Real Estate Investment Business Plan
You’ve come to the right place to create your Real Estate Investment business plan.
We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Real Estate Investment businesses.
Below is a template to help you create each section of your Real Estate Investment business plan.
Executive Summary
Business Overview
Lone Star Real Estate Investments is a new real estate investment company located in the heart of Dallas, Texas. We have a proactive interest in this wonderful city and aim to invest in properties and neighborhoods that have great potential. Our mission is to ensure that our investments benefit the city as a whole and make Dallas a wonderful place to live.
Lone Star Real Estate Investments is founded and run by Gabriel Pattinson, an experienced real estate broker. He has spent his entire career working in the Dallas area, so he has extensive knowledge of the local market. His experience and expertise in the industry will ensure we find ideal properties to invest in and flip.
Product Offering
Lone Star Real Estate Investments will purchase commercial properties in the Dallas area and then flip them for a profit. We will invest in all the design, construction, and renovations that are necessary to upgrade these properties.
Customer Focus
Lone Star Real Estate Investments will target property owners who are interested in selling their land or commercial real estate. We will also target and sell to business owners looking for a commercial space to set up their business. We will only invest in commercial properties located in the Dallas area.
Management Team
Lone Star Real Estate Investments’ most valuable asset is the expertise and experience of its founder, Gabriel Pattinson. He has been a licensed commercial real estate broker for the past 20 years and has extensive knowledge of the local market. After selling properties to the residents and business owners of Dallas for several years, he is ready to make the switch to real estate investment, where he has more of a hand in improving and updating the properties that he sells.
Success Factors
Lone Star Real Estate Investments will be able to achieve success by offering the following competitive advantages:
- Gabriel is popular in the industry and knows an extensive list of architects, construction companies, and contractors.
- The company is committed to investing in local properties in order to improve the value of the local community.
- Gabriel has extensive experience in the local real estate industry. As such, he knows how to find commercial properties that are worth investing in.
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Financial Highlights
Lone Star Real Estate Investments is seeking $5,000,000 in debt financing to launch the business. The funding will be dedicated towards securing an office space, purchasing office equipment, funding marketing expenses, and purchasing initial properties. The breakout of the funding is below:
- Office lease up-front cost and build out: $50,000
- Office equipment and supplies: $25,000
- Capital for property purchases: $4,500,000
- Six months of overhead costs (rent, utilities, salaries): $250,000
- Marketing expenses: $100,000
- Working capital: $75,000
The following graph outlines the pro forma financial projections for Lone Star Real Estate Investments:
Company Overview
Who is Lone Star Real Estate Investments?
Lone Star Real Estate Investments is a new real estate investment company located in the heart of Dallas, Texas. We have a proactive interest in this wonderful city and aim to invest in properties and neighborhoods that have great potential. Our mission is to ensure that our investments benefit the city as a whole and make Dallas a wonderful place to live.
To find the best commercial properties for our portfolio, we do a thorough market analysis to see which available properties have the best potential. After choosing ideal properties, we negotiate a selling price with the owner. After the purchase, we fix up the property and add upgrades that we believe will add value to the investment. Once the renovations are completed, we sell the property at a competitive price to ensure we make a profit.
Lone Star Real Estate Investments is founded and run by Gabriel Pattinson, an experienced real estate broker. He has spent his entire career working in the Dallas area, so he has extensive knowledge of the local market. His experience and expertise in the industry will ensure we find ideal properties to invest in and flip.
Gabriel began researching what it would take to create his own real estate investment company and did a thorough analysis on the costs, market, demographics, and competition. Gabriel has now compiled enough information to develop his business plan in order to approach investors.
Lone Star Real Estate Investments’ History
Once his market analysis was complete, Gabriel Pattinson began surveying the local vacant office space and located an ideal location for his firm’s headquarters. Gabriel incorporated Lone Star Real Estate Investments as an LLC on May 1st, 2023.
