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Great real estate investors treat their portfolios like a business. They build a team, have a keen understanding of their profit and loss statements, and take the time to create a strategic real estate business plan. This last component is essential– it will help you go farther and faster in the right direction. However, did you know that most new entrepreneurs spend more time planning a week-long vacation than creating a business plan?

In this blog, we are sharing nine essential components of creating a dynamic real estate business plan. The beauty of this is that you can create a plan at any stage of your investing journey. Whether you’re waiting to get into your first property or have a dozen doors, a plan will position you from the dreaming phase into the doing phase. So, let’s get started! 


What Is A Real Estate Investing Business Plan?

Like any business plan, a real estate business plan is a document that provides the framework for a business’s operations and goals. A business includes current operations, future goals for the company, and organized steps to get there. 

To get started, it’s wise to plan for one to five years at a time. Your real estate investing business plan is a living document, so you should always change it to fit your needs! 

real estate business plan

9 Stages of Creating a Dynamic Real Estate Business Plan

1. Consider Your Why 

Why do you want to invest in real estate in the first place? What is your motivation for creating passive income? Perhaps you want to be financially free so that you can spend more time with family or pursue the dreams you’ve had to push off to the side. Maybe you want to build generational wealth and set your family up for success. There may be a ministry or business idea you want to fund. Whatever your reason, your why will give you the motivation you need to endure through the highs and lows of real estate investing.


2. Set Solid Goals

Once you’ve identified your motivation, it’s time to set clear and achievable goals for your real estate endeavors. Utilizing the SMART criteria (Specific, Measurable, Achievable, Relevant, Time-Bound), outline both short-term and long-term objectives that align with your overarching vision. Whether it’s acquiring a certain number of properties within a specified timeframe or achieving a targeted return on investment, articulate your goals with precision and clarity. When you set these goals, pray and be flexible as the Holy Spirit guides your planning process!


3. Determine Your Numbers

Put a demand on your properties to produce. Many people have a “set-it-and-forget-it” mentality when it comes to their investments. However, good investors treat their assets like a job. Think about it this way–if you went to work and didn’t get paid, you’d ask the boss where your paycheck was. So, a key part of your real estate business plan is determining the numbers you you need to make in order to be profitable. 

At our upcoming Real Estate Workshop, April 5-7th, we share the exact ratios you need to look for as a real estate investor. You will learn how to mitigate risk and maximize profits using proven formulas. Click the banner below to learn more and register.

real estate business plan

4. Determine Your Business Strategy (and Exit Strategies)

With your goals and financial metrics in place, it’s time to define your business strategy. Will you focus on long-term buy-and-hold properties, pursue fix-and-flip opportunities, or engage in wholesale transactions? Each strategy comes with its own set of advantages and challenges, so choose the approach that aligns with your expertise, resources, and risk tolerance. Additionally, consider your exit strategies for each investment, whether it’s selling for a profit, refinancing to extract equity, or holding for long-term appreciation.


5. Build Your Team 

Real estate investing is a team sport, and assembling the right team can make all the difference in your success. Identify key professionals who will support your investment strategy. Typically, every team needs:

  • A realtor (who invests in real estate)
  • A mortgage broker or lender (that invests in real estate themselves)
  • A contractor 
  • A banker at a local bank
  • A property manager
  • An insurance agent 
  • An Accountant
  • An Attorney (Who is familiar with real estate transactions.)


6. Form an Entity

As our friend and real estate attorney, Bill Bronchick, always says, “It’s not about how much money you make; it’s about how much money you get to keep.” Forming the right type of entity for your real estate business will give you legal protection and maximize tax benefits. 

In this part of your business plan, you’ll want to decide if you want to work with a partner. To learn more about this part of your real estate business plan, check out this episode of The WealthBuilders Podcast: Asset Protection: How to Set Up Your Real Estate Entity.


7. Plan on Building & Establishing Credit

In real estate investing, access to capital is essential for growth and expansion. Building and establishing credit can provide you with the financial leverage needed to pursue lucrative investment opportunities. Maintain a strong credit profile by managing your debts responsibly, making timely payments, and keeping your credit utilization below 30 percent. Explore options such as business lines of credit, home equity lines of credit (HELOCs), and commercial loans to finance your real estate ventures and fuel your business growth.


8. Review Quarterly and Update Regularly

A real estate business plan is not a static document; it’s a dynamic tool that requires regular review and updating. Schedule quarterly reviews to assess your progress, evaluate market conditions, and adjust your strategies and goals accordingly. Stay informed about industry trends, regulatory changes, and economic developments that may impact your investments, and be prepared to pivot and adapt as needed to maximize your success.


9. Ask for Input from Coaches or Others 

Proverbs 11:14 says, “Where there is no guidance, a people falls, but in an abundance of counselors there is safety.” As you advance on your real estate investing journey, surrounding yourself with expert guidance is crucial. By learning from others’ mistakes, you can save yourself from losing a lot of money! 

So, at WealthBuilders, we provide ample opportunities to surround yourself with expert investors and wise guidance. The first is our Real Estate Coaching Program, which you can learn more about here. Secondly, our upcoming Real Estate Workshop is in Denver, Colorado, or online via livestream. Click here to learn more about this dynamic event, coming to you April 5 – 7th, 2024!