting in the market now to save up for retirement? Are you hoping to become a full-time real estate flipper?
Once you have a good understanding of why you’re doing this, it will be easier to come up with goals, strategies, and action plans that fit with what you want to achieve.
Why create a real estate investment plan?
There are a few key reasons why you should create a real estate investment plan:
- To set short-term and long-term goals for your business Without having clear goals in place, you may be prone to making impulsive or impractical decisions as you begin your investment journey. Use your goals as a barometer.
- To figure out how much money you need to save up for your investments Creating a business plan means getting crystal clear on what out-of-pocket expenses to expect as you grow your portfolio.
- To develop strategies for finding good deals and growing your portfolio Your business plan should have a clear and repeatable strategy you can use to source, acquire, and manage your investments.
Now that we know why a plan is so important, here are the 10 steps you need to follow in order to create a real estate investment business plan.
Step 1: Define your short-term goals
What are your goals for the next 12-24 months? What do you hope to achieve in that time frame? Your short-term goals should be realistic and achievable, and they should help you move closer to your long-term goals.
Here are some ideas to help you get started:
- When do you want to buy your first property?
- How much do you need to save up for a down payment? (If you think you need tens or hundreds of thousands to get your first investment, check out BuyProperly . They help investors get started for as little as $2,500 using a fractional ownership model.)
- What sort of returns (if any) are you looking for in your first 12-24 months?
- What other expenses are you saving up for?
Step 2: Define your long-term goals
Here’s where we get into the fun stuff! Your long-term goals should be even more ambitious than your short-term goals. What do you hope to achieve in the next five, ten, or 20 years? How will your real estate investment business help you reach these goals?
Are you hoping to build a nest egg so you have money for your child’s college tuition? Are you planning on saving up for retirement?
Remember, real estate is a long-term game that works best when you’re prepared to hold onto your properties. When setting financial goals, look at both the potential rental income and appreciation over time to get a better idea of your return.
Step 3: Assess your current financial situation
Before you can start investing in real estate, you need to know where you stand financially. How much money do you have to invest? What is your credit score? How much debt do you currently have? Answer these questions and more in order to get a clear picture of your current financial situation.
Once you know how much money you’re working with, assess whether it’s enough for you to get started (comfortably) in traditional real estate investing.
Make sure you have enough money to cover:
- The closing costs (lawyer’s fees, surveys, title search, realtors, etc.)
- One-time repairs
- Property management fees
- Utilities, mortgage costs, and taxes
- Ongoing maintenance and repairs
These expenses can really add up, so be sure to factor them into your financial plan. In fact, it’s often this step that makes many people rethink real estate investing altogether.
When new investors check out BuyProperly , they’re often shocked to learn that traditional real estate isn’t the only way to grow a lucrative portfolio. BuyProperly helps people get started in real estate for a small fraction of the cost of traditional investing.
Are you curious about accredited investing?
Accredited investors have special status and are able to invest directly into:
- Private equity
- Venture capital
- Angel investments
- Hedge funds
Find out more — Schedule a call with us today!
Step 4: create a solid financial plan.
Now that you have an idea of what you need to begin investing in real estate, it’s time to build out a solid financial plan.
Investing in real estate can be a great way to grow your wealth, but it’s important to understand how to invest and what to expect before you get started.
Anticipate your monthly expenses In your area, what are average management costs? What about heat, electricity, and water?
Look at potential rental income What can you expect for a 1, 2, or 3-bedroom rental in your area?
What monthly net income can you expect? After all expenses, work out what you expect to receive monthly.
What annual appreciation are you expecting? Look at your local market to determine these rates.
How will you continue to invest? Will you be able to leverage your current assets to continue growing your portfolio?
STEP 5: RESEARCH THE MARKET
Before you invest in any property, it’s important to do your research and understand the current real estate market conditions.
First, decide on the area you want to invest in. Do you want to stay local or are you open to investing out of your city or province?
Next, take a close look at your chosen area. Are prices rising or falling? What are the current vacancy rates? How much competition is there for properties in your area?
Knowing this information will help you make smarter investment decisions.
STEP 6: CHOOSE YOUR INVESTMENT STRATEGY
There are many different ways to invest in real estate, and each comes with its own set of risks and rewards.
First, do some research and decide which investment strategy is right for you. Maybe you want to buy and hold properties for the long term, or maybe you’re interested in flipping houses for a quick profit.
Next, decide on which type of real estate investment you’d like to start with. Are you looking for single-family dwellings with lower repair and maintenance costs, or multi-family buildings that can yield a higher return but are more expensive to get underway?
Are you hoping to quickly leverage your properties to grow your portfolio, or are you more interested in buying properties that have the potential to appreciate over time?