Since incorporation, Lone Star Real Estate Investments has achieved the following milestones:
- Found office space and signed a letter of intent to lease it
- Developed the company’s name, logo and website
- Determined equipment and fixture requirements
- Began recruiting key employees
Lone Star Real Estate Investments’ Services
Lone Star Real Estate Investments will purchase commercial properties in the Dallas area and then flip them for a profit. We will invest in all the design, construction, and renovations that are necessary to upgrade these properties.
Industry Analysis
Investing in real estate is a common way for individuals to earn wealth and passive income. Real estate is something that everyone needs, whether they need a property as a home or the location for their business. Therefore, the real estate industry is bound to continue to grow and can weather the storm of volatile market trends.
The real estate industry is currently booming in the aftermath of the pandemic. Both commercial and residential property prices are rising, making it a great time to invest in property. Buyers are more than eager to pay high prices for premium commercial and residential properties. By using caution and thoroughly researching markets before making investments, real estate investment companies can choose good investments and make enormous profits on their properties.
According to Allied Market Research, the Real Estate Investment industry was valued at $11,444.7 billion in 2021 and is projected to grow at a CAGR of 10.7% from now until 2031. With such a promising projection paired with increasing prices of commercial real estate in the local area, Lone Star Real Estate Investments is sure to become highly profitable.
Download the Real Estate Investment business plan template (including a customizable financial model) to your computer here <–
Customer Analysis
Demographic Profile of Target Market
Lone Star Real Estate Investments will target property owners who are interested in selling their land or commercial real estate in the Dallas area. We will also target and sell to business owners looking for a commercial space to set up their business.
Customer Segmentation
Lone Star Real Estate Investments will primarily target the following customer profiles:
- Landowners wanting to sell their land in prime commercial districts
- Business owners looking to sell their commercial properties
- Business owners looking for move in ready properties for their businesses
Competitive Analysis
Direct and Indirect Competitors
Lone Star Real Estate Investments will face competition from other real estate investment companies with similar business profiles. A description of each competitor realtor is below.
Dallas Property Investments
Dallas Property Investments is the largest real estate investment company in the Dallas area. They purchase and flip properties throughout the entire Dallas area, including both residential and commercial properties. They have already managed a large portfolio of properties near our office location and continue to be a major presence in the local real estate industry. We expect Dallas Property Investments to be our largest competitor.
Premium Home Investments
Premium Home Investments is a real estate investment company that focuses on investing in and flipping residential properties throughout the Dallas metro area. They acquire average looking homes and flip them in the luxurious and premium residences. Though Premium Home Investments will continue to thrive, they will only be a minor competitor since they invest primarily in residential properties.
Property Investment Solutions
Property Investment Solutions is a real estate investment company that purchases multi-family complexes to operate and sell. They already own dozens of complexes, some of which they manage and others that they are improving to sell. Though Property Investment Solutions is a major investment firm in the Dallas area, we don’t expect much competition from them since they primarily purchase and sell multi-family residential properties.
Download the Real Estate Investment business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
Lone Star Real Estate Investments will be able to offer the following advantages over their competition:
- Location: Lone Star Real Estate Investments’ location is near the center of town. The office is visible from the street with many working professionals walking to and from work on a daily basis, giving passersby a direct look at the firm.
- Management: Gabriel Pattinson has been extremely successful working in the real estate industry. His unique qualifications will serve clients in a much more sophisticated manner than Lone Star Real Estate Investments’ competitors.
- Relationships: Having lived in the community for 25 years, Gabriel knows many of the local leaders, newspapers, and other influences. Furthermore, he will be able to draw from his ties to the community in order to build up an initial portfolio of properties to invest in.
- Commitment to the community: Lone Star Real Estate Investments is committed to investing in and improving local commercial properties in order to improve the value and appeal of the local community.
Marketing Plan
Brand & Value Proposition
Lone Star Real Estate Investments will offer the unique value proposition to its clientele:
- Client-focused real estate investment services, where the company’s interests are aligned with the clients’ interests
- Service built on long-term relationships
- Big-firm expertise in a small-firm environment
Promotions Strategy
The promotions strategy for Lone Star Real Estate Investments is as follows:
Website/SEO
Lone Star Real Estate Investments will invest heavily in developing a professional website that displays all of the features and benefits of the company. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.
