Investing in real estate can be lucrative, regardless of whether you make it your primary business or a side hustle. Appreciation can be a great source of ongoing income and profits. Investing in real estate is also an excellent way to build wealth. These are some real estate investing business plan templates to help you get started.
Key Components of a Real Estate Investment Business Plan
However, real estate investing requires a business plan, as with all business ventures. A business plan is necessary to guide your decision-making and growth and help you finance your real estate and business operations.
A real estate investing business plan includes several components.
Executive Summary
The executive summary introduces your business and provides an overview of your business and the contents of your business plan. It describes how you plan to succeed at your business. It also includes your mission and vision statement.
Your mission and vision statement articulates the values and direction of your real estate business. It is the guiding star that you use to develop your strategy. The mission statement should inspire customers and your team.
You’ll develop your mission and vision statement first, and your strategy will fit your vision. To create your mission and vision statement, consider companies that you admire. (They can be from any industry.) Then, find their mission and vision statements and use them to develop your own.
Your executive summary is the first part of your plan. However, you should write it after you’ve written the rest of the plan.
Company Description
Your business plan should contain a brief overview of your company, your management team, and your expertise. It describes your legal structure, such as whether you are an S-Corp., LLC, or corporation.
It also describes the type of real estate investing business you will operate. For example, do you plan to make long-term investments in rental properties or embrace a short-term investment strategy in which you buy a fixer-upper, renovate it, and sell it quickly at a profit?
You’ll provide further details on your company in the rest of the business plan.
Industry Analysis
This section includes a market analysis, including any market trends that may affect your business. Writing this section requires that you research the business that educates you. It also should prove to potential funding sources that you are knowledgeable.
The industry analysis section should include answers to several questions, such as
- How big is the market?
- Is it increasing or decreasing?
- What trends are affecting the industry?
- Who are your key competitors?
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Investment Strategy
Although you briefly mention your strategy for your investment properties in the company description, you’ll deal with it in depth. You’ll also discuss how your strategy will help you meet your business and personal goals.
For example, you may purchase real estate and want to focus on long-term investments that produce income while also appreciating. However, until you can build up sufficient capital, you may engage in wholesaling, where you put a contract on a home and then find an investor to buy it.
Your strategy should also include the types of properties you will invest in, such as single-family homes, apartment buildings, or commercial properties. If your investments are within a specific geography, you’ll also list that geography in this section.
Customer Analysis
The customer analysis section briefly overviews your target customers, such as renters or home buyers. A well-researched customer analysis will break their target market into demographic and psychographic groups.
Competitive Analysis
The competitive analysis section overviews your competitors, their target market, products and services, and marketing share. Many real estate business plans also analyze their strengths, weaknesses, opportunities, and threats (SWOT), especially concerning their competitors. A SWOT analysis is an excellent way to find solutions to potential challenges.
The SWOT analysis starts with strengths and weaknesses. You might consider questions such as
- Are you successful at finding high-quality tenants?
- What is your track record in identifying good properties to renovate and sell?
- What is your competitive advantage, i.e., what do you do better than your competitors?
- How successful are you at raising capital?
The SWOT analysis also looks at opportunities and threats. A potential opportunity could be a new subway stop opening near a property you own that could boost its desirability or an opportunity to increase amenities at one of your apartment complexes. A threat could be a competitor renting similar properties at a lower price.
Marketing Plan
The marketing plan is a critical component of any business plan. The marketing plan should include
- Your business logo. Your logo should reflect your mission statement in some way.
- The value proposition of your real estate investing business. The value proposition is what the business offers customers that is unique.
- Your promotion strategy should include how you’ll gain referrals, use the Internet and social media, advertise in publications, and undertake other promotions.
- Your plan to develop, maintain, and grow relationships with potential customers.
- The types of products or services you will offer are property management services, renovated homes, and brokerage services.
- Your pricing strategy and how that compares with competitors.
Operations Plan
The Operations Plan describes how you operate from day to day. It includes information on how you:
- Find properties to acquire
- Oversee renovations
- Market properties when you wish to sell them
- Determine when to sell
It should also include information on your company’s organizational structure, the status of specific projects, milestones you expect to reach and when, and the steps you’ll take to achieve them.
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Management Team
You’ll have briefly discussed the expertise of your management team as a whole. You want to provide details in your real estate investment business plan. Highlight the experience of each key team member, emphasizing how each member will help you reach your business goals.
