A real estate investment business plan is vital to your success. A plan provides the direction and vision for your advisers and your team; it's a GPS for business. And it outlines investing resources needed to efficiently and effectively achieve the investment goals.
The best chance for success. Research indicates that businesses with a plan are twice as likely to succeed and 30% more likely to grow than those without one
Both. Successful investors understand that the two go hand and hand. By creating a business with a solid structure and using real estate investing strategies for start-up and growth, you'll be able to build long-term wealth.
Use an action plan, including goals for profit and growth, which focuses on outcomes and achievements. Your plan needs to have flexibility embedded in the core, but it needs a specific and detailed description of the goals that you want to achieve to become successful.
Keep your real estate investment plan goals SMART Specific, Measurable, Attainable, Realistic, and Timely. Specify how much cash flow is needed, what types of investments, measure success by the number of rental units, yearly income, or increase in net worth.
Describe how to execute the real estate investment business plan and how long it will take, including short and long-term goals. When you have a clear understanding of where you want to be, it is easier to choose investment strategies to get you there.
Create your vision and mission- why the company exists and its purpose considering that each goal must ultimately support the company mission.
Legal structure and asset protection to reduce risk. Will the business become a C corp or an LLC. Will land trust be used for asset protection? Which type of insurance? How to reduce taxes using benefits and business structures.
Which contracts and leases?
Decide which investing strategies. What is your niche? Decide how each strategy results in profit, cash-flow, and growth.
Research the market where you'll invest using a SWOT analysis. Create a plan to take advantage of strengths, eliminate weaknesses, invest in opportunities, identify threats and neutralize them. What is the median property price, average rental income, occupancy rate, and potential return on investment (ROI) in your real estate market? Do they enable you to reach your goals?
Secure Financing. Purchase properties with cash, hard money, or angel financing, and where will you find it? From local private money lenders or national mortgage brokers? Or will equity partners be used for rehab costs?
Marketing to buy, sell and rent. Which online and offline efforts will be used? How to find properties in your area, motivated sellers, and cash buyers. How much to budget for direct mail? How will you build a positive reputation?
Business systems and operations, including technology and software, automated processes that increase efficiency. And everything that affects the day-to-day operations of your investment business.
Your team. Who will be on it, and how will you delegate and optimize others' power? Which types of partnerships, professionals, and staff? Realtor to lease and sell your properties? VAs for essential office duties? Attorneys and title company for closing? Which contractors for rehab? Include special training for your team or yourself.
How will you network with other investors?
Build a timeline, pace out the goals and indicate an exact time for completions.
Take time to develop your business plan because it's your road map to success. Periodically, update and keep it fresh with a version that reflects your company's growth and role in the current market.
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