Having a clear strategy in place before you start investing is the best way to ensure you’ll meet your short and long-term goals.
NOW IT’S TIME TO CREATE YOUR BUSINESS PLAN
Even if you’re not raising funds or seeking outside investment, it’s always a good idea to have a business plan in place. This will help you stay organized and keep track of your progress over time. It can also be helpful when applying for loans or other financing.
Now that you know your goals and what you need to do to achieve them, it’s time to put together a real estate investment business plan. This will act as your roadmap for growing your portfolio and achieving success in real estate investing.
Your business plan should include the following:
– A description of your business
– The goals you hope to achieve with real estate investing
– How you plan to finance your investments
– Strategies for finding and evaluating deals
– Plans for managing your properties
– Marketing and sales strategies
– Projected income and expenses
– A risk management plan
Creating a business plan is not easy, but it is essential if you want to be successful in real estate investing. It will help you stay on track and make smart decisions as your business grows. So take the time to create a plan that is tailored to your specific goals and needs.
With a well-constructed business plan, you can confidently move forward with your real estate investment business and achieve the success you desire.
Real estate investing can be a great way to build wealth and create financial security for you and your family. But like any business, it takes planning, hard work, and dedication to succeed.
By following the steps outlined in this article, you can create a real estate investment business plan that will help you reach your goals. Stay focused on your goals, do your research, and take action to make your dreams a reality!
So what are you waiting for? Start planning today and see how real estate investing can change your life.
Learn how BuyProperly helps investors get 10-40% projected annual returns for a fraction of the cost of traditional real estate investing.
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Real Estate Investment Business Plan Template
Real estate investment business plan.
You’ve come to the right place to create your Real Estate Investment business plan.
We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Real Estate Investment businesses.
Below is a template to help you create each section of your Real Estate Investment business plan.
Lone Star Real Estate Investments is a new real estate investment company located in the heart of Dallas, Texas. We have a proactive interest in this wonderful city and aim to invest in properties and neighborhoods that have great potential. Our mission is to ensure that our investments benefit the city as a whole and make Dallas a wonderful place to live.
Lone Star Real Estate Investments is founded and run by Gabriel Pattinson, an experienced real estate broker. He has spent his entire career working in the Dallas area, so he has extensive knowledge of the local market. His experience and expertise in the industry will ensure we find ideal properties to invest in and flip.
Lone Star Real Estate Investments will purchase commercial properties in the Dallas area and then flip them for a profit. We will invest in all the design, construction, and renovations that are necessary to upgrade these properties.
Lone Star Real Estate Investments will target property owners who are interested in selling their land or commercial real estate. We will also target and sell to business owners looking for a commercial space to set up their business. We will only invest in commercial properties located in the Dallas area.
Lone Star Real Estate Investments’ most valuable asset is the expertise and experience of its founder, Gabriel Pattinson. He has been a licensed commercial real estate broker for the past 20 years and has extensive knowledge of the local market. After selling properties to the residents and business owners of Dallas for several years, he is ready to make the switch to real estate investment, where he has more of a hand in improving and updating the properties that he sells.
Lone Star Real Estate Investments will be able to achieve success by offering the following competitive advantages:
- Gabriel is popular in the industry and knows an extensive list of architects, construction companies, and contractors.
- The company is committed to investing in local properties in order to improve the value of the local community.
- Gabriel has extensive experience in the local real estate industry. As such, he knows how to find commercial properties that are worth investing in.
Lone Star Real Estate Investments is seeking $5,000,000 in debt financing to launch the business. The funding will be dedicated towards securing an office space, purchasing office equipment, funding marketing expenses, and purchasing initial properties. The breakout of the funding is below:
- Office lease up-front cost and build out: $50,000
- Office equipment and supplies: $25,000
- Capital for property purchases: $4,500,000
- Six months of overhead costs (rent, utilities, salaries): $250,000
- Marketing expenses: $100,000
- Working capital: $75,000
The following graph outlines the pro forma financial projections for Lone Star Real Estate Investments:
Who is lone star real estate investments.
To find the best commercial properties for our portfolio, we do a thorough market analysis to see which available properties have the best potential. After choosing ideal properties, we negotiate a selling price with the owner. After the purchase, we fix up the property and add upgrades that we believe will add value to the investment. Once the renovations are completed, we sell the property at a competitive price to ensure we make a profit.
Gabriel began researching what it would take to create his own real estate investment company and did a thorough analysis on the costs, market, demographics, and competition. Gabriel has now compiled enough information to develop his business plan in order to approach investors.
Lone Star Real Estate Investments’ History
Once his market analysis was complete, Gabriel Pattinson began surveying the local vacant office space and located an ideal location for his firm’s headquarters. Gabriel incorporated Lone Star Real Estate Investments as an LLC on May 1st, 2023.
