startup real estate investment business plan

How to Write a Real Estate Investment Business Plan + Free Sample Plan PDF

Elon Glucklich

8 min. read

Updated February 19, 2024

Download a free one-page real estate investment sample business plan

With the worst of recent inflation in the rear-view mirror and interest rates projected to start falling in 2024, real estate investors see signs of optimism. 

New apartment construction is rising sharply . These new properties coming onto the market and the prospect of lower borrowing costs point to plenty of long-term opportunities for investors.

However, investing in real estate requires a sharp eye for market trends, as well as significant upfront resources. Investors need to understand the different strategies for securing financing, and how to manage their properties to increase their value before reselling.

A business plan reduces your likelihood of making a bad investment, because it gets you in the habit of organizing your market research, and updating it as conditions evolve. The plan ultimately helps align your investment strategies with your opportunities.

| Looking for a fix and flip , home inspection , or other type of plan? Browse the Bplans library of sample real estate business plans |

• What should you include in a real estate investment business plan?

Here are the most common sections any real estate investor should consider including in their plan:

• Executive summary
• Company overview
• Investment strategy
• Market analysis
• SWOT analysis
• Financial plan and forecasts
• Exit strategy

The length and depth of your business plan will vary depending on your business. For instance, a real estate investment firm with a national portfolio of office and apartment buildings is bound to have a more complex set of financial projections and supporting documents than an investor with single-family houses in a few markets.

Here’s an example of a real estate investment business plan outline.

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• The 8 elements of an effective real estate investment business plan

1. Executive summary

Most business plans start with an executive summary outlining the business opportunity and the core strategies of your business. 

It’s the first section that most readers (including loan officers) will read. You’ll want to highlight any unique value or competitive edge you have, such as a track record of generating positive returns, or knowledge of a specific market. 

You should also give a high-level overview of your financial projections and anticipated returns, which you’ll go into greater detail on in the plan’s financial section. If you’re writing a business plan because you’re seeking bank financing or an investment, this is a good section to state your funding request and how you’ll use those funds.

2. Company overview 

The company overview describes your company’s operational and legal structure . 

List whether you have any partners, and detail your team’s experience, expertise, and roles within the company. Also, outline your portfolio, such as investing in residential properties, commercial buildings, or new development projects. 

3. Investment strategy

There are many ways to invest in real estate — buying homes to rent out, fixing and flipping houses, pooling your resources with partners into a real estate investment group, investing in real estate investment trusts, and more. Describe your strategy and why it will generate the highest returns.You should also describe your criteria for choosing properties to invest in, and whether your primary focus is to invest in a certain geographic region or a type of property, such as apartments or fixer-upper homes.

4. Market analysis

If you have any experience in investment real estate, you know how important market research is. Imagine paying $1 million for an apartment building and adding $100,000 on renovations, only to realize you can’t find tenants to pay the higher rents you want to charge.

That’s where a thorough market analysis comes in. It helps you understand the landscape you’re operating in. 

Use resources like the U.S. Census Bureau to research your target market’s age, income, and population trends. Look online for local data about real estate prices and how they’ve changed over time, or reach out to local realtors to get a feel for the market.

You should also try to determine how much investment activity is taking place in the market and who you’re competing with for opportunities. 

Many cities and larger towns with development departments make their building permit databases available online, since permits are typically public records. Reviewing permit records can show you how much development activity is already occurring where you plan to invest.

5. SWOT analysis

Because of the risks involved in real estate investment, a SWOT analysis can be a helpful exercise. It’s a strategic way of evaluating your company’s internal and external environment (think about your company’s financial health as an internal factor, and interest rates as an external factor).

The SWOT analysis gets you thinking about your company’s:

Strengths: What you do well , and what unique resources you have.

Weaknesses: What you need to improve on, what resources you lack, or what your competitors do better than you.

Opportunities: What are the current opportunities you want to take advantage of?

Threats: What factors could expose your company to risk, or what might competitors do to harm your position?

6. Financial plan and forecasts

Your financial plan should provide a detailed view of the expected financial performance of your real estate investments. Include income statements , cash flow forecasts , and balance sheets projecting the next 3-5 years. 

List the assumptions you used in your projections, such as rental income changes from rent increases or unrealized revenue due to certain amounts of vacant commercial space. 

You should also include a break-even analysis. This calculates when you expect a property’s operating income to exceed the debt taken to buy and maintain it.

7. Exit strategy

If you’re writing your business plan for investors, detailing your exit strategy will clarify their pathways for realizing their returns. It also trains you to think about the long-term timeline for your investments and how to maximize their value. 

Consider strategies that will help you maximize your profits, like refinancing your properties or looking into potential tax-deferral opportunities like a 1031 exchange.

8. Appendix

The appendix is an optional section at the end of your business plan. It’s where you include additional documents that support your business plan but don’t fit in the plan. This might include your detailed market research data, financial tables not covered in the main sections of the plan, legal documents, or permit records.

• Key considerations for writing a real estate investment business plan

To write a business plan that you can use as a guide for your decision making, consider places in the plan to emphasize these key points.

1. Develop a niche

If you’re a small investor or just starting, focus on carving out a specific niche for your investment strategy instead of trying to compete in multiple real estate segments. This could mean concentrating on a particular property type, such as multi-family homes, commercial real estate, or foreclosure properties, and diversifying your portfolio only after you’ve developed some traction. Or, you may decide to focus only on the segment you have the greatest advantage in.

2. Understand your risks

Real estate investment is inherently risky. 

Market dynamics, regulatory changes, and economic fluctuations can all impact the performance of your investments. 

As you compile research for your market analysis, dedicate time to conduct a detailed risk analysis to understand these factors and their potential impact on your investments. This includes assessing location-specific risks, economic cycles, and tenant or occupancy issues. 

Writing these out before they happen will help you think of strategies to mitigate these risks if they actually occur.

3. Network and develop market knowledge

Building a strong network with other real estate professionals, such as brokers and contractors, can provide valuable insights into the markets you hope to operate in. Document in your business plan how you will cultivate these relationships — you can include timelines for developing contacts in the milestones section of your plan.

Also, try to keep up to date on current events in the area, especially news about the regional economy. Look into the tax climate in the area, as well. All of this helps you build a deeper understanding of your market dynamics, and helps validate your investment strategy — or gives you reasons to reconsider.

4. Consider help with your financials

Even if you have the financial background to write financial forecasts, you may want to leave room in your budget for accounting support. 

If you’re starting or investing in an unfamiliar market, a CPA will help you navigate tricky tax issues that could throw off your projections. 

Include the expense of hiring an accountant in your plan if you decide to bring one on, and describe their role, whether it’s helping with budgeting, tax planning, or financial analysis.

• Download your free real estate investment one page sample business plan

Download your free real estate investment sample business plan right now, or explore the Bplans gallery of over 550 sample business plans if you want to see plans for other industries.

You can also see how other real estate businesses have written their plans by checking out our free library of real estate business plans .

There are many reasons why real estate investors should write a business plan . Not only does it demonstrate credibility to the banks or investors you want to fund your acquisitions — it also increases your chances for growth , and gives you a strategy to manage your finances for the long term.

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

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Your 10 Step Guide to Building a Real Estate Investing Business Plan

Real estate empires grow from a blueprint, not last-minute hunches. This guide outlines how to create a real estate investing business plan to help you navigate market dynamics, seek funding, and add to your team so that you can successfully grow your business.

Let’s be honest, the idea of drafting a formal real estate investing business plan probably doesn’t excite you. After all, you got into real estate investing to scout deals and transform properties, not write novels full of financial projections.

But experienced investors know a solid plan spells the difference between profitability and major headaches. It forces clarity on direction and feasibility before you sink hundreds of thousands into property purchases and rehabs.

Think of your business plan as a blueprint for success tailored to your unique investment goals and market conditions. Whether you currently own a few rentals or are launching a full-fledged development firm, a plan guides decisions, aligns partners, and demonstrates viability to secure financing.

So how do you build one effectively without needless complexity? What key strategy areas require your focus? Let’s explore components that set you up for growth while avoiding common first-timer pitfalls. With realistic planning as your foundation, your investing journey can start smooth and stay the course.

What is a real estate investing business plan?

At its core, a real estate investment business plan is simply a strategic guide outlining your intended real estate approach. It defines target markets, preferred project types based on expertise, capital sources, growth strategy, key operational procedures, and other investment specifics tailored to your situation.

View your plan as an evolving document rather than a rigid static rulebook collecting dust. It should provide goalposts and guardrails as markets shift over time and new opportunities appear. You'll be able to refer back to the plan to confirm that these new opportunities align with proven tactics that yield predictable returns.

Detailed upfront planning provides a sound foundation for confident direction. It protects stakeholders by identifying potential pitfalls and mitigation strategies before costly surprises trip up the stability of your real estate business.

So, it's worth it to take the time and develop a customized plan aligned to your niche, resources, and risk tolerance. While initially tedious, the practice of putting together your strategic real estate business plan ultimately provides clarity and confidence moving forward.

Importance of having a business plan

Now that we’ve defined what a business plan is, let’s explore why having one matters — especially if you want to grow a successful real estate investment company.

Have you considered what originally attracted you to investing in properties? Whether it was rehabbing flips, acquiring rentals, or simply a lucrative hobby, your motivations and ideal path can get lost in the daily distractions of life. That’s where an intentional business plan provides clarity and conviction moving forward.

Reasons every real estate investor should prioritize planning are:

• Goals and vision : You might be wanting to quit your day job and focus on real estate full time, or you might simply want to generate some extra income on the side. Either way, a business plan forces you to define what success looks like for you.
• Due diligence : Creating a plan forces you to research the real estate markets you want to invest in — analyzing sales, rents, permits, zoning, demographics, and growth projections. This helps you objectively identify high-potential neighborhoods and properties rather than relying on hearsay or intuition.
• Funding and financing : Lenders and potential investors will want to review your business plan to evaluate the viability and profitability of your real estate investment business before offering any financing . A complete plan builds credibility and confidence with stakeholders.
• Guide decision-making : It's easy to get distracted by the latest real estate seminar or shiny new construction techniques. But sticking to the parameters and strategies laid out in your plan prevents you from making hasty changes or going down rabbit holes.
• Identify potential risks : There are always things that can unexpectedly go wrong: what if interest rates spike and make your loans unaffordable, or your best tenants move out and unreliable folks move in? Brainstorming these scenarios in advance allows you to minimize risks and have contingency plans.
• Systemize operations : As you grow, how will you scale operations? A business plan helps you identify areas that will require attention as your business evolves, like creating maintenance checklists for rentals, standardizing lease agreements , or automating accounting procedures.
• Build the right team : Your business plan provides guidance on the team you'll need for your business. Know if you require a real estate agent to help you find deals or a property manager to handle tenant complaints at 2 AM.
• Track progress : Your plan helps you compare things like actual rehab costs, rental occupancy rates, cash flow, etc. to your initial projections and determine whether you're on track.  You can then make adjustments as needed.
• Maintain strategy : As you scale your operations with new hires or partnerships, you'll want to maintain direction in alignment with your original business plan. For example, if you are considering new verticals like commercial real estate, does evaluation criteria match your proven risk metrics and return hurdles? A real estate business plan keeps everyone focused on the same goals as your business grows.

What to include in a real estate investment business plan

A good real estate investing business plan covers everything from business goals to financing strategy. Here are the ten key elements you should include:

1. Executive summary

The executive summary provides a high-level overview of your real estate investment business plan. It briefly describes your company mission, objectives, competitive advantages, growth strategies, team strengths, and financial outlook.