If you feel your team lacks experience, consider assembling an advisory board of experienced real estate professionals and noting the board’s existence in this section.
Also, note if you plan to hire additional managers as your real estate investment business reaches certain milestones. List what experience and skills you’ll seek in your new hires.
Financial Plan
Financial information is a significant component of a real estate investment business plan. Begin this section by specifying the source of your revenue as well as what drives your costs. If the purpose of your business plan is to receive funding, state the amount of funding you need and what you’ll use it for.
Then, include financial projections for your real estate investment property and business for the next five years. You’ll include several types of financial statements in your financial plan. In each statement, you’ll also include the assumptions you used to arrive at the projects.
Income Statement
The income statement (or profit and loss statement) shows the revenues minus the costs to show the amount of profit. To derive your revenue projections, you’ll need to assume a certain level of sales or number of rental units at a specific price.
Your costs would include maintenance, repair, or renovation costs, salaries and commissions, office rent (if any), marketing costs, and the cost of utilities and software. Do market research to base your assumptions on reality as much as possible.
Balance Sheet
The balance sheet is a snapshot of the assets and liabilities of your real estate investing business at a specific time. You’ll project assets, such as cash, real estate, and accounts receivables, for each of the five years. You’ll also project liabilities, such as debt and accounts payable. You’ll also launch the amount of equity for each of the five years.
Cash Flow Statements
The cash flow situation of a real estate investment business can significantly affect its success. Some businesses turn a profit but end up in bankruptcy because their cash flow is insufficient to pay bills when they are due.
For example, suppose a new commercial tenant requests a significant build-out. You’ll have to front the money to make the improvements and may not recoup it until the tenant has paid six months or more of rent. You may also have other expenses during that time.
If you have no other source of income, you could run out of money before you recoup your investment. Remember to list the assumptions that led you to project the cash flow as you did.
Appendix
If potential funding sources will be scrutinizing your plan, add an appendix. The appendix might include all the documents related to your financial plans, such as leases and a potential exit strategy, as needed.
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Best Real Estate Investing Business Plan Templates
Writing a business plan requires considerable research and strategy skills. It also requires a significant time commitment. Templates help reduce the time you need to write your business plan.
Many types of organizations offer business plan templates that you can download for free, although you may have to leave your email. Here are free business plan templates for the real estate investor.
1. Growthink
Growthink is a consulting firm that helps companies develop business plans and raise capital. Its co-founders, Dave Lavinsky and Jay Turo, graduated from the Anderson School of Management at UCLA and started Growthink to help entrepreneurs grow their businesses. The company’s values are “Integrity,” “Courage,” and “Positivity.”
Lavinsky has designed a real estate investing business plan template that includes most of the key elements above and provides advice on how to complete each section.
2. Fit Small Business
Fit Small Business is an online publication that answers questions from small business owners across all industries. It has industry-specific experts and a management team that supports the experts. The company, founded in 2013, claims 80,000 readers.
The publication provides tips on how to write your vision and mission statement, complete your SWOT analysis, and choose an investing model. It also provides tips on measuring business success, writing a company summary, and developing a financial plan. Its business plan template is free and downloadable.
3. Upmetrics
Upmetrics is a data analysis and data management software company based in India. Its software is designed to help startups plan and is used worldwide.
The company aims to spark business growth, promote job creation, and foster personal wealth. In addition to software, its website offers several small business guides and resources.
The company provides 200 sample business plans across several industries, including one for a real estate investing business. It also explains the various sections of the plan and tips on completing the sections.
See Related: Best Real Estate Investment Websites
4. FortuneBuilders
FortuneBuilders teaches people how to invest in real estate through courses, coaching, books, and podcasts. Its four founders have considerable experience in the real estate investment market, having invested more than $1 billion in residential and commercial properties.
They still manage real estate projects, generally 25 to 40 at a time. They also provide additional information through their blogs.
FortuneBuilders bases its real estate investing business plan template around eight “must-haves,” including a mission statement, goals, strengths and weakness analysis, investment strategy for each property, marketing plan, management team bios, explanation of financing, and answers to “what if” questions. The introduction to its full business planning template also has excellent information to help you determine whether you are likely to succeed in the real estate investment business.
5. BusinessPlanTemplate.com
BusinessPlanTemplate.com has over 250 customizable business plans for small businesses across many industries. Dave Lavinsky, also a co-founder of Growthink, founded BusinessPlanTemplate.com more than 20 years ago, and BusinessPlanTemplate.com is a subsidiary of Growthink.