Since incorporation, Lone Star Real Estate Investments has achieved the following milestones:
- Found office space and signed a letter of intent to lease it
- Developed the company’s name, logo and website
- Determined equipment and fixture requirements
- Began recruiting key employees
Lone Star Real Estate Investments’ Services
Investing in real estate is a common way for individuals to earn wealth and passive income. Real estate is something that everyone needs, whether they need a property as a home or the location for their business. Therefore, the real estate industry is bound to continue to grow and can weather the storm of volatile market trends.
The real estate industry is currently booming in the aftermath of the pandemic. Both commercial and residential property prices are rising, making it a great time to invest in property. Buyers are more than eager to pay high prices for premium commercial and residential properties. By using caution and thoroughly researching markets before making investments, real estate investment companies can choose good investments and make enormous profits on their properties.
According to Allied Market Research, the Real Estate Investment industry was valued at $11,444.7 billion in 2021 and is projected to grow at a CAGR of 10.7% from now until 2031. With such a promising projection paired with increasing prices of commercial real estate in the local area, Lone Star Real Estate Investments is sure to become highly profitable.
Demographic profile of target market.
Lone Star Real Estate Investments will target property owners who are interested in selling their land or commercial real estate in the Dallas area. We will also target and sell to business owners looking for a commercial space to set up their business.
Lone Star Real Estate Investments will primarily target the following customer profiles:
- Landowners wanting to sell their land in prime commercial districts
- Business owners looking to sell their commercial properties
- Business owners looking for move in ready properties for their businesses
Direct and indirect competitors.
Lone Star Real Estate Investments will face competition from other real estate investment companies with similar business profiles. A description of each competitor realtor is below.
Dallas Property Investments
Dallas Property Investments is the largest real estate investment company in the Dallas area. They purchase and flip properties throughout the entire Dallas area, including both residential and commercial properties. They have already managed a large portfolio of properties near our office location and continue to be a major presence in the local real estate industry. We expect Dallas Property Investments to be our largest competitor.
Premium Home Investments
Premium Home Investments is a real estate investment company that focuses on investing in and flipping residential properties throughout the Dallas metro area. They acquire average looking homes and flip them in the luxurious and premium residences. Though Premium Home Investments will continue to thrive, they will only be a minor competitor since they invest primarily in residential properties.
Property Investment Solutions
Property Investment Solutions is a real estate investment company that purchases multi-family complexes to operate and sell. They already own dozens of complexes, some of which they manage and others that they are improving to sell. Though Property Investment Solutions is a major investment firm in the Dallas area, we don’t expect much competition from them since they primarily purchase and sell multi-family residential properties.
Lone Star Real Estate Investments will be able to offer the following advantages over their competition:
- Location : Lone Star Real Estate Investments’ location is near the center of town. The office is visible from the street with many working professionals walking to and from work on a daily basis, giving passersby a direct look at the firm.
- Management : Gabriel Pattinson has been extremely successful working in the real estate industry. His unique qualifications will serve clients in a much more sophisticated manner than Lone Star Real Estate Investments’ competitors.
- Relationships : Having lived in the community for 25 years, Gabriel knows many of the local leaders, newspapers, and other influences. Furthermore, he will be able to draw from his ties to the community in order to build up an initial portfolio of properties to invest in.
- Commitment to the community : Lone Star Real Estate Investments is committed to investing in and improving local commercial properties in order to improve the value and appeal of the local community.
Brand & value proposition.
Lone Star Real Estate Investments will offer the unique value proposition to its clientele:
- Client-focused real estate investment services, where the company’s interests are aligned with the clients’ interests
- Service built on long-term relationships
- Big-firm expertise in a small-firm environment
The promotions strategy for Lone Star Real Estate Investments is as follows:
Lone Star Real Estate Investments will invest heavily in developing a professional website that displays all of the features and benefits of the company. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.
Lone Star Real Estate Investments will invest heavily in a social media advertising campaign. The brand manager will create the company’s social media accounts and invest in ads on all social media accounts. It will use targeted marketing to appeal to the target demographics.
Gabriel will be attending all networking industry events and actively networking at non-industry events. He will also be a member of local professional associations where professionals in the real estate industry are a part of.
Lone Star Real Estate Investments will invest in professionally designed print ads to display in programs or flyers at industry networking events. He will also invest in two billboards to display in highly trafficked areas of town.
Lone Star Real Estate Investments will purchase properties for a competitive price. We will also sell our properties for a moderate price that is determined by the local real estate market and the upgrades added to each property.
The following will be the operations plan for Lone Star Real Estate Investments. Operation Functions:
- Gabriel will be the CEO of Lone Star Real Estate Investments. He will oversee the general operations of the company and identify which properties the company will purchase and flip.
- Gabriel will hire an Administrative Assistant to help with the basic administrative functions of the company.
- Gabriel will also hire an Accountant and Social Media Manager.
- Gabriel will hire architects, contractors, and interior designers to help flip and upgrade each property.
Lone Star Real Estate Investments will have the following milestones complete in the next six months.
- 6/1/202X – Finalize contract to lease office space
- 7/1/202X – Finish buildout of office space
- 8/1/202X – Hire key staff
- 9/1/202X – Purchase first properties
- 10/1/202X – Begin fixing up properties
- 11/1/202X – Start selling properties and reach break even
Lone Star Real Estate Investments’ most valuable asset is the expertise and experience of its founder, Gabriel Pattinson. He has been a licensed commercial real estate broker for the past 20 years and as such has extensive knowledge of the local market. After selling properties to the residents and business owners of Dallas, he is ready to upgrade the commercial properties of the area and make a bigger profit.
Though Gabriel has never run a business of his own, he has worked in the real estate industry long enough to gain an in-depth knowledge of the operations (e.g., running day-to-day operations) and the business (e.g., staffing, marketing, etc.) sides of the industry. He will also hire several professionals to help him run other aspects of the business he is unfamiliar with.
Key revenue & costs.
The key revenues for Lone Star Real Estate Investments will come from selling the properties we invest in after fixing them up.
The major cost drivers will include the cost of the properties we purchase, renovation/construction costs, the lease, salaries, and marketing expenses.
Funding Requirements and Use of Funds
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Initial Number of Transactions Per Month: 1
- Annual Office Space Lease: $50,000
Income statement, balance sheet, cash flow statement, real estate investment business plan faqs, what is a real estate investment business plan.
A real estate investment business plan is a plan to start and/or grow your real estate investment business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Real Estate Investment business plan using our Real Estate Investment Business Plan Template here .
What are the Main Types of Real Estate Investment Businesses?
There are a number of different kinds of real estate investment businesses , some examples include: Real estate investment, and real estate trading.
How Do You Get Funding for Your Real Estate Investment Business Plan?
Real Estate Investment businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Real Estate Investment Business?
Starting a real estate investment business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Real Estate Investment Business Plan - The first step in starting a business is to create a detailed real estate investment business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your real estate investment business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your real estate investment business is in compliance with local laws.
3. Register Your Real Estate Investment Business - Once you have chosen a legal structure, the next step is to register your real estate investment business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your real estate investment business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Real Estate Investment Equipment & Supplies - In order to start your real estate investment business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your real estate investment business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful real estate investment business:
- How to Start a Real Estate Investment Company
How to Write a Real Estate Investment Business Plan: Complete Guide
- Tweet Share Share
Last updated on November 15, 2022
Building an investing business without a real estate investment business plan is sort of like riding a bike without handlebars.
You might be able to do it… but why would you?
It’s far easier and more practical to set out on your venture with a business plan that outlines things like your lead-flow, where you’ll find funding, and which market(s) you’ll operate.
Plus, according to Entrepreneur, having a business plan increases your chances of growth by 30%.
Download Now: Free marketing plan video and a downloadable guide
So don’t skip this critical first step.
Here’s how to do it.
Real Estate Investment Business Plan Guide
In this article we’re going to discuss:
- What is a real estate investment business plan?
- Create your mission and vision
- Run market analysis
- Choose your business model(s)
- Determine your business goals
- Find funding / Cash buyers
- Identify lead-flow source
- Gather property analysis information
- Create your brand
- Set growth milestones
- Plan to Delegate
What is a Real Estate Investment Business Plan and Why Does it Matter?
A real estate investment business plan is a document that outlines your goals, your vision, and your plan for growing the business .
It should detail the real estate business model you’re going to pursue, your chosen method for lead-gen, how you’ll find funding, and how you plan to close deals.
The kit and caboodle.
It shouldn’t be overly complicated.
Whether this real estate investment business plan is only for your personal use or to present to someone else, simplicity is best. Be thorough, be clear, but don’t over-explain what you’re going to do.
As far as why you should have a business plan, consider that it gives you a 30% better chance of growing your business.
Also, consider that setting out without a plan would be like — full of unexpected twists and turns — is that something you want to do?
It’s worth taking a few days or weeks to put together a business plan, even if it’s just for your own sake. By the time you’re complete, you’ll have greater confidence in the business you’re setting out to build.
And an entrepreneur’s confidence is everything.
How to Create Your Real Estate Investment Business Plan
Now we get into the nitty-gritty.
How do you create your real estate investment business plan? Here are the 10 steps!
1. Create Your Mission & Vision
This can be considered your “summary” section. You might not think that you need a mission statement or vision for your real estate business.