Think of it as the elevator pitch for your business plan, and write it last after you have completed the full plan. Limit it to 1-2 pages at most.

Make your executive summary compelling and motivate investors or lenders to learn more. Be sure to also summarize your past successes and experiences to build credibility.

2. Company description

The company description section provides background details on your real estate investment company. Keep this section brief, but use it to legitimize your business and team.

• Business model : Explain your core business model and investment strategies. Will you primarily flip properties, buy and hold rentals, conduct wholesale deals, or use another approach?
• Company history and achievements : Provide a brief timeline of your company's history, including its formation, past projects, key milestones, and achievements.
• Legal business structure : Identify your corporate structure, such as LLC , S-Corp , C-Corp, or sole proprietorship.
• Office location : Provide your company's office address, which lends you credibility. If you are initially working from home, consider establishing a local PO Box or virtual address.
• Founders and key team members : Introduce your founders and key team members. Highlight relevant real estate, finance, management expertise, and credentials.
• Past projects : Provide an overview of any successful prior real estate projects your company or founders have executed.
• Competitive advantages : Explain unique resources, systems, or other strengths that give your company an edge over competitors. These could be proprietary analytic models, contractor relationships, deal access, or specialized expertise.
• Technologies and tools : Discuss technologies, software programs, or tools your company uses to streamline processes and optimize operations.

3. Market analysis

The market analysis section validates whether your real estate investment strategy makes sense in a given area.

Conduct detailed research from multiple sources to create realistic real estate investment market projections and identify potentially profitable opportunities.

Outline why certain neighborhoods, property types, or price points pique your interest more than others.

Your market analysis should dig deep into factors like:

• Local sales and rental price trends : Analyze pricing history and current trends for both sales and rents. Look at different property types, sizes, and neighborhoods.
• Housing inventory and demand analysis : Research the balance of supply and demand and how that impacts prices. Is the market undersupplied or oversupplied?
• Market growth projections : Review forecasts from real estate analysts on expected market growth or decline in coming years. Incorporate these projections into your analysis.
• Competitor analysis : Identify other real estate investors actively acquiring or managing properties in your target areas. Look at their business models and strategies.
• Target neighborhood and property analysis : Provide an in-depth analysis of your chosen neighborhoods and target property types. Outline positive attributes, risks, and opportunities.
• Demographic analysis : Analyze the demographics of potential tenants or homebuyers for your target properties. Factors like income, age, and family size impact demand.
• Local construction and renovation costs : Research materials and labor costs for accurate budgets and understand the permitting process and timelines.
• Regional economic outlook : Factor in projections for job growth, new employers, infrastructure projects, and how they may impact the real estate market.

4. SWOT analysis

SWOT stands for strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis means stepping back from day-to-day business to assess your broader position and path from a strategic lens.

Internal strengths for your real estate investment business may include an experienced team skilled in major rehab projects, strong contractor relationships, or access to private lending capital. Weaknesses might be limited staff for handling tenant maintenance issues across a growing rental portfolio or only having a small number of referral partners for deal flow.

External opportunities can come from accelerating population growth and development in your target market, new zoning favorable to multifamily housing, or record-low mortgage interest rates. Threats could be rising material prices that hurt your flip margins, laws imposing restrictions on non-primary residence owners, or an oversupply of new luxury rentals, allowing tenants to be choosy.

The SWOT analysis highlights strengths to double down on and risks to mitigate in the real estate market.

5. Financial projections

The financial plan helps for both internal preparation and attracting investors. For real estate companies, the financial plan section should cover:

• Startup costs : Include the expected startup costs involved to start your investment project, such as getting licenses and permits or paying for legal fees.
• Profit and loss forecasts : Create projected profit and loss statements that outline what you think your revenues and expenses will be over the next 3-5 years.
• Cash flow projections : Put together projected cash flow statements that show expected cash flow for each month.
• Return on investment projections : Project your company's expected ROI over time under the different investment scenarios.
• Funding requirements : Based on your forecasts, detail exactly how much capital you will need to start and operate your business until it is profitable. Specify whether you plan to use debt or equity financing.

6. Investment strategy

The investment strategy outlines your niche — will you focus on flipping, buying rentals, commercial properties, or a blend? Define any geographic targets like certain cities or zip codes backed by your research on growth potential.

Specify your criteria for ideal investment properties based on your goals. Decide which factors — age, size, layout, condition, or price point — matter most to you.

You can also use this section to explain how you plan to find deals, whether that's by scouting listed properties, attending foreclosure auctions, or networking to create off-market opportunities.

Clearly conveying your approach allows lenders and potential private investors to grasp your niche, planned pursuits, and process for finding deals. Having a strong strategy that summarizes how you locate, evaluate and capture deals matching your investing thesis can increase lender and private investor confidence in your ability to execute.

7. Marketing plan

Real estate marketing can’t just be an afterthought; it helps attract profitable deals, financing, and tenants to your business, making it a necessary component of your business plan to prioritize.

Components of your marketing plan can include:

• Networking: Actively networking at local real estate meetups puts you directly in front of promising off-market opportunities and partnerships with motivated sellers, lenders and contractors in your community.
• Social media: Consistently nurturing your social media presence can also pay off to help you find opportunities or potential investors.
• Direct marketing: Never underestimate old school direct marketing — sending postcards to addresses with outdated “We Buy Houses” signs or calling the For Sale by Owners numbers from public listings can help you reach motivated sellers.
• Listings management: Note that marketing does not end once you own property. To keep rental vacancies filled, leverage listing sites that can publish your units to a wide audience of prospective tenants.

8. Operations plan

Without systems, real estate investors struggle through renovations plagued by cost overruns, shoddy contractors who never call back, and frustrating tenants who always pay late . The operations component of your plan should consider aspects like:

• Renovations: Ever lined up a contractor who juggles too many clients and leaves your projects languishing? Create standardized processes for accurate scoping, vetting subs, enforcing deadlines contractually, and maintaining contingency funds.
• Business technologies: As your portfolio grows, tasks like tracking income, expenses , assets, and communicating with tenants can quickly overwhelm. Identify technologies early on that help centralize details to avoid getting swamped. Look into property management platforms that automate listings, tenant screening , digitized lease agreements, maintenance work order flows, and communications.
• Insurance: Tenants or contractors can sometimes damage assets. Discuss landlord insurance policies to protect you against lawsuits, natural disasters, and major property repairs as you scale up.

9. Team structure

If you plan to grow your team beyond just yourself or a few partners, your business plan should outline your organization's key roles and responsibilities. This helps you consider what positions you may need to fill as your company scales.

• Partners or co-founders: These are the main decision-makers and equity holders. Outline their background, skills, and the value they bring.
• Property manager: This person handles day-to-day management of properties, tenants and maintenance issues.
• Bookkeeper: You may need daily help managing bank accounts, invoices, taxes, and financial reporting.
• Contractors and project managers : You'll need trusted renovations, repairs, and landscaping contractors. Dedicated project managers help oversee large jobs.
• Leasing agents : As you grow and add more properties, leasing agents handle showings, applications, and signing new tenants.
• Real estate attorneys : Real estate investing requires proper legal filings and compliance. Attorneys can help you manage this risk.

10. Exit strategies

Every wise investor plans their exit strategy upfront before acquiring a property. Will you aim to flip the asset quickly or retain it as a rental long-term? What factors determine ideal timing and the right profit margin for you to walk away?

Build flexibility into your strategy, as markets move in unpredictable ways. Especially with flips, have contingency plans if your listing gets lowballs or no offers. Be willing to rent short-term, refinance and hold if possible, convert to condos, or just patiently wait until the market changes. Having reserves and backup options allows you to avoid a distress sale.

Also include plans for strategies after a property sale, like a 1031 exchange to defer capital gains taxes and reinvest in another property. You may want to use sale proceeds to reduce or clear outstanding debts, enhancing cash flow and financial standing.

Tips for your real estate business plan 

Now that you know what to include, consider the following four tips to help your real estate investment business plan stand out.

1. Be detailed and specific

Resist the urge to gloss over details as you put together your plan. Drill down on the specifics for parameters like:

• Target purchase and rehab costs.
• Timelines for completing projects.
• Minimum profit margins.
• Maximum allowable vacancy rates .
• Minimum cash reserves.

2. Refine and update regularly

Markets change, so don't create your business plan and file it away. Review your plan regularly to see how market conditions and your actual results compare to projections.

Make adjustments as needed. Tweak your approach if your rehabs are going over budget or your properties aren't selling as quickly as expected.

Aim to update your full plan annually at a minimum. Even if your overall strategy remains consistent, refresh the details around market factors, financials, tactics, risks, and projections.

3. Seek expert feedback

Before implementing your new real estate investment business plan, seek feedback from advisors who can identify potential issues or weaknesses.

Ask experienced real estate investors in your area to review your plan and provide constructive input. It's also a good idea to share your plan and numbers with your CPA and legal counsel as well.

4. Keep it simple

While specificity is good, don't over complicate your business plan to the point where it becomes difficult to follow. You want to inform readers without confusing them.

The goal is for stakeholders, such as co-investors, lenders, and partners, to easily digest your plan and understand it after a quick skim. Make it easy for readers to grasp your reasons behind focusing on a given area or project type based on market conditions and opportunity.

A property investment business plan fit to your goals

After finally finishing your business plan, you’re probably eager to dive into tangible investments rather than tweaking spreadsheets. But in the real estate industry, even experienced investors periodically step back and update strategies.

Approach your business plan as a living document that evolves as the market shifts, as you create new partnerships, or when you need to make changes in strategy. Set reminders to revisit quarterly and confirm your activities of today still align with the vision from day one.

Solid planning is proven to improve outcomes in dynamic industries like real estate investing. Though preparation isn’t glamorous, it pays dividends. Thoughtfully constructing your playbook puts the odds of executing successfully in your favor.

With a solid blueprint backed by your research, you’re now ready to capture the best real estate investment opportunities.

Business plan real estate investor FAQs

How do i stay flexible and adapt my business plan to changes in the market.

To stay flexible, review your real estate investing business plan regularly and update it based on changes in market conditions, trends, and opportunities. If things change in the market, find ways to adapt your strategy. This can include your goals, target market, financing, and even your exit plans.

How do I know if my real estate investing business plan is effective?

You'll know your business plan is effective if you're meeting the key objectives and metrics you outlined. Let's say your plan called for you to purchase a certain number of properties and achieve a specific cash flow or rate of return. If you're falling short, you can use the plan to course-correct.

Are there any specific software or tools for creating a real estate investing business plan?

Azibo is a helpful software tool for creating real estate investing business plans. This comprehensive platform has templates and tools to build out key sections of your plan. Its robust accounting and financial capabilities help construct accurate statements and projections.

Incorporating Azibo's online rent collection allows you to model cash flows. By centralizing lease documents , accounting, and portfolio management, Azibo streamlines the process of putting together a strategically sound real estate business plan.

Important Note: This post is for informational and educational purposes only. It should not be taken as legal, accounting, or tax advice, nor should it be used as a substitute for such services. Always consult your own legal, accounting, or tax counsel before taking any action based on this information.

Nichole co-founded Gateway Private Equity Group, with a history of investments in single-family and multi-family properties, and now a specialization in hotel real estate investments. She is also the creator of NicsGuide.com, a blog dedicated to real estate investing.

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How to Start a Real Estate Investment Company

Free Real Estate Investment Business Plan Template

11 Min Read

Are you thinking about growing your wealth? Consider the power of real estate! This industry has a strong track record, with an average annual growth of around 5.4% over the last six decades.

