Any property investment requires a strong real estate business plan. Talk with investors who failed with real estate investing and you'll find majority of them did due to a lack of preparation and planning. Don't fall into this trap.

What Your Real Estate Business Plan Should Include.

A Mission Statement

This should clearly define your purpose and should include the benefits your business provides. A stranger should know what you do "investor" by reading this mission statement.

What's your Goal?

Where do you want your investing career to take you?  Whether you're looking for a monthly income with "buy and hold" strategies or want to flip 10 homes a year, write down your goals. Use short and long term goals, this will help you stay motivated as well as cover some changes you have over time.

Choose an Investment Strategy

With so many ways to make money in real estate, it's best to focus on a single strategy and become a master at it. Dabbling with too many strategies can lead to unfocused results and potential failure. Remember, your real estate business plan can and probably will change as you learn, just update your plan.

Include Your Time Frame

What is your time frame to reach your real estate goals? Be realistic in your approach, but don't be afraid to set aggressive goals. Whether your goal is to retire by a certain date or start and complete your first deal, combine these goals with a time frame.

Defining your real estate market

Will you be looking for low income, high income or commercial areas? What are you most comfortable with? If your area affords it, new investors should plan on investing a short distance from home, instead of investing far away. Become an expert in an area, this will help analyzing deals and opportunities a lot easier.

Setting your Criteria

The most important thing with criteria, is to stick to it! Walk away from any deal that doesn't fit your criteria. Don't get emotionally attached to a deal, stick to your criteria, walk away from any deal that does not meet it. If you are not finding enough deals, try adjusting your market and/or strategy. You're criteria can include:

Location of Deals

How will you find motivated sellers? Where will you find the best deals listed? Will you use the MLS, REALTORS, preform online searches, direct mail to lists of potential sellers, any other ways to locate deals?

Create Your Team and Design Systems

Who will be part of your team? Will you need a real estate attorney, an investor focused CPA, a Realtor or agent, etc. Define your teams necessary rolls, you don't have to have specific names till you build relationships through networking.

Know Your Exit Strategies & Backup Plans

You must have a clearly defined exit strategy in your real estate business plan.  Knowing exactly how you are going to exit a deal is critical. Not having a plan when a deal goes awry can possibly end your real estate investment career forever. What will your backup plan be? 

Outline Your Deals

Now you'll want to lay out the future of your business. Start with your optimal but realistic 10 year outline of what your business will look like. Lay down a foundation of your deal purchases including cash flow, appreciation, sales, trading, possible 1031 exchanges and cash on cash return.  Like your goals, depict the possible scenerios of making your deals happen. Over time your outline and goals will change as "optimal" deals are not always reality.

Financials

Describe your financial position as it currently exists. What capital and resources do you bring to a deal?  What kind of equity can you uses or are you starting with little to no funds. Write down you current financials and update it frequently as things change. Having your total financials handy is useful when following through with an investment.

Have you figured out what Real Estate Investment Niche yet?