And you don’t.
We know a lot of real estate investors (many of our members, in fact) don’t have a clear mission or vision that they’ve outlined — and they’re successful regardless.
But if you’re just getting started…
Then we think it’s a worthwhile use of your time.
Because if you don’t know why you’re going to build your real estate investing business, if you don’t see what purpose it serves on a personal and professional level, then it’s not going to be very exciting to you.
You can either use this time to create a mission for your business… or a mission statement for you as it relates to growing your business (depending on your goals).
- Our mission is to create affordable house opportunities in the Roseburg, Oregon community.
- Our mission is to provide homeowners with an exceptional experience when selling their properties for cash.
Or you could go a more personal route…
- My mission is to create a business that supports my family.
- My mission is to build a company that gives me more time for what matters most to me.
Or you could do both…
- My mission is to create a business that supports my family, and my business’ mission is to provide homeowners with an exceptional experience when selling their properties for cash.
Either way, it’s good to think about this before getting started.
Because if you know why you’re going to build your business — and if, ideally, that reason resonates with you — then you’ll be more excited and determined to work hard toward your goals.
It is also an excellent opportunity to outline the core values you’ll adhere to within your business as Brian Rockwell does on his website …
With this information in hand, you’re ready to move on to the next step.
2. Run Competitive Market Analysis
Which market are you going to operate in?
That might be an easy question to answer — if you’re just going to operate in the town where you live, fair enough.
But it’s worth keeping in mind that today’s technology has made it possible to become a real estate investor in any market from pretty much any location (remotely).
So if the market you’re in is lacking in opportunity, then you might consider investing elsewhere.
How do you know which market to choose?
Here are the 10 top real estate markets for investors, according to our own Carrot member data of over 7000 accounts, based on lead volume…
- Atlanta, GA
- Houston, TX
- Chicago, IL
- Charlotte, NC
- New York, NY
- Los Angeles, CA
- Orlando, FL
- Philadelphia, PA
- Phoenix, AZ
And here are the top 20 states…
- North Carolina
That’ll give you some ideas.
But what makes a market good or bad for real estate investors? Here are some metrics to pay attention to when you’re doing your research.
- Median Home Value — This will tell you how much the average home sells for in the market, which will impact whether you’ll be willing to operate there. Because obviously, you want to play with numbers that feel reasonable to you.
- Median Home Value Increase Year Over Year — Ideally, you want to invest in a market where homes are appreciating every year. And a positive increase in this metric is a good sign that the properties you invest in will continue to increase in value.
- Occupied Housing Rate — A high housing occupancy rate means it’s easy to find tenants, and there’s a healthy demand for housing. That’s a good sign.
- Median Rent — This is the average cost of rent in the market and will give you a good idea of how much you’ll be able to charge on any rentals you own.
- Median Rent Increase Year Over Year — If you’re going to buy rentals, it’s a good sign if rental costs increase every year.
- Population Growth — When the population grows, it creates demand for housing, both rentals and on the MLS. That’s a good sign for a real estate investor.
- Job Growth — Job growth is a sign of a healthy economy and indicates that you’ll have an easier time capitalizing on your real estate investments.
Fortunately, all of this research is super easy to do on Google.
You can just type in the market and the metric in Google and you’ll get meaningful results.
Thank god for technology.
Want more freedom & impact?
From Mindset to Marketing, join our CEO as he unlocks the best stories, tactics, and strategies from America’s top investors and agents on the CarrotCast . If you want to grow your business, you need to check it out!
3. Choose Your Business Model(s)
There’s not just one real estate business model .
There are many.
And the market you’re in — as well as your business goals — will determine which business model you choose.
Here’s a brief overview of each…
- Wholesaling — Is a prevalent business model in the real estate world. Wholesalers find deals and flip them to other cash buyers for an assignment fee, typically somewhere between $5,000 to $10,000. It’s low risk and requires little capital upfront (you can get started with as little as $2,000).
- Wholetailing — Wholetailing is a mix between wholesaling and house flipping. A wholetailer will find a deal, do some very minor repairs (if any), and sell the house on the MLS themselves. It results in large profits with far less work. But wholetail deals are hard to come by.
- BRRRR — This stands for Buy, Rehab, Rent, Refinance, Repeat. It’s a long-term process for buying and holding rental properties. It’s a great way to build net worth and create generational wealth.
- Flipping — House flipping is the most popularized real estate investing method. It consists of purchasing distressed properties, fixing them up, and selling them at a good profit on the MLS, often making upwards of $100,000 per deal. However, this method involves much more risk than the other methods and each deal takes a lot longer to complete.
If you’re just getting started, then we recommend choosing just one business model and doing that until you’ve mastered it.
Down the road, you will likely want to use multiple business models.
