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How_to_Create_a_Simple_Real_Estate_Business_Plan
| How to Create a Simple Real Estate Business Plan
Becoming a full time property rehabber is actually a very easy
process. 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 wether 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:
- How many renovations do you wish to complete in one year? - Do
you have sufficient capital/finance to achieve this target? -
Will you sell for profit or hold? - Do you wish to create an
additional income stream? Do you wish to do it as a full time
job?
Why you need to write a business plan?
To plot the course
- To create the "big picture" - to recognise long term direction
and think about staying in business and not just starting a
business
To create a feasibility study
- Test the viability of your goals - Is it going to be
profitable - What kind of financing will you need - Recognise
the barriers to your success
Become a better decision maker
- Anticipate problems - The process of gathering information
ahead of time will allow you to make more informed decisions -
Your plan will provide you with an organised way to face issues
For a reality check
- 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
recognise what will be required of you - Identifies your
strengths and weaknesses and highlights needed areas of
assistance
Guide and measurement tool
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. 10. Summary.
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