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Real Estate Investing & Rental Management | How To

How to Write a Real Estate Investment Business Plan (+ Free Template)

Published September 22, 2023

Published Sep 22, 2023

REVIEWED BY: Gina Baker

WRITTEN BY: Jealie Dacanay

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• 1 Write Your Mission & Vision Statement
• 2 Conduct a SWOT Analysis
• 3 Choose a Real Estate Business Investing Model
• 4 Set Specific & Measurable Goals
• 5 Write a Company Summary
• 6 Determine Your Financial Plan
• 7 Perform a Rental Market Analysis
• 8 Create a Marketing Plan
• 9 Build a Team & Implement Systems
• 10 Have an Exit Strategy
• 11 Bottom Line

A real estate investment business plan is a guide with actionable steps for determining how you’ll operate your real estate investing business. It also indicates how you’ll measure your business’ success. The plan outlines your mission and vision statement, lets you conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis, and sets goals in place. It’s similar to a business plan for any business, but the objectives are geared toward how you will manage the business, grow your investment, and secure funding.

We’ve created a free real estate investment business plan template for you to download and use as a guide as you read through the article and learn how to write a business plan for real estate investment:

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Free Real Estate Investment Business Plan Template

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1. write your mission & vision statement.

Every real estate investment business plan should begin with a concrete mission statement and vision. A mission statement declares actions and strategies the organization will use—serving as its North Star in achieving its business or investment objectives. A strong mission statement directs a real estate business, keeps teams accountable, inspires customers, and helps you measure success.

Before you compose your mission statement, you need to think about the following questions to do it effectively:

• What exactly is our business? The answer should encompass the essential functions of your real estate organization.
• How are we doing it? The response must explain your real estate goals and methods based on your core principles.
• Who are we doing it for? The response explains who your primary market is.
• What are our guiding principles? The “why” for your real estate company’s existence.

Mission statement example (Source: Oak Tree Capital )

The example above provides the mission statement of Oak Tree Capital. As a real estate investment business, it’s clear what its ultimate business objective is and how it will approach investing with integrity to maximize profit. Essentially, the investment company will drive monetary results—while maintaining its moral principles.

On the other hand, vision statements differ slightly from mission statements. They’re a bit more inspirational and provide some direction for future planning and execution of business investment strategies. Vision statements touch on a company’s desires and purpose beyond day-to-day operational activity. A vision statement outlines what the business desires to be once its mission statement is achieved.

For more mission statement examples, read our 16 Small Business Mission Statement Examples & Why They Inspire article and download our free mission statement template to get started.

If you want to write a vision statement that is truly aspirational and motivating, you should include your significant stakeholders as well as words that describe your products, services, values, initiatives, and goals. It would be best if you also answer the following questions:

• What is the primary goal of your organization?
• What are the key strengths of your business?
• What are the core values of your company?
• How do you aim to change the world as a business?
• What kind of global influence do you want your business to have?
• What needs and wants does your company have?
• How would the world be different if our organization achieved its goals?

In the example below from Aguila Real Estate, it hopes to be the preferred real estate company in its market.

Example of a vision statement (Source: Aguila Real Estate )

To make it easier, download our free template and follow our steps to create a vision statement for your small business. Take a look also at our 12 Inspiring Vision Statement Examples for Small Businesses in 2023 article to better understand how to create an impactful vision statement.

2. Conduct a SWOT Analysis

A SWOT analysis section of your real estate investing business plan template helps identify a business’ strengths, weaknesses, opportunities, and threats. This tool enables real estate investors to identify internal areas of improvement within their business through their strengths and weaknesses.

The opportunities and threats can assist with motivating a team to take actions that keep them ahead of an ever-changing real estate landscape. For a real estate business investor, the SWOT analysis is aimed at helping grow and protect investments over time.

Strengths & Weaknesses

Specifically for real estate investing, strengths and weaknesses correlate with the investment properties’ success and touch on items that will drive investment growth. The strengths can be the property’s location, condition, available amenities, and decreased vacancy. All of these items contribute to the success of a property.

On the contrary, the weaknesses include small unit sizes, excessive expenditures (finances to repair, upgrade, properties to acquire), low rents, and low cap rates. These weaknesses indicate less money is being collected and a lower overall return on investment (ROI). They are all factors that limit cash flow into the business and are internal factors that an investor can change.

See below for an example of strengths and weaknesses that could be included in a SWOT analysis:

Opportunities & Threats

Opportunities and threats are external factors that can affect an investment business. You don’t have control over these items, but you can maneuver your business to take advantage of the opportunities or mitigate any long-term effects of external threats. Opportunities relating to investment properties can be receiving certification with a city as a preferred development or having excess equity.

However, threats to an investment property do not need to be particularly connected to the property itself. They can be factors that affect your overall business. For example, interest rates may be high, which cuts your profits if you obtain a mortgage during that time frame.

An example of possible opportunities and threats for an investment business could be:

After creating your SWOT analysis, an investor can use these factors to develop business goals to support your strengths and opportunities while implementing change to combat the weaknesses and threats you anticipate. It also helps investors prioritize what items need to be addressed to succeed. These factors in a SWOT can change as the business grows, so don’t forget to revisit this portion and continuously reevaluate your SWOT.

3. Choose a Real Estate Business Investing Model

The core of real estate investing is to purchase and sell properties for a profit. How to make that profit is a factor in identifying your investment model. Different investing models are beneficial to an investor at different times.

For example, when interest rates are low, you may consider selling your property altogether. When interest rates are high and it is more difficult for people to obtain a mortgage, you may choose to rent out your properties instead. Sometimes, you must try a few models to see what works best for your business, given your area of expertise.

We’ve identified some investment business models to consider:

• Buy and hold: This strategy mainly involves renting out the property and earning regular rental income. This is also considered the BRRRR method : buy, rehab, rent, refinance, and repeat until you have increased your portfolio.
• Flipping properties : Flipping a property entails purchasing, adding value, and selling it higher than the investment costs. Many investors have a set profitability number they would like to hit but should consider market fluctuations on what they can realistically receive during the sale.
• Owner-occupied: Investors can live in the property while renting out extra units to reduce their housing costs and have rental income coming in simultaneously. This model is best if you own multifamily units, especially duplexes, triplexes, or fourplexes . It’s also a great way to understand the complexities of being a landlord. You can transition your unit to another renter when you want to move.
• Turnkey: Buying a turnkey property is the best option for investors who wish to enter the real estate market without having to deal with renovations or tenant management. It’s a practical way for seasoned investors to diversify their portfolios with fewer time commitments.

Investors don’t have to stick to one model, and they can have a few of these investment models within their portfolio, depending on how much effort they would like to put into each property. Before choosing an investment model, consider which will help you meet your investing goals most efficiently.

Read our Investing in Real Estate: The 14-Tip Guide for Beginners article to learn how real estate investment works and other investing business models. Also, if you’re new to real estate investing and are looking for foundational knowledge to get started or seeking information about the best online courses for real estate investing, look at our The 13 Best Real Estate Investing Courses Online 2023 article.

4. Set Specific & Measurable Goals

The next step to completing a real estate investment business plan for real estate investing is to set SMART goals. SMART is an acronym that stands for specific, measurable, achievable, relevant, and time-bound. Creating goals that contain all of the criteria of SMART goals results in extremely specific goals, provides focus, and sets an investor up for achieving the goals. The process of creating these goals takes some experience and continued practice.

An investor’s goals can consist of small short-term goals and more monumental long-term goals. Whether big or small, ideal goals will propel your business forward. For example, your end goal could be having a specific number of properties in your portfolio or setting a particular return on investment (ROI) you want to achieve annually.

Remember that your SMART goals don’t always have to be property-related just because you’re an investor. They can be goals that help you improve your networking or public speaking skills that can also add to a growing business.

Example of improving goals with SMART in mind:

Begin creating SMART goals with an initial goal. Then, take that initial goal and break it down into the different SMART components. SMART goals leave no room for error or confusion. The specific, measurable, and time-bound criteria identify the exact components for success.

However, the relevant and achievable parts of the goal require a little extra work to identify. The relevancy should align with your company’s mission, and extra research must be performed to ensure the goal is attainable.

Initial goal: Receive a 5% return on investment from the property

Smart goal:

• Specific: I want to achieve a 5% return on the 99 Park Place property.
• Measurable: The goal is to sell it for greater than or equal to $499,000.
• Achievable: The current market value for a two-bedroom in Chicago is selling for $500,000 and growing by 1% yearly.
• Relevant: I aim to meet my overall portfolio returns by 20% annually.
• Time-bound: I want to offload this property in the next three years.

5. Write a Company Summary

The company summary section of a business plan for investors is a high-level overview, giving insight into your business, its services, goals, and mission, and how you differentiate yourself from your competition. Other items that can be included in this overview are business legal structure, business location, and business goals. The company summary is beneficial if you want to involve outside investors or partners in your business.

​​Example company profile from Choueri Real Estate

A company summary is customizable to your target audience. If you’re using this section to recruit high-level executives to your team, center it around business operations and corporate culture. However, if you’re looking to target funding and develop investor relationships for a new project, then you should include investor-specific topics relating to profitability, investment strategy, and company business structure.

Partners and outside investors will want to consider your company’s specific legal business structure to know what types of liabilities are at hand. Legal business structure determines how taxes are charged and paid and what legal entity owns the assets. This information helps determine how the liabilities are separated from personal assets. For example, if a tenant wants to seek legal damages against the landlord and the property is owned by an LLC, personal assets like your personal home will not be at risk.

6. Determine Your Financial Plan

The most essential part of creating a real estate investing business is the financial aspect since much of the business involves purchasing, managing, and selling real estate. To buy real estate initially, you’ll have to determine where funding will come from. Funding can come from your personal assets, a line of credit, or external investors.

A few options are available to real estate investors when obtaining a loan to purchase properties. The lending options available to most real estate investors include the following:

• Mortgage: This is one of the most common means of obtaining financing. A financial institution will provide money based on a borrower’s credit score and ability to repay the loan.
• Federal Housing Authority (FHA) loans : This loan is secured by the FHA to assist with getting you a low down payment or lower closing costs, and sometimes easily obtain credit. There are some restrictions to qualify for this loan—but it could be suitable for newer investors who want to begin investing starting with their primary home.
• Home equity line of credit (HELOC) : If you currently have property, obtain a HELOC by using your current property to secure the line of credit and borrow against the equity in your property. As you repay the loan, your available balance on the line of credit gets replenished.
• Private lenders : These are lenders who are not financial institutions. These individual lenders typically have fewer restrictions than traditional lenders and will lend money to individuals who can grow their investments.
• Hard-money loans : This loan requires a hard asset to be leveraged for money. For example, you can put up the home you want to purchase as the asset for cash upfront, and the hard-money loan will be paid back once the home is sold or other funding is secured. This is great for short-term deals due to quick approval and little upfront money.

After funding is obtained to purchase property, financial projections help investors understand their financial standing. These projections can tell you potential income, profits, and when you may need additional funding in the future. Similar to lending options, these calculations are specific to your investing model. If you’re not planning to rent out the property, then calculations like gross rent multiplier are not applicable.

For more information on what is needed to obtain financing, read our articles Investment Property Financing & Requirements and 5 Best Crowdfunding Sites for Investors 2023 .

Additional Investment Calculations

In a rental property business plan, it’s important to use a rental property calculator to determine a property’s potential return on investment. The calculator considers various factors, such as purchase price, operating expenses, monthly income, or vacancy rates, to determine whether a property is a good investment.

Click on the tabs below for the other important calculations all investors should be aware of when purchasing and managing rental properties :

• Gross Operating Income
• Gross Rent Multiplier
• Vacancy Rate

The gross operating income (GOI) calculates the amount of rent and income received from a property minus any vacancy. It doesn’t take into account other expenses. It tells an investor how much income they’ll make after some assumed losses with vacancy.

GOI = Total rent + Other income – Vacancy losses

The capitalization (cap) rate calculates the return on investment (ROI) of a property. This equation is used to compare the return of one building to another. The higher the cap rate, the better since the purchase price is low.

Cap Rate = Net operating income / Purchase price

The gross rent multiplier (GRM) is a factor that helps determine a property’s potential profitability. It can be used to compare perspective buildings to determine which one is the better deal.

GRM = Property price / Gross annual income

The vacancy rate calculates the vacancy percentage of all your investment properties during a specific period. Percentage helps an investor determine how their property performs given current market conditions. If you have a high vacancy rate, you must determine the cause. Perhaps your asking rents are too high for the current housing market.

Vacancy Rate Formula = # of Vacant Units x 100 / Total # of Units

Cash flow is the movement of money in and out of your business, also known as net operating income. In an ideal scenario, investors will bring in more income than expenses, thus showing profit and a positive cash flow. Positive cash flow allows investors to decide how to use that profit. They can invest it in growing their portfolio or increasing their cash reserves for unexpected expenses.

Cash Flow = Gross rental income – Total expenses

Investors can use their current cash flow to forecast future cash flows, which will give you an idea of how much profit you will see over a specific period. Use past cash flow information to determine if there are any trends. For example, during the summer, your water expenses increase, or possibly every few months, you see an increase in property repairs. Consider these trends when estimating future cash flows and compare actual numbers to determine if your forecasting is accurate.

Use the template below to forecast future cash flow for six months and determine how much cash flow reserves you will have:

Cash Flow Template

💡 Quick tip:

In addition to the template, investing in property management software like TenantCloud will set you up for success. The free plan from TenantCloud will help you list apartments, collect rent payments, and screen applicants to maximize profits and minimize vacancies.

7. Perform a Rental Market Analysis

While determining what properties to purchase, investors should perform a rental market analysis (RMA) to gauge the investment potential of a rental property. The RMA consists of running comparables against current units on the market and collecting data that may affect your rental rate to understand if the rental property in question is a solid long-term investment. The analysis helps determine the average rental rate and future rent if you want to make any property upgrades.

Investors can use resources like Zillow to pull comparable property information and gather information on unit layout, building amenities, rental concessions offered, or listing prices. Once the information is gathered, the spreadsheet itemizes the average, median, highest, and lowest rent. When such information is available, it also provides an average price per square foot compared to the subject property. With this information, investors can decide whether the subject property is worth the investment.

Read our 10 Best States to Invest in Real Estate (& 5 Worst) in 2023 article to better understand which states yield a positive cash flow, build equity, and have long-term profitability.

8. Create a Marketing Plan

Once you determine which property to invest in, investors should identify a marketing plan to list the vacant units. Some investors offload the marketing and advertising to real estate agents and brokerages, which will also collect a fee for renting out the property. Refer to some of the best real estate marketing materials to get started, or use our free real estate marketing plan template to lay out your objectives and tactics.

A real estate marketing plan should include your goals, budget, target market, competitors, feasible marketing strategies, and unique selling offers. In addition, it’s crucial to balance your strategy and split your potential marketing plans into categories, like print materials, online ads, email, and social media, so that you can be very specific with your goals and metrics.

Here are some of the real estate marketing mediums to include as you set your marketing goals:

• Real estate website and landing pages
• Email marketing
• SMS and text message marketing
• Real estate ads
• Social media marketing
• Print marketing materials
• Real estate signs

Download our marketing plan template by visiting our article Free Real Estate Marketing Plan Template & Strategy Guide .

9. Build a Team & Implement Systems

As a new investor, you may be unable to hire an entire team of employees to help perform research, run analysis, property management , and accounting duties. It is best to have a list of vendors you can rely on to assist you with purchasing, rehabilitating, and buying or selling your investment properties. Find vendors you trust so you can free yourself from having to micromanage them and know they have your best interest and the interest of your investments in mind.

Here are a few people you want to include on your team:

• Contractors
• Electricians
• Property managers
• Accountants

You should also utilize real estate investing apps and property intelligence software like Baselane that relieve you of manually performing daily duties to keep your investments profitable.

Automated rent collection feature (Source: Baselane )

Baselane is an all-in-one solution—from banking to rent collection, bookkeeping, reporting, and analytics. This software will help you efficiently manage your portfolio and eliminate the need for manual tasks. Learn more about how Baselane can make you a better property owner.

Visit Baselane

If you’re looking for more tools to help you get started, improve your portfolio management, and streamline your operations, read our 6 Best Real Estate Software for Investors 2023 article. We listed the six best software tools available for real estate investing based on affordability, customer reviews, features, and support to assist you in finding the best software that suits your needs.

10. Have an Exit Strategy

Since an investor’s money is tied up in the properties they own until they choose to sell, deciding when to sell or liquidate to get access to your money is part of an investor’s overall real estate exit strategy. The exit strategy for a real estate investment business is a plan for when an investor would like to remove themself from a deal or the business altogether. It helps weigh the different scenarios to minimize business risks and maximize the total return on investments.

