In the new decade, the U.S. housing market is worth a staggering $33.6 trillion. That’s almost as much or equal to the combined GDP of both the U.S. and China.
No matter which way you look at it, real estate in the U.S. is almost always a promising venture. However, before you go pouring all your money into real estate, you first need a solid real estate investment business plan.
Venturing into real estate without a business plan is like driving in a new country without a road map. You’ll obviously get lost and maybe even wander into dangerous territories.
Making a real estate business plan isn’t as difficult as you’d think. Keep reading to find out how you can craft the perfect real estate investment plan. That way, you can secure a piece of the $33.6 trillion pie.
How to Craft the Perfect Real Estate Investment Business Plan
At the core of any solid real estate investment plan are both short-term and long-term goals. These goals are what give your plan direction and vision.
The secret to a great real estate business plan is knowing the right ingredients for the perfect plan. Here’s what you need for the perfect real estate investment business plan.
Your real estate business plan is anchored in your company or individual goals. You can split these goals into short-term and long-term goals, then work from there. Short-term goals are easily attainable, but that doesn’t mean you shouldn’t put much thought into them.
The long-term goals entail how you envision the company’s future. They include stuff like profit numbers, financing, and company size. Remember to have consultative meetings with all the involved parties before setting any goal. Also, remember to set realistic goals to avoid any future disappointments.
After you’ve set definite and realistic goals, then it’s time to outline the company’s vision. Your vision should align with your goals and be a culmination of all your investment efforts. The vision will guide you in crucial decision-making and when making business partnerships.
You should encapsulate your vision in a single vision statement. This brief statement should capture all that you envision for your real estate venture. It shouldn’t be just about money.
You can also refer to other companies and see what vision they have. That doesn’t mean that you can copy their exact mission statement; you can only use them as guides. Take your time when crafting your vision statement; it must be perfect.
The SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities, and threats. SWOT analysis is an evaluation of the strengths, weaknesses, opportunities, and threats of your venture. It helps you understand your place in the real estate industry and what you need to do to improve.
As the name suggests, SWOT analysis contains four main tenets and these areas are:
Strengths: You have to explore the strengths of your company and what gives it an edge over the competition. You need to leverage your strengths for the success of your venture.
Weaknesses: This is where to look at what aspects of your venture need a little work. Listing the weaknesses helps you come up with ways of addressing them.
Opportunities: You need to identify and capitalize on any opportunities that come knocking at your door.
Threats: Lastly, you need to take note of any threats to the stability and success of your venture. That way, you can steer clear from them.
Most folks outsource their SWOT analysis for the greatest effect. However, if you think you’ve got the chops for it, you can conduct one on your own.
Quite frankly, real estate is an expensive venture. So, before you think of joining the game, make sure you have a reliable source of funding. This financial plan will outline where you’ll get the money and how you plan to pay it back.
Strategies for Investment
At this point, you’re about midway through your real estate investment business plan, but there’s still lots to do. Now you have to put strategies in place for your real estate investment and follow-up on them. There are plenty of real estate strategies; you only have to do your research and find one that suits you best.
If you have considerable funding, you can consider rental properties for the long term. With limited funding, real estate wholesaling is still a great strategy and doesn’t involve a lot of risks. However, the best strategy depends on your situation and what goals you set earlier on.
With the strategies in place, now it’s time to get the marketing on lock. Marketing for real estate is all about building your brand and getting the word around. For marketing, make sure you have a website, a logo, a few social media accounts, and customer care.
If you can afford a marketing agency, then the better it is for you. Remember, the central point of your marketing is attracting potential clients. That means you need to make your ads as attractive as you can and give enough information for any prospective client.
If things don’t go as expected, then you should always have an exit plan to get you out of any sticky fix. Having an exit plan isn’t being optimistic; it’s practical. Even large multi-million companies have some sort of backup plan.
Think of this exit strategy as a plan of action should things backfire in your face. It addresses any potential problems and the interests of everyone in case things go wrong. Your exit plan should answer all “what if” questions and should leave no stone unturned.
Plan for Success
Real estate is a goldmine, but only if you approach it the right way. With the right real estate investment business plan, you’ll get your venture off the ground and set it up for success. With hard work, determination, and the right moves, you’ll be laughing to the bank in no time.
Real estate is a great venture, but if it doesn’t work for you, there are plenty of others you should consider. The best way to learn about other promising ventures is by checking out our other informative articles on all business matters.