Writing a Business Plan: Tips for Developing a Real Estate Investment Roadmap

Writing a business plan is essential to building a successful real estate investing business. There are many ways to get industry planning tools at no cost. The Internet provides a variety of free and paid software. Many programs focus specifically on real estate and include templates that can be customized to meet your needs.

Writing a business plan allows investors to determine their real estate goals. The main purpose of creating a plan is to develop a road map for starting or expanding a successful business.

A strategic plan helps investors set goals and determine a plan of action. If you’re not sure which direction to take with your real estate business, strategic planning software can help you determine a niche.

Some real estate business software is pre-programmed with questions about various types of investment opportunities. These questions are designed to help users decide if they are a better fit for retail or commercial businesses, rental properties, home remodeling, or wholesale.

When developing your concept, it’s important to stay focused on your business requirements. For example, a new business will have different needs than an established business.

Writing a real estate investing business plan takes time and patience. This is particularly true if the plan will be used to raise seed capital or financing for expansion. On average, business plans consist of 20 to 30 written pages that include tables, graphs, and financial projections.

Typical plans focus on seven themes and should include the following information:

1. Executive Summary – In most cases, the executive summary is the first thing investors, lenders, and potential business partners will read. The executive summary should be concise and contain attention-grabbing information while summarizing the overall plan.

2. Mission Statement – ​​This section expresses your company’s focus, what it stands for, its target market, and what sets it apart from the competition.

3. Products and Services – Provide a detailed explanation of the products and services offered through your real estate business. Do you buy houses in a niche market? Can you guide people through difficult situations like bankruptcy, foreclosure, or short sales?

4. Market Analysis – Use graphs and tables to emphasize a specific market analysis. Discuss current and future trends and describe how your organization will capitalize on those trends.

5. Strategy and Implementation – Detail the strategies that will be implemented to develop a successful and profitable business. Explain your real estate goals and how you plan to achieve them.

6. Management Team – Whether you plan to set up a business as a sole proprietorship, partnership, or corporation, it’s important to include a resume from your management team. Include details of each member’s qualifications, experience, and role. Even if you’re flying solo, you’ll likely need assistance in some areas.

7. Financial projections: Considering that real estate is a turbulent market, this step can be one of the most challenging. Use the information provided in the previous sections to evaluate the financial projections. If the presentation will be used to obtain financing, include sales forecasts for a minimum of three years.

Writing a business plan can seem like a daunting task. Dividing it into sections makes it more manageable. Real estate business plans are intended to provide information to develop and expand your business. They are not set in stone and should be reviewed three to four times a year to make sure you are on track.