Flipping houses is a process, it often means putting hundreds of thousands of dollars and if you’re going to do that then you need to have a Rehab Business Plan in Place! With that said however, that there is no reason you need to reinvent the wheel when building your own plan. Take a look at what others before you have done and replicate what’s already been done. Let’s take a look at some of the most important parts you need to include in your Rehab Business Plan.
1. Mission Statement
This is where you lay out the foundation of your entire company. Be sure to define what your companies long term goals are in a clear, concise statement. This shouldn’t be a complicated multi-page statement. Keep it simple. Talk about what you want to accomplish, not how you intend to do so. You don’t want people asking more questions or getting confused when they read your mission statement. You will likely reference this in the future so be sure you like it as well.
Who’s on your team? Building a business by yourself is getting easier and easier with technology, tools, the internet, and all that comes along with that but real estate will usually require some team members. You don’t need to name off every single person on your time, with their age, date of birth, and that, however we recommend you note those who are critical to making your business operate. Note who the key players are and what experience they bring to the business. If it’s just you for now then just put yourself here, but make sure you update your plan as your team grows and you bring on critical team players.
3. Market Summary
Every market for real estate is VERY different. This section should describe your LOCAL market. This section should include where the market has been, where it is now and where it’s currently headed. Reference your competitors, not every single one because there are generally hundreds of “real estate investors” in the area, but most of them aren’t running a business, they are simply fixing a home here or there. Hone in on who the big guys are. The awesome part about investing in real estate is that your competitors are also your partners. We can often buy and sell deals to those in the same business as us. So not only will it be good to note who they are but it will be awesome for you to be able to use these folks to help you find more deals!
The largest majority of millionaires in the US became so by investing in real estate. You likely know this since you’re looking to build a Rehab Business Plan of your own. Be sure to focus this section on the opportunity in your LOCAL market. What are your competitors not doing or what can you do better than them? What problems plague your local market? Talk about how you can solve those here. What problems does your target audience need help with? Talk about how you’re going to serve those needs. Talk about what your customers need and how you will provide it. That’s what opportunity is all about!
5. Business Concept
How are you going to rehab homes? Who will be doing the work, what systems do you have in place to make this a business and not a hobby? What technology are you going to plug in to make things faster, easier, and more efficient? What will help sell your services as a rehabber to your target audience? Perhaps it’s the systems you use to find and close deals, or maybe it’s the extensive network of professionals you have aligned yourself with. No matter what you bring to the table note it down here. This business plan should serve as a reference for years to come, so there is no reason to be anything but honest. Honesty is always the best route especially when you start presenting this to other investors will want to know what you do and how you do it before they lend you money!
6. Goals & Objectives
Now it’s time to expand on the mission statement you identified in the first step of drafting your real estate rehab business plan. This is your opportunity to out shine most other business plans. Instead of simply stating what you want to accomplish, take it to the next level and come up with the steps you will need be carrying out in order to attain the goals you have set forth. We recommend looking forward 5 years and what you want to accomplish and what it will take to get there. This way you will take the first step in holding yourself accountable to get to that 5 year goal. Even if you don’t make it you will have pushed yourself beyond where you thought you could get!
7. Financial Plan
Real estate is one of the most expensive assets you can purchase. So obtaining access to capital and over time reducing down your cost of funds will be a critical component of your successful rehab business. What is your financial plan? This is the place to outline that. This plan should simultaneously explain the model you intend to use and any pricing assumptions your research has uncovered. How will you fund your deals? What rates do you expect to obtain cash for? Don’t forget to include forecasting for annual sales and profits over the next three years at a minimum ideal for the next five so that it matches section 6’s five year plan. This is another one of those sections where the more you include, the better.
Drafting a great real estate rehab business plan is no simple task, but taking the time to do so is well worth your time and effort. Few things in your business have the power to guide you along the road to real estate success like a rock solid rehab business plan. Take the time to make a plan you are comfortable following for years to come, and there is no reason you should ever find yourself lost.