Social Media
Lone Star Real Estate Investments will invest heavily in a social media advertising campaign. The brand manager will create the company’s social media accounts and invest in ads on all social media accounts. It will use targeted marketing to appeal to the target demographics.
Networking/Prospecting
Gabriel will be attending all networking industry events and actively networking at non-industry events. He will also be a member of local professional associations where professionals in the real estate industry are a part of.
Print Advertising/Billboard
Lone Star Real Estate Investments will invest in professionally designed print ads to display in programs or flyers at industry networking events. He will also invest in two billboards to display in highly trafficked areas of town.
Pricing
Lone Star Real Estate Investments will purchase properties for a competitive price. We will also sell our properties for a moderate price that is determined by the local real estate market and the upgrades added to each property.
Operations Plan
The following will be the operations plan for Lone Star Real Estate Investments.
Operation Functions:
- Gabriel will be the CEO of Lone Star Real Estate Investments. He will oversee the general operations of the company and identify which properties the company will purchase and flip.
- Gabriel will hire an Administrative Assistant to help with the basic administrative functions of the company.
- Gabriel will also hire an Accountant and Social Media Manager.
- Gabriel will hire architects, contractors, and interior designers to help flip and upgrade each property.
Download the Real Estate Investment business plan template (including a customizable financial model) to your computer here <–
Milestones:
Lone Star Real Estate Investments will have the following milestones complete in the next six months.
- 6/1/202X – Finalize contract to lease office space
- 7/1/202X – Finish buildout of office space
- 8/1/202X – Hire key staff
- 9/1/202X – Purchase first properties
- 10/1/202X – Begin fixing up properties
- 11/1/202X – Start selling properties and reach break even
Management Team
Lone Star Real Estate Investments’ most valuable asset is the expertise and experience of its founder, Gabriel Pattinson. He has been a licensed commercial real estate broker for the past 20 years and as such has extensive knowledge of the local market. After selling properties to the residents and business owners of Dallas, he is ready to upgrade the commercial properties of the area and make a bigger profit.
Though Gabriel has never run a business of his own, he has worked in the real estate industry long enough to gain an in-depth knowledge of the operations (e.g., running day-to-day operations) and the business (e.g., staffing, marketing, etc.) sides of the industry. He will also hire several professionals to help him run other aspects of the business he is unfamiliar with.
Financial Plan
Key Revenue & Costs
The key revenues for Lone Star Real Estate Investments will come from selling the properties we invest in after fixing them up.
The major cost drivers will include the cost of the properties we purchase, renovation/construction costs, the lease, salaries, and marketing expenses.
Funding Requirements and Use of Funds
Lone Star Real Estate Investments is seeking $5,000,000 in debt financing to launch the business. The funding will be dedicated towards securing an office space, purchasing office equipment, funding marketing expenses, and purchasing initial properties. The breakout of the funding is below:
- Office lease up-front cost and build out: $50,000
- Office equipment and supplies: $25,000
- Capital for property purchases: $4,500,000
- Six months of overhead costs (rent, utilities, salaries): $250,000
- Marketing expenses: $100,000
- Working capital: $75,000
Download the Real Estate Investment business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Initial Number of Transactions Per Month: 1
- Annual Office Space Lease: $50,000
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Real Estate Investment Business Plan FAQs
What Is a Real Estate Investment Business Plan?
A real estate investment business plan is a plan to start and/or grow your real estate investment business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
What are the Main Types of Real Estate Investment Businesses?Â
There are a number of different kinds of real estate investment businesses, some examples include: Real estate investment, and real estate trading.
How Do You Get Funding for Your Real Estate Investment Business Plan?
Real Estate Investment businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Real Estate Investment Business?
Starting a real estate investment business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Real Estate Investment Business Plan - The first step in starting a business is to create a detailed real estate investment business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your real estate investment business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your real estate investment business is in compliance with local laws.
3. Register Your Real Estate Investment Business - Once you have chosen a legal structure, the next step is to register your real estate investment business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your real estate investment business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Real Estate Investment Equipment & Supplies - In order to start your real estate investment business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your real estate investment business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful real estate investment business: