How to Create a Simple Real Estate Business Plan


By Sal Vannutini

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:
  • 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?
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
  • 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.
Become a Better Decision Maker
  • 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.
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 recognize 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