With a whopping $5.16 trillion market, the opportunities are huge. But it’s not just about owning buildings—it’s a chance to really make a difference in our communities and shape the way cities evolve.

If you’re ready to learn how to start a real estate investment company , let this guide be your roadmap to success. We’ll cover market trends, smart real estate investing strategies, and everything you need to build your own thriving investment business.

Benefits of Starting a Real Estate Investment Business

It’s not just about watching your property value climb – real estate investment is also about generating steady cash flow from rental income. This kind of reliable stream pays off big time, especially when the rest of the market experiences a downturn.

Another bonus? Real estate adds variety to your portfolio. It often moves independently of stocks and bonds, making it a great way to spread your risk and weather those market storms.

Plus, unlike some real estate investments, real estate has tangible assets. Even if the project doesn’t hit a home run, you still have the land and the building—there are ways to recover a good chunk of your investment.

And that’s just the start! A real estate business also offers a whole range of benefits like:

• Steady income streams
• Potential for properties to increase in value
• Tax benefits
• A way to protect your money against inflation

What You Need to Start a Real Estate Business?

Starting a real estate investment company isn’t about just finding properties! Think of it like building a house – you need a strong foundation first. Here’s what you’ll need:

• A Business Plan: Your business plan is your roadmap. What’s your mission? How much does it cost to launch? How will you track success?
• Investment Strategy & Capitalization: Before chasing deals, know your investment plan. What type of properties? How much cash do you have on hand?
• Operations plan: This is your business blueprint. Decide on a solo or team approach, define your daily tasks, and make sure everything supports your main goals.
• Networking: Build that network! Finding the gems and closing those deals often hinges on solid connections in the real estate market.

Now that you understand the benefits of starting a real estate investment company, let’s explore the steps involved.

• Select a suitable business type
• Write a comprehensive business plan
• Form a legal business entity
• Open business banking accounts
• Figure out business finances
• Obtain required licenses and permits
• Build a professional network
• Develop an investment strategy

1. Select a suitable business type

Choosing the right real estate path is critical to building your dream business. Let’s break down a few popular options:

Residential Rental Company

Become a landlord! This is about finding suitable properties, attracting reliable tenants, and generating steady rental income. If you hold on to the property, it might even gain value over time.

Commercial Real Estate Company

Think outside the (residential) box! Retail spaces, offices, warehouses – this diverse sector offers a unique way to expand your holdings and tap into different market trends.

Wholesaling

Do you have a nose for a good deal? Wholesalers track down discounted properties, secure the rights, and then connect with buyers looking for a bargain. It’s a fast-paced world of deal-making, not long-term ownership.

Real Estate Investment Group (REIGs)

REIGs let you team up with other investors. You can combine your money to take on bigger projects and share the rewards.

Real Estate Development Business

Got an eye for potential? Developers transform land or renovate existing buildings. This includes house flippers and those who build massive new projects – they see opportunity where others see problems.

2. Write a comprehensive business plan

Your real estate business plan is your blueprint for success. It’s where you strategize about your property focus, nail those operational details, and craft a marketing plan that attracts serious investors.

A solid real estate investment business plan should cover:

• Your Focus:  What types of properties will you target? Residential, commercial, or a mix? Will you specialize in a niche, like fixer-uppers or luxury condos?
• Marketing that Matters: How will you reach potential investors and stand out in a crowded market? What channels will you use?
• Know Your Rivals:  Who else is competing for those same deals? How will you differentiate yourself and secure the best properties?
• The Bottom Line: Project your finances realistically. This isn’t just about finding excellent properties; it’s about building a profitable business!

The best part? The planning process forces you to understand your ideal real estate investor. Are you targeting those seeking steady income or high-risk/high-reward players? Knowing your audience puts you in the driver’s seat.

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3. Form a legal business entity

Stepping into business registration is more than a formality; it’s your entry ticket into the business world. This crucial move sets the stage for paying taxes, securing funding, and everything in between.

Plus, the moment your business is registered, it transforms from an idea to reality — it’s official, and it’s yours.

Here’s what you will need to get started:

Location Matters

Your location choice impacts taxes, legal hoops, and potential earnings. While many stick to their home turf, eyeing other states could offer competitive advantages, especially for real estate ventures.

If you’re open to relocating, your business could benefit significantly. And remember, moving your business isn’t as difficult as it sounds.

Choose the right business structure

Choosing your business structure is akin to choosing its foundation. Each option — be it real estate LLC, sole proprietorship, or corporation — comes with its unique impact on taxes, liability, and paperwork.

Tip: For real estate investment, LLCs are often favored for their flexibility and lighter regulatory load.

Lastly, registering for taxes means obtaining an Employer Identification Number (EIN), a straightforward process via the IRS website.

Your EIN is essential for tax purposes, and if you’re a sole proprietor, your social security number can also serve this purpose. Selecting your tax year is crucial, too, as it defines your financial reporting period.

4. Open business banking accounts

Separating your personal and business finances is a smart safeguard, especially when dealing with a real estate holding company.

It helps protect your personal assets from any potential hiccups related to your properties and keeps your financial life organized, especially when tax season rolls around.

The best way to do this? Set up separate bank accounts specifically for your company.

Only use these accounts for your real estate business – rent, maintenance, taxes, the whole nine yards. This creates a clear divide and makes tracking your finances a whole lot easier.

5. Figure out business finances

Jumping into real estate investing means having a good amount of cash ready. Depending on your approach, the upfront investment can range significantly from around $120,300 to $1,090,000 .

To make smart financial moves, it’s essential to understand where that money is going. This includes down payments, closing fees, and maybe even some renovation costs.

A detailed budget plan is essential. It helps you make informed investment decisions and sets you up for a successful, long-term real estate business.

Now, how do you fund these costs? Well, you have a few options:

Your own savings

Using your cash reserves is tempting, but remember, real estate deals have their ups and downs. You don’t want to put all your funds in one property and risk getting stuck if the market shifts.

Borrow from friends or family

While loved ones might be supportive, blending money and relationships can get complex. What happens if a renovation takes longer than expected or your projected returns hit a snag?

Seek external funding

This is where your real estate investments strategy really takes shape! Consider:

6. Obtain required licenses and permits

Starting a real estate investment business means navigating a bit of a permit and license jungle. It depends on where you’re operating, but expect to deal with paperwork at the local, state, and sometimes even federal levels.

Now, the good news: you don’t necessarily need a real estate agent or broker license to be a real estate investor. But here’s the thing – getting that license could save you a serious chunk of change.

Why? Because you can cut out the realtor and their commission fees when buying or selling real estate properties. If you’re planning on doing a lot of transactions, the license might pay for itself.

Of course, each state has its own rules about getting licensed, and so does your research.

Beyond the real estate license, there’s the whole world of business permits. Think DBA (“Doing Business As”), maybe health and safety stuff from OSHA, and protecting trademarks for your excellent company name.

Depending on your specific investment niche, there might be industry-specific licenses to deal with.

Then comes the local stuff: state, county, and city permits can all be involved. The best way to figure this out is to visit the websites of your local governments or, better yet, actually call them.

7. Build a professional network

Building a robust network is the lifeblood of your real estate investing business. The right connections can open doors to incredible deals, fast funding, and serious profits.

It’s your secret weapon, especially when things get unpredictable.

So, let’s dive into the best ways to get out there and make those connections:

Expand Your Territory

Traveling isn’t just about vacation; it’s about expanding your turf. Look up local players in the areas you visit – investors, lenders, you name it. A few coffee meetings could land you a deal that funds your whole trip and maybe even gets you some tax breaks (talk to your accountant!).

Attend Strategic Events

Every town has networking events – happy hours, trade shows, the works. These folks are there to meet people like you! Don’t just show up, do your homework and target the attendees you want to connect with.

Leverage Social Media

Social media is powerful, but don’t just collect followers. Build genuine relationships with potential partners, clients, and those who share your interests. Find relevant groups, offer value, and be genuine.

Share Your Expertise

Once you’ve gained some experience, host your own classes or workshops. Share your expertise on buying, flipping, or whatever you’re good at. This will position you as the go-to expert and attract like-minded folks.

Foster Community Connections

Get involved in local events, charities, or community improvement projects. This builds strong relationships within your area and can organically generate leads, funding sources, and partnerships.

Utilize Your Network

Don’t underestimate the power of your existing contacts. Ask for referrals, introductions, and recommendations to expand your reach exponentially. Be sure to reciprocate by connecting with others within your network.

8. Develop an investment strategy

Building a successful portfolio takes more than just enthusiasm. A well-defined strategy aligned with the market is your roadmap to success. Let’s break down the essential steps:

Define Your Goals & Risk Profile

Before buying even a single brick, ask yourself: Are you in it for the long haul, aiming for slow and steady growth? Or is fast cash flow your top priority?

Understanding your goals shapes every decision that follows. Also, be honest about your risk tolerance. Some investors love a high-stakes gamble; others need the security of a slow-and-steady approach.

Conduct Thorough Market Research

Winning at real estate means knowing the playing field. Dig into market trends – not just your neighborhood, but the bigger economic picture.

Study rental demand, job growth, and all those factors that drive the value up (or down!). Informed investors spot opportunities others miss and dodge potential pitfalls.

Embrace Diversification

Diversification is your best friend. Sure, spread it across different locations, but think bigger—residential vs. commercial, traditional rentals vs. real estate investment trusts (REITs), or crowdfunding. An intelligent mix protects you if one market segment takes a temporary dip.

Prioritize Financial Planning & Risk Management

Real estate is a business, not just a romantic dream about fancy houses. Have a rock-solid budget, know your cash flow needs, and leave room for those “oops” moments – vacancies, repairs, etc.

Build in safety nets like insurance and get savvy about legal structures to protect your personal assets.

Real estate can build serious wealth, give you options with your money, and even offer some tax advantages. But it’s also a serious commitment – there’s money on the line, risks to manage, and you need a good dose of patience.

The key to making it work? A rock-solid business plan. Think of it as your roadmap – it gets your goals clear, helps you understand the market, and keeps you focused on building a sustainable real estate investment business.

The Quickest Way to turn a Business Idea into a Business Plan

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Frequently Asked Questions

Do i need a degree to start a real estate investing company.

Nope!  While a business or finance degree can be useful, it’s not mandatory. Success depends more on real-world knowledge – understanding the market, smart financial strategies, and the legal side of things.

Is starting a real estate investment company profitable?

It absolutely can be! But think of it as a long game, not a get-rich-quick scheme. There are different ways to profit: steady rental income, riskier fix-and-flips, even large-scale development projects. The key is finding the strategy that fits.

Should I hire an investment property manager for my real estate investing business?

That depends!  Do you have the time and energy to handle tenant issues, repairs, and the day-to-day grind? Investment  Property managers take that burden off your plate, freeing you up to focus on growth, but it’s an added expense.

Is there a most profitable type of real estate investing?

No single magic bullet here. Different real estate investing strategies come with their own risk-reward balance. Want steady, predictable income? Think established rentals. Up for some risk in exchange for potentially huge profits? Flipping or development might be your thing.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Start a Real Estate Investment Company

Starting a real estate investment company can be very profitable. With proper planning, execution, and hard work, you can enjoy great success. Below you will learn the keys to launching a successful real estate investment company.

Importantly, a critical step in starting a real estate investment company is to complete your business plan. To help you out, you should download Growthink’s Ultimate Real Estate Investment Business Plan Template here .