A few exit strategy examples are:

The factors that an investor should consider when devising an exit strategy are minimizing financial loss, recouping as much of their original investment as possible, and avoiding any unseen fees that will cut into profits like tax consequences. An investor’s plan should always be to grow their original investment, but unforeseen circumstances may occur that will require you to plan on when to cut your losses as well.

Bottom Line

Before launching a successful real estate investment business, you must have an efficient business plan, aligning your strategies with your business objectives. Our real estate investment business plan template can help get you started. These plans act as a roadmap so you can focus on the steps required to grow your business. Business plans evolve, so continuously revisit and improve your strategies. There is no right or wrong way to write a real estate investor business plan as long as it is used to achieve your goals.

About the Author

Find Jealie On LinkedIn

Jealie Dacanay

Jealie is a staff writer expert focusing on real estate education, lead generation, marketing, and investing. She has always seen writing as an opportunity to apply her knowledge and express her ideas. Over the years and through her internship at a real estate developer in the Philippines, Camella, she developed and discovered essential skills for producing high-quality online content.

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Your 10 Step Guide to Building a Real Estate Investing Business Plan

Real estate empires grow from a blueprint, not last-minute hunches. This guide outlines how to create a real estate investing business plan to help you navigate market dynamics, seek funding, and add to your team so that you can successfully grow your business.

Let’s be honest, the idea of drafting a formal real estate investing business plan probably doesn’t excite you. After all, you got into real estate investing to scout deals and transform properties, not write novels full of financial projections.

But experienced investors know a solid plan spells the difference between profitability and major headaches. It forces clarity on direction and feasibility before you sink hundreds of thousands into property purchases and rehabs.

Think of your business plan as a blueprint for success tailored to your unique investment goals and market conditions. Whether you currently own a few rentals or are launching a full-fledged development firm, a plan guides decisions, aligns partners, and demonstrates viability to secure financing.

So how do you build one effectively without needless complexity? What key strategy areas require your focus? Let’s explore components that set you up for growth while avoiding common first-timer pitfalls. With realistic planning as your foundation, your investing journey can start smooth and stay the course.

What is a real estate investing business plan?

At its core, a real estate investment business plan is simply a strategic guide outlining your intended real estate approach. It defines target markets, preferred project types based on expertise, capital sources, growth strategy, key operational procedures, and other investment specifics tailored to your situation.

View your plan as an evolving document rather than a rigid static rulebook collecting dust. It should provide goalposts and guardrails as markets shift over time and new opportunities appear. You'll be able to refer back to the plan to confirm that these new opportunities align with proven tactics that yield predictable returns.

Detailed upfront planning provides a sound foundation for confident direction. It protects stakeholders by identifying potential pitfalls and mitigation strategies before costly surprises trip up the stability of your real estate business.

So, it's worth it to take the time and develop a customized plan aligned to your niche, resources, and risk tolerance. While initially tedious, the practice of putting together your strategic real estate business plan ultimately provides clarity and confidence moving forward.

Importance of having a business plan

Now that we’ve defined what a business plan is, let’s explore why having one matters — especially if you want to grow a successful real estate investment company.

Have you considered what originally attracted you to investing in properties? Whether it was rehabbing flips, acquiring rentals, or simply a lucrative hobby, your motivations and ideal path can get lost in the daily distractions of life. That’s where an intentional business plan provides clarity and conviction moving forward.

Reasons every real estate investor should prioritize planning are:

• Goals and vision : You might be wanting to quit your day job and focus on real estate full time, or you might simply want to generate some extra income on the side. Either way, a business plan forces you to define what success looks like for you.
• Due diligence : Creating a plan forces you to research the real estate markets you want to invest in — analyzing sales, rents, permits, zoning, demographics, and growth projections. This helps you objectively identify high-potential neighborhoods and properties rather than relying on hearsay or intuition.
• Funding and financing : Lenders and potential investors will want to review your business plan to evaluate the viability and profitability of your real estate investment business before offering any financing . A complete plan builds credibility and confidence with stakeholders.
• Guide decision-making : It's easy to get distracted by the latest real estate seminar or shiny new construction techniques. But sticking to the parameters and strategies laid out in your plan prevents you from making hasty changes or going down rabbit holes.
• Identify potential risks : There are always things that can unexpectedly go wrong: what if interest rates spike and make your loans unaffordable, or your best tenants move out and unreliable folks move in? Brainstorming these scenarios in advance allows you to minimize risks and have contingency plans.
• Systemize operations : As you grow, how will you scale operations? A business plan helps you identify areas that will require attention as your business evolves, like creating maintenance checklists for rentals, standardizing lease agreements , or automating accounting procedures.
• Build the right team : Your business plan provides guidance on the team you'll need for your business. Know if you require a real estate agent to help you find deals or a property manager to handle tenant complaints at 2 AM.
• Track progress : Your plan helps you compare things like actual rehab costs, rental occupancy rates, cash flow, etc. to your initial projections and determine whether you're on track.  You can then make adjustments as needed.
• Maintain strategy : As you scale your operations with new hires or partnerships, you'll want to maintain direction in alignment with your original business plan. For example, if you are considering new verticals like commercial real estate, does evaluation criteria match your proven risk metrics and return hurdles? A real estate business plan keeps everyone focused on the same goals as your business grows.

What to include in a real estate investment business plan

A good real estate investing business plan covers everything from business goals to financing strategy. Here are the ten key elements you should include:

1. Executive summary

The executive summary provides a high-level overview of your real estate investment business plan. It briefly describes your company mission, objectives, competitive advantages, growth strategies, team strengths, and financial outlook.

Think of it as the elevator pitch for your business plan, and write it last after you have completed the full plan. Limit it to 1-2 pages at most.

Make your executive summary compelling and motivate investors or lenders to learn more. Be sure to also summarize your past successes and experiences to build credibility.

2. Company description

The company description section provides background details on your real estate investment company. Keep this section brief, but use it to legitimize your business and team.

• Business model : Explain your core business model and investment strategies. Will you primarily flip properties, buy and hold rentals, conduct wholesale deals, or use another approach?
• Company history and achievements : Provide a brief timeline of your company's history, including its formation, past projects, key milestones, and achievements.
• Legal business structure : Identify your corporate structure, such as LLC , S-Corp , C-Corp, or sole proprietorship.
• Office location : Provide your company's office address, which lends you credibility. If you are initially working from home, consider establishing a local PO Box or virtual address.
• Founders and key team members : Introduce your founders and key team members. Highlight relevant real estate, finance, management expertise, and credentials.
• Past projects : Provide an overview of any successful prior real estate projects your company or founders have executed.
• Competitive advantages : Explain unique resources, systems, or other strengths that give your company an edge over competitors. These could be proprietary analytic models, contractor relationships, deal access, or specialized expertise.
• Technologies and tools : Discuss technologies, software programs, or tools your company uses to streamline processes and optimize operations.

3. Market analysis

The market analysis section validates whether your real estate investment strategy makes sense in a given area.

Conduct detailed research from multiple sources to create realistic real estate investment market projections and identify potentially profitable opportunities.

Outline why certain neighborhoods, property types, or price points pique your interest more than others.

Your market analysis should dig deep into factors like:

• Local sales and rental price trends : Analyze pricing history and current trends for both sales and rents. Look at different property types, sizes, and neighborhoods.
• Housing inventory and demand analysis : Research the balance of supply and demand and how that impacts prices. Is the market undersupplied or oversupplied?
• Market growth projections : Review forecasts from real estate analysts on expected market growth or decline in coming years. Incorporate these projections into your analysis.
• Competitor analysis : Identify other real estate investors actively acquiring or managing properties in your target areas. Look at their business models and strategies.
• Target neighborhood and property analysis : Provide an in-depth analysis of your chosen neighborhoods and target property types. Outline positive attributes, risks, and opportunities.
• Demographic analysis : Analyze the demographics of potential tenants or homebuyers for your target properties. Factors like income, age, and family size impact demand.
• Local construction and renovation costs : Research materials and labor costs for accurate budgets and understand the permitting process and timelines.
• Regional economic outlook : Factor in projections for job growth, new employers, infrastructure projects, and how they may impact the real estate market.

4. SWOT analysis

SWOT stands for strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis means stepping back from day-to-day business to assess your broader position and path from a strategic lens.

Internal strengths for your real estate investment business may include an experienced team skilled in major rehab projects, strong contractor relationships, or access to private lending capital. Weaknesses might be limited staff for handling tenant maintenance issues across a growing rental portfolio or only having a small number of referral partners for deal flow.

External opportunities can come from accelerating population growth and development in your target market, new zoning favorable to multifamily housing, or record-low mortgage interest rates. Threats could be rising material prices that hurt your flip margins, laws imposing restrictions on non-primary residence owners, or an oversupply of new luxury rentals, allowing tenants to be choosy.

The SWOT analysis highlights strengths to double down on and risks to mitigate in the real estate market.

5. Financial projections

The financial plan helps for both internal preparation and attracting investors. For real estate companies, the financial plan section should cover:

• Startup costs : Include the expected startup costs involved to start your investment project, such as getting licenses and permits or paying for legal fees.
• Profit and loss forecasts : Create projected profit and loss statements that outline what you think your revenues and expenses will be over the next 3-5 years.
• Cash flow projections : Put together projected cash flow statements that show expected cash flow for each month.
• Return on investment projections : Project your company's expected ROI over time under the different investment scenarios.
• Funding requirements : Based on your forecasts, detail exactly how much capital you will need to start and operate your business until it is profitable. Specify whether you plan to use debt or equity financing.

6. Investment strategy

The investment strategy outlines your niche — will you focus on flipping, buying rentals, commercial properties, or a blend? Define any geographic targets like certain cities or zip codes backed by your research on growth potential.

Specify your criteria for ideal investment properties based on your goals. Decide which factors — age, size, layout, condition, or price point — matter most to you.

You can also use this section to explain how you plan to find deals, whether that's by scouting listed properties, attending foreclosure auctions, or networking to create off-market opportunities.

Clearly conveying your approach allows lenders and potential private investors to grasp your niche, planned pursuits, and process for finding deals. Having a strong strategy that summarizes how you locate, evaluate and capture deals matching your investing thesis can increase lender and private investor confidence in your ability to execute.

7. Marketing plan

Real estate marketing can’t just be an afterthought; it helps attract profitable deals, financing, and tenants to your business, making it a necessary component of your business plan to prioritize.

Components of your marketing plan can include:

• Networking: Actively networking at local real estate meetups puts you directly in front of promising off-market opportunities and partnerships with motivated sellers, lenders and contractors in your community.
• Social media: Consistently nurturing your social media presence can also pay off to help you find opportunities or potential investors.
• Direct marketing: Never underestimate old school direct marketing — sending postcards to addresses with outdated “We Buy Houses” signs or calling the For Sale by Owners numbers from public listings can help you reach motivated sellers.
• Listings management: Note that marketing does not end once you own property. To keep rental vacancies filled, leverage listing sites that can publish your units to a wide audience of prospective tenants.

8. Operations plan

Without systems, real estate investors struggle through renovations plagued by cost overruns, shoddy contractors who never call back, and frustrating tenants who always pay late . The operations component of your plan should consider aspects like:

• Renovations: Ever lined up a contractor who juggles too many clients and leaves your projects languishing? Create standardized processes for accurate scoping, vetting subs, enforcing deadlines contractually, and maintaining contingency funds.
• Business technologies: As your portfolio grows, tasks like tracking income, expenses , assets, and communicating with tenants can quickly overwhelm. Identify technologies early on that help centralize details to avoid getting swamped. Look into property management platforms that automate listings, tenant screening , digitized lease agreements, maintenance work order flows, and communications.
• Insurance: Tenants or contractors can sometimes damage assets. Discuss landlord insurance policies to protect you against lawsuits, natural disasters, and major property repairs as you scale up.

9. Team structure

If you plan to grow your team beyond just yourself or a few partners, your business plan should outline your organization's key roles and responsibilities. This helps you consider what positions you may need to fill as your company scales.

• Partners or co-founders: These are the main decision-makers and equity holders. Outline their background, skills, and the value they bring.
• Property manager: This person handles day-to-day management of properties, tenants and maintenance issues.
• Bookkeeper: You may need daily help managing bank accounts, invoices, taxes, and financial reporting.
• Contractors and project managers : You'll need trusted renovations, repairs, and landscaping contractors. Dedicated project managers help oversee large jobs.
• Leasing agents : As you grow and add more properties, leasing agents handle showings, applications, and signing new tenants.
• Real estate attorneys : Real estate investing requires proper legal filings and compliance. Attorneys can help you manage this risk.

10. Exit strategies

Every wise investor plans their exit strategy upfront before acquiring a property. Will you aim to flip the asset quickly or retain it as a rental long-term? What factors determine ideal timing and the right profit margin for you to walk away?

Build flexibility into your strategy, as markets move in unpredictable ways. Especially with flips, have contingency plans if your listing gets lowballs or no offers. Be willing to rent short-term, refinance and hold if possible, convert to condos, or just patiently wait until the market changes. Having reserves and backup options allows you to avoid a distress sale.

Also include plans for strategies after a property sale, like a 1031 exchange to defer capital gains taxes and reinvest in another property. You may want to use sale proceeds to reduce or clear outstanding debts, enhancing cash flow and financial standing.

Tips for your real estate business plan 

Now that you know what to include, consider the following four tips to help your real estate investment business plan stand out.

1. Be detailed and specific

Resist the urge to gloss over details as you put together your plan. Drill down on the specifics for parameters like:

• Target purchase and rehab costs.
• Timelines for completing projects.
• Minimum profit margins.
• Maximum allowable vacancy rates .
• Minimum cash reserves.

2. Refine and update regularly

Markets change, so don't create your business plan and file it away. Review your plan regularly to see how market conditions and your actual results compare to projections.

Make adjustments as needed. Tweak your approach if your rehabs are going over budget or your properties aren't selling as quickly as expected.

Aim to update your full plan annually at a minimum. Even if your overall strategy remains consistent, refresh the details around market factors, financials, tactics, risks, and projections.

3. Seek expert feedback

Before implementing your new real estate investment business plan, seek feedback from advisors who can identify potential issues or weaknesses.

Ask experienced real estate investors in your area to review your plan and provide constructive input. It's also a good idea to share your plan and numbers with your CPA and legal counsel as well.

4. Keep it simple

While specificity is good, don't over complicate your business plan to the point where it becomes difficult to follow. You want to inform readers without confusing them.

The goal is for stakeholders, such as co-investors, lenders, and partners, to easily digest your plan and understand it after a quick skim. Make it easy for readers to grasp your reasons behind focusing on a given area or project type based on market conditions and opportunity.

A property investment business plan fit to your goals

After finally finishing your business plan, you’re probably eager to dive into tangible investments rather than tweaking spreadsheets. But in the real estate industry, even experienced investors periodically step back and update strategies.

Approach your business plan as a living document that evolves as the market shifts, as you create new partnerships, or when you need to make changes in strategy. Set reminders to revisit quarterly and confirm your activities of today still align with the vision from day one.

Solid planning is proven to improve outcomes in dynamic industries like real estate investing. Though preparation isn’t glamorous, it pays dividends. Thoughtfully constructing your playbook puts the odds of executing successfully in your favor.

With a solid blueprint backed by your research, you’re now ready to capture the best real estate investment opportunities.

Business plan real estate investor FAQs

How do i stay flexible and adapt my business plan to changes in the market.

To stay flexible, review your real estate investing business plan regularly and update it based on changes in market conditions, trends, and opportunities. If things change in the market, find ways to adapt your strategy. This can include your goals, target market, financing, and even your exit plans.

How do I know if my real estate investing business plan is effective?

You'll know your business plan is effective if you're meeting the key objectives and metrics you outlined. Let's say your plan called for you to purchase a certain number of properties and achieve a specific cash flow or rate of return. If you're falling short, you can use the plan to course-correct.

Are there any specific software or tools for creating a real estate investing business plan?

Azibo is a helpful software tool for creating real estate investing business plans. This comprehensive platform has templates and tools to build out key sections of your plan. Its robust accounting and financial capabilities help construct accurate statements and projections.

Incorporating Azibo's online rent collection allows you to model cash flows. By centralizing lease documents , accounting, and portfolio management, Azibo streamlines the process of putting together a strategically sound real estate business plan.

Important Note: This post is for informational and educational purposes only. It should not be taken as legal, accounting, or tax advice, nor should it be used as a substitute for such services. Always consult your own legal, accounting, or tax counsel before taking any action based on this information.

Nichole co-founded Gateway Private Equity Group, with a history of investments in single-family and multi-family properties, and now a specialization in hotel real estate investments. She is also the creator of NicsGuide.com, a blog dedicated to real estate investing.

