How to Create a Simple Real Estate Business Plan
|Becoming a full time property rehabber is actually very easy, So why do so many investors get it wrong, or even worse, do nothing? Simple: No Business Plan! Make no mistake about it: This is a business! If you invest time and capital with the aim of making a profit, then you are in business, regardless of whether you purchase one or fifty homes. Before you commit a single dollar or a minute of your time, you should step back and have a good think about what it is that you want to achieve.|
When developing your business plan, you may wish to consider the following questions:
Why You Need to Write a Business Plan?
- Will you sell for profit or hold?
- Do you wish to do it as a full time job?
- Do you wish to create an additional income stream?
- How many renovations do you wish to complete in one year?
- Do you have sufficient capital/finance to achieve this target?
To Plot the Course
To Create a Feasibility Study
- To create the "big picture" - to recognise long term direction and think about staying in business and not just starting a business
Become a Better Decision Maker
- Is it going to be profitable.
- Test the viability of your goals.
- What kind of financing will you need.
- Recognise the barriers to your success.
For a Reality Check
- Anticipate problems.
- Your plan will provide you with an organised way to face issues.
- The process of gathering information ahead of time will allow you to make more informed decisions.
Guide and Measurement Tool
- The plan will challenge some of your pre-conceived assumptions.
- Your plan will raise questions that will inspire solutions before you need to face those problems.
- It allows you to recognize what will be required of you.
- Identifies your strengths and weaknesses and highlights needed areas of assistance.
The business plan will act as a guide throughout your development and allow you to measure your progress against planned expectations. You can make adjustments accordingly.
Your business plan should contain the following elements:
1. Executive Summary: Include general information about your business; your objectives; and your Start-Up details.
2. Market Analysis Summary: Give a brief description of the market that you intend to work in, and your acquisition strategy.
3. Implementation Plan: Outlines your renovation strategy and process.
4. Sales Strategy
5. Sales Projection
6. Projected Profits and/or Losses
7. Financial Plan
8. Management Summary
9. Important Assumptions
|Sal has successfully renovated real estate for both personal and investment purposes for over 10 years where he has bought, renovated and sold over 40 properties and build up a substantial portfolio. |
His knowledge and expertise in renovating is based on the many lessons learned from his hands-on experiences; as well as his many years in the real estate industry where he has helped clients to do the same with his private workshops and mentoring.
His application of the "buy and renovate" strategy gave him the option to stop working full-time at the age of 35. At the time of writing Sal has just turned 40 and had retired from full-time employment. He now lives his "perfect" life and divides his time between his renovation projects, as a private mentor to his clients, as a public speaker, traveling the world and "hanging out" with his wife and children.
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without the express written permission of the Author and/or REIClub.com.
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