Download our Ultimate Real Estate Investment Business Plan Template here

14 Steps to Start a Real Estate Investment Company:

• Choose the Name for Your Real Estate Investment Company
• Develop Your Real Estate Investment Business Plan
• Choose the Legal Structure for Your Real Estate Investment Company
• Secure Startup Funding for Your Real Estate Investment Company
• Find an Ideal Location for Your Real Estate Investment Company
• Register Your Real Estate Investment Company with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Real Estate Investment Company
• Buy or Lease the Right Real Estate Investment Company Equipment
• Develop Your Real Estate Investment Company Marketing Materials
• Purchase and Setup the Software Needed to Run Your Real Estate Investment Company
• Open for Business

1. Choose the Name for Your Real Estate Investment Company

When choosing a name for your real estate investment company, it is important to find a name that reflects the type of business you are running. If your real estate investment company is focused on flipping houses, then a good name might be “House Flipping” or “House Hunting.” You will also want to make sure that the name you choose for your real estate investment company is unique.

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally, you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your real estate investment company:

• Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also, check to see if a suitable domain name is available.
• Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing. Come up with a name that reflects the desired brand and/or focus of your real estate investment company.

2. Develop Your Real Estate Investment Business Plan

One of the most important steps in starting a real estate investment company is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a  sample real estate investment company business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your real estate investment business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your real estate investment company.
• Company Overview – this section tells the reader about the history of your real estate investment company and what type of real estate investment company you operate. For example, are you a real estate investment company that buys homes, flips them for quick profits, or leases them?
• Industry Analysis – here you will document key information about the real estate investment company industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important in services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build a competitive advantage.
• Product: Determine and document what products/services you will offer
• Prices: Document the prices of your products/services
• Place: Where will your business be located and how will that location help you increase sales?
• Promotions: What promotional methods will you use to attract customers to your real estate investment company? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization, and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• What startup costs will you incur?
• How will your real estate investment company make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

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3. choose the legal structure for your real estate investment company.

Next, you need to choose a legal business structure for your real estate investment company and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a company entity in which the owner and the company are legally the same person. The owner of a sole proprietorship is responsible for all business debts and responsibilities. A sole proprietorship does not require any formalities to set up or run, and it is simple to do so. One of its major advantages is that it is the easiest company entity to create and maintain.

2) Partnerships

A business partnership is a legal entity utilized by small enterprises. It’s the agreement between two or more people who want to start a company. The business partners split any profits and losses from the company equally.

The advantages of forming a partnership are that it is simple to start and the business partners share in the profits and losses of the firm. The disadvantages of real estate investment partnerships are that the partners are jointly responsible for the company’s debts, and partner conflict resolution may be difficult.

3) Limited Liability Company (LLC)

An LLC, often known as a “limited liability company,” is a sort of business entity that protects its owners from responsibility. This implies that the proprietors of an LLC are not personally liable for the firm’s debts and liabilities. The flexibility of an LLC includes management freedom, pass-through taxation (which avoids double taxation), and limited personal liability.

4) C Corporation

A C Corporation is a business entity that is independent of its owners. It has its own tax identification number and can have shareholders. The major benefit of a C Corporation is that it provides limited responsibility to its shareholders. This implies that the company’s owners are not held accountable for the firm’s debts and liabilities. The disadvantage is that C Corporations are taxed separately from their owners, which means they also pay taxes at the corporate tax rate.

5) S Corporation

An S Corporation is a type of business organization that offers its owners limited liability protection and allows them to transfer earnings from their company to their personal tax returns, avoiding double taxation. There are several restrictions placed on S Corporations, including the number of shareholders they can have, among others.

Once you register your business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your real estate investment firm.

4. Secure Startup Funding for Your Real Estate Investment Company

In developing your real estate investment business plan , you might have determined that you need to raise funding to launch your business.

Other common sources of funding for a real estate investment firm to consider are personal savings, family and friends, bank loans, crowdfunding, and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a real estate investment company that they believe has a high potential for growth.

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5. Find an Ideal Location for Your Real Estate Investment Company

When choosing a location for your real estate investment firm, you should consider factors such as your budget, customer demographics, and the demographics of the real estate market.

If you have a limited budget, you might want to choose a location where rent is inexpensive. If you’re operating in more rural areas with low population densities, it will be easier for you to find discounted real estate investment properties. However, if your target market is composed of customers who are located in the surrounding area, you will need to offer them easy access to your business. When choosing a location, you should also consider factors that could affect foot traffic such as where do customers live, work and play.

The real estate market also plays a role in deciding on a location for your business. For instance, some markets will be better for multifamily real estate, while some markets might be more suitable for commercial real estate.

You should also consider the demographics and the income and employment levels of potential customers in your target market. This is key to helping you determine location and customer traffic.

Places with high concentrations of upscale homes or luxury retail stores are examples of good markets.

6. Register Your Real Estate Investment Company with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your real estate investment company’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your real estate investment company to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

The licenses and permits required to start a real estate investment firm include the following:

• Sales Tax License (if required in your state)
• Business License (if required by the city, county, or state where you plan to operate)
• Occupational Permit (often required for your business category)

10. Get Business Insurance for Your Real Estate Investment Company

Below are the main types of insurance to consider for your business:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance : This can cover a single vehicle or a fleet of vehicles. If you have employees, it’s especially important to get auto insurance because your employees drive business vehicles.
• Workers’ compensation insurance : If you have employees, it works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Professional liability insurance : This protects your business against claims of professional negligence.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

11. Buy or Lease the Right Real Estate Investment Company Equipment

The equipment required to start a real estate investment firm include the following:

• Computer with Internet access for research
• Laptop or tablet with Internet access for on-the-go research
• Scanner Printer Fax machine
• Photocopier
• Legal and accounting books and software

Depending on the laws of your state, you may be required to have a physical office in order to run your business.

12. Develop Your Real Estate Investment Company Marketing Materials

Marketing materials will be required to attract and retain customers to your real estate investment company.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your real estate investment firm. Your logo will be printed on company stationery, business cards, marketing materials, and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional real estate investment company website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your companies name. Accounts on Facebook, Twitter, LinkedIn, and/or other social media networks will help customers and others find and interact with your real estate investment business.

13. Purchase and Setup the Software Needed to Run Your Real Estate Investment Company

The software needed to start a real estate investment company may include the following:

• Accounting software
• Email marketing software
• Office suite (includes word processing, spreadsheet, and presentation tools)

Real estate investment business-specific software is also available to help you track sales leads, manage projects, etc.

14. Open for Business

You are now ready to open your real estate investment firm. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

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How to Start a Real Estate Investment Company FAQs

Where can i download a real estate investment business plan pdf.

You can download our  real estate investment business plan PDF  template here. This is a business plan template you can use in PDF format.

Is it hard to start a real estate investment company?

No. If you have experience in real estate, the right knowledge and training, good support from mentors, and some seed money to get started, then starting a real estate investment business should be relatively easy.

How can I start a real estate investment company with no experience?

You can be successful without having prior knowledge or experience if you have good mentors to offer guidance. Additionally, consider taking real estate courses by attending seminars and finding mentors who are already successfully owned and managed real estate investment companies.

Is a real estate investment company a good idea and/or a good investment?

Yes. However, running a real estate investment business can also be risky and challenging. As with any business, you should research the pros and cons of starting your own before deciding to start one.

What type of real estate investment company is most profitable?

The most profitable real estate investment business is one that understands what type of real estate to specialize in and how to manage it. For example, a passive real estate business invests in high-profit real estate investments such as apartment complexes, shopping centers, and other well-established projects.

How much does it cost to start a real estate investment company?

The cost to start a real estate business varies depending on the nature of your business. For example, opening a real estate company that invests in foreclosed investment properties requires less seed money than opening one that invests in rental properties for profit.

What are the ongoing expenses for a real estate investment company?

Ongoing expenses for a real estate investment company include licensing, payroll (employees and/or contractors), and marketing. Additionally, you should also budget for startup costs like rental and/or investment property and equipment.

How does a real estate investment company make money?

A real estate investment business can make money in a number of ways such as through receiving rent from tenants, collecting loan interest and/or principal repayment, selling portions of the property or project, and consulting services.

How much can you make owning a real estate investment company?

You can make a good amount of money owning your own real estate investment company. However, the amount you will make depends on the type of business you run and how successful it is. For example, a passive real estate investor typically does not work directly on their projects and tend to make more than active real estate investors.

Is owning a real estate investment company profitable?

Yes, a real estate investment company can be profitable for those who understand the market and take the time to learn about all aspects involved in running a successful business.

Why do real estate investment companies fail?

Real estate investment businesses fail for many reasons. Some of the common causes are poor cash flow management, lack of experience/expertise, and an unprofitable business model.

Other Helpful Business Plan Articles & Templates

How to Write a Real Estate Investment Business Plan: Complete Guide

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Last updated on December 19, 2023

Building an investing business without a real estate investment business plan is sort of like riding a bike without handlebars. 

You might be able to do it… but why would you? 

It’s far easier and more practical to set out on your venture with a business plan that outlines things like your lead-flow, where you’ll find funding, and which market(s) you’ll operate. 

Plus, according to Entrepreneur, having a business plan increases your chances of growth by 30%. 

Download Now: Free marketing plan video and a downloadable guide

So don’t skip this critical first step. 

Here’s how to do it. 

Real Estate Investment Business Plan Guide

In this article we’re going to discuss:

• What is a real estate investment business plan?
• Create your mission and vision
• Run market analysis
• Choose your business model(s)
• Determine your business goals
• Find funding / Cash buyers
• Identify lead-flow source
• Gather property analysis information
• Create your brand
• Set growth milestones
• Plan to Delegate

What is a Real Estate Investment Business Plan and Why Does it Matter?

A real estate investment business plan is a document that outlines your goals, your vision, and your plan for growing the business . 

It should detail the real estate business model you’re going to pursue, your chosen method for lead-gen, how you’ll find funding, and how you plan to close deals. 

The kit and caboodle. 

It shouldn’t be overly complicated. 

Whether this real estate investment business plan is only for your personal use or to present to someone else, simplicity is best. Be thorough, be clear, but don’t over-explain what you’re going to do. 

As far as why you should have a business plan, consider that it gives you a 30% better chance of growing your business. 

Also, consider that setting out  without  a plan would be like — full of unexpected twists and turns — is that something you want to do? 

Probably not. 

It’s worth taking a few days or weeks to put together a business plan, even if it’s just for your own sake. By the time you’re complete, you’ll have greater confidence in the business you’re setting out to build. 

And an entrepreneur’s confidence is everything. 

How to Create Your Real Estate Investment Business Plan

Now we get into the nitty-gritty. 

How do you create your real estate investment business plan? Here are the 10 steps!

1. Create Your Mission & Vision

This can be considered your “summary” section. You might not think that you need a mission statement or vision for your real estate business. 

And you don’t. 

We know a lot of real estate investors (many of our members, in fact) don’t have a clear mission or vision that they’ve outlined — and they’re successful regardless. 

But if you’re just getting started…

Then we think it’s a worthwhile use of your time. 

Because if you don’t know why you’re going to build your real estate investing business, if you don’t see what purpose it serves on a personal and professional level, then it’s not going to be very exciting to you. 

You can either use this time to create a mission for your business… or a mission statement for you as it relates to growing your business (depending on your goals).

For instance…

• Our mission is to create affordable house opportunities in the Roseburg, Oregon community. 
• Our mission is to provide homeowners with an exceptional experience when selling their properties for cash. 

Or you could go a more personal route…

• My mission is to create a business that supports my family. 
• My mission is to build a company that gives me more time for what matters most to me.

Or you could do both…

• My mission is to create a business that supports my family, and my business’ mission is to provide homeowners with an exceptional experience when selling their properties for cash. 