Whether you’re a property owner, renter, property manager, or real estate agent, gain valuable insights, advice, and updates by joining our blog.

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How to Create a Real Estate Investment Business Plan for Residential Rental Properties (Free Template)

Ready to unlock the potential of real estate investment and build your financial future? Whether you’re an experienced investor or just starting out , crafting a well-thought-out business plan is critical if you're to succeed in the world of residential rental properties. 

This article will guide you through the essential steps, considerations, and components of creating a real estate investment business plan. Plus, we've got a valuable free template to make your journey even more manageable.

Why You Need a Business Plan for Real Estate Investment

Crafting an effective real estate investment business plan is about more than paperwork; it's about turning your aspirations into achievements.

Creating a formalized business plan for your real estate investment venture is tantamount to success. It forces you—the investor—to organize your thoughts, feelings, goals, and ideas moving forward in the business in a single, powerful document. 

Remember, this is a living document meant to be flexible as your business grows or changes tactics over the years. It keeps you on target, helps expand your business, and keeps your financial goals on track. 

It’s also a helpful document for potential investors, creditors, and partners to peruse before pursuing a business venture with you. 

And speaking of collaborators, finding sample real estate investment business plans or a template to download to get you started is a good idea. But before diving into that, let's look at a few general considerations that will shape your plan.

General Considerations for a Real Estate Investment Business Plan

Before you start actually writing your business plan, there are a few general considerations to keep in mind:

• The Why. When you start any new venture, it’s good to know you’ve got the strength to realize your goals, even when things get tricky. Defining why you’re embarking upon this real estate investment journey is necessary if you want  to reach your destination. Why do you want to invest in real estate? To create financial independence? To serve the community? To provide for your family? Everyone’s “why” is unique to them. As such, your underlying motivation should be the starting point of creating a business plan. Everything follows from this origin.
• Financial Goals. Next, it’s wise to consider your financial goals. What are you hoping to accomplish financially? This is a business, and having defined financial goals will help keep your real estate investments trending in the right direction. 
• Timeline. When do you want to achieve all this? Are you taking this business from now until retirement or looking to flip a few houses before the decade closes? Having a general timeline in mind when planning means you’ll be realistic about what goals you can accomplish. 
• Real Estate Investment Strategy. There are countless ways to jumpstart your real estate investments. Doing a bit of research to discover which real estate investment strategies best suit your financial goals and desired timeline will ensure your business plan is realistic moving forward.

These considerations form the foundation of your real estate investment business plan. But how do you piece it together and create a comprehensive, winning document? 

Spoiler alert: Property managers can be your secret weapon in crafting an airtight plan and guiding you through your investment journey. 

But first, let's explore the essential components of your business plan and how a property manager can make the process smoother.

Essential Components of a Business Plan for Real Estate Investment 

A well-thought-out business plan for real estate investment should help you secure the financing and partnerships needed to bring your dream to fruition. 

To do this, it must include the following components:

• Executive Summary: a bird’s eye view. The first section of a business plan is like an abstract for a research paper. Here, you’ll introduce the plan and give an overview of what comes later in the document. 
• Define your team. Who are you bringing on this journey? What are their qualifications? This section can attract new investors and partners by touting the team's accomplishments. 
• Outline marketing strategy. A business plan won’t succeed without a marketing strategy to connect with potential clients, in this case, future tenants. Your real estate business plan must include understanding the need for top-quality marketing and a method to market your business successfully. Will you run social media ads? Rent local billboard space? 
• Demonstrate initiative and a willingness to learn. Include a section to show that you know this industry, have researched the competition, and are aware of local real estate market trends and areas for growth. This will communicate to potential investors you’re willing to put in the elbow grease it takes to succeed long-term in this business. 
• Describe the “What”. What services will you offer? What type of properties will you invest in? What are the next steps to your plan moving forward? 

As you dive deeper into your real estate investment journey, remember that the strength of every property manager relationship reflects the property owner's dedication. 

How to Create a Residential Real Estate Business Plan Quickly 

If you're looking to create a residential real estate business plan quickly, here are a few must-have tips to get you started:

• Define: Mission. Vision. Values. A business is only as strong as its “big three” pillars: the mission, vision, and values. Begin your business plan by defining what the purpose of your business is (its mission), your plan to bring this mission to life (vision), and the values that will guide your actions when the going gets tough. Careful consideration of these will give you clarity when finding team members to build your business later on. You need people who click with what your business stands for. 
• Identify short and long-term goals. A real estate business is only as successful as it prepares to be. Remember the adage: if you fail to plan, you plan to fail. Spending time identifying short (3-12 months out) and long (1-5 years in the future) term goals gives you and your team ways to mark the journey to success with well-defined milestones. 
• Figure out the finances. How will you fund your business? There are many ways to find capital to bring your real estate business plan to life, but you may have to get creative. And you’ll need to stay organized and on task to bring your financial goals to fruition. 
• Find the perfect property manager. The quickest way to accomplish this magnificent business plan you’re creating? Hire a property manager to help you skip the grunt work. But while finding the right manager for your business isn’t easy—you’ll need to research and interview several property managers before you get a feel for what’s best for you—the road will be much less bumpy with a solid business plan in hand. 

How a Property Manager Can Help You Create a Real Estate Investment Business Plan

A property manager can help you create a real estate investment business plan in five important  ways. 

• Provide you with insights into the local real estate market.
• Help you identify and evaluate potential investment properties.
• Help you develop a marketing strategy to attract tenants.
• Help you manage your finances and keep track of your expenses.
• Provide you with guidance and support throughout the investment process.

When you enter property manager interviews armed with a robust business plan, you demonstrate your commitment and pave the way for a successful partnership. 

Ultimately, creating the ideal business plan for real estate investment begins with you. Every property manager relationship is only as strong as the drive of the property owner. 

Download APM’s free sample real estate investment business plan template to get started.

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How to write your real estate investing business plan: the ultimate guide.

• February 8, 2023
• , Business Advice , How to , Real Estate Investing Tips

Want to create a real estate investing business plan?

Well, you could just launch your business.

You could go door-knocking for the next week, maybe even find a property to buy, buy it, and then try to flip it or rent it out. Then you could do that over and over again.

Heck — maybe you’d even build a healthy business out of it.

Buuuuut, maybe not.

If you’re anything like me, then you favor planning over mindless execution (sorry Gary Vee). You don’t want to just launch a business that may or may not succeed, you want a real estate investing business plan . You want to give your business the best possible chance of success.

For that, you need to spend a little time thinking about the details of how your business will function.

Let me prove it to you…

Why do you need a real estate investing business plan?

I could talk your ear off about why people who make a plan for their real estate investing business will succeed. Or I could tell you about the people I’ve personally  seen set out without a plan and fail. Or I could tell you a story about one person who had the best of intentions for his new real estate investing business, but lost money his first month because he didn’t have a clearly defined budget.

But I won’t…

I’ll  show you.

Research from 2,877 business owners revealed that people with a plan are more likely to grow their business, secure investment capital, and/or secure a loan.

( Image Source )

Here’s how the authors of the study put it:

“Except in a small number of cases, business planning appeared to be positively correlated with business success as measured by our variables. While our analysis cannot say that completing a business plan will lead to success, it does indicate that the type of entrepreneur who completes a business plan is also more likely to run a successful business.”

So whether you want to give your business a better chance at succeeding down the road, or simply  become the kind of person who will likely grow a successful business, drafting a plan is in your best interest.

And it doesn’t have to be remarkably complicated.

12 Steps To Create Your Real Estate Investing Business Plan

Here are 12 steps to get you moving.

Step 1. Create your vision and mission

It might seem like a silly first step to creating your real estate investing business plan.

Because let’s be honest: you’re setting out to make money, achieve financial freedom, and live on your own terms. You’re not setting out to save the world from some big injustice (probably — props if you  are ) or change other people’s lives for the better.

You want to build a business that will benefit  you .

Still, a mission and vision statement can help define  how you’re going to build that business, why you’re building it, and who your business is going to serve. Because even though you’re building a business to benefit you in the end, the only way to build a successful business is by helping  others .

As Bob Burg wrote, “Your income is determined by how many people you serve and how well you serve them.”

Here’s an example of a mission and vision statement.

Just like you personally have a “why?” to your existence, your business needs a “why?” to its existence. Your mission and vision statement will help you determine what that “why?” is and how your business is going to make you money by helping others.

Step 2. Determine your end goal

You also must connect your own personal goals to the goals of your business — you’re the one who’ll be building it, after all. Your business will live or die based on your own daily motivation, ambition, and energy levels.

For that reason, you should ask yourself this dead-simple question: “Why am I building this business? What is my end goal?”

Do you want to be a millionaire? Do you want to live on the beach in Tahiti and sip gin for the rest of your life while this business makes you money on autopilot? Do you want to be the CEO of a large corporation? Do you want to make $200k per year and work 10 hours per week?

What you want out of your business will determine the kind of business you build. And the more attractive your end goal is, the more determined you will be to keep going when things get tough. I love the way that Tim Ferriss puts it: “The question you should be asking yourself isn’t, ‘What do I want?’ or ‘What are my goals?’ but ‘What would excite me?'” Because the more excited you are, the more determined you’ll be.

Step 3. Do market research using a SWOT analysis

SWOT stands for Strengths, Weaknesses, Opportunity, and Threats.

And determining those four things for your own business  before you launch is vital. Ask yourself…

• Strengths: What are competitors already doing well in my market that I likely won’t be able to compete with?
• Weaknesses: What are competitors in my market  not doing well?
• Opportunity: What opportunity in my market are most competitors not leveraging and might I be able to exploit that?
• Threats: What will be the big threats to my business and how can I prepare for these?

Here’s a more thorough graphical breakdown of SWOT to help you perform your market analysis.

Step 4. Choose a real estate investing business model

After you’ve performed your SWOT analysis, you should be ready to determine the  type  of real estate investing that will be most lucrative for your market. Try not to let funding make the decision for you (i.e. I don’t have much capital, so I guess I’m going to wholesale), because the reality is that there’s  always a way to get money to build your business — the important thing is that you’ve chosen a type of real estate investing which is likely to succeed given current market conditions.

Here are the most common real estate investing business models:

• Wholesaling   — This is when you find good deals and flip those deals to cash buyers for an assignment fee. You can usually make $5,000 to $25,000 per deal and it doesn’t require any money down.
• Wholetailing   — Wholetailing is similar to wholesaling except that you purchase a home for a good deal, do very little work to it, and then sell it on the MLS. This can be a very profitable business model, but it’ll require access to more funds than wholesaling .
• Flipping  — House flipping is when you purchase a distressed home, fix it up, and sell for a profit on the MLS. This is a high-risk, high-return strategy.
• Buy-and-hold  — Buy-and-hold investing is when you purchase properties and rent them out to create passive income. The goal is usually to do this with a lot of properties to increase net worth and build long-term wealth.

Step 5. Determine where funding will come from

If you’ve determined that the most profitable type of real estate investing for your market will take some serious capital, don’t worry: there are  tons of different ways to find money for building your business. Lots of people with big money just want their money to work for them and provide a healthy ROI.

Ryan Dossey (my brother) has this great video about raising private money for your business and how he raised his first $100k.

Step 6. Choose your marketing strategies

In many ways, this is where the rubber hits the road for your business: how will you find deals in your market? How will you find motivated sellers ? How will you convince those sellers to work with you? How will you find buyers to purchase those properties or tenants to live in them? How will you fix up properties if you’re planning to fix and flip ?

These are all questions you need to answer on your real estate investing business plan.

And if you’re at a loss for answering them, sitting down with another real estate investor in your market and asking them questions can go a long way.

However you do it, write down your marketing plan of attack — how you plan to find and close deals — what you’ll need to make per deal to remain profitable, and how much you should expect each deal will cost you.

Here are a few common marketing strategies that you might consider.

• Direct mail (check out Ballpoint Marketing if you want to send hand-written mailers en masse).
• Bandit signs
• Door knocking
• Facebook ads
• Search engine optimization
• Cold calling

Here are some more specific suggestions to consider…

1. Send personalized mailers every single week

There is a rhythm to the flow of potential deals in any market.

A market might have a lot of deals during a particular season, and fewer deals just a couple of months down the road. These fluctuations are normal. And where there’s inconsistency in the market, the investor must remain steadfast.

This is as true in the stock market as it is in the real estate market.

Don’t gamble all of your marketing budgets on a single season. Instead, get in the habit of sending the same amount of mailers every single week — whatever is a reasonable number for your business. Send those mailers to different lists and recycle lists every few months or so.

To get the best performance possible, we recommend using mailers from our sister company,  Ballpoint Marketing , where you can get hand-written letters at an affordable cost.

2. Run effective Facebook Ads & do some SEO

Facebook ads and SEO (Search Engine Optimization) are two of the best ways to market your real estate investing business.

The first can provide you with leads quickly and the second can create longevity for your business.

To create effective Facebook ads, just go look at what your top competitors are doing. Go to their Facebook Page, click on “Page Transparency”, and you can see all of the ads that they’re running.

Examine a few of your competitor’s ads and take notes on what their sales copy and images are like. Then contemplate how you might try to do something similar.

Don’t copy them verbatim, of course, but why not try something similar to what they’re doing?

If it’s working for them, it’ll probably work for you as well!

As for SEO, get in the habit of publishing blog posts on your website that target specific keyword phrases. You can use  Ubersuggest  to find high-value keyword phrases. And here’s a  helpful article  that shows you how to optimize your pages to rank in Google.

3. Hire someone to answer the phone for you

If you follow our previous advice of sending personalized mailers every week, running effective Facebook ads, and spending a little time on SEO , the good news is that you’re going to start generating quite a few leads…  predictably .

The bad news is that your phone is going to start ringing like crazy.

The more mailers you send and Facebook ads you run, the more the phone is going to ring.

And while all of those leads are exciting, they can quickly distract you from working on important business-growth tasks like polishing processes, creating systems, and hiring employees.

That’s why more than 100 U.S. investors use our expert-trained reps to answer the phone for them. We answer the phone  when it rings , we know how to talk to motivated sellers , we’ll ask the right questions, and we’ll even schedule a follow-up appointment with you or your Acquisitions Manager.

Sound cool?

Then get a free, no-obligation demo by clicking here!

Step 7. Create a plan for consistently networking with other professionals

When you’re just starting out, no business-building strategy is quite as effective as networking with other real estate professionals within your market. There’s something about those face-to-face connections which can benefit your business for a lifetime.

You might learn a thing or two from other friendly professionals in your market. Or maybe you’ll end up partnering up with them. Or maybe you’ll learn how better to  compete with them.

Whatever the case, networking can help build your business. And you should map out a game plan for consistently networking with other professionals — even if it’s something as simple as going to a monthly meetup or working from different coffee shops every day.

Step 8. Create a plan for delegating down the road

You’re building a business,  not a prison cell. This means that you’ll need to make a plan for delegating tasks to other people down the road.

In the beginning, you’ll likely be the horse, driver,  and carriage — that is, you’ll be doing pretty much everything.

But don’t make that time-intensive phase of business last longer than it needs to. You’ll be surprised at how much faster your business will grow (with less work) when you hire A-players, treat them well, and trust them to do their job.

You won’t have to work as many hours, your business will grow more quickly, and you’ll make more money. So make a plan for which tasks you’d like to delegate when the time comes and which ones you’d like to keep (the ones that you enjoy the most, ideally).

And if you imagine that answering the phone every time it rings is a task you’ll want to delegate, Call Porter can help. We’ve built the only call center designed for real estate investors. Our reps are trained specifically to talk with motivated sellers, convert them, and then schedule a follow-up call with you or your acquisitions manager. You can try us out for yourself over here . 🙂

Step 9. Find your exit strategy

Every good real estate investing business plan includes a thorough plan of attack…  and an exit strategy if things go terribly wrong.

Since you have a business plan, your chances of things going horribly wrong decrease quite significantly. Still, it’s good to have a plan B or a way out if things go sideways. Maybe wait to quit your day job, for instance, until your business starts providing for itself. Choose your investors and/or tenants carefully. And consider including a clause in your contracts that gives you a way out (at least in the beginning).

Step 10. Create your growth plan

Have you ever heard the 80/20 rule?

It’s my fav 🙂

Essentially, it states that 20% of the work produces 80% of the results (and vice versa).

While it’s easy to feel that you must do everything right as an entrepreneur in order to succeed… that’s simply not true. You only have to do some key things right .

In terms of real estate investing, you have to acquire properties, you have to make profitable decisions with those properties, and you have to do that consistently.

That’s it — that’s the formula.

In terms of actual to-dos, here are three things that — if you do them consistently — will virtually guarantee that your business keeps growing.