We know the most successful real estate investors are wholesalers, wholesalers, flippers, and they own some rental properties.
That allows them to make the most of every opportunity that comes their way.
But again… to start, just choose one.
4. Determine Your Business Goals
At this point, you should have a pretty clear idea of why you’re going to build your real estate investing business.
Are you going to build it because you want to make an impact in your community? Because you want more financial freedom? Because you want more time freedom?
All of the above?
Whatever the case, now it’s time to set some goals related to your mission for the business.
Remember the SMART acronym for goal setting…
Start by thinking about how much money you’d like to make per month — this should be the first income threshold that you’re excited to hit.
Let’s pretend you said $10,000 per month.
Okay, now take a look at your business model. How many properties do you need to have cash-flowing to hit that number? How many deals do you have to do per month? How many flips?
Try to be as realistic with your numbers as possible.
Here are some baselines to consider for the different business models at the $10k/month threshold…
- Wholesaling – 2-3 Deals Per Month
- Wholetailing – 2-3 Deals Per Month
- BRRRR – $1 Million in Assets
- Flipping – 1-2 Flips Per Year
Now you have a general idea of the results you’ll need to hit your first income threshold.
But we haven’t talked about overhead costs.
How much will you need to spend to get those results?
Your answer to that question will be influenced by the market analysis you already did. But it’s pretty standard for the price of finding a deal to hover around $2,000 for a real estate investor (if you’re doing your own advertising).
So now you’re spending $2,000 per deal, or whatever your specific number is. That’s going to have an impact on how much money you’re making. So now we can adjust your goals to be more realistic for hitting that $10k per month marker…
- Wholesaling – 4-5 Deals Per Month
- Wholetailing – 4-5 Deals Per Month
- BRRRR – $1.5 Million in Assets
- Flipping – 2-3 Flips Per Year
The idea here is to figure out how many deals you’ll have to do per month to hit your income goals.
Then work that back into figuring out how much you’ll need to spend every month to realistically and predictably hit your goals.
At $2k per deal and intending to hit $10k/month, here’s what your deal-finding costs might look like…
- Wholesaling – 4-5 Deals Per Month – $8k-$10k/month
- Wholetailing – 4-5 Deals Per Month – $8k-$10k/month
- BRRRR – $1.5 Million in Assets – $6k-$8k/month
- Flipping – 2-3 Flips Per Year – $4k-$6k/month
That should give you a baseline.
How do those numbers look?
If they feel too high for you right now, lower your initial goal — you want to make your first goal something that you know you can accomplish.
Then, as you gain experience, you can increase your goals and make more money down the road.
Free Real Estate Marketing Plan Template
Take our short survey to find out where you struggle most with your online marketing strategy. Generate your free marketing plan video and downloadable guide to increase lead generation and conversion, gain momentum, and stand out in your market:
Download your marketing plan template here.
5. Find Funding / Cash Buyers
Are you going to fund your own deals or find private investors ? Or maybe you’re going to get a business loan from a bank?
If you’re just starting as a wholesaler or wholetailer, then it’s recommended funding your own first few deals — that should only cost $2,000 to $5,000… and why overcomplicate things in the beginning when you’re still trying to learn the ropes?
However, as a wholesaler or wholetailer, you’ll still need to find some cash buyers.
Here’s a great video that’ll teach you how to do that…
To consistently grow your cash buyer list (which is an important part of the wholesaling and wholestailing business model), we also recommend creating a buyer website like this…
Learn more about creating your cash buyer website with Carrot over here .
To scale, you might seek out other sources of funding.
Here are some options…
- Bank Loan — Getting a loan from a bank might be the most straightforward strategy if you’re just getting started. But keep in mind that the requirements for a loan on an investment property will be more stringent than the requirements were for your primary residence mortgage. And the interest rate will likely be higher as well. For that reason, you might seek out some of the other options.
- Hard Money — Hard money loans come from companies that specifically serve real estate investors. They are easier and faster to secure than a bank loan and hard money lenders typically base their approval of the loan on the quality of the investment property rather than the investor’s financial standing.
- Private Money — Whereas a hard money loan comes from a company; a private money loan comes from an individual with a good chunk of capital they’re looking to invest. That could be a friend, family member, coworker, and acquaintance. Interest rates and terms on these loans are typically very flexible and the interest rate is usually quite good. Private money is an excellent option for real estate investors looking to scale their business.
But before you seek out funding from those sources, get clear on what exactly you’re going to use those funds for.
Finding funding is even more critical. In fact — if you’re flipping properties or using the BRRRR method.
(It’s a key part of the BRRRR method)
You’ll likely want to use hard money or private money to fund your deals as you grow your business.
But how do you find and secure those loans?