Either way, it’s good to think about this before getting started. 

Because if you know why you’re going to build your business — and if, ideally, that reason resonates with you — then you’ll be more excited and determined to work hard toward your goals. 

It is also an excellent opportunity to outline the core values you’ll adhere to within your business as Brian Rockwell does on his website …

With this information in hand, you’re ready to move on to the next step. 

2. Run Competitive Market Analysis

Which market are you going to operate in? 

That might be an easy question to answer — if you’re just going to operate in the town where you live, fair enough. 

But it’s worth keeping in mind that today’s technology has made it possible to become a real estate investor in any market from pretty much any location (remotely). 

So if the market you’re in is lacking in opportunity, then you might consider investing elsewhere. 

How do you know which market to choose? 

Here are the 10 top real estate markets for investors, according to our own Carrot member data of over 7000 accounts, based on lead volume…

• Atlanta, GA
• Houston, TX
• Chicago, IL
• Charlotte, NC
• New York, NY
• Los Angeles, CA
• Orlando, FL
• Philadelphia, PA
• Phoenix, AZ

And here are the top 20 states…

• North Carolina
• Pennsylvania
• Oregon 

That’ll give you some ideas. 

But what makes a market good or bad for real estate investors? Here are some metrics to pay attention to when you’re doing your research. 

• Median Home Value — This will tell you how much the average home sells for in the market, which will impact whether you’ll be willing to operate there. Because obviously, you want to play with numbers that feel reasonable to you. 
• Median Home Value Increase Year Over Year — Ideally, you want to invest in a market where homes are appreciating every year. And a positive increase in this metric is a good sign that the properties you invest in will continue to increase in value. 
• Occupied Housing Rate — A high housing occupancy rate means it’s easy to find tenants, and there’s a healthy demand for housing. That’s a good sign. 
• Median Rent — This is the average cost of rent in the market and will give you a good idea of how much you’ll be able to charge on any rentals you own. 
• Median Rent Increase Year Over Year — If you’re going to buy rentals, it’s a good sign if rental costs increase every year.
• Population Growth — When the population grows, it creates demand for housing, both rentals and on the MLS. That’s a good sign for a real estate investor. 
• Job Growth — Job growth is a sign of a healthy economy and indicates that you’ll have an easier time capitalizing on your real estate investments. 

Fortunately, all of this research is super easy to do on Google. 

You can just type in the market and the metric in Google and you’ll get meaningful results. 

Thank god for technology. 

Want more freedom & impact?

From Mindset to Marketing, join our CEO as he unlocks the best stories, tactics, and strategies from America’s top investors and agents on the CarrotCast . If you want to grow your business, you need to check it out!

3. Choose Your Business Model(s)

There’s not just one real estate business model . 

There are many. 

And the market you’re in — as well as your business goals — will determine which business model you choose. 

Here’s a brief overview of each…

• Wholesaling — Is a prevalent business model in the real estate world. Wholesalers find deals and flip them to other cash buyers for an assignment fee, typically somewhere between $5,000 to $10,000. It’s low risk and requires little capital upfront (you can get started with as little as $2,000). 
• Wholetailing — Wholetailing is a mix between wholesaling and house flipping. A wholetailer will find a deal, do some very minor repairs (if any), and sell the house on the MLS themselves. It results in large profits with far less work. But wholetail deals are hard to come by. 
• BRRRR — This stands for Buy, Rehab, Rent, Refinance, Repeat. It’s a long-term process for buying and holding rental properties. It’s a great way to build net worth and create generational wealth. 
• Flipping — House flipping is the most popularized real estate investing method. It consists of purchasing distressed properties, fixing them up, and selling them at a good profit on the MLS, often making upwards of $100,000 per deal. However, this method involves much more risk than the other methods and each deal takes a lot longer to complete. 

If you’re just getting started, then we recommend choosing just one business model and doing that until you’ve mastered it. 

Down the road, you will likely want to use multiple business models. 

We know the most successful real estate investors are wholesalers, wholesalers, flippers,  and  they own some rental properties. 

That allows them to make the most of every opportunity that comes their way. 

But again… to start, just choose one. 

4. Determine Your Business Goals

At this point, you should have a pretty clear idea of why you’re going to build your real estate investing business. 

Are you going to build it because you want to make an impact in your community? Because you want more financial freedom? Because you want more time freedom? 

All of the above? 

Whatever the case, now it’s time to set some goals related to your mission for the business. 

Remember the SMART acronym for goal setting…

Start by thinking about how much money you’d like to make per month — this should be the first income threshold that you’re excited to hit.

Let’s pretend you said $10,000 per month. 

Okay, now take a look at your business model. How many properties do you need to have cash-flowing to hit that number? How many deals do you have to do per month? How many flips? 

Try to be as realistic with your numbers as possible. 

Here are some baselines to consider for the different business models at the $10k/month threshold…

• Wholesaling – 2-3 Deals Per Month
• Wholetailing – 2-3 Deals Per Month
• BRRRR – $1 Million in Assets
• Flipping – 1-2 Flips Per Year

Now you have a general idea of the results you’ll need to hit your first income threshold. 

But we haven’t talked about overhead costs. 

How much will you need to spend to get those results? 

Your answer to that question will be influenced by the market analysis you already did. But it’s pretty standard for the price of finding a deal to hover around $2,000 for a real estate investor (if you’re doing your own advertising). 

So now you’re spending $2,000 per deal, or whatever your specific number is. That’s going to have an impact on how much money you’re making. So now we can adjust your goals to be more realistic for hitting that $10k per month marker…

• Wholesaling – 4-5 Deals Per Month
• Wholetailing – 4-5 Deals Per Month
• BRRRR – $1.5 Million in Assets
• Flipping – 2-3 Flips Per Year

The idea here is to figure out how many deals you’ll have to do per month to hit your income goals. 

Then work that back into figuring out how much you’ll need to spend every month to realistically and predictably hit your goals. 

At $2k per deal and intending to hit $10k/month, here’s what your deal-finding costs might look like…

• Wholesaling – 4-5 Deals Per Month – $8k-$10k/month
• Wholetailing – 4-5 Deals Per Month – $8k-$10k/month
• BRRRR – $1.5 Million in Assets – $6k-$8k/month
• Flipping – 2-3 Flips Per Year – $4k-$6k/month

That should give you a baseline. 

How do those numbers look? 

If they feel too high for you right now, lower your initial goal — you want to make your first goal something that you know you can accomplish. 

Then, as you gain experience, you can increase your goals and make more money down the road. 

Free Real Estate Marketing Plan Template

Take our short survey to find out where you struggle most with your online marketing strategy. Generate your free marketing plan video and downloadable guide to increase lead generation and conversion, gain momentum, and stand out in your market:

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5. Find Funding / Cash Buyers

Are you going to fund your own deals or find private investors ? Or maybe you’re going to get a business loan from a bank? 

If you’re just starting as a wholesaler or wholetailer, then it’s recommended funding your own first few deals — that should only cost $2,000 to $5,000… and why overcomplicate things in the beginning when you’re still trying to learn the ropes? 

However, as a wholesaler or wholetailer, you’ll still need to find some cash buyers. 

Here’s a great video that’ll teach you how to do that…

To consistently grow your cash buyer list (which is an important part of the wholesaling and wholestailing business model), we also recommend creating a buyer website like this…

Learn more about creating your cash buyer website with Carrot over here . 

To scale, you might seek out other sources of funding. 

Here are some options…

• Bank Loan — Getting a loan from a bank might be the most straightforward strategy if you’re just getting started. But keep in mind that the requirements for a loan on an investment property will be more stringent than the requirements were for your primary residence mortgage. And the interest rate will likely be higher as well. For that reason, you might seek out some of the other options. 
• Hard Money — Hard money loans come from companies that specifically serve real estate investors. They are easier and faster to secure than a bank loan and hard money lenders typically base their approval of the loan on the quality of the investment property rather than the investor’s financial standing. 
• Private Money — Whereas a hard money loan comes from a company; a private money loan comes from an individual with a good chunk of capital they’re looking to invest. That could be a friend, family member, coworker, and acquaintance. Interest rates and terms on these loans are typically very flexible and the interest rate is usually quite good. Private money is an excellent option for real estate investors looking to scale their business. 

But before you seek out funding from those sources, get clear on what exactly you’re going to use those funds for. 

Finding funding is even more critical. In fact — if you’re flipping properties or using the BRRRR method. 

(It’s a key part of the BRRRR method)

You’ll likely want to use hard money or private money to fund your deals as you grow your business.

But how do you find and secure those loans? 

Hard money lenders are easy to find — just Google for hard money lenders in your area and call the companies that pop up to get more details. 

Private money (which usually has more favorable terms than hard money) is a bit trickier to find but not at all impossible. 

To find private money lenders, you can…

• Tell Friends & Family — This should be the first thing you do. Tell everyone you can about the business you’re building and the returns you can offer investors. Then ask them if they know anyone who might be interested in investing. 
• Network — After you’ve exhausted all your friends and family, make a point of getting to know people everywhere you go. The easiest way to do this is to wear branded clothing so people ask about what you do. Talk to people at coffee shops, grocery stores, movie theaters, and anywhere else that you frequent. You never know who you might meet. 
• Attend Foreclosure Auctions — Foreclosure auctions are jam-packed with people who have cash-on-hand to buy properties. These people might also be interested in investing in your real estate endeavors. Or they might know where to find private money. Either way, it’s in your interest to build relationships with these people. Attend foreclosure auctions and bring some business cards. 

Here are some tips on finding private money lenders…

6. Identify Lead-Flow Source

Now let’s talk about how you will generate a consistent flow of motivated leads for your business. 

Because no matter which of the business models you’ve chosen… you’re going to need to find motivated sellers.

And you’re going to need to find those people every single month. 

There are essentially two parts to a successful lead generation strategy for real estate investing business. 

Both pieces are critical… 

• The Short Term — We call this “hamster-wheel marketing” because it requires you to  keep working  and  spending money  to generate leads. Examples include Facebook ads, direct mail, bandit signs, cold calling, driving for dollars, and other tit-for-tat strategies that will burn you out if you’re not careful.
• The Long Term — We call this “evergreen marketing” because it requires an upfront investment… but that investment pays off for years and years to come. Examples include increasing brand awareness for your business in your target market(s) and improving your website’s SEO , so that motivated sellers find you . 

Short-term tactics are critical when you’re first starting — in fact, they are likely going to be your only source of leads for at least the first few months. 

Here are some more details on the most popular and effective methods… 

• Tax default mailing lists
• Vacant house lists
• Expired listing lists
• Pre-foreclosure lists
• Out-of-state landlord lists
• Cold Calling — This might be more uncomfortable than stubbing your toe on a piece of furniture, but it can still be effective for finding motivated sellers. We have an article all about colding calling — it even has scripts for you to use. 
• Facebook Ads — Facebook ads is another excellent method for generating leads so long as you have a high-converting website to send them to . If you don’t, get yourself a Carrot website . Each Carrot site is built to convert. Here are some more details about running successful ads on Facebook for your real estate investing business.
• Google Ads — Google Ads is one of the most popular platforms for real estate professionals needing to provide quick results with a minimal to high investment depending on markets.

But over time, the goal is to invest in more long-term evergreen marketing tactics so that you can get off the hamster wheel and build a more sustainable business. 

Check out the video below to learn more about the critical distinction between short-term and long-term marketing. 

At Carrot, we’ve created an online marketing system that makes generating leads super easy and simple for real estate investors. 

And it’s 100% evergreen. 