1. Send mail & run paid ads

To generate leads and close deals, you have to market your business.

That means sending mail and running paid ads  every single month .

Keep in mind: all marketing strategies (especially direct mail ) experience a sort of lag-time. You might send 500 mailers this month and not get very many phone calls, assuming that your mailers were ineffective.

Then you stop and try something else.

Suddenly, you start getting phone calls because of those mailers that you sent a month ago.

This lag-time isn’t bad… but you need to  expect it and  prepare for it … which basically means marketing your business consistently, even when your efforts seem to be less effective than usual.

Pro-Tip:  Want to stand out with your direct mailers? Check out our sister company, Ballpoint Marketing , which produces hand-written mailers (with real ink ) that add a personal touch your competitors won’t be able to match!

2. Answer the phone & follow-up

Yes, Call Porter is an answering service built specifically for real estate investors.

Yes, there’s going to be a pitch at the end of this section.

And yet, it’s still difficult to overstate the importance of answering the phone  when it rings .

Research shows that your chance of having a meaningful conversation with a prospect decreases with every passing moment after a phone call goes unanswered.

Problem is, if your business is thriving and you do manage to answer the phone every time it rings… then you’re probably limiting your business’ full potential (because you’re not spending that time on mission-critical, “quadrant 2” activities).

You want the phone to ring off the hook… but you don’t want to be the one responsible for answering it. 

The solution?

(Pitch incoming)

At Call Porter, we’ve trained all of our U.S.-based reps to speak with motivated sellers. They know what questions to ask, how to stay level-headed, and they’ll schedule a follow-up call with you or your acquisitions manager.

Check out the call below to see for yourself (this lead resulted in a $36,000 profit for the investor!).

The phone needs to get answered… but certainly not by the founder of your business (YOU) 😉

Oh — and don’t forget to follow up! 90% of deals happen during a rigorous follow-up regimen, not during the initial call .

(We recommend following up  at least 15 times).

Get a FREE Call Porter Demo Today!!

3. build processes & reinvest into your business.

If you do the first two things, you’re going to generate leads and get the phone ringing like crazy.

You’re also going to start closing quite a few deals.

But there’s still one problem left to solve:  you will quickly become a bottleneck.

Having Call Porter answer the phone is certainly a step in the right direction… but the more you want to grow, the more you’ll have to delegate and automate the daily operations of your business.

This means hiring someone to answer emails, create marketing campaigns, speak with sellers, collect buyer information, and even acquire profitable properties.

Step 11. Create a memorable brand

Good business is built on trust.

Without the trust of your prospects and your clients, positive word-of-mouth won’t spread and people will hesitate to work with you.

But in the same way that that hesitation creates an obstacle for your business, building knee-jerk trust in your market creates a doorway.

The question is… how do you build a memorable reputation in your market so that past clients know you’re the real deal, prospects trust you to treat them right, and people who’ve never worked with you respect your business?

Well, the primary answer is consistency — day-in and day-out, treating your customers right, sharing case studies, engaging in charity, and whatever else will enhance your brand image.

In fact, here are three things to consider doing more consistently in order to build memorable trust in your market.

1. Choose a charity

Donating to charity doesn’t just help you forge a more meaningful mission for your business, it can  also help you market your business.

For example, you can celebrate your donations publicly and host events to raise money for local charities. These efforts build brand awareness  and trust at the same time.

There’s just something about a highly philanthropic business that feels trustworthy.

(That’s probably why customers are 85% more likely to buy products from a company that is associate with a charity).

Choose a charity that’s in line with your business’s mission, and then get in the habit of donating. Over time, you’ll build trust with people in your market and prove that you care about more than just making money.

2. Care about your clients

This might seem like an obvious piece of advice, but I know how hard it can be to authentically care for your clients when you’re  doing the same thing every day .

It’s easy to become callused.

Still, showing your prospects (even the tire-kickers) and your clients (even the ones who don’t accept your offer) that you genuinely care about them is one of the best ways to increase how many referrals you get and how much word-of-mouth you generate.

This is a simple trick, but perhaps the most difficult.

Be kind to everyone. Care about the people you work with. And be generous in how you serve others.

Do that for long enough and people won’t be able to ignore your business’ impact on the community.

Just think of the businesses that you most admire… how do they treat people? What are their values? And how can your business emulate their attitude toward leads, prospects, and clients?

3. Collect case studies

People might love you and respect you, but how do they know that your business   works ? That is, how do they know it can actually benefit them?

To some degree, trusting you is different than believing in the helpfulness or effectiveness of your service.

The best way to prove to your community that your business is the “real deal” — that what you’re doing can actually help people who are trying to sell their home — is by sharing testimonials and case studies from past clients.

This includes publishing case study content on your website, sharing reviews on your social media profiles, and telling stories of people who you’ve helped in the past.

Don’t undervalue the impact of telling stories to build your business’ reputation.

It’s  extremely powerful .

Step 12. Build your timeline

The final step is to determine when you want everything to happen. When do you want/expect to hit your real estate goals ? When do you expect to start hiring people? When do you expect your business will be able to fully support you and your family?

These timelines need not be written in stone, though — no one can accurately predict how long it’ll take you to build a successful business (the most important thing is consistent progress ). But having a timeline that you can reference and which keeps you heading in the right direction is wildly valuable, especially if you post it on your wall, where you can see it every day.

Final Thoughts

So you know you need a real estate investing business plan. You know that having a plan will give your business a better chance of success and turn you into the kind of forward-thinking entrepreneur that succeeds.

But you don’t only know that you need it, you also now know how to create it.

With the above 12 steps, you can draft a real estate investing business plan which increases your statistical chance of success.

And while you  could just launch your business without a plan, why would you? It’s a far better idea to spend some time thinking about the details of how your business will succeed  in order to succeed than it is to launch quickly and fail quicker.

So get to it — and don’t press the big red button until you’ve drafted a business plan which you’re confident will succeed.

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How To Start A Rental Property Business Like A Pro

What is a rental property business?

Starting a rental property business

Writing a business plan

Is a rental property business a good investment?

As Antoine de Saint-Exupery once said, “A goal without a plan is just a wish.” Consequently, the best plans have developed a reputation for helping people in every industry realize their own goals, no matter how lofty they may be. There literally isn’t a single professional who couldn’t benefit more from a well-crafted strategy, and real estate investors are no exception. When learning how to start a rental property business , buy-and-hold investors in particular stand to improve their long term outlook by establishing a rental property business plan.

A proven rental property business plan can help layout the systems and benchmarks investors need to realize success at a higher level. That said, only one question remains: what does a rental property business plan look like?

If you are interested in starting a rental property business, there are several valuable lessons to take away from experience. Meanwhile, here’s a guide for developing a bullet-proof rental property business plan; it may be just what you have been waiting for.

On the FortuneBuilders Real Estate Investing Show , join our host, Jeffrey Rutkowski, as he talks to Gregg Cohen, the Co-Founder of JWB Real Estate Capital, on the subject of passive income and rental properties. Listen to the podcast here:

What Is A Rental Property Business?

A rental property business is a venture through which an investor will purchase and manage one or more income-producing properties. These properties can have one or more units leased out to tenants in exchange for monthly rental fees. Investors can have an effective rental plan without directly managing these properties; property management companies can be hired to carry out the duties often associated with landlords, such as rent collection and maintenance.

Is My Rental Property A Business?

Renting a house may be considered a business endeavor, depending on who you ask. This may seem like a controversial question, and there are at least two answers to consider. From a financial standpoint, renting a residential property may result in passive income. It is important to note that investors do not have to pay self-employment taxes when reporting their rental properties. Therefore, many would argue that owning a rental property is not considered a “business,” specifically in the lens of tax filing. However, from a career standpoint, many individuals live on passive income derived from their rental property companies; in this lens, renting a house can be considered a business. It’s entirely possible to manage a rental property portfolio as a business. Still, those with a single rental property may not need to start a company to collect passive income. It’s only once the portfolio starts to grow that turning the practice of renting into a business becomes more important.

How To Start A Rental Property Business

Learning how to start a rental property business isn’t all that different from just about every other entrepreneurial endeavor. Investors need to identify several key elements before getting started; that way, they can start their business on a solid foundation. Here are some of the most important steps to consider when drafting a rental property business plan and becoming a real estate entrepreneur:

Join a local REI club and start networking

Pick a niche and choose your rental property market

Figure out the proper financing and secure it

Conduct the appropriate research and hire a manager

Implement systems to improve efficiency

Manage the properties and scale the business at a sustainable pace

1. Join A Real Estate Investor Club

Joining a local real estate investing club or association provides networking opportunities, not the least of which may actually help rental property investors find a partner—or perhaps anyone else who may help them further their rental property business plan. Nathan Hughes at DiggityMarketing suggests that “investors need to identify various factors before entering the rental property business. Investors should join some real estate investors clubs as a beginner”. There’s absolutely no reason to think new investors, specifically aspiring rental property owners, can’t find a helpful hand at a real estate investor club. These types of meet-ups are specifically designed to help their attendees, and there’s always someone willing to lend a hand. At the very least, investors will gain insight into local professionals who are most likely already doing the one thing they want to do.

2. Pick A Niche & Choose A Market

Determining where to invest can often be more important to investors than how much capital or experience they bring to the table. After all, the golden rule of real estate persists: location, location, location. There is perhaps no more influential factor to a rental property investor’s success than the location in which they choose to invest. The location will determine everything from demand and price, not to mention the property’s long-term potential. Therefore, a truly great rental property business plan will want to make sure it answers these questions and many more like them:

How distant a market am I willing to invest in?

Do I have a team in place to handle the day-to-day, or will I have to commute back-and-forth?

How much will commute and market research cost me?

How stable and diverse is the economy in a market? Are there various business sectors that can help keep jobs and businesses? Is there one main employer?

What’s the average market price for property acquisition?

What’s the average rental price?

No rule says investors need to live in the markets they invest in, but there is no excuse for neglecting to mind due diligence and research the local housing market. To invest successfully, investors need to know every detail about a specific area, not to mention the specific niche they intend to serve.

Jordon Scrinko, the Founder & Marketing Director of Precondo states that “Investors’ decisions on where to invest are frequently more significant than their capital or experience. After all, when it comes to real estate, location is the most important. The area in which a rental property owner chooses to invest is possibly the most important aspect in determining their success”.

If for nothing else, investors need to know their renters just as much as the area they are investing in. Picking a niche, not unlike focusing on college housing or single-family homes, is the easiest way to target a specific audience. Therefore, at this time, rental property investors should decide who they will serve; only then will they be able to tailor their rental property business plan to see their audience’s needs.

3. Figure Out Financing

Securing financing is probably the biggest hurdle rental property investors face. However, financing a real estate deal isn’t nearly as hard as many new investors make it out to be. As it turns out, there are countless lenders just waiting for an opportunity to give savvy investors the money they need to invest in real estate. Like institutionalized banks, today’s real estate investors have access to more funding sources outside of traditional sources than ever before. Private money lenders and hard money lenders, in particular, have become synonymous with the best ways to secure funding and are as willing to work with investors as investors are eager to work with lenders.

These “alternative” sources tend to coincide with higher interest payments (often three to four times higher than traditional banks), but the added cost is well worth it. In exchange for their higher rates, investors not only receive the money they need to complete a deal, but they also receive it a lot faster than they would if they went through a bank. Whereas banks can take upwards of a few months to distribute funds, alternative lenders can have the money in investors’ hands in as little as a few days—if not hours.

It is also important to note that securing financing should be done before even looking for a home. That way, the investor will know exactly how much home they can afford and which investments are worth pursuing further.

4. Conduct Research & Hire A Property Manager

Becoming a landlord means investors will be responsible for maintaining the appearance and function of the rental property. However, whether or not the investor is a handyman is a moot point, as hiring a property manager is highly recommended. While it helps to know everything about a subject property, enlisting a third-party property manager’s services is an essential step in a rental property business plan. Through their help, investors may expand their portfolio without adding on countless hours of work. If for nothing else, a property manager will take care of everything. From finding tenants to collecting rent, property managers will see to it that everything is covered. Meanwhile, the investor is free to add more assets to their portfolio and increase their passive income cash flow.

5. Systemize

There are many rental plan options for landlords, such as specializing in low-income neighborhoods or university towns. Alternatively, they can choose to specialize in higher-income, urban neighborhoods. Different strategies require different skill sets, so landlords may find better success if they pick a niche in which they specialize. However, landlords will need to set up a system for running applications, credit, and background checks regardless of the niche. Adding proven systems to a rental property business plan is the surest way to make success habitual. Therefore, investors will need to create a system for every single process associated with rental property investing. That way, there will always be an appropriate course of action, regardless of the situation. Property managers, for that matter, make it a lot easier to implement systems.

6. Manage The Properties

Managing a rental property is about far more than just hiring a property manager; it’s about figuring out exactly what systems will be put in place to keep the properties in good shape and the cash flowing in. This means answering queries like:

Are you going to be a landlord? (Or will you hire a property manager?)

Who will find and select tenants?

Will you perform repairs to maintain the property? (Or hire a contractor?)

Who will perform yard maintenance and other duties?

Your answers will depend on your budget and available time. The key is to use your rental property business plan to map out all management systems beforehand and ensure no last-minute surprises.

Why Write A Business Plan

A well-crafted business plan will help in more ways than one as you learn to navigate the real estate industry. You can establish a clear framework of your goals and overall mission by writing a business plan. It should also include the reason why you want to start investing. This will ensure you remain focused as you make investment decisions and eventually grow your business. Think of a business plan as a roadmap for your future.

A business plan is also highly useful when speaking to potential lenders, designing marketing campaigns, and hiring new employees. These tasks will be made easier if you have a clear outline of what your business does (and how). For example, when you begin raising funds for your first deal, you will likely need to present your business goals to potential investors. A business plan can help take the pressure off — as the information will already be written down. If you are even slightly considering opening a rental real estate business, learning how to write a business plan is a great first step.

How To Write A Rental Property Business Plan

Starting a rental property business is one thing, but learning how to write a rental property business plan is entirely different. While the two sound similar, the latter is critical to making the former even stronger. At the very least, knowing how to start a rental property business must come before actually starting one. As a result, investors will need to familiarize themselves with the most important steps first:

Determine a vision and write a mission statement

Set passive income and business goals

Build a team structure that is conducive to success

Gain a high-level overview perspective of the company as a whole

Develop marketing systems and funnels tailored to a specific audience

1. Vision & Mission

A truly great rental property business plan must emphasize one thing above everything else: the investor’s vision or mission. What an investor hopes to achieve by investing in real estate may simultaneously serve as motivation and a guide when times are less than ideal. Therefore, investors must take a minute to think about why they are investing. Is it to retire comfortably? Is it to spend more time with family and friends? Is it both of these things? Knowing their “why” will help investors build out a sound business strategy, one that gets them closer to their goals with every investment. Consequently, those without a mission won’t know what direction to head, which doesn’t bode well for any rental property business.

2. Passive Income Goals

While closely related to one’s own vision or mission, passive income goals identify how much cash flow will be necessary to satiate investors’ appetites. That said, passive income goals should help investors meet their own mission statement. Likewise, if an investor wants to retire comfortably, they will need to set their passive income goals high enough to facilitate their desired retirement. While everyone’s passive income goals will be different, a general rule of thumb accounts for how much cash flow will be necessary to maintain their preferred lifestyle.

Remember, goals should be realistic and directly related to the reason someone wants to invest. Seeing overly ambitious goals can deter many investors from progressing, so the goals must be achievable. The sense of accomplishment developed from realizing a goal is, oftentimes, a powerful motivator.

Determining passive income goals will also help answer the most important question of them all: what type of rental property will I focus on? Residential? Commercial? Multi-family? Start from the end and work backward for better results; it’s the best and most efficient way to build a business.

3. Structure

Starting a rental property business may lead many investors to hire a team. After all, it’s true what they say: many hands make light work. The more qualified individuals investors have worked towards a common goal, the more likely they are to realize success. Not only that but hiring a competent real estate team is simply one more step towards investors removing themselves from the equation and earning more passive income. That said, it’s not enough to hire just anyone; the employees need to bring something new to the table. Investors need to hire a team that complements their skills—not that replicates them. That way, the team structure is more well-rounded and capable of accomplishing more tasks.

4. High-Level Overview

Investors need to look beyond the prospects of a single investment property and towards the potential of an entire portfolio. While a single home can produce encouraging cash flow levels, an entire portfolio can help investors realize financial freedom. Therefore, it’s important not to forget the “bigger picture.” Sure, start with a single home, but plans should inherently be scalable. When writing a rental property business plan, see that everything can be expanded to include future growth.

