The real estate market has never been quite as precarious or as lucrative as it is right now. With hundreds of want to be investors leaping into the market, a solid real estate investment plan is crucial to getting approved for what are now considered high-risk loans!
A real estate investor business plan is more than a quick overview of the property the loan will be used to secure. It is a comprehensive document that outlines the potential net profit that can be realized by an investment property, encouraging the bank, investor or venture capitalist to look favorably on the loan application. This particular type of business plan must stand out among a host of similar applications, which is why it is wise to retain a business plan consultant to ensure the information stays focused, relevant, and convincing. Projections should be reasonable and believable.
A real estate investor business plan should comprehensively present information. First, the overall project should be described in detail. Explain exactly how it fits the individual needs of the target investors, pinpointing cash flow and appreciation targets as well as providing an analysis of the operational and investment risk. A business plan consultant can help lay out income projections and cash flow models. Next a section regarding a summary of your strategy and implementation plans should be presented, followed by information describing financing assumptions such as mezzanine and senior debt, preferred equity and any other associated transactions.
The final plan should contain all of the above pulled together into a professional presentation that outlines the potential investor returns and includes a worst case scenario exit strategy. Once completed, the business plan can be presented to investors or a bank to increase chances of approval of a real estate purchase.