Here’s an example of one of our members’ websites that converts like crazy…

Try our free Marketing Plan Generator here.

7. Gather Property Analysis Information

We just talked about how you can generate leads.

But once someone calls you, once you’re checking out a property… How will you  know  if the property is a good fit for your chosen business model? 

After all, not every property will be a fit. 

First, ask the following questions when the seller calls…

• What is the address of the house you want to sell?
• How many bedrooms, bathrooms does it have?
• Does it have a garage, basement, or pool?
• If you were going to list it with a Realtor, what repairs and/or updating would you say would be needed?
• How much is owed on the house?
• Do you have an asking price in mind?
• Is the house behind on payments?
• If I come out and look at the property and make you a cash offer to buy it ‘As-Is’ and close as soon as you want, what would be the least you would be willing to take?

That will provide you with a lot of critical information about what you’re dealing with. 

Next, once you’re off the phone, do a bit of due diligence and look at what nearby properties of similar size have sold for in the last 90 days or so — that should give you a ballpark idea for the after-repair value of the property. 

If you decide that the property sounds promising, you’ll want to walk through it and take pictures of anything and everything that’ll need to be repaired. 

Back at the office, estimate the cost of those repairs — here’s a great resource from REISift that’ll help you estimate rehab costs . 

You’ll need to go through this entire process regardless of your business model so that you understand your max offer on the property. 

So how do you calculate your max offer? 

Use the 75% rule — check out this video from Ryan Dossey…

With that, you’ll know how much to pay for the property, how much to spend on repairs, and how much it’ll sell for. 

The more you streamline this part of the process, the better. 

8. Create Your Brand

Building a company is one thing. 

Building an easily recognizable brand and known to be reputable in your marketplace is quite another.

But that’s an integral part of the process. Consider some of these statistics…

• Using a signature color can increase brand recognition by 80 percent.
• It takes about 50 milliseconds (0.05 seconds) for people to form an opinion about your website.
• Consistent presentation of a brand has seen to increase revenue by 33 percent.
• 66 percent of consumers think transparency is one of the most attractive qualities in a brand.

When it comes to building a real estate investing brand, your goals are to…

• Establish Rapport 
• Create Easy Recognizability
• Dominate The Conversation

The first step in this process is building an online presence – that means creating a high-converting website (i.e., one that systematically turns visitors into leads by capturing their contact information), running advertisements, and ranking in Google for important keywords. 

That’s what we can help you with at Carrot . 

Out of the box, our website templates are built to convert visitors into leads – and you can customize them however you want with your branding materials…

You’ll even receive immediate text notifications when someone signs up to be a lead so that you can contact them right away (speed is the name of the game!). 

Having a high-converting website is ground zero for brand-building success. If you don’t have a website that systematically converts visitors into leads, then every dollar you spend on advertising is going to be wasted. 

So that’s where we start. 

Once you’ve got your website up and running, then – if you’re on our Content Pro or Advanced Marketer plan – we’ll provide you with blog posts every single month that are written to rank in Google for high-value keywords relevant to your specific market …

You just upload, make some minor tweaks, and publish – and the more you publish, the more traffic you’ll drive. 

To help you become a true authority in your market, we also have the following tools…

• Keyword Ranking Tracker
• SEO Tool For Optimizing All Pages
• Text Notifications For Leads
• World-Class Support
• Campaign Tracking Links
• Coaching Calls

We want to make generating leads as easy as possible for you… so you can focus on closing deals and growing your business. 

You can try us here risk-free for 30 days. 

If you get yourself a Carrot website, that’ll take care of the “Dominate The Conversation” part of the branding process.

But what about these parts? 

Super easy. 

Establishing rapport is simply a matter of putting testimonials and case studies on your website. The more of these you have, the more people will trust your brand when they arrive on your website for the first time. 

As for creating an easily recognizable brand, create a simple branding package…

• Brand Colors

And then be consistent across all platforms. Use the same colors, font, logo, and brand name on everything – online and offline. 

That’ll make it feel like you’re everywhere – which is what you want. 

So there you go. 

That’s how you create a brand identity as a real estate investor. You’ll know you’ve done it right if people are coming to you out of nowhere – because a friend of a friend told them about you. 

And if you want a brand that dominates your market without all of the footwork, we’ve got just the thing – it’s called the Authority Leader Plan … and we’ll do everything for you. 

9. Set Growth Milestones

Okay – let’s pretend that you’ve taken all of the steps above. 

You’ve got yourself a functioning business and brand with funding, you’ve got consistent lead-flow, and you’re even closing some deals. 

Now what? 

Well… you want to grow, of course!

You don’t just want to do one deal per month… you want to do three, five, or even ten deals per month.

You want to make more money, increase your net worth, grow your business, and have a significant impact. 

How do you do that? 

First, you set new goals and milestones for your business’ growth – how many deals do you want to be doing per month in 6 months? In a year? 

Then break those goals down by quarter – and turn them into actionable to-dos. 

For example, if you’re currently doing one deal per month and you want to be doing five deals per month by the end of Q2, here’s what your goals might look like…

• Send 10,000 Mailers Per Month
• Spend $5,000 on Facebook Ads Per Month
• Hire Salesperson To Answer Phone
• Hire Acquisition Manager
• Create Workflow Process

Or maybe it’ll look a bit different. Make your to-dos as realistic as possible so that if you do those things … you’re virtually guaranteed to hit your goals. 

After all, what’s the point of having goals if you’re not going to hit them? 

All in all…

Set milestone goals to grow your business, turn those into to-dos and break them down by quarter. The next and final step of your real estate investment business plan might be even more important… 

10. Plan To Delegate

At some point, every real estate investor has to come to terms with a straightforward fact…

You can’t build the business of your dreams on your own . You need to delegate .

You’ve got to partner with other people, build critical relationships, hire people, manage people, create systems and processes to streamline your team’s workflow, and lots more. 

One of the most important areas that deserve a highlight is your client communications and satisfaction. Consider setting up a robust cloud contact center software to manage all the communications that will lead to long-term partnerships.

Building a business isn’t so much about hustling and bustling as it is about putting the right pieces in the right place. 

How do you scale your business? 

The answer is quite simple: you do the same things you’re doing now… but at scale – that means hiring people, training people, and creating clean-cut systems. 

That’s how you grow your business. 

Automate, delegate, and step outside of your business as much as possible to build a real estate investment company that serves you rather than enslaves you. 

Final Thoughts on Real Estate Investment Business Plan

What more is there? 

You know how to create a mission and vision statement, run market analysis, choose an REI business model, set goals, find funding, generate leads, analyze properties, create a brand, set long-term growth milestones, and delegate. 

All that’s left is action. 

And reach out anytime with questions – we’re always here to help!

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Starting your real estate investment business.

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Business Development Manager at  Karla Dennis & Associates INC , overseeing the Sales Department in North America. Follow me @karltondennis.

As a tax strategist, one common question I receive from my real estate investors and business owner friends is, “Should I buy a house or an investment property?” Many of them are young, and like most people, still building a foundation for life — their cash flow for investments is limited. However, there are strategies to get into real estate investing with less money. If you have been wondering the same question, I've compiled some answers to help start or grow your real estate investment business. 

After years of real estate investing experience, I now personally own several properties and have come far from my first closing. Speaking of which, when I got my first investment, I was just fresh out of college and wasn't truly prepared. By graduation, I had saved up $11,000 in my bank account — and thought I was a baller at the time — so I had plans to travel all of Europe and visit Greece. My mother, however, had other plans for that money and advised me to invest in real estate. At the time, she was a prominent real estate investor. Following my mother's advice, I decided to couple my $11,000 with my mother’s money and purchased my first duplex in Long Beach, California. 

Leveraging People To Get Your First Asset

Although not everyone is afforded the privilege of a supportive family member who is financially able to help purchase a property, there are still ways you can leverage 'other people's money' (OPM). You can benefit greatly if you are able to invest in a deal between yourself and another person, especially if you put up a smaller portion of the deal.

To do this, consider the relationships that are currently at your disposal and determine the people who could be potential investment partners. Consider if they have real estate investing experience, how much they could potentially afford to set aside for investment, as well whether or not this person possesses the qualities and traits of a good business partner. These include but are not limited to communication skills and an inherent drive/motivation to succeed.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024.

You want to get into an investment deal with someone who you can trust, count on and continue to build with for the long-term. Once you have found a real estate investment partner to go in on a property with you, come up with a plan by doing research on market trends, making projections for profits and losses, as well as understanding the real estate laws in the locality you plan to purchase within. Then, when you are ready, make your approach and share how it will benefit him/her to go in with you on a property. 

Real Estate Syndication

If you are looking to get into commercial real estate like I did when I was ready to invest in a second property, you may want to consider real estate syndication. Back when I was 25 years old, I was just getting comfortable in my role at a sales job and money was still tight, but I knew I wanted another stream of income and I wanted my money to work for me. 

Part of the reason why I wanted to go to commercial real estate as opposed to staying in residential real estate is because of the headaches caused by dealing with tenants and their toilets (or different issues that arise) on the weekends. They can really cut into family time and your free time.

I would rather purchase a large-scale apartment building and have a property manager who manages that property for me while I just earn income as a passive investment without having to do as much heavy lifting. Being that commercial real estate is expensive and requires large down payments, sometimes as much as $20,000, I knew I would have to invest in a fund with other people as a limited partner.

Under regulation 506b, you are allowed to invest in a fund with other people as a limited partner where you simply put up the money while your general partner is responsible for getting the property, negotiating the loan and making sure the property is properly managed. Real estate syndication is one way to earn a passive income every month, but that isn't everything you can do with real estate syndication. 

With real estate syndication, you can invest as an accredited investor. This is typically someone who has a net worth of a million or made at least $200,000 or almost $250,000 a year over the last three years. A lot of people don't fall into an accredited investor category, but real estate syndication still allows investors with less money, no accreditation and a desire for (hopefully) fewer headaches to invest. 

When I did my very first syndication, I only put in $6,000, yet that syndication pays me monthly about an upwards of about $2,600 a month. The beauty of that syndication is that I will make those $6,000 back, and whenever that property gets sold, which should be in about five to seven years, I should be able to benefit from some appreciation on the property.

We all know there are tons of different investment types — there’s “fix and flip,” wholesaling, buy and hold syndications, or even Delaware Statutory Trust Opportunity Zones. The most important thing when it comes to real estate investing is having the information to make well-informed decisions. 

If you are also looking to begin your real estate investing journey, I urge you to schedule an appointment with your financial advisor and/or tax advisor to consult with you regarding the ins, outs and caveats of the tax code for investors. 

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Forbes Business Development Council is an invitation-only community for sales and biz dev executives. Do I qualify?

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Real Estate | How To

How to Write a Real Estate Business Plan (+ Free Template)

Published June 30, 2023

Published Jun 30, 2023

REVIEWED BY: Gina Baker

WRITTEN BY: Jealie Dacanay

This article is part of a larger series on How to Become a Real Estate Agent .

• 1 Write Your Mission Statement
• 2 Conduct a SWOT Analysis
• 3 Set Specific & Measurable Goals
• 4 Plan Your Marketing Strategies & Tactics
• 5 Create a Lead Generation & Nurturing Strategy
• 6 Calculate Your Income Goal
• 7 Set Times to Revisit Your Business Plan
• 8 Why Agents Need a Real Estate Business Plan
• 9 Real Estate Business Plan Examples & Templates
• 10 Bottom Line
• 11 Frequently Asked Questions (FAQs)

A real estate business plan lays the groundwork and provides direction on income targets, marketing tactics, goal setting, lead generation, and an overview of your industry’s competition. It describes your company’s mission statement in detail and assesses your SWOT (strengths, weaknesses, opportunities, and threats) as an organization. Business plans should include measurable goals and financial projections that you can review periodically throughout the year to ensure you meet your goals.