5. Marketing

Buying a rental property is just the first step on a passive income investing journey. At some point, investors need to figure out how to find tenants to bring in cash flow. More often than not, investors will rely on their property managers to fill vacancies. However, in the event an investor neglects to hire a property manager, there are various ways to find tenants, not the least of which include:

Rental websites

Social media

Print media/newspaper

Local bulletin boards

Local Realtors

Word-of-mouth marketing

Direct mail campaigns

Previous renters

Is A Rental Property Business A Good Investment?

Investors will know if a rental property is a good investment if their net cash flow remains consistently positive. Seasoned real estate investors know that to have a solid rental plan and business, they must first mind their due diligence and ensure that a rental property is indeed a good investment. There are several measurements available to help investors get an idea of the profit-making potential for a property. Make use of 10 real estate calculators that are helpful for any type of real estate investor.

Features of Successful Rental Properties

You don’t have to reinvent the wheel to be successful. Many successful rental properties can serve as a model for your business. Here are some distinct features of profitable rental properties:

Location: Real estate is always about location. The location of your rental property will be a major determinant of the type of tenants you will attract. For example, if you purchase a rental property at the edge of a university, you’ll naturally get applications from many college students. Consider the neighborhood and how it could influence your tenant profile, behavior, income, and vacancies.

Taxes: The location will also influence the property taxes that you end up paying. High property taxes may be well-worth it if your property is located in a great area that attracts high-paying tenants. However, property taxes could be a burden if your financials don’t make sense. Find out your property tax rate by contacting the local assessor’s office.

Schools: The ratings of local schools will help indicate what type of tenants you’ll attract. Rental properties near distinguished school systems will help draw in families willing to pay higher rental rates.

Safety: No one wants to walk home while constantly checking over their shoulder, or living in fear that their car will get broken into. Check local crime statistics and pay attention to trends. A reg flag could be a stead increase in criminal activity, even if it’s in a neighborhood that was known to be safe in the past.

Employment: A hot job market can help draw in larger groups of tenants, thus creating a healthy demand for your property. This could bring in benefits such as higher rental rates and lower vacancy rates. Growing employment opportunities can also boost your local economy and local amenities.

Local amenities: Tenants are constantly looking to balance rental rates with quality and easy of life. If your rental property is located near public transit systems, shopping, restaurants, gyms, and entertainment, you may find yourself having to field competitive offers from many tenants.

Economy: The local economy and horizon of industrial developments can also be a good indicator of rental property performance in a given area. The resulting improvement of local infrastructure could vastly improve the neighborhood and tenant pool. However, watch out for noisy construction that could hurt rental rates temporarily, plus new housing developments that could put a strain in competition.

Rental rates: Be sure to research a local neighborhoods average rental rate. This number can help you conduct a financial analysis to determine whether owning a rental property in the area would be feasible. Be sure to factor in costs such as property taxes, maintenance, repairs, and mortgage payments.

Vacancy rates: If you notice that the neighborhood has an abnormally high number of listings, it could signal that demand is low and vacancy rates are up. You may not want to invest in an area that is on the decline.

How To Determine Rent

Rent can typically be determined by analyzing other properties in the area. Start by reviewing the average rental rates, and then look at similar units to see what they go for. Pay attention to properties with the same number of bedrooms, bathrooms, and amenities. This will give the best idea of what you can charge.

Another approach is to take your monthly loan repayment as a baseline, and raise the rate to cover maintenance and repairs. Maintenance costs can vary significantly, so again pay attention to the typical market. If your rental property is in a college town, you may want extra room for maintenance. However, if you already know you are renting to a tenant you know you may be able to leave less room for repairs.

The final number should stay in the range of other properties in the area. However, they may be some wiggle room to decide exactly where to land for your own property. Just remember: charge too much and you risk vacancies, charge too little and you lose out on valuable income. If you want to learn more about determining rent , be sure to read our guide.

Confidence isn’t simply a positive mood based on affirmations and “feel-good” mantras. Confidence, according to Webster’s Dictionary, is the “state of feeling certain about something.” As you learn how to start a rental property business , there may be no greater confidence-booster than a business plan that comes to fruition. By mapping out your precise goals—and the systems you’ll employ to achieve them—you’ll find wealth-building objectives more attainable than you ever thought possible.

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How to Write a Real Estate Investment Business Plan: Complete Guide

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Last updated on December 19, 2023

Building an investing business without a real estate investment business plan is sort of like riding a bike without handlebars. 

You might be able to do it… but why would you? 

It’s far easier and more practical to set out on your venture with a business plan that outlines things like your lead-flow, where you’ll find funding, and which market(s) you’ll operate. 

Plus, according to Entrepreneur, having a business plan increases your chances of growth by 30%. 

Download Now: Free marketing plan video and a downloadable guide

So don’t skip this critical first step. 

Here’s how to do it. 

Real Estate Investment Business Plan Guide

In this article we’re going to discuss:

• What is a real estate investment business plan?
• Create your mission and vision
• Run market analysis
• Choose your business model(s)
• Determine your business goals
• Find funding / Cash buyers
• Identify lead-flow source
• Gather property analysis information
• Create your brand
• Set growth milestones
• Plan to Delegate

What is a Real Estate Investment Business Plan and Why Does it Matter?

A real estate investment business plan is a document that outlines your goals, your vision, and your plan for growing the business . 

It should detail the real estate business model you’re going to pursue, your chosen method for lead-gen, how you’ll find funding, and how you plan to close deals. 

The kit and caboodle. 

It shouldn’t be overly complicated. 

Whether this real estate investment business plan is only for your personal use or to present to someone else, simplicity is best. Be thorough, be clear, but don’t over-explain what you’re going to do. 

As far as why you should have a business plan, consider that it gives you a 30% better chance of growing your business. 

Also, consider that setting out  without  a plan would be like — full of unexpected twists and turns — is that something you want to do? 

Probably not. 

It’s worth taking a few days or weeks to put together a business plan, even if it’s just for your own sake. By the time you’re complete, you’ll have greater confidence in the business you’re setting out to build. 

And an entrepreneur’s confidence is everything. 

How to Create Your Real Estate Investment Business Plan

Now we get into the nitty-gritty. 

How do you create your real estate investment business plan? Here are the 10 steps!

1. Create Your Mission & Vision

This can be considered your “summary” section. You might not think that you need a mission statement or vision for your real estate business. 

And you don’t. 

We know a lot of real estate investors (many of our members, in fact) don’t have a clear mission or vision that they’ve outlined — and they’re successful regardless. 

But if you’re just getting started…

Then we think it’s a worthwhile use of your time. 

Because if you don’t know why you’re going to build your real estate investing business, if you don’t see what purpose it serves on a personal and professional level, then it’s not going to be very exciting to you. 

You can either use this time to create a mission for your business… or a mission statement for you as it relates to growing your business (depending on your goals).

For instance…

• Our mission is to create affordable house opportunities in the Roseburg, Oregon community. 
• Our mission is to provide homeowners with an exceptional experience when selling their properties for cash. 

Or you could go a more personal route…

• My mission is to create a business that supports my family. 
• My mission is to build a company that gives me more time for what matters most to me.

Or you could do both…

• My mission is to create a business that supports my family, and my business’ mission is to provide homeowners with an exceptional experience when selling their properties for cash. 

Either way, it’s good to think about this before getting started. 

Because if you know why you’re going to build your business — and if, ideally, that reason resonates with you — then you’ll be more excited and determined to work hard toward your goals. 

It is also an excellent opportunity to outline the core values you’ll adhere to within your business as Brian Rockwell does on his website …

With this information in hand, you’re ready to move on to the next step. 

2. Run Competitive Market Analysis

Which market are you going to operate in? 

That might be an easy question to answer — if you’re just going to operate in the town where you live, fair enough. 

But it’s worth keeping in mind that today’s technology has made it possible to become a real estate investor in any market from pretty much any location (remotely). 

So if the market you’re in is lacking in opportunity, then you might consider investing elsewhere. 

How do you know which market to choose? 

Here are the 10 top real estate markets for investors, according to our own Carrot member data of over 7000 accounts, based on lead volume…

• Atlanta, GA
• Houston, TX
• Chicago, IL
• Charlotte, NC
• New York, NY
• Los Angeles, CA
• Orlando, FL
• Philadelphia, PA
• Phoenix, AZ

And here are the top 20 states…

• North Carolina
• Pennsylvania
• Oregon 

That’ll give you some ideas. 

But what makes a market good or bad for real estate investors? Here are some metrics to pay attention to when you’re doing your research. 

• Median Home Value — This will tell you how much the average home sells for in the market, which will impact whether you’ll be willing to operate there. Because obviously, you want to play with numbers that feel reasonable to you. 
• Median Home Value Increase Year Over Year — Ideally, you want to invest in a market where homes are appreciating every year. And a positive increase in this metric is a good sign that the properties you invest in will continue to increase in value. 
• Occupied Housing Rate — A high housing occupancy rate means it’s easy to find tenants, and there’s a healthy demand for housing. That’s a good sign. 
• Median Rent — This is the average cost of rent in the market and will give you a good idea of how much you’ll be able to charge on any rentals you own. 
• Median Rent Increase Year Over Year — If you’re going to buy rentals, it’s a good sign if rental costs increase every year.
• Population Growth — When the population grows, it creates demand for housing, both rentals and on the MLS. That’s a good sign for a real estate investor. 
• Job Growth — Job growth is a sign of a healthy economy and indicates that you’ll have an easier time capitalizing on your real estate investments. 

Fortunately, all of this research is super easy to do on Google. 

You can just type in the market and the metric in Google and you’ll get meaningful results. 

Thank god for technology. 

Want more freedom & impact?

From Mindset to Marketing, join our CEO as he unlocks the best stories, tactics, and strategies from America’s top investors and agents on the CarrotCast . If you want to grow your business, you need to check it out!

3. Choose Your Business Model(s)

There’s not just one real estate business model . 

There are many. 

And the market you’re in — as well as your business goals — will determine which business model you choose. 

Here’s a brief overview of each…

• Wholesaling — Is a prevalent business model in the real estate world. Wholesalers find deals and flip them to other cash buyers for an assignment fee, typically somewhere between $5,000 to $10,000. It’s low risk and requires little capital upfront (you can get started with as little as $2,000). 
• Wholetailing — Wholetailing is a mix between wholesaling and house flipping. A wholetailer will find a deal, do some very minor repairs (if any), and sell the house on the MLS themselves. It results in large profits with far less work. But wholetail deals are hard to come by. 
• BRRRR — This stands for Buy, Rehab, Rent, Refinance, Repeat. It’s a long-term process for buying and holding rental properties. It’s a great way to build net worth and create generational wealth. 
• Flipping — House flipping is the most popularized real estate investing method. It consists of purchasing distressed properties, fixing them up, and selling them at a good profit on the MLS, often making upwards of $100,000 per deal. However, this method involves much more risk than the other methods and each deal takes a lot longer to complete. 

If you’re just getting started, then we recommend choosing just one business model and doing that until you’ve mastered it. 

Down the road, you will likely want to use multiple business models. 

We know the most successful real estate investors are wholesalers, wholesalers, flippers,  and  they own some rental properties. 

That allows them to make the most of every opportunity that comes their way. 

But again… to start, just choose one. 

4. Determine Your Business Goals

At this point, you should have a pretty clear idea of why you’re going to build your real estate investing business. 

Are you going to build it because you want to make an impact in your community? Because you want more financial freedom? Because you want more time freedom? 

All of the above? 

Whatever the case, now it’s time to set some goals related to your mission for the business. 

Remember the SMART acronym for goal setting…

Start by thinking about how much money you’d like to make per month — this should be the first income threshold that you’re excited to hit.

Let’s pretend you said $10,000 per month. 

Okay, now take a look at your business model. How many properties do you need to have cash-flowing to hit that number? How many deals do you have to do per month? How many flips? 

Try to be as realistic with your numbers as possible. 

Here are some baselines to consider for the different business models at the $10k/month threshold…

• Wholesaling – 2-3 Deals Per Month
• Wholetailing – 2-3 Deals Per Month
• BRRRR – $1 Million in Assets
• Flipping – 1-2 Flips Per Year

Now you have a general idea of the results you’ll need to hit your first income threshold. 

But we haven’t talked about overhead costs. 

How much will you need to spend to get those results? 

Your answer to that question will be influenced by the market analysis you already did. But it’s pretty standard for the price of finding a deal to hover around $2,000 for a real estate investor (if you’re doing your own advertising). 

So now you’re spending $2,000 per deal, or whatever your specific number is. That’s going to have an impact on how much money you’re making. So now we can adjust your goals to be more realistic for hitting that $10k per month marker…

• Wholesaling – 4-5 Deals Per Month
• Wholetailing – 4-5 Deals Per Month
• BRRRR – $1.5 Million in Assets
• Flipping – 2-3 Flips Per Year

The idea here is to figure out how many deals you’ll have to do per month to hit your income goals. 

Then work that back into figuring out how much you’ll need to spend every month to realistically and predictably hit your goals. 

At $2k per deal and intending to hit $10k/month, here’s what your deal-finding costs might look like…

• Wholesaling – 4-5 Deals Per Month – $8k-$10k/month
• Wholetailing – 4-5 Deals Per Month – $8k-$10k/month
• BRRRR – $1.5 Million in Assets – $6k-$8k/month
• Flipping – 2-3 Flips Per Year – $4k-$6k/month

That should give you a baseline. 

How do those numbers look? 

If they feel too high for you right now, lower your initial goal — you want to make your first goal something that you know you can accomplish. 

Then, as you gain experience, you can increase your goals and make more money down the road. 

Free Real Estate Marketing Plan Template

Take our short survey to find out where you struggle most with your online marketing strategy. Generate your free marketing plan video and downloadable guide to increase lead generation and conversion, gain momentum, and stand out in your market:

Download your marketing plan template here.

5. Find Funding / Cash Buyers

Are you going to fund your own deals or find private investors ? Or maybe you’re going to get a business loan from a bank? 

If you’re just starting as a wholesaler or wholetailer, then it’s recommended funding your own first few deals — that should only cost $2,000 to $5,000… and why overcomplicate things in the beginning when you’re still trying to learn the ropes? 

However, as a wholesaler or wholetailer, you’ll still need to find some cash buyers. 

Here’s a great video that’ll teach you how to do that…

To consistently grow your cash buyer list (which is an important part of the wholesaling and wholestailing business model), we also recommend creating a buyer website like this…

Learn more about creating your cash buyer website with Carrot over here . 

To scale, you might seek out other sources of funding. 

Here are some options…

• Bank Loan — Getting a loan from a bank might be the most straightforward strategy if you’re just getting started. But keep in mind that the requirements for a loan on an investment property will be more stringent than the requirements were for your primary residence mortgage. And the interest rate will likely be higher as well. For that reason, you might seek out some of the other options. 
• Hard Money — Hard money loans come from companies that specifically serve real estate investors. They are easier and faster to secure than a bank loan and hard money lenders typically base their approval of the loan on the quality of the investment property rather than the investor’s financial standing. 
• Private Money — Whereas a hard money loan comes from a company; a private money loan comes from an individual with a good chunk of capital they’re looking to invest. That could be a friend, family member, coworker, and acquaintance. Interest rates and terms on these loans are typically very flexible and the interest rate is usually quite good. Private money is an excellent option for real estate investors looking to scale their business. 

But before you seek out funding from those sources, get clear on what exactly you’re going to use those funds for. 

Finding funding is even more critical. In fact — if you’re flipping properties or using the BRRRR method. 

(It’s a key part of the BRRRR method)

You’ll likely want to use hard money or private money to fund your deals as you grow your business.

But how do you find and secure those loans? 

Hard money lenders are easy to find — just Google for hard money lenders in your area and call the companies that pop up to get more details. 

Private money (which usually has more favorable terms than hard money) is a bit trickier to find but not at all impossible. 

To find private money lenders, you can…

• Tell Friends & Family — This should be the first thing you do. Tell everyone you can about the business you’re building and the returns you can offer investors. Then ask them if they know anyone who might be interested in investing. 
• Network — After you’ve exhausted all your friends and family, make a point of getting to know people everywhere you go. The easiest way to do this is to wear branded clothing so people ask about what you do. Talk to people at coffee shops, grocery stores, movie theaters, and anywhere else that you frequent. You never know who you might meet. 
• Attend Foreclosure Auctions — Foreclosure auctions are jam-packed with people who have cash-on-hand to buy properties. These people might also be interested in investing in your real estate endeavors. Or they might know where to find private money. Either way, it’s in your interest to build relationships with these people. Attend foreclosure auctions and bring some business cards. 

Here are some tips on finding private money lenders…

6. Identify Lead-Flow Source

Now let’s talk about how you will generate a consistent flow of motivated leads for your business. 

