Free Real Estate Investment Firm Business Plan
For Raising Capital from Investors, Banks, or Grant Companies!
Please note that the financials
in this complete free business plan are completely fictitious and may not
match the text of the business plan below. This free business plan demonstration
purposes only. If you are interested in purchasing the completed editable MS Word
and Excel documents for this business plan, please click the button below! Also,
the text of the business plan is formatted with a fully automated
table of contents.
It should be noted that there is no special software required to use these
templates. All business plans come in Microsoft Word and Microsoft Excel format.
Each business plan features:
- Excecutive Summary
- Company and Financing Summary
- Products and Services Overview
- Strategic Analysis with current research!
- Marketing Plan
- Personnel Plan
- 3 Year Advanced Financial Plan
- Expanded Financial Plan with Monthly Financials
- FREE 30 Page Sample Private Placement Memorandum
- FREE PowerPoint Presentation for Banks, Investors,
or Grant Companies!
1.0 Executive Summary
The purpose of this business plan is to raise $1,000,000 for the development of a real estate investment firm that specializes in the rental and sale of residential properties while showcasing the expected financials and operations over the next three years. The Real Estate Investment Firm, Inc. (“the Company”) is a New York based corporation that will provide real estate acquisition rental services to customers in its targeted market. The Company was founded in 2009 by John Doe.
1.1 Products and Services
The primary revenue center for the business is acquiring properties with the intent to rent the properties to the general public. The business will generate profits from both the ongoing rental income paid to the Real Estate Investment Firm while generating capital appreciation from the long term holding of these properties. Now that that the real estate market has hit come to its bottom, Management expects that the market will have a future growth rate of 5% to 6% per year starting in 2009. The third section of the business plan will further document the residential rental services offered by the business.
1.2 The Financing
Mr. Doe is seeking to raise $1,000,000 from an investor. The terms, dividend payouts, and aspects of the deal are to be determined at negotiation. This business plan assumes that an investor will receive 50% of the Company’s stock, a regular stream of dividends, and a seat on the board of directors.
1.3 Mission Statement
Mr. Doe’s mission is to develop the Real Estate Investment Firm into a premier regional real estate investment firm that will acquire and rent properties profitably.
1.4 Mangement Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the real estate industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. As the real estate market returns to normal conditions, the Real Estate Investment Firm will be an excellent position to recognize profits from the sale of properties. In the future, the business may seek to acquire additional capital for the acquisition of additional properties.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Real Estate Investment Firm, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Real Estate Investment Firm requires $1,000,000 of investor funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
John Doe intends to sell 50% of the Real Estate Investment Firm in exchange for the capital.
2.4 Management Equity
John Doe will retain 50% of the business once the capital is raised.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple or divest the properties individually. Most likely, the Company will hire a qualified real estate broker to sell the properties on behalf of the Real Estate Investment Firm.
3.0 Products and Services
Below is a description of the real estate services offered by the Real Estate Investment Firm
3.1 Rental of Acquired Properties
The direct finance and purchase of residential property is the primary business of Real Estate Investment Firm. Residential real estate will provide a continuous stream of rental income that the Management will use for reinvestment and profit stability for the Company. Management is developing a complex economic pricing strategy that will determine the fair market rate of a property based on its capitalization rate in conjunction with the market values of residential property. Residential real estate is the least risky form of real estate investing because the service offered is a necessity.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Management is developing a very complex pricing method to ensure that the Company can continue to provide its units at profit despite possible drawbacks in the overall economic market. The Company’s two prong approach to real estate will allow the business to grow successfully in the rapidly changing real estate market. More importantly, this strategy will allow the Company to offset the risks from each business unit so that there is a diversified balance in the Company’s real estate portfolio. This is especially important as the business uses leverage to finance the acquisition of its properties.
4.2 Industry Analysis
The Real Estate Investment Firm plans to actively pursue a real estate acquisition program that will focus on the purchase of multiunit apartment buildings with the intent of creating a recurring stream of income. Management will use reasonable leverage to purchase these properties so that a positive cash flow is generated after debt service has been paid. The recurring streams of revenue generated from the rental of multi-unit residential property will allow the Company to continually recognize revenue despite drawbacks in the real estate market. As these properties increase in value through capital appreciation, the Company will divest of these properties to reap its capital gain profits. The Company will divest its properties once Management feels that its real estate holdings have become overvalued. Mr. Doe has worked diligently to create a pricing model that will allow the business to understand when the properties have become overvalued. This model will examine the capitalization rates of the income producing properties for a determination of true asset value. There are tremendous tax benefits for the Company as it engages its real estate investments. As the business makes its real estate divestitures, The Company will recognize capital gain income rather than income on its properties. These windfall gains will be taxed at a rate that is significantly lower than the federal regular income tax levels. This assumes that the business will divest its properties after one year’s time Recently, the number of real estate sales has increased significantly within the last year. This is one of the primary signals of an overvalued real estate market. As stated earlier, the Bureau of Economic Analysis estimates that homes on the market have increased more than 13% over last years figures. During the boom time for real estate over the last five years, many people overextended and over leveraged their properties with floating interest only loans.
4.3 Customer Profile
As the Company intends to operate among several different investment and operating units, it is hard to characterize any specific tenant that will occupy the Company’s properties. However, Management will enact strict tenant quality and credit review procedures to ensure the Company’s revenues will not be interrupted by tenant default.
4.4 Competitive Analysis
Since real estate is effectually one of the most free market oriented businesses in the country, competition can not be accurately categorized. The Company anticipates that there will be a sizable amount of competition from both single owner investment firms to large construction companies that are seeking to gain from the unusually high real estate prices throughout the Midwest.
5.0 Marketing Plan
The Real Estate Investment Firm intends to maintain an extensive marketing campaign that will ensure maximum visibility for the acquired units in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.
5.1 Marketing Objectives
• Establish relationships with other real estate brokers and agents within the targeted market.
• Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth.
• Develop an online presence by acquiring accounts for major online real estate portals.
5.2 Marketing Strategies
Property and renter buyer marketing will be the most difficult portion of the marketing strategy. This task will be accomplished through the business’s broad marketing campaign throughout its targeted market. Primarily, Mr. Doe intends to use local real estate brokerage firms to place tenants (and attract buyers during property sales) with the Company’s residential properties. In addition to using a real estate broker, Mr. Doe intends to develop his own marketing strategies that will further increase the visibility of the business’s units. This is especially important with the current real estate market environment. The Real Estate Investment Firm will also use an internet based strategy. This is very important as many people seeking real estate for purchase or rent use the Internet to conduct their preliminary searches. Mr. Doe will register Company and its properties with these online portals so that potential buyers/renters can easily reach the business. The Company will also develop its own online website. The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the homes and properties that the Company is selling.
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
6.3 Management Biographies
In this section of the business plan, you should write a two to four paragraph biography
about your work experience, your education, and your skill set. For each owner or
key employee, you should provide a brief biography in this section.
7.0 Financial Plan
7.1 Underlying Assumptions
• Real Estate Investment Firm will have an annual revenue growth rate of 16% per year.
• The Owner will acquire $1,000,000 of investor funds to develop the business.
• The Company will not seek debt financing in the first three years of operations.
7.2 Sensitivity Analysis
The Company’s revenues can change depending on the general economic climate of the real estate industry. In times of economic recession, the Company may have issues with its top line income as fewer sales will be made and rental income may decrease. However, the Company will generate income from its rental business, which will reduce the risks associated with this business.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statements
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 General Assumptions
7.9 Business Ratios
Expanded Profit and Loss Statements
Expanded Cash Flow Analysis