Continue reading to see real estate business plan examples and discover how to write a real estate business plan. Start by making your own by downloading and using the free real estate business plan template we’ve provided below.

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Real Estate Business Plan Template

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💡Quick tip:

Market Leader provides a comprehensive paid inbound lead, automated marketing, and CRM solution to help agents acquire, engage, and nurture real estate leads.

Furthermore, Market Leader offers and guarantees you a number of exclusive seller and buyer leads in your target niche at a monthly rate.

1. Write Your Mission Statement

Every real estate agent’s business plan should begin with a mission statement, identifying your values and why your business exists. Your mission statement serves as the guide to achieving your ultimate business objective. When you create a solid clear mission statement, all other items identified in your realtor business plan should be aimed at fulfilling this statement.

Compass’ mission statement: “Our mission is to help everyone find their place in the world.” (Source: Compass )

Your mission statement should identify your target audience, what product or service you provide, and what makes your business distinct. As seen in the example above, a powerful mission statement should be short and concise but sums up a business objective.

Let’s take Compass’ mission statement above as an example: “Our mission is to help everyone find their place in the world.” The statement identifies what the company offers, for what reasons, and who it benefits.

2. Conduct a SWOT Analysis

SWOT is an acronym that stands for a business’ strengths, weaknesses, opportunities, and threats. The primary objective of these four elements is to assess a business by evaluating internal and external factors that can drive decision-making and help you make more money . Conducting a SWOT analysis as you develop your business plan for real estate uncovers opportunities to differentiate yourself from the massive competition currently on the market.

Strengths & Weaknesses

Strengths and weaknesses are internal parts of your organization. Strengths identify what product or services you provide better than others, your access to resources, and items that benefit your customers. Weaknesses are items that need improvement, lack of resources, or what your competition does better. These are items within your control to change because you can convert a weakness into a strength.

See the example below if “Agent X” was doing their SWOT analysis:

Opportunities & Threats

External factors drive opportunities and threats and are areas you can take advantage of to benefit your business. Examples of opportunities can be shifts in the current marketplace, emerging trends you can capitalize on, features that competitors lack, or even changes with your competitors. Threats, on the other hand, are anything that can negatively impact your business. You don’t have control over changing the opportunities or threats, but you can develop a practice to anticipate and protect your business against the threats.

The opportunities and threats for “Agent X” would be:

When you complete your SWOT analysis, use it as a guide when creating strategies to meet your business objectives. To gain the most benefit from creating a SWOT analysis, make sure you are being realistic about your business and evaluating it in its present state. You don’t want to be unrealistic by listing strengths or opportunities that don’t exist yet, and you want to allocate time and money to the most impactful solution to your business issues.

If “Agent X” completed the above SWOT analysis, a few strategies they could derive would be:

• Incentivize agents to keep them at the brokerage for longer
• Implement a technology-based key machine to reduce lost keys and keep the team accountable
• Find a competitive advantage against competing brokerages and use that in marketing messages

Zillow agent finder (Source: Zillow )

To help agents locate other brokerages operating in your preferred market, agents can use Zillow’s agent finder page as a research tool to see which agents or brokerages are operating in a specific area. You can find an agent by location, name, specialty, and language. Once you click on a Zillow profile , you can read their reviews, see their team members, contact and website information, and property listings. Take a deep dive into your competitor profiles and can use the information to implement strategies within your own business.

Visit Zillow

Read how our experts feel about this real estate lead generation company in our Zillow Premier Agent review .

3. Set Specific & Measurable Goals

You’re ready to set some business goals after clearly defining your mission statement and SWOT analysis. Goals can help set the tone to increase your performance and drive your business in the right direction. Your goals should have a definitive way to show progress, which can be a prime motivator to keep you on track to achieving them.

Each goal should follow a pattern to identify set criteria. This will ensure that your daily efforts are performed to meet business objectives within a set period. A way to do this is by using SMART goals:

Examples of SMART goals for agents or brokerages:

• Increase closed transactions by 20% to a total of 150 deals within the next year
• I will ask all closed clients for a referral and review within 30 days of closing the deal

Goals can be split into short-term and long-term goals. Short-term goal lengths vary between days and weeks but do not exceed six months. Short-term goals can also be worked on simultaneously with long-term goals. Long-term goals can take up to six months or more to complete and require careful planning and perseverance. A mix of short-term and long-term goals will help you maintain motivation.

All goals are equally important; however, success will stem from how you prioritize each one. Slowly add on additional goals as you have the capacity and feel comfortable with the current progress of your current set of goals. Without identifying your business goals, you’ll leave your results up to luck to attain your business objectives.

4. Plan Your Marketing Strategies & Tactics

Developing marketing strategies and tactics and implementing them help you identify and locate your current value proposition in the real estate industry, along with specific timelines for execution. In addition to determining your overall business objectives and goals, your marketing strategy and plan should include the following:

• Pinpoint general marketing goals
• Estimate projected marketing budget
• Know your geographic farm area data and identify your target niche audience
• Analyze market competition
• Identify your unique selling proposition
• Establish a timeline and set your plan in motion
• Track your progress and readjust as needed

While a marketing strategy identifies the overall marketing goals of your business, developing marketing tactics will help you achieve those individual goals. They can include referral business tactics, retention efforts, and ways to acquire new customers. For example, you can offer incentives to anyone who refers your business, or you can implement new email drip campaigns to help increase lead conversion rates.

These tactics should have set key performance indicators (KPIs) to help you evaluate your performance. For instance, a KPI you can set for your business could be that referral business should exceed 20% of your lead generation sources.

If you’re unsure how to put together your marketing plan, check out our article Real Estate Marketing Plan Template & Strategy Guide and download the free template to get started.

Postcard campaign example (Source: ProspectsPLUS! )

If direct mail is part of your promotion strategy, services like ProspectsPLUS! can help easily create and distribute mailers to a targeted area. It also has options for postcards , brochures, newsletters , flyers, and folders. You can also send mailers to prospective clients by geographic or demographic farm areas through its campaigns. Check out its templates and mailing options today.

Visit ProspectsPLUS!

Read how our experts feel about this real estate direct mail service in our ProspectsPLUS! review .

5. Create a Lead Generation & Nurturing Strategy

Having a successful lead generation strategy will help you maintain business growth. Lead generation can be performed organically and through paid advertisements to attract and convert prospective clients. In addition to generating leads, agents should have systems to manage, nurture, and re-engage with contacts to maximize opportunities.

Generating leads through a multipronged approach is the best way to maintain lead flow. Use organic strategies like hosting an open house, reaching out to your sphere of influence, and attending networking events. Employ paid generation strategies, such as purchasing leads from a lead generation company or setting up a website to funnel potential clients. Your marketing strategies will directly correlate with your lead generation strategies.

Every lead is an opportunity, even if they don’t immediately convert into a deal. Effectively nurturing leads can make sure no opportunity falls through the cracks. Agents can nurture leads by continuously engaging and developing relationships with prospective leads . It’s important to provide prospective clients with a constant flow of essential and relevant information, depending on where they are in the real estate buying or selling process.

Here are the top lead generation companies for real estate agents and brokers:

Engage more efficiently with buyer and seller leads using Market Leader’s new feature Network Boost. Network Boost has shown a 40% increase in agents successfully connecting with leads. Market Leader social media experts design highly targeted and optimized ads for your Instagram and Facebook. As visitors engage with your ads, they will be prompted to complete a form and funnel directly into your Market Leader client relationship manager (CRM). This will also trigger an automatic marketing campaign that nurtures your clients and lets you know they are ready to engage with you personally. Try Market Leader’s Network Boost today.

6. Calculate Your Income Goal

Your income goal is one of the most critical items to be included in your business plan. While this may be more difficult for new agents who are still learning the business, it’s still necessary to estimate the amount of money you will earn for the year. Work with an experienced agent or mentor to help you estimate your monetary goals. For professional agents, review your previous years to judge your income goals for the upcoming year.

To calculate your income goal and the amount of work you’ll need to complete to get to that goal, you’ll need to have some basic number estimates:

• Net income: The amount of money you will put in your pocket after commission splits with your real estate brokerage.
• Fee split with brokerage: This is the agreed-upon commission split you have with your brokerage for each completed transaction. For example, if you have a 70/30 split with your brokerage, you will collect 70% of the commission, and your brokerage will receive a 30% commission for each deal.
• Estimate of completed deals per year: You also want to estimate the number of deals you intend to complete yearly. Remember that some months will be busier than others, so make sure to account for holidays, weather, and your schedule.

Real Estate Yearly Goal Calculator

By figuring out these numbers, you can give yourself a realistic number for your income goal. Compute the gross income commission (GCI) or amount of money you must make before the commission splits and the average profit per deal and month you’ll need to reach your goal.

For a more detailed breakdown of your yearly goal, download and use our yearly goal calculator. Input your information into the highlighted yellow boxes, and the spreadsheet will automatically calculate the GCI, total deal count, and gross income you’ll have to earn each month to reach your goal. Adjust the average gross commission per deal and brokerage split as necessary.

FitSmallBusiness Year Goal Calculator

For additional information on real estate agent salaries, review our article Real Estate Agent Salary: How Much Do Real Estate Agents Make?

7. Set Times to Revisit Your Business Plan

Business plans are only effective if you use them. A business plan is a roadmap for your business, and you’ll need to revisit it often to ensure you’re staying on track. It should be a constant resource to guide you through meeting your goals and business objectives, but it’s not necessarily set in stone if you need to make any changes.

Agents should revisit their business plans monthly to measure progress and make any changes to stay the course. If you find that you’re missing the times set for your goals, then you should continue to revisit your business plan regularly. Changing the business plan itself should occur annually once you can have a complete picture of your yearly performance. Evaluating the business plan can help you discover new strategies and ensure you have the appropriate resources for the upcoming year.

Overall status of sales activities in the dashboard (Source: Pipedrive )

Sales software like Pipedrive can help you track your overall business performance when revisiting your business plan. It presents company sales data in easy-to-visualize dashboards that track your business performance and contains forecasting tools to project future revenue. It can maintain company and team goals with progress tracking to keep goals top of mind.

Visit Pipedrive

Read how our experts feel about this real estate customer relationship manager (CRM) system in our Pipedrive review .

Why Agents Need a Real Estate Business Plan

A real estate business plan keeps you up to date on market developments and one step ahead of your competitors. It also enables you to test lead-generating tactics and create new marketing campaigns while keeping track of results over time. A solid business plan for a real estate agent presents the following:

• Where you are at the moment
• Where you would like to be
• How you’re going to get there
• How to evaluate and measure your performance
• When and when to correct the course

Real Estate Business Plan Examples & Templates

Real estate agents and brokerages don’t have to build their business plans from scratch, as many resources provide different examples. Business plan templates can also have different objectives. Some are used to secure financing or help you focus on lead generation, while others are single-page plans meant to get you started.

Here are five real estate business plan examples you can use to create yours:

Lead Generation & Income Plan

Market Leader business plan example (Source: Market Leader )

This business plan is from Market Leader, a third-party lead generation platform. It specializes in lead generation, marketing, and converting leads into customers with an attractive IDX (Internet Data Exchange) website and robust automation tools. Agents can also participate in purchasing leads through their lead products to receive a guaranteed number of leads per month.