Because no matter which of the business models you’ve chosen… you’re going to need to find motivated sellers.

And you’re going to need to find those people every single month. 

There are essentially two parts to a successful lead generation strategy for real estate investing business. 

Both pieces are critical… 

• The Short Term — We call this “hamster-wheel marketing” because it requires you to  keep working  and  spending money  to generate leads. Examples include Facebook ads, direct mail, bandit signs, cold calling, driving for dollars, and other tit-for-tat strategies that will burn you out if you’re not careful.
• The Long Term — We call this “evergreen marketing” because it requires an upfront investment… but that investment pays off for years and years to come. Examples include increasing brand awareness for your business in your target market(s) and improving your website’s SEO , so that motivated sellers find you . 

Short-term tactics are critical when you’re first starting — in fact, they are likely going to be your only source of leads for at least the first few months. 

Here are some more details on the most popular and effective methods… 

• Tax default mailing lists
• Vacant house lists
• Expired listing lists
• Pre-foreclosure lists
• Out-of-state landlord lists
• Cold Calling — This might be more uncomfortable than stubbing your toe on a piece of furniture, but it can still be effective for finding motivated sellers. We have an article all about colding calling — it even has scripts for you to use. 
• Facebook Ads — Facebook ads is another excellent method for generating leads so long as you have a high-converting website to send them to . If you don’t, get yourself a Carrot website . Each Carrot site is built to convert. Here are some more details about running successful ads on Facebook for your real estate investing business.
• Google Ads — Google Ads is one of the most popular platforms for real estate professionals needing to provide quick results with a minimal to high investment depending on markets.

But over time, the goal is to invest in more long-term evergreen marketing tactics so that you can get off the hamster wheel and build a more sustainable business. 

Check out the video below to learn more about the critical distinction between short-term and long-term marketing. 

At Carrot, we’ve created an online marketing system that makes generating leads super easy and simple for real estate investors. 

And it’s 100% evergreen. 

Here’s an example of one of our members’ websites that converts like crazy…

Try our free Marketing Plan Generator here.

7. Gather Property Analysis Information

We just talked about how you can generate leads.

But once someone calls you, once you’re checking out a property… How will you  know  if the property is a good fit for your chosen business model? 

After all, not every property will be a fit. 

First, ask the following questions when the seller calls…

• What is the address of the house you want to sell?
• How many bedrooms, bathrooms does it have?
• Does it have a garage, basement, or pool?
• If you were going to list it with a Realtor, what repairs and/or updating would you say would be needed?
• How much is owed on the house?
• Do you have an asking price in mind?
• Is the house behind on payments?
• If I come out and look at the property and make you a cash offer to buy it ‘As-Is’ and close as soon as you want, what would be the least you would be willing to take?

That will provide you with a lot of critical information about what you’re dealing with. 

Next, once you’re off the phone, do a bit of due diligence and look at what nearby properties of similar size have sold for in the last 90 days or so — that should give you a ballpark idea for the after-repair value of the property. 

If you decide that the property sounds promising, you’ll want to walk through it and take pictures of anything and everything that’ll need to be repaired. 

Back at the office, estimate the cost of those repairs — here’s a great resource from REISift that’ll help you estimate rehab costs . 

You’ll need to go through this entire process regardless of your business model so that you understand your max offer on the property. 

So how do you calculate your max offer? 

Use the 75% rule — check out this video from Ryan Dossey…

With that, you’ll know how much to pay for the property, how much to spend on repairs, and how much it’ll sell for. 

The more you streamline this part of the process, the better. 

8. Create Your Brand

Building a company is one thing. 

Building an easily recognizable brand and known to be reputable in your marketplace is quite another.

But that’s an integral part of the process. Consider some of these statistics…

• Using a signature color can increase brand recognition by 80 percent.
• It takes about 50 milliseconds (0.05 seconds) for people to form an opinion about your website.
• Consistent presentation of a brand has seen to increase revenue by 33 percent.
• 66 percent of consumers think transparency is one of the most attractive qualities in a brand.

When it comes to building a real estate investing brand, your goals are to…

• Establish Rapport 
• Create Easy Recognizability
• Dominate The Conversation

The first step in this process is building an online presence – that means creating a high-converting website (i.e., one that systematically turns visitors into leads by capturing their contact information), running advertisements, and ranking in Google for important keywords. 

That’s what we can help you with at Carrot . 

Out of the box, our website templates are built to convert visitors into leads – and you can customize them however you want with your branding materials…

You’ll even receive immediate text notifications when someone signs up to be a lead so that you can contact them right away (speed is the name of the game!). 

Having a high-converting website is ground zero for brand-building success. If you don’t have a website that systematically converts visitors into leads, then every dollar you spend on advertising is going to be wasted. 

So that’s where we start. 

Once you’ve got your website up and running, then – if you’re on our Content Pro or Advanced Marketer plan – we’ll provide you with blog posts every single month that are written to rank in Google for high-value keywords relevant to your specific market …

You just upload, make some minor tweaks, and publish – and the more you publish, the more traffic you’ll drive. 

To help you become a true authority in your market, we also have the following tools…

• Keyword Ranking Tracker
• SEO Tool For Optimizing All Pages
• Text Notifications For Leads
• World-Class Support
• Campaign Tracking Links
• Coaching Calls

We want to make generating leads as easy as possible for you… so you can focus on closing deals and growing your business. 

You can try us here risk-free for 30 days. 

If you get yourself a Carrot website, that’ll take care of the “Dominate The Conversation” part of the branding process.

But what about these parts? 

Super easy. 

Establishing rapport is simply a matter of putting testimonials and case studies on your website. The more of these you have, the more people will trust your brand when they arrive on your website for the first time. 

As for creating an easily recognizable brand, create a simple branding package…

• Brand Colors

And then be consistent across all platforms. Use the same colors, font, logo, and brand name on everything – online and offline. 

That’ll make it feel like you’re everywhere – which is what you want. 

So there you go. 

That’s how you create a brand identity as a real estate investor. You’ll know you’ve done it right if people are coming to you out of nowhere – because a friend of a friend told them about you. 

And if you want a brand that dominates your market without all of the footwork, we’ve got just the thing – it’s called the Authority Leader Plan … and we’ll do everything for you. 

9. Set Growth Milestones

Okay – let’s pretend that you’ve taken all of the steps above. 

You’ve got yourself a functioning business and brand with funding, you’ve got consistent lead-flow, and you’re even closing some deals. 

Now what? 

Well… you want to grow, of course!

You don’t just want to do one deal per month… you want to do three, five, or even ten deals per month.

You want to make more money, increase your net worth, grow your business, and have a significant impact. 

How do you do that? 

First, you set new goals and milestones for your business’ growth – how many deals do you want to be doing per month in 6 months? In a year? 

Then break those goals down by quarter – and turn them into actionable to-dos. 

For example, if you’re currently doing one deal per month and you want to be doing five deals per month by the end of Q2, here’s what your goals might look like…

• Send 10,000 Mailers Per Month
• Spend $5,000 on Facebook Ads Per Month
• Hire Salesperson To Answer Phone
• Hire Acquisition Manager
• Create Workflow Process

Or maybe it’ll look a bit different. Make your to-dos as realistic as possible so that if you do those things … you’re virtually guaranteed to hit your goals. 

After all, what’s the point of having goals if you’re not going to hit them? 

All in all…

Set milestone goals to grow your business, turn those into to-dos and break them down by quarter. The next and final step of your real estate investment business plan might be even more important… 

10. Plan To Delegate

At some point, every real estate investor has to come to terms with a straightforward fact…

You can’t build the business of your dreams on your own . You need to delegate .

You’ve got to partner with other people, build critical relationships, hire people, manage people, create systems and processes to streamline your team’s workflow, and lots more. 

One of the most important areas that deserve a highlight is your client communications and satisfaction. Consider setting up a robust cloud contact center software to manage all the communications that will lead to long-term partnerships.

Building a business isn’t so much about hustling and bustling as it is about putting the right pieces in the right place. 

How do you scale your business? 

The answer is quite simple: you do the same things you’re doing now… but at scale – that means hiring people, training people, and creating clean-cut systems. 

That’s how you grow your business. 

Automate, delegate, and step outside of your business as much as possible to build a real estate investment company that serves you rather than enslaves you. 

Final Thoughts on Real Estate Investment Business Plan

What more is there? 

You know how to create a mission and vision statement, run market analysis, choose an REI business model, set goals, find funding, generate leads, analyze properties, create a brand, set long-term growth milestones, and delegate. 

All that’s left is action. 

And reach out anytime with questions – we’re always here to help!

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Real Estate Investment Business Plan Template

Written by Dave Lavinsky

Real Estate Investment Business Plan

Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their real estate businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a real estate investing business plan step-by-step so you can create your plan today.

Download our Ultimate Real Estate Investment Business Plan Template here >

What is a Real Estate Business Plan?

A successful business plan provides a snapshot of your real estate business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why Successful Real Estate Investors Use a Business Plan

If you’re looking to start a real estate business or grow your existing business you need a business plan. A solid business plan will help guide your business strategy, your investment strategy and your decision-making. Having a comprehensive business plan is crucial for several reasons:

• To Secure Financing : Most lenders and investors want to see a well-reasoned business plan before they consider funding your real estate venture. Your plan should convince them that you fully understand your market, have a viable strategy and have a management team that can execute. These factors in your plan give investors the confidence that they’ll receive an adequate return on their investment, and make lenders feel that you’ll be able to pay their loan back with interest.
• To Identify Business Goals and Objectives : A business plan helps you to clearly define what you want to achieve with your real estate business over the next five years. These objectives include financial goals, such as revenue targets, or operational goals, such as property acquisition rates.
• To Understand the Market : Conducting market research and including this in your business plan gives you a deeper understanding of the real estate market you’re entering, including potential challenges and real estate investment opportunities. This knowledge helps you craft better marketing, operational, financial and strategic decisions.
• To Plan for Growth : Your business plan should outline the milestones you expect to achieve over the coming months and years. This helps keep you and your team focused and less prone to become distracted with new opportunities that may push you in the wrong direction.
• To Manage Risk : By identifying potential risks in your business plan, you can devise strategies to mitigate them. This proactive approach can save your business from potential pitfalls in the future.

In summary, developing a strategic business plan is a key step for real estate investors who want to launch or expand their business successfully. Your plan will improve and lay out your strategy and keep you focused so you can flawlessly execute it.

Finish Your Business Plan Today!

How to write a business plan for a real estate investment company.

A detailed real estate investment business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of real estate investing business you are operating and the status; for example, are you a startup, do you have a business that you would like to grow, or are you operating a chain of real estate investment companies?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the real estate industry. Discuss the type of real estate investment business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing strategies. Identify the key team members, and offer an overview of your financial plan.

Company Analysis

In your company analysis, you will provide a company description of the real estate investment business you are operating. For example, you might operate one of the following types: Real estate investment companies do two basic things: invest in real estate and trade in real estate.

• Real estate investment is a long-term investment wherein you purchase real estate with the intent of keeping properties to rent out.
• Real estate trading is a short-term investment, wherein you buy a property that needs fixing up and flip it for a higher price soon after.

In addition to explaining the type of real estate investment company you operate, the Company Analysis section of your real estate business plan needs to provide background on the business. Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the real estate investing business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the real estate investment industry educates you. It helps you understand the target market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards increasing foreclosures in a particular city, it would be helpful to ensure your plan calls for an increased focus in this real estate market.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your real estate investing business plan:

• How big is the real estate investment industry (in dollars)?
• Is the real estate market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the target market for your real estate investment business. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your real estate investing business plan must detail the customers you serve and/or expect to serve. The following are examples of customer segments: mortgage holders, home buyers, renters, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of real estate investment business you operate. Clearly first-time home buyers would want different pricing and product options, and would respond to different marketing efforts than banks.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most real estate investment businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.  

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other real estate investment businesses.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes property management companies, realtors, and DIY home fixer-uppers. You need to mention such competition to show you understand that not everyone who purchases or leases real estate uses a real estate investment business to do so.

With regards to direct competition, you want to detail the other real estate investment businesses with which you compete. Most likely, your direct competitors will be real estate investment businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your competitive advantages. For example:

• Will you specialize in a particular real estate type or market?
• Will you provide services that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your real estate?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a real estate investing business, your marketing plan should include the following:

Product : in the product section you should reiterate the type of real estate investment company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, will you offer residential properties, or commercial properties?

Price : Document the prices you will offer and how they compare to your competitors. In this section, you are presenting the types of real estate you offer and the current price ranges.

Place : Place refers to the location of your business. Document your location and mention how the location will impact your success. For example, is your real estate investment business located in a market with a high foreclosure rate, or with a low inventory of office space. Discuss how your location might provide a steady stream of customers.

Promotions : Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local bloggers and websites
• Social media advertising
• Local radio advertising
• Banner ads at local venues

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your real estate investment business such as finding properties to acquire, marketing completed properties, overseeing renovations, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to flip your 25th house, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch in a new market.

Management Team

While the earlier sections of your real estate business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your real estate investment business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say you signed a commercial tenant that needs an extensive build out, that would cost you $50,000 to complete. Well, in most cases, you would have to pay that $50,000 now for materials, equipment rentals, employee salaries, etc. But rent will not cover build-out costs for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a real estate investment business:

• Location build-out including design fees, construction, etc.
• Renovation costs
• Cost of depreciation
• Payroll or salaries paid to staff
• Business insurance
• Property management software
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

Free Business Plan Template for Real Estate Investors

You can download our real estate investment business plan PDF template here. This is a business plan template you can use in PDF format.

Real Estate Investment Business Plan Summary

Putting together a business plan for your real estate investment company will improve your company’s chances of success. The process of developing your plan will help you better understand the real estate investment market, your competition, and your customers. You will also gain a marketing plan to better attract and serve customers, an operations plan to focus your efforts, and financial projections that give you goals to strive for and keep your company focused.

Growthink’s Ultimate Real Estate Business Plan Template is the quickest and easiest way to complete a business plan for your real estate investing business.  

Additional Resources For Starting a Real Estate Investment Business

• How To Find Investment Opportunities
• Estimating Rehab Costs for Real Estate Investors
• How To Become a Real Estate Investor
• How To Start a Real Estate Investment Business
• Real Estate Investor Marketing Strategies

Don’t you wish there was a faster, easier way to finish your Real Estate Investment business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan consulting services can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Writing A Residential Rental Property Business Plan

May 27, 2019

The business plan format we’ll discuss includes five sections:  Property, Market, Goals and Objectives, Management and Financial (see Appendix A for an outline). Let’s take a brief look at each of these sections.

Rental Property Business Plan Section 1:  Property

Describing the property is the first step to determining how it should be managed and estimating its potential for return on investment (ROI).  Noting the property’s type, features and location provides a basis for comparison to other properties in the market to determine its competitive position . This section may seem elementary, but it is vitally important to establishing the property’s realistic market potential and an appropriate management approach.

Rental Property Business Plan Section 2:  Market

The Market section identifies the managed property’s market and how our property compares with competing properties.  This information supports decisions regarding rent levels, marketing strategies and long term positioning of the property within the market.  A Market Rent Analysis  (MRA) should being included to provide comparisons to direct competitors (similar properties) and indirect competitors (other types of properties that potential tenants might prefer if the managed property is not competitive in terms of price, location and/or amenities).

The Market section identifies the target market (preferred tenants) for vacancy advertising and strategies for reaching that market effectively.  Understanding the needs of the target market also supports decisions regarding the potential ROI of future property upgrades and some management procedures (e.g. whether to offer online rent payments).

Rental Property Business Plan Section 3:  Goals and Objectives

In simple terms, goals are a measurable what and objectives are the reason why .  A business plan could have several dozen goals, or perhaps just a few, depending on the property, its market and how it will be managed.  But each goal should have at least one objective.

Let’s look at a simple example of a goal and its objective:

“Goal:  $29,000 or higher net operating income. Objective:  Meet or exceed ROI compared to other available investments.”

Let’s say we have a more specific reason for earning a minimum ROI and a 2 nd objective that is dependent on the first:

“Goal 1A:  $39,000 or higher net operating income.  Objective:  Achieve minimum acceptable ROI.”

“Goal 1B:  Increase balance of reserve fund from $90,000 to $100,000.  Objective:  Increase investment safety from unexpected expenses.”

We might also have a goal of repositioning our property in the market:

“Goal:  Remodel to add new master suite. Objective:  Increase the property’s income potential.”

Some owners and managers prefer to develop objectives first, and then formulate goals that support achievement of those objectives.  Here’s an example:

“Objective:  Improve property to increase gross rental income.  Goal:  Install new kitchen stove, refrigerator and dishwasher before renewing current tenant lease.”