Hard money lenders are easy to find — just Google for hard money lenders in your area and call the companies that pop up to get more details.
Private money (which usually has more favorable terms than hard money) is a bit trickier to find but not at all impossible.
To find private money lenders, you can…
- Tell Friends & Family — This should be the first thing you do. Tell everyone you can about the business you’re building and the returns you can offer investors. Then ask them if they know anyone who might be interested in investing.
- Network — After you’ve exhausted all your friends and family, make a point of getting to know people everywhere you go. The easiest way to do this is to wear branded clothing so people ask about what you do. Talk to people at coffee shops, grocery stores, movie theaters, and anywhere else that you frequent. You never know who you might meet.
- Attend Foreclosure Auctions — Foreclosure auctions are jam-packed with people who have cash-on-hand to buy properties. These people might also be interested in investing in your real estate endeavors. Or they might know where to find private money. Either way, it’s in your interest to build relationships with these people. Attend foreclosure auctions and bring some business cards.
Here are some tips on finding private money lenders…
6. Identify Lead-Flow Source
Now let’s talk about how you will generate a consistent flow of motivated leads for your business.
Because no matter which of the business models you’ve chosen… you’re going to need to find motivated sellers.
And you’re going to need to find those people every single month.
There are essentially two parts to a successful lead generation strategy for real estate investing business.
Both pieces are critical…
- The Short Term — We call this “hamster-wheel marketing” because it requires you to keep working and spending money to generate leads. Examples include Facebook ads, direct mail, bandit signs, cold calling, driving for dollars, and other tit-for-tat strategies that will burn you out if you’re not careful.
- The Long Term — We call this “evergreen marketing” because it requires an upfront investment… but that investment pays off for years and years to come. Examples include increasing brand awareness for your business in your target market(s) and improving your website’s SEO , so that motivated sellers find you .
Short-term tactics are critical when you’re first starting — in fact, they are likely going to be your only source of leads for at least the first few months.
Here are some more details on the most popular and effective methods…
- Tax default mailing lists
- Vacant house lists
- Expired listing lists
- Pre-foreclosure lists
- Out-of-state landlord lists
- Cold Calling — This might be more uncomfortable than stubbing your toe on a piece of furniture, but it can still be effective for finding motivated sellers. We have an article all about colding calling — it even has scripts for you to use.
- Facebook Ads — Facebook ads is another excellent method for generating leads so long as you have a high-converting website to send them to . If you don’t, get yourself a Carrot website . Each Carrot site is built to convert. Here are some more details about running successful ads on Facebook for your real estate investing business.
- Google Ads — Google Ads is one of the most popular platforms for real estate professionals needing to provide quick results with a minimal to high investment depending on markets.
But over time, the goal is to invest in more long-term evergreen marketing tactics so that you can get off the hamster wheel and build a more sustainable business.
Check out the video below to learn more about the critical distinction between short-term and long-term marketing.
At Carrot, we’ve created an online marketing system that makes generating leads super easy and simple for real estate investors.
And it’s 100% evergreen.
Here’s an example of one of our members’ websites that converts like crazy…
Try our free Marketing Plan Generator here.
7. Gather Property Analysis Information
We just talked about how you can generate leads.
But once someone calls you, once you’re checking out a property… How will you know if the property is a good fit for your chosen business model?
After all, not every property will be a fit.
First, ask the following questions when the seller calls…
- What is the address of the house you want to sell?
- How many bedrooms, bathrooms does it have?
- Does it have a garage, basement, or pool?
- If you were going to list it with a Realtor, what repairs and/or updating would you say would be needed?
- How much is owed on the house?
- Do you have an asking price in mind?
- Is the house behind on payments?
- If I come out and look at the property and make you a cash offer to buy it ‘As-Is’ and close as soon as you want, what would be the least you would be willing to take?
That will provide you with a lot of critical information about what you’re dealing with.
Next, once you’re off the phone, do a bit of due diligence and look at what nearby properties of similar size have sold for in the last 90 days or so — that should give you a ballpark idea for the after-repair value of the property.
If you decide that the property sounds promising, you’ll want to walk through it and take pictures of anything and everything that’ll need to be repaired.
Back at the office, estimate the cost of those repairs — here’s a great resource from REISift that’ll help you estimate rehab costs .
You’ll need to go through this entire process regardless of your business model so that you understand your max offer on the property.
So how do you calculate your max offer?
Use the 75% rule — check out this video from Ryan Dossey…
With that, you’ll know how much to pay for the property, how much to spend on repairs, and how much it’ll sell for.
The more you streamline this part of the process, the better.
8. Create Your Brand
Building a company is one thing.
Building an easily recognizable brand and known to be reputable in your marketplace is quite another.