The company claims to be a leading resource for business plan templates. In addition to templates, it includes advice on writing a business plan.
The company template for a real estate investment business is highly detailed, with more than a page on how to write each of the nine sections. It is also updated for 2023.
6. PlanBuildr
PlanBuildr is another Growthink company founded by Dave Lavinsky, who serves as its president. The company’s management team has deep entrepreneurial experience. Lavinsky, a managing partner in several other entrepreneurial ventures, previously worked as a marketing consultant.
Jay Turo is the CEO. Turo works with Lavinsky in many of his other ventures. He has an MBA and a bachelor’s degree in international business.
The PlanBuildr real estate investment business plan template includes sections on the investment company’s success factors and most standard business plan sections. The customizable plan is also downloadable.
7. Real Estate Investing.org
Real Estate Investing.org aims to help families “replace their income with passive income.” The company claims to have more than 25,000 investors.
It has articles and stories to help real estate investors succeed. Its values include having an abundance mindset and always empowering others.
Founder Eric Bowlin is an experienced real estate investor who has managed a portfolio of 450 properties. Real Estate Investing.org’s business plan template provides extensive advice on successfully projecting financials.
It also provides some information on other sections of the plan. Although you can download a plan for free, the information includes a link to a business plan software solution you purchase.
8. IncFile
IncFile helps small businesses manage the paperwork for forming or dissolving a new business or obtaining a trademark. The company also helps businesses develop an annual report and provides a free tax consultation.
It features a lot of information on business entity types. It claims to have more than 1 million customers.
IncFile’s blog contains several guides for startups, including a guide and template for a business plan for a real estate investment business. In addition to the more common sections of the business plan, it also includes a section on writing a backup business plan. It links with a template.
9. Carrot
Carrot is an online lead generation hub for real estate agents and investors. The company says its members convert leads at a rate seven times that of nonmembers and earn a profit of $14,000 greater on each lead.
Carrot also provides SEO and other tools to help real estate owners market and run their businesses. CEO Trevor Mauch is an experienced real estate investor with expertise in inbound marketing.
Carrot also provides advice on developing a business plan for a real estate investment business. Its free template includes an executive summary, business description, competitive analysis, building credibility section, and marketing strategy.
See Related: Ways to Start Investing in Apartment Buildings
10. Wiki Download
More than 19,000 people have downloaded the Wiki Download real estate investment business template. Available in PDF or Microsoft Word format, the 12-page document outlines the business plan and uses questions to help you develop a simple real estate investment plan yourself.
Sections include the executive summary, market analysis, implementation plan (operations plan), marketing efforts, sales strategy, financial forecasts, and assumptions.
11. Truic
Truic provides business services such as business organization, accounting, and business banking. It provides many of these services through partners and receives a referral commission.
It also provides classes on setting up a small business. The company is mainly focused on helping LLCs.
Truic offers many guides for small business owners, including the real estate investment business template. Truic’s real estate business plan guide primarily targets those who invest in and sell residential properties. Its template differs slightly from others because it starts with the owner’s financial goals.
The owner decides how much they wish to earn, then defines the amount of revenue required, and then the number of houses that must be purchased. It also offers advice on tailoring your business plan to potential readers, including lenders and investors.
12. Property Geek
Property Geek’s business plan template is aimed at property investment businesses. Writer Rob Dix founded Property Geek in 2012, and property soon became his life. He later launched Property Hub, which offers free courses and a YouTube channel, and created an investment app called Portfolio.
He also has written books and podcasts on property investment issues. He aims to make property investment fun. His website offers investment strategy, financing, property management software, and tax advice.
Property Geek’s real estate investment business plan development starts by determining goals. Then, you build a strategy to get from where you are now to the goal you hope to achieve.
Much of the strategy is developed around compensating for a lack of cash. The site offers a free downloadable business plan worksheet.
Frequently Asked Questions
Do I need a business plan if I want to buy a couple of houses and flip them?
A business plan will help you succeed at any real estate investment endeavor, no matter the scale or time frame. Startups with plans are likelier to launch and grow than those without.
Must I hire a consultant to help me develop a business plan for my real estate business?
No, many companies in the real estate industry offer free worksheets and templates for real estate investment businesses. They also provide advice on writing the plan. Most real estate investors can complete the business plan with these resources. If you need additional advice, you can generally obtain it through the SBA or another nonprofit.
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