The important factor in each of these goals is that they are measurable, either with a numerical value or by answering a yes or no question.  The corresponding objective should represent a strategic improvement to either the property or its performance as an investment.

Rental Property Business Plan Section 4:  Management

A business plan should not be confused with a manager’s Standard Operating Procedures (SOP, see Note 1).  A plan is a list of tasks, while procedures describe how those tasks should be done.  The Management section will identify recurring and non-recurring tasks and who will perform them.  These include leasing, tenant care, property care, and improvements.

For example, Section 4.B, Inspections, could include the following:

“Full exterior/interior inspections will be conducted semi-annually and per the Management SOP.”

What does the Management SOP say about inspections?  That depends on the manager’s standard practices.  Most commonly, the SOP will stipulate the types of inspections that will be performed in the usual course of managing a property, such as weekly drive-by exterior inspections.  The SOP may also describe inspections to be performed under special circumstances, such as a tenant complaint about a specific problem, complaints from neighbors, notification of a nuisance on the property by law enforcement, suspicion of illegal activity on the property, suspicion of abuse on the property, or habitually late rent payments (see Note 2).

If there is a plan to make capital improvements, the Management section is a good place to describe them.  There should, however, be a separate Project Plan for each improvement that gets into the details of what is to be done.

A Property Management Schedule , either in list form or graphic (e.g. Ganntt chart ), should be used to identify and track progress of all recurring and non-recurring management activities.

Rental Property Business Plan Section 5:  Financial

Financial plans can be either simple, such as a single page spreadsheet, or consist of hundreds of pages that include detailed descriptions of each income, expense or financing item.  For most single unit or small multi-unit owners and managers, a spreadsheet reflecting an Operating Budget like the example below should suffice (see Note 3).

Rental Property Business Plan:  Tracking Performance

Tracking performance against the business plan is the ultimate purpose for having it.  The primary tracking tools are the Management Schedule and the Operating Budget, which we created in the Management and Financial sections.  Establish regular reviews (monthly, quarterly, etc.) and write a brief analysis of your performance to the plan – even if you are the only person who will read it.  Your analysis is feedback that should prompt you to take action in response to changing market conditions.

Rental Property Business Plan:  A Few Final Words

The business plan we’ve been discussing is applicable to a property or small group of properties, typically condos, single family homes, or small multi-family complexes.   As with all plans and procedures, the format and content of the document should be tailored to your specific needs.  In most instances, rental property profit or loss is just one part of an owner’s total financial picture.  When this is the case, the rental property business plan should be incorporated into a broader company or family financial plan.

If you’re an active investor, you may find that drafting a business plan for a potential investment target provides a great analysis tool. To get a good start, you might want to order our Business Plan Services to help get your first plan organized.

Hope you found this review of the residential rental property business plan helpful.  For answers to your questions or for help with California real estate investing, sales and property management, please use Contact Us .

• Most professional property managers have written Standard Operating Procedures (SOPs) that they either apply globally to all properties under their management or adapt to each property individually. It is common for managers to either reference their existing SOP or attach an SOP tailored to a client’s property to a property management contract.
• We offer “ Problem Tenant Services ” that include inspections when special circumstances warrant them.
• Financial plans and the bookkeeping system used to track financial performance should support the information requirements of your accountant and tax adviser. Consult with these professionals when drafting your operating budget.

Appendix A:  Residential Rental Property Business Plan Outline

• Demographics
• Target Market
• Market Rent Analysis
• Goals and Objectives
• Inspections
• Maintenance and Repairs
• Capital Improvements
• Operating Budget
• Capital Budget

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How to Start a Real Estate Investment Company

11 Min Read

Are you thinking about growing your wealth? Consider the power of real estate! This industry has a strong track record, with an average annual growth of around 5.4% over the last six decades.

With a whopping $5.16 trillion market, the opportunities are huge. But it’s not just about owning buildings—it’s a chance to really make a difference in our communities and shape the way cities evolve.

If you’re ready to learn how to start a real estate investment company , let this guide be your roadmap to success. We’ll cover market trends, smart real estate investing strategies, and everything you need to build your own thriving investment business.

Benefits of Starting a Real Estate Investment Business

It’s not just about watching your property value climb – real estate investment is also about generating steady cash flow from rental income. This kind of reliable stream pays off big time, especially when the rest of the market experiences a downturn.

Another bonus? Real estate adds variety to your portfolio. It often moves independently of stocks and bonds, making it a great way to spread your risk and weather those market storms.

Plus, unlike some real estate investments, real estate has tangible assets. Even if the project doesn’t hit a home run, you still have the land and the building—there are ways to recover a good chunk of your investment.

And that’s just the start! A real estate business also offers a whole range of benefits like:

• Steady income streams
• Potential for properties to increase in value
• Tax benefits
• A way to protect your money against inflation

What You Need to Start a Real Estate Business?

Starting a real estate investment company isn’t about just finding properties! Think of it like building a house – you need a strong foundation first. Here’s what you’ll need:

• A Business Plan: Your business plan is your roadmap. What’s your mission? How much does it cost to launch? How will you track success?
• Investment Strategy & Capitalization: Before chasing deals, know your investment plan. What type of properties? How much cash do you have on hand?
• Operations plan: This is your business blueprint. Decide on a solo or team approach, define your daily tasks, and make sure everything supports your main goals.
• Networking: Build that network! Finding the gems and closing those deals often hinges on solid connections in the real estate market.

Now that you understand the benefits of starting a real estate investment company, let’s explore the steps involved.

• Select a suitable business type
• Write a comprehensive business plan
• Form a legal business entity
• Open business banking accounts
• Figure out business finances
• Obtain required licenses and permits
• Build a professional network
• Develop an investment strategy

1. Select a suitable business type

Choosing the right real estate path is critical to building your dream business. Let’s break down a few popular options:

Residential Rental Company

Become a landlord! This is about finding suitable properties, attracting reliable tenants, and generating steady rental income. If you hold on to the property, it might even gain value over time.

Commercial Real Estate Company

Think outside the (residential) box! Retail spaces, offices, warehouses – this diverse sector offers a unique way to expand your holdings and tap into different market trends.

Wholesaling

Do you have a nose for a good deal? Wholesalers track down discounted properties, secure the rights, and then connect with buyers looking for a bargain. It’s a fast-paced world of deal-making, not long-term ownership.

Real Estate Investment Group (REIGs)

REIGs let you team up with other investors. You can combine your money to take on bigger projects and share the rewards.

Real Estate Development Business

Got an eye for potential? Developers transform land or renovate existing buildings. This includes house flippers and those who build massive new projects – they see opportunity where others see problems.

2. Write a comprehensive business plan

Your real estate business plan is your blueprint for success. It’s where you strategize about your property focus, nail those operational details, and craft a marketing plan that attracts serious investors.

A solid real estate investment business plan should cover:

• Your Focus:  What types of properties will you target? Residential, commercial, or a mix? Will you specialize in a niche, like fixer-uppers or luxury condos?
• Marketing that Matters: How will you reach potential investors and stand out in a crowded market? What channels will you use?
• Know Your Rivals:  Who else is competing for those same deals? How will you differentiate yourself and secure the best properties?
• The Bottom Line: Project your finances realistically. This isn’t just about finding excellent properties; it’s about building a profitable business!

The best part? The planning process forces you to understand your ideal real estate investor. Are you targeting those seeking steady income or high-risk/high-reward players? Knowing your audience puts you in the driver’s seat.

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3. Form a legal business entity

Stepping into business registration is more than a formality; it’s your entry ticket into the business world. This crucial move sets the stage for paying taxes, securing funding, and everything in between.

Plus, the moment your business is registered, it transforms from an idea to reality — it’s official, and it’s yours.

Here’s what you will need to get started:

Location Matters

Your location choice impacts taxes, legal hoops, and potential earnings. While many stick to their home turf, eyeing other states could offer competitive advantages, especially for real estate ventures.

If you’re open to relocating, your business could benefit significantly. And remember, moving your business isn’t as difficult as it sounds.

Choose the right business structure

Choosing your business structure is akin to choosing its foundation. Each option — be it real estate LLC, sole proprietorship, or corporation — comes with its unique impact on taxes, liability, and paperwork.

Tip: For real estate investment, LLCs are often favored for their flexibility and lighter regulatory load.

Lastly, registering for taxes means obtaining an Employer Identification Number (EIN), a straightforward process via the IRS website.

Your EIN is essential for tax purposes, and if you’re a sole proprietor, your social security number can also serve this purpose. Selecting your tax year is crucial, too, as it defines your financial reporting period.

4. Open business banking accounts

Separating your personal and business finances is a smart safeguard, especially when dealing with a real estate holding company.

It helps protect your personal assets from any potential hiccups related to your properties and keeps your financial life organized, especially when tax season rolls around.

The best way to do this? Set up separate bank accounts specifically for your company.

Only use these accounts for your real estate business – rent, maintenance, taxes, the whole nine yards. This creates a clear divide and makes tracking your finances a whole lot easier.

5. Figure out business finances

Jumping into real estate investing means having a good amount of cash ready. Depending on your approach, the upfront investment can range significantly from around $120,300 to $1,090,000 .

To make smart financial moves, it’s essential to understand where that money is going. This includes down payments, closing fees, and maybe even some renovation costs.

A detailed budget plan is essential. It helps you make informed investment decisions and sets you up for a successful, long-term real estate business.

Now, how do you fund these costs? Well, you have a few options:

Your own savings

Using your cash reserves is tempting, but remember, real estate deals have their ups and downs. You don’t want to put all your funds in one property and risk getting stuck if the market shifts.

Borrow from friends or family

While loved ones might be supportive, blending money and relationships can get complex. What happens if a renovation takes longer than expected or your projected returns hit a snag?

Seek external funding

This is where your real estate investments strategy really takes shape! Consider:

6. Obtain required licenses and permits

Starting a real estate investment business means navigating a bit of a permit and license jungle. It depends on where you’re operating, but expect to deal with paperwork at the local, state, and sometimes even federal levels.

Now, the good news: you don’t necessarily need a real estate agent or broker license to be a real estate investor. But here’s the thing – getting that license could save you a serious chunk of change.

Why? Because you can cut out the realtor and their commission fees when buying or selling real estate properties. If you’re planning on doing a lot of transactions, the license might pay for itself.

Of course, each state has its own rules about getting licensed, and so does your research.

Beyond the real estate license, there’s the whole world of business permits. Think DBA (“Doing Business As”), maybe health and safety stuff from OSHA, and protecting trademarks for your excellent company name.

Depending on your specific investment niche, there might be industry-specific licenses to deal with.

Then comes the local stuff: state, county, and city permits can all be involved. The best way to figure this out is to visit the websites of your local governments or, better yet, actually call them.

7. Build a professional network

Building a robust network is the lifeblood of your real estate investing business. The right connections can open doors to incredible deals, fast funding, and serious profits.

It’s your secret weapon, especially when things get unpredictable.

So, let’s dive into the best ways to get out there and make those connections:

Expand Your Territory

Traveling isn’t just about vacation; it’s about expanding your turf. Look up local players in the areas you visit – investors, lenders, you name it. A few coffee meetings could land you a deal that funds your whole trip and maybe even gets you some tax breaks (talk to your accountant!).

Attend Strategic Events

Every town has networking events – happy hours, trade shows, the works. These folks are there to meet people like you! Don’t just show up, do your homework and target the attendees you want to connect with.

Leverage Social Media

Social media is powerful, but don’t just collect followers. Build genuine relationships with potential partners, clients, and those who share your interests. Find relevant groups, offer value, and be genuine.

Share Your Expertise

Once you’ve gained some experience, host your own classes or workshops. Share your expertise on buying, flipping, or whatever you’re good at. This will position you as the go-to expert and attract like-minded folks.

Foster Community Connections

Get involved in local events, charities, or community improvement projects. This builds strong relationships within your area and can organically generate leads, funding sources, and partnerships.

Utilize Your Network

Don’t underestimate the power of your existing contacts. Ask for referrals, introductions, and recommendations to expand your reach exponentially. Be sure to reciprocate by connecting with others within your network.

8. Develop an investment strategy

Building a successful portfolio takes more than just enthusiasm. A well-defined strategy aligned with the market is your roadmap to success. Let’s break down the essential steps:

Define Your Goals & Risk Profile

Before buying even a single brick, ask yourself: Are you in it for the long haul, aiming for slow and steady growth? Or is fast cash flow your top priority?

Understanding your goals shapes every decision that follows. Also, be honest about your risk tolerance. Some investors love a high-stakes gamble; others need the security of a slow-and-steady approach.

Conduct Thorough Market Research

Winning at real estate means knowing the playing field. Dig into market trends – not just your neighborhood, but the bigger economic picture.

Study rental demand, job growth, and all those factors that drive the value up (or down!). Informed investors spot opportunities others miss and dodge potential pitfalls.

Embrace Diversification

Diversification is your best friend. Sure, spread it across different locations, but think bigger—residential vs. commercial, traditional rentals vs. real estate investment trusts (REITs), or crowdfunding. An intelligent mix protects you if one market segment takes a temporary dip.

Prioritize Financial Planning & Risk Management

Real estate is a business, not just a romantic dream about fancy houses. Have a rock-solid budget, know your cash flow needs, and leave room for those “oops” moments – vacancies, repairs, etc.

Build in safety nets like insurance and get savvy about legal structures to protect your personal assets.

Real estate can build serious wealth, give you options with your money, and even offer some tax advantages. But it’s also a serious commitment – there’s money on the line, risks to manage, and you need a good dose of patience.

The key to making it work? A rock-solid business plan. Think of it as your roadmap – it gets your goals clear, helps you understand the market, and keeps you focused on building a sustainable real estate investment business.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks, AI-assistance, and automatic financials make it easy.

Frequently Asked Questions

Do i need a degree to start a real estate investing company.

Nope!  While a business or finance degree can be useful, it’s not mandatory. Success depends more on real-world knowledge – understanding the market, smart financial strategies, and the legal side of things.

Is starting a real estate investment company profitable?

It absolutely can be! But think of it as a long game, not a get-rich-quick scheme. There are different ways to profit: steady rental income, riskier fix-and-flips, even large-scale development projects. The key is finding the strategy that fits.

Should I hire an investment property manager for my real estate investing business?

That depends!  Do you have the time and energy to handle tenant issues, repairs, and the day-to-day grind? Investment  Property managers take that burden off your plate, freeing you up to focus on growth, but it’s an added expense.

Is there a "most profitable" type of real estate investing?

No single magic bullet here. Different real estate investing strategies come with their own risk-reward balance. Want steady, predictable income? Think established rentals. Up for some risk in exchange for potentially huge profits? Flipping or development might be your thing.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Grow Your Wealth

Sample Real Estate Investing Business Plan

If you’ve been scouring the web trying to find a sample business plan so you can get your real estate investing business off the ground, look no further.

On this page, I will provide you a real, sample real estate investing business plan.

I will also give you step-by-step instructions to help you create your own business plan so you can stop sitting around and start investing in real estate.

Need a Business Plan Before Investing in Real Estate?

Real estate financial projections, real estate is predictable, and your numbers should be too, business financial plan, how to write a real estate investing business plan..

I put together this infographic which will help break down the elements of planning (and backward planning), then we’ll pick it up on the other side with more information about crafting your sample business plan.

There are a lot of paths to go down in our quest to achieve  financial independence  and create a long-term residual income. With a business plan, you are: ** Nearly 2x more likely to succeed than those without a plan ** **49% more likely to grow than those without a plan** ** 2x as likely to get investment capital ** ** 30% more growth potential than those without a plan **

Writing Your Business Plan

Before you even start typing, you need to know your goals and write them down. The infographic above has an example of how to backward plan and fill in the blanks.

Alright, now that you have a general idea of where you are going and how you will get there, you are ready to start writing your business plan.

What You Need Before Starting Your Investing Business Plan

Before you get started writing your business plan, you need to put together a few pieces of information:

• Business plan writing software (I use  LivePlan )
• Your  target market
• Your  analysis criteria
• How you will  find real estate deals
• How you plan to  finance your properties
• How you plan to rent/sell your properties (exit strategy).

1) Start Writing the Pitch

The first thing I like to do is write the pitch. Imagine yourself on a 30-second elevator ride to the 10th floor of some building, and you happen to be riding along with the CEO, or finance manager of some investing firm. What could you say to that person in 30 seconds to make them want to sit down and hear more?

That’s your pitch.

Click on the image to see an example of a “pitch” (it’s just a fictitious company I made up for this example).

The  business plan writing  software that I use puts this all together for me and even hosts it on a unique webpage so I can email the pitch if I want. Obviously, you don’t have to get that fancy – you could even put something together in PowerPoint if you want.