But that’s an integral part of the process. Consider some of these statistics…
- Using a signature color can increase brand recognition by 80 percent.
- It takes about 50 milliseconds (0.05 seconds) for people to form an opinion about your website.
- Consistent presentation of a brand has seen to increase revenue by 33 percent.
- 66 percent of consumers think transparency is one of the most attractive qualities in a brand.
When it comes to building a real estate investing brand, your goals are to…
- Establish Rapport
- Create Easy Recognizability
- Dominate The Conversation
The first step in this process is building an online presence – that means creating a high-converting website (i.e., one that systematically turns visitors into leads by capturing their contact information), running advertisements, and ranking in Google for important keywords.
That’s what we can help you with at Carrot .
Out of the box, our website templates are built to convert visitors into leads – and you can customize them however you want with your branding materials…
You’ll even receive immediate text notifications when someone signs up to be a lead so that you can contact them right away (speed is the name of the game!).
Having a high-converting website is ground zero for brand-building success. If you don’t have a website that systematically converts visitors into leads, then every dollar you spend on advertising is going to be wasted.
So that’s where we start.
Once you’ve got your website up and running, then – if you’re on our Content Pro or Advanced Marketer plan – we’ll provide you with blog posts every single month that are written to rank in Google for high-value keywords relevant to your specific market …
You just upload, make some minor tweaks, and publish – and the more you publish, the more traffic you’ll drive.
To help you become a true authority in your market, we also have the following tools…
- Keyword Ranking Tracker
- SEO Tool For Optimizing All Pages
- Text Notifications For Leads
- World-Class Support
- Campaign Tracking Links
- Coaching Calls
We want to make generating leads as easy as possible for you… so you can focus on closing deals and growing your business.
You can try us here risk-free for 30 days.
If you get yourself a Carrot website, that’ll take care of the “Dominate The Conversation” part of the branding process.
But what about these parts?
Establishing rapport is simply a matter of putting testimonials and case studies on your website. The more of these you have, the more people will trust your brand when they arrive on your website for the first time.
As for creating an easily recognizable brand, create a simple branding package…
- Brand Colors
And then be consistent across all platforms. Use the same colors, font, logo, and brand name on everything – online and offline.
That’ll make it feel like you’re everywhere – which is what you want.
So there you go.
That’s how you create a brand identity as a real estate investor. You’ll know you’ve done it right if people are coming to you out of nowhere – because a friend of a friend told them about you.
And if you want a brand that dominates your market without all of the footwork, we’ve got just the thing – it’s called the Authority Leader Plan … and we’ll do everything for you.
9. Set Growth Milestones
Okay – let’s pretend that you’ve taken all of the steps above.
You’ve got yourself a functioning business and brand with funding, you’ve got consistent lead-flow, and you’re even closing some deals.
Well… you want to grow, of course!
You don’t just want to do one deal per month… you want to do three, five, or even ten deals per month.
You want to make more money, increase your net worth, grow your business, and have a significant impact.
How do you do that?
First, you set new goals and milestones for your business’ growth – how many deals do you want to be doing per month in 6 months? In a year?
Then break those goals down by quarter – and turn them into actionable to-dos.
For example, if you’re currently doing one deal per month and you want to be doing five deals per month by the end of Q2, here’s what your goals might look like…
- Send 10,000 Mailers Per Month
- Spend $5,000 on Facebook Ads Per Month
- Hire Salesperson To Answer Phone
- Hire Acquisition Manager
- Create Workflow Process
Or maybe it’ll look a bit different. Make your to-dos as realistic as possible so that if you do those things … you’re virtually guaranteed to hit your goals.
After all, what’s the point of having goals if you’re not going to hit them?
All in all…
Set milestone goals to grow your business, turn those into to-dos and break them down by quarter. The next and final step of your real estate investment business plan might be even more important…
10. Plan To Delegate
At some point, every real estate investor has to come to terms with a straightforward fact…
You can’t build the business of your dreams on your own . You need to delegate .
You’ve got to partner with other people, build critical relationships, hire people, manage people, create systems and processes to streamline your team’s workflow, and lots more.
Building a business isn’t so much about hustling and bustling as it is about putting the right pieces in the right place.
How do you scale your business?
The answer is quite simple: you do the same things you’re doing now… but at scale – that means hiring people, training people, and creating clean-cut systems.
That’s how you grow your business.
Automate, delegate, and step outside of your business as much as possible to build a real estate investment company that serves you rather than enslaves you.
Final Thoughts on Real Estate Investment Business Plan
What more is there?
You know how to create a mission and vision statement, run market analysis, choose an REI business model, set goals, find funding, generate leads, analyze properties, create a brand, set long-term growth milestones, and delegate.
All that’s left is action.
And reach out anytime with questions – we’re always here to help!
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