Writing this pitch is going to help you start working on a few important details:

The Real Estate Problem You are Solving (and Your Solution)

This is how you will position yourself and be better than everybody else…and fully expect it to change over time.

• When we first started investing, we focused on student rentals. More specifically, we realized that foreign students had a hard time finding good apartments and trusting their rent and security deposit wouldn’t be stolen before they arrived in the United States.
• Though that was our focus, we also bought other buildings if the numbers made sense…and our mission changed to acquiring under-valued properties and using my expertise to renovate them cheaply.
• Finally, as we grew, we have incorporated those other things into our target investments but now we are focused on building systems that other smaller landlords couldn’t have in place.

The great thing about real estate, when compared to other startup businesses, is the financials are already out there for you. You can easily look at any property and get the current owner’s proforma rent (rent and expenses on paper under ideal circumstances).

In other industries, you may be stuck guessing what your retail demand will be, what your advertising, marketing, and other overhead might be.

In real estate, it’s easy to find and easy to estimate in the absence of actual numbers. My point is, there is no reason why your financials section shouldn’t be  amazing . It should be spot on so you can impress whoever your lender will be.

Since the financial section should be easy to figure out, it’s what I like to work on second.

2) Create an Amazing Financial Forecast

The financial forecast should be pretty boring and not hard for you to determine.

There is nothing terribly exciting about the financial section of a business plan. There is even less excitement with real estate financials. If you aren’t actively buying more property, then your revenue and expenses should literally never change.

And in this example, you can see how I plan for absolutely no change throughout most of 2016 for this made-up company.

But then something happens – I plan to buy more property!

But then it flatlines again.

Your banker, financier, or private lender will know real estate inside and out. They will know how much people spend on maintenance, collections, etc.

So, if the numbers in your plan are out of line, they will see it.

If you’re lucky, they will assume it’s a simple mistake, let you amend the numbers and move on… or they may think you’re a novice and it could jeopardize your financing. So spend more time on this section than any other

Honestly, I probably spend 3 or 4 hours just making up numbers for this example. It would take me a few days to get everything perfect if I were using this for funding.

3) The Rest of the Business Plan

Maybe it seems weird that I just throw it all together at the end, but in real estate, it’s pretty true. If you’ve created a solid plan utilizing the backward planning method, then created a pitch and did a solid job on your financials, the rest of the plan will fill itself in.

Sure, there may be a few areas that you haven’t put thought into yet, but that’s the purpose of the business plan.

The great thing is, the pitch uses these categories as well, so it gives you a great starting place.

Here is a quick breakdown of the real estate business plan categories

Executive Summary

The  Executive Summary  is a brief outline of the company’s purpose and goals and should include:

• A brief description of products and services. For real estate, this could mean single family vs multi-family, self-storage, commercial, etc.
• A summary of objectives.
• A solid description of the market. How is your niche growing and what does the future look like in your particular market?
• Financial justification. What your profit margins look like and how you plan to make money. Include growth potential
• An overview of funding requirements.

Find your Business Opportunity

Every business finds an  Opportunity  to exploit. Essentially, opportunities are created by problems which you will solve. There may be a lack of low-income housing, or on the opposite side, a lack of luxury apartments. Other problems may be poor management, high eviction rates, or a lack/excess of a particular type of real estate.

It may be helpful to answer these  four questions  to help you define your opportunity:

• Where do you make your money?  – What niche of the market will you operate in?
• How do you spend your time?  – Will you focus on management, maintenance, finding investments, etc.
• Who do you sell?  – Are your target tenants businesses, low-income, high-income, students, or something else.
• What do you sell them?  – Are you selling tiny (green) homes to high-income individuals or large homes to middle-income people with families?

Execution of your Business Plan

Writing the execution part of your business plan isn’t always easy because it includes some big sections. In the execution section, you will have Operations, Marketing & Sales, Milestones, Metrics, and anything else that will affect your investments on a day-to-day basis.

Operations  –  This includes technology you may use (property management software), locations, management plan, and anything else that affects the day-to-day operations of your business and investments.

Marketing & Sales  –  This may include how you plan to stage and rent properties or to sell your real estate. From online listings all the way down to your concept for showings.

Milestones –  How fast do you want to grow, when will you raise rents, when do you want to hire your first employee… anything can be a milestone and it’s unique to your particular investing strategy.

Metrics –  It’s important to determine how you measure success. There are many ways to measure this, but in real estate, it could be the number of units, yearly income, or net worth among other things.

Company Profile

The  company profile  section is where you “sell” the management team and history of the company. If you have a lot of experience in real estate, then really highlight it in this section.

If you don’t have a strong real estate background (a lot of new investors have very little experience) then focus on talking about your “team” such as your real estate agent, accountant, attorney, contractors, and other professionals

Remember all the numbers you worked on before? Well, this is the where they go.

Try not to create pages and pages of useless graphs, charts, or spreadsheets. Try to put the important information up front, and tuck supporting spreadsheets in the back as a reference.

Another note – profit is really important in business, but cash-flow is more important. In real estate, it’s quite possible that a company can be profitable but cash-flow negative. It’s also possible to exhaust cash reserves and fail to meet debt obligations, even if you planned on earning a fortune in just a few months.

Your financial section should show your solid cash-flow management plan.

Don’t forget to download your free sample real estate investing business plan

Wrapping up Your Real Estate Investment Business Plan

The design is an important last step. People are more likely to read through your business plan and judge it’s content if it has a beautiful and easy to read design. Spend plenty of time making it colorful, make the headings pop, and work hard to draw attention to the areas you want to highlight.

With that last piece of advice, I hope I’ve been able to give you some specific advice about real estate investing and your business plan.

Check out  LivePlan  and give it a shot. It’s an amazing product!

And if you haven’t already yet, get a copy of the free business plan for real estate investors

Eric Bowlin has 15 years of experience in the real estate industry and is a real estate investor, author, speaker, real estate agent, and coach. He focuses on multifamily, house flipping. and wholesaling and has owned over 470 units of multifamily.

Eric spends his time with his family, growing his businesses, diversifying his income, and teaching others how to achieve financial independence through real estate.

You may have seen Eric on Forbes, Bigger Pockets, Trulia, WiseBread, TheStreet, Inc, The Texan, Dallas Morning News, dozens of podcasts, and many others.

Reader Interactions

June 20, 2023 at 8:49 am

This is a great blog post! I’m a recent college graduate and I’m looking to get into real estate investing. This post has given me a lot of great information to work with.

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Technology’s role in rental property investment market

The need for proptech in today's rental market

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The rental segment has been marked by strong demand and looks to continue on this trajectory given mortgage rates that continue to hover around 7% and record property prices across many U.S. regions. In spite of some slowdown, rents have continued to appreciate, being nearly 30% higher than prior to the pandemic, with February levels up 3.5% as compared to the previous year.

The strength of the U.S. rental sector has benefitted most landlords in this country, from larger multifamily investors to smaller mom-and-pop owners. Real estate investments have long been a key pathway to wealth in the U.S. About 90% of millionaires have built their fortunes in great part through the ownership and management of real estate, according to industry data. Among the variety of investment opportunities within the sector, rental properties have been in the spotlight as a steady income source.

In 2023, the total U.S. apartment rental segment was expected to reach about $251 billion, according to data by Statista. Individual investors own about 70% of rental properties in the U.S., according to U.S. Census data, serving around 44.1 million renting households.

Given rental demand in the U.S., in addition to intentional property investors, the number of so-called “accidental landlords” has also been increasing since 2018, according to research from TenantCloud . This group of property owners originally bought their assets due to circumstance and are renting out instead of selling; however, they don’t necessarily consider themselves real estate investors.

Challenges and harnessing the power of technology

The challenges any rental property owner most commonly faces include finding dependable tenants, ensuring regular rent payments, meeting the changing needs of today’s renters and managing their properties effectively and efficiently. 

In order to tackle these challenges and respond to evolving market dynamics, one pivotal shift has been the integration of property technology (proptech) into management practices. Top-of-mind solutions for landlords include automated tenant screening and online rent collection, as well as smart home amenities.

Online tenant screening helps landlords identify qualified renters fast while safeguarding their information during the application process. Online rent collection helps automate an otherwise often clunky system that might include checks or payment services, and smart home amenities can help optimize energy use and increase security.

Given the continued high interest rate environment and soaring home prices that have made owning a home challenging at best, rentals are likely to remain a cornerstone of the U.S. housing market, generally offering more affordable options while providing investors with a stable income stream. 

However, rising property costs, increased taxes and the risk of missed rent payments highlight the importance of financial management and effective tenant screening processes. Technology-based solutions, such as online rent collection platforms and smart home amenities, are becoming increasingly indispensable to streamline operations, enhance tenant satisfaction, and ensure long-term profitability.

Michael Lucarelli is the CEO and Co-Founder of RentSpree .

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story: [email protected]

To contact the editor responsible for this story: [email protected]

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A good business plan is the first step in recession-proofing your business. Check out some sample business plans for real estate, mortgage broker, realtor, property management, and similar businesses to get ideas for your own business plan.

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Business Plan Writer Moscow

A well written business plan is an essential component for any company seeking to raise capital. Our team at Prospectus.com has over 20 years of experience writing business plans and structuring business models for start-ups, later stage and expansion companies, those seeking venture or angel financing all the way to mezzanine and 144A funding, spanning a wide range of industries across the globe. We have been involved in thousands business projects and assisted with business planning, offering and private placement setup, feasibility studies, drafting financial projections, both for private companies and those seeking initial public offerings or listings on a stock exchange.  Our team is a recognized leader in business plan development. In fact, our CEO is the Chairman and Founder of  Borders.org  ( Business Plans Without Borders ), a not-for-profit 501c3 organization which assist low income families as well as refugees and immigrants with business plan writing services and grants.

Our Team’s Business Plan Advisory Services Value-Proposition:

• Our staff are known as one of the most reliable and affordable Business Plan developers in the U.S. and worldwide. Our straight forward and honest assessment of one’s business is one of our strongest characteristics
• Offices and associates in numerous countries, including New York, London, Hong Kong Beijing, Singapore and Seattle
• 1 to 2 weeks’ average time for completing business plans
• Proven track record of saving entrepreneurs thousands of dollars in needless spending while developing the business plan
• Ability to draft your business plan and prospectus or private placement memorandum or offering memorandum for debt or equity offerings or any other service and package    everything as one price
• We are somewhat of a one stop business for most of the startup and later stage company needs.

Moscow Business Plan Options

There are mainly two types of business plans that are written in Moscow: capital raising business plans and management or managerial business plans.

Raise Capital with a Business Plan

Most business plans are written with eye towards raising money for their venture. In a business plan that is written for investment capital, the structure of the business plans and therefore the most important point of the document will be the value-added benefit. Information on the products, services and the market will play central roles in the development of the plan, as well as various payout or exit strategies for the investors. Most business plans will focus on either selling equity or debt to investors.

• Equity : In an equity business plan the company seeking funding will sell an ownership stake. If the company is a corporation, they will sell shares or common stock or a variation of them. If the company is a LLC or a Limited Company (which is popular worldwide) interest or units in the company would be offered. Both a form of ownership, just with a different name for each entity. In additional, there are other sweeteners one can add into any business plan offering, including warrants or preferred shares or preferred units or convertible debt.
• Debt : in a debt offering business plan the company will be issuing some type of bond or a note to investors. A bond or note differ only in terms of the length of each security, which bonds being considered a longer maturity date than a note. There are also convertible debt securities that would convert the notes/bonds to equity at a certain fixed point in time. The business plan for bonds would detail the terms, such as the maturity date, interest rate and other vital information.

Managerial Guidance Business Plan

• No Capital Raising : In a managerial or a management business plan, the focus is not on raising money but what strategy a company should employ. While most companies that write business plans do so to raise capital, there are some that simply want to get a second opinion or an outside view of their business. They ask us to write them a business plan for growth opportunities, not to raise money. Said another way, the management of the company wants to see our view and take on their business and what we would do to expand their company.
• Recommendations : A business plan used to simply strategically plan one’s next move is referred to as managerial guidance business plan document. No capital is being raised initially, although sometimes we may conclude that capital should be raised for the company to penetrate or open new markets or opportunities. In the course of research, we may conclude that, in fact, the company should conduct an offering and raise money. We will recommend the amount to raise based on the company’s expansion needs and the company valuation.

3 Levels of Business Plans

Our firm offers various levels of business plan writing service and consulting, including: Level I Start-up Business Plan »

• Prospectus.com’s team consists of industry expert business plan writers. Our Level I Start-up Business Plan can be used for companies raising initial seed funding and getting off the ground. The dollar amount being raised is not of paramount importance.
• The Start-up Plan includes complete financials, potential cash-flow, market analysis and marketing strategies as well as a break-even analysis, and a separate executive summary and much more.

Level II Expansion or Series B Business Plan »

• Prospectus’ Level II Expansion or Series B Business Plan assists companies and entrepreneurs that are seeking to expand or scale their business, including by increasing market share.
• The Level II Start-up Plan helps to define concepts, target markets and market potential, as well as financial clarity necessary to define your concept, identify your market potential, and identify capital requirements. Executive summary included.

Level III Enterprise Business Plan »

• Prospectus’ Level III Enterprise Business Plan serves the need of those later stage and established companies seeking to raise additional capital to expand their businesses, often in the form of issuing debt securities such as bonds or convertible notes.
• The Level III Enterprise Business Plan is our most comprehensive business plan and often our clients will need a prospectus or a private placement memorandum (offering memorandum) written as well.

Our firm has years of experience drafting securities documents and is confident we can assist with your Moscow Business Plan Writer.  Feel free to contact us anytime, or call us to setup an appointment at any one of our global offices.

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Morgan Stanley Real Estate Investing Acquires Metropolis Mall in Moscow

A real estate fund managed by Morgan Stanley Real Estate Investing (MSREI) today announced the acquisition of the Metropolis Shopping and Entertainment Mall, a 205,000 sqm shopping center in Moscow, from Capital Partners.  The acquisition of the Metropolis shopping centre is the largest-ever transaction in the Russian commercial real estate market.  Terms of the transaction were not disclosed. 

Developed by Capital Partners, Metropolis opened in 2009 and provides 82,000 sqm of fully enclosed retail accommodation and 2,900 parking spaces.  It is widely recognized as Russia's premier retail development with a favorable location in the north-west of the city, along the Leningradskiy highway and next to the metro station Voykovskaya.  The shopping centre is part of the institutional quality mixed-use complex Metropolis with 311,000 sqm of gross built area which, apart from the shopping centre, includes three office buildings with a total GLA of approximately 80,000 sqm.

“We are very pleased to be acquiring the Metropolis Mall in Moscow,” said Brian Niles, Head of MSREI EMEA.  “The acquisition is consistent with our strategy of investing in high quality assets in Russia, a market that should continue to benefit from strong growth in consumer demand.  Together with our previous investment in the Galeria Mall in St Petersburg, we believe the acquisition of Metropolis will deliver operational synergies and strategic benefits associated with owning two prime shopping centers in Russia.  We look forward to managing the assets as we seek to deliver additional value to our investors.”

Metropolis is one of the most visited shopping centres in Moscow with approximately 55,000 customers per day in 2012.  The complex is fully leased and has a waiting list for retailers wanting to rent space.  Major tenants include food hypermarket Karusel and department store Stockmann, along with a large number of international retailers including Michael Kors, H&M, GAP, River Island, New Look, DKNY, Bebe, Jaeger, Uterque, Imaginarium, and Zara.  The center also has a multi-screen cinema operated by Cinema Park Deluxe and a bowling alley.

Among the awards received by Metropolis are: the “Best Mixed-use Complex” award in the Commercial Real Estate Awards, Moscow, 2009; “Best new development category extra-large” award in the Russian Council of Shopping Centres; and “Best Shopping Centre of the Year” award in the FIABCI “Prix d’excellence” Awards, 2010.

Capital Partners was advised by JLL.

Morgan Stanley Real Estate Investing (MSREI) is the global real estate investment management arm of Morgan Stanley.  Established in the early 1990s, MSREI has been one of the most active real estate investors for two decades, acquiring over $184 billion of assets in 36 countries.  MSREI leverages the expertise, relationships and franchise of Morgan Stanley with dedicated real estate investing professionals located in 15 offices around the world providing acquisition, finance and asset management services.  MSREI manages opportunistic and core investment strategies on behalf of its clients, including some of the largest pension funds, sovereign wealth funds and high net worth investors worldwide.  For more information about Morgan Stanley Real Estate Investing, please visit www.morganstanley.com/realestate .

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The Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of nationwide and international conventions; exhibitions; and business, public, youth, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.

The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, helps foster social entrepreneurship and charitable initiatives.

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