A Single-page Business Plan

Business plan for real estate (Source: PngFind )

Agents who are new to writing a business plan can start small. Business plans do not have to be multipage to be effective. This single-page business plan helps identify a single goal followed by three areas to focus on and five objectives for each focus area. As real estate agents begin to feel comfortable with goal setting and completion, they can continue to add to this single-page business plan with duplicate pages, identifying additional goals.

Business Plan for Real Estate Brokers

Real estate broker business plan (Source: AgentEDU )

This robust real estate broker business plan is designed to address organization and management goals. It contains pages identifying personnel information like title, job description, and salary. The business plan also encourages the broker to identify operational goals for future personnel changes. It’s best suited for a broker with a larger team to help drive operational change.

Business Plan With Detailed Financials

Example of real estate agent business plan template (Source: FinModelsLab )

This multipage business plan contains eye-catching graphics and detailed company financial information for real estate agents and brokers seeking funding from outside investors. One of the last sections of the business plan is a financial planning section geared toward showing how viable your business is through your provided income statements, cash flow, and balance sheet reports.

Real Estate Developers’ Business Plan

Realtor business plan template sample (Source: Upmetrics )

Upmetrics’ real estate business plan templates are easy to edit and share and contain professional cover pages to help agents convert their business ideas into actionable goals. The business plans from Upmetrics are geared toward agents looking to transition into real estate development. This plan includes vital sections important for a developer to analyze, such as building location, demand for housing, and pricing.

Real estate CRM (Source: Market Leader )

Market Leader’s business plan is centered around driving more business through lead generation. It helps agents understand their lead sources, average sales price, and how much commission was earned in a given year. It also allows agents to set income and transactional goals for the following year.

Visit Market Leader

Bottom Line

Whether you are a new real estate agent or looking to grow your brokerage, writing a real estate business plan template will help you define the steps needed to build a successful business . It serves as a guided roadmap to help you achieve your business goals, identify areas of improvement, and provide guidance in all aspects of your business, from marketing, operations, and finance to your products and services. Business plans can help determine if your business is viable and worth the financial investment.

Frequently Asked Questions (FAQs)

What is a real estate business plan.

A real estate business plan is a document that presents an outline of your organizational goals. A business plan lays out future company goals and structured procedures to achieve them. Business plans commonly contain plans for one to five years at a time, though they can differ from investor to investor.

A real estate business plan will put you in a position to succeed while also assisting you in avoiding potential pitfalls. It serves as a guide to follow when things go as expected and when they diverge from the initial plan of action. Also, a real estate business plan will ensure that investors know the steps they need to take to succeed.

How do I jump-start my real estate business?

It is important to note that starting a real estate business is not a simple task. Before launching a firm in any field, entrepreneurs should spend numerous hours researching and developing a solid business plan. As you start your real estate business, use the following tips as guidance:

• Think about your professional goals
• Conduct extensive research
• Organize your finances
• Create a business plan
• Establish an LLC
• Make a marketing plan
• Create a website
• Start campaigns
• Keep track of leads
• Develop a network of connections

How can I grow my real estate business?

You can use multiple strategies and ways to grow your real estate business. They include:

• Assess your current situation
• Invest in your professional growth
• Establish strategic alliances
• Take advantage of omnichannel marketing
• Start blogging
• Create consistent social media profiles and campaigns
• Improve your website
• Consider working with a marketing company
• Optimize your signs and direct mail

About the Author

Find Jealie On LinkedIn

Jealie Dacanay

Jealie is a staff writer expert focusing on real estate education, lead generation, marketing, and investing. She has always seen writing as an opportunity to apply her knowledge and express her ideas. Over the years and through her internship at a real estate developer in the Philippines, Camella, she developed and discovered essential skills for producing high-quality online content.

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How To Start A Real Estate Business In 10 Steps [Updated 2024]

What Is A Real Estate Business?

Top 5 benefits of a real estate business, types of real estate businesses, 10 steps to start a real estate business, common mistakes to avoid, is real estate a profitable business.

Are you considering diving into the world of real estate in 2024? If so, understanding how to start and successfully manage a real estate business is crucial. This comprehensive guide is designed to walk you through the process, whether you’re a beginner or a seasoned investor looking to expand your portfolio. Real estate business opportunities are abundant and can offer substantial financial rewards if approached correctly. In this article, we’ll explore the foundational steps you need to take to build a thriving real estate business in today’s market.

At its core, a real estate business involves purchasing, managing, and selling real estate properties for profit. This can include residential homes, commercial properties, and even land. A successful real estate business doesn’t just focus on buying and selling; it encompasses market analysis, investment strategies, property management, and customer relations. The diversity in the real estate business model allows for various approaches, whether you’re interested in long-term rental income, flipping houses, or developing properties from the ground up.

Steady Income Stream: One of the most attractive aspects of a real estate business is the potential for a consistent and steady income, primarily through rentals. This can provide financial stability and a cushion against market fluctuations.

Property Value Appreciation: Over time, real estate typically appreciates in value. This long-term appreciation can result in significant profit when properties are sold.

Tax Advantages: Real estate investors benefit from various tax deductions, including depreciation, mortgage interest, and property tax deductions, which can significantly reduce tax liability.

Diversification of Investment Portfolio: Investing in real estate is an excellent way to diversify your investment portfolio , reducing risk and improving overall financial health.

Inflation Hedging: Real estate is often considered a hedge against inflation. As living costs rise, so do rental incomes and property values, helping to protect your purchasing power.

Understanding the different types of real estate businesses is essential for anyone looking to enter this field. Each type offers unique opportunities and challenges, and choosing the right path can significantly impact your success in the real estate business. Let’s explore some of the most common types:

Real Estate Wholesaler: Real estate wholesaling involves finding and contracting undervalued properties and then selling those contracts to potential buyers, usually other investors. Wholesalers profit from the difference between the contracted price and the sale price. This type doesn’t typically require significant capital, making it an attractive entry point for many newcomers to the real estate business.

Real Estate Flipper: Flipping properties is a well-known real estate business model. It involves purchasing properties, often in need of repairs or renovation, and then selling them at a higher price for a profit. This type requires a keen eye for potential, knowledge of renovation costs, and the ability to act quickly in competitive markets.

Buy and Hold: This long-term investment strategy involves purchasing properties and holding onto them for a considerable period. Investors typically earn money through rental income during the hold period, with the potential for significant capital gains when the property is eventually sold. This type of real estate business is often praised for its potential to generate passive income.

Real Estate Developer: Developers take on larger projects, often involving the purchase of land and the construction or significant renovation of buildings. This type of real estate business can be highly lucrative but also involves more significant risks and requires substantial capital and expertise in project management, construction, and market analysis.

Real Estate Agent: Real estate agents facilitate the buying and selling of properties for clients, earning a commission on the transactions. This role requires strong interpersonal skills, a thorough understanding of the real estate market, and often, a license to practice.

1. Market Research and Niche Selection

The first step in starting a real estate business is conducting thorough market research. This involves understanding the latest trends, identifying potential niches, and analyzing demographic data to determine where the best opportunities lie. Whether your interest lies in commercial real estate, residential properties, or a specific type of investment like fixer-uppers, choosing the right niche is crucial. It’s about understanding where you can add the most value and what type of real estate business aligns with your skills and resources.

2. Crafting a Comprehensive Business Plan

A detailed business plan is your blueprint for success. It should outline your business goals, target market, financial projections, marketing strategy, and operational plans. This plan will not only guide your initial steps but also help attract investors or secure financing. It should be a living document, adaptable to changes in the market or your business.

3. Legal Setup and Compliance

Setting up your business legally is critical. This includes selecting the right business structure, such as an LLC or corporation, which can impact your taxes and liability. Ensure that you obtain all necessary licenses and permits and understand the real estate laws and regulations in your area. Compliance is key to building a sustainable and reputable real estate business.

4. Financing Your Business

Securing the necessary funding is one of the most challenging aspects of starting a real estate business. This may involve tapping into personal savings, obtaining a bank loan, or finding investors. Understanding your financial needs and options is essential, as is a solid budgeting plan that accounts for both expected and unexpected expenses.

5. Building Your Brand and Online Presence

In today’s digital age, having a strong brand and online presence is crucial. This involves creating a professional website, engaging in social media marketing, and possibly running online advertisements. Your brand should reflect the values and mission of your real estate business, and your online presence should make it easy for potential clients and partners to find and interact with you.

6. Networking and Relationship Building

The real estate industry is built on relationships. Networking with other real estate professionals, potential clients, and investors is essential. Attend industry events, join real estate forums, and consider partnering with other businesses. Building strong relationships can lead to new opportunities and referrals.

7. Property Acquisition

Acquiring the right properties is the heart of your real estate business. This involves not just finding properties but also assessing their potential for profit, whether through rental income, resale, or development. It requires a good understanding of the market, negotiation skills, and an eye for properties that offer good value.

8. Effective Marketing and Sales Techniques

Marketing your properties effectively is key to your success. This could involve a variety of strategies, from digital marketing campaigns to traditional advertising and hosting open houses. Understanding your target audience and how to reach them is crucial. Sales skills are also important, as you’ll need to negotiate deals and close sales effectively.

9. Managing Properties and Client Relations

If your real estate business involves property management, doing this efficiently is essential. This includes regular maintenance, dealing with tenants, and ensuring a steady income flow from your properties. Good client relations are also crucial; satisfied clients are more likely to provide repeat business and referrals.

10. Growth and Expansion

Lastly, consider how you’ll grow and expand your real estate business. This could involve diversifying into different types of real estate, expanding into new geographic areas, or scaling up your investments. Continuous learning and adapting to market changes are vital for long-term success.

Overlooking Market Research: Failing to conduct thorough market research can lead to poor investment decisions. Understanding the market is key to identifying profitable opportunities.

Neglecting Legal and Tax Aspects: Ignoring the legal and tax implications of real estate transactions can lead to significant issues. Ensure compliance and take advantage of available tax benefits.

Poor Property Management: Ineffective property management can result in high vacancy rates and low profitability. Effective management is vital for maintaining property value and income.

Failing to Plan for Scaling: . Without a clear plan for growth, expanding your real estate business can be challenging. Strategic planning helps in scaling your business successfully.

Real estate has traditionally been viewed as a highly profitable venture. It offers various pathways to profitability, whether through long-term rental income, short-term property flipping, or large-scale development projects. However, success in the real estate business requires strategic planning, market understanding, and the ability to adapt to changing market conditions.

Starting a real estate business in 2024 offers exciting opportunities for both novice and seasoned investors. By following these 10 steps, understanding the potential for profit, and avoiding common pitfalls, you can build a successful and sustainable real estate business. Remember, the key to success in real estate lies in thorough planning, continuous learning, and adaptability to market changes.

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Guide to Portfolio Building

Starting and growing a real estate portfolio the right way, how to start a rental property business like a pro, investor's guide to the real estate contingency contract.

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Blog Business 5 Real Estate Business Plan Examples & How to Create One?

5 Real Estate Business Plan Examples & How to Create One?

Written by: Danesh Ramuthi Nov 28, 2023

Crafting a business plan is essential for any business and the real estate sector is no exception. In real estate, a comprehensive business plan serves as a roadmap, delineating a clear path towards business growth. 

It guides owners, agents and brokers through various critical aspects such as identifying target markets, devising effective marketing strategies, planning finances and managing client relationships.

For real estate businesses, a well-written plan is crucial in attracting potential investors, showcasing the company’s mission statement, business model and long-term income goals.

So, how can you write one?

Leveraging tools like Venngage Business Plan Make r with their Business Plan Templates to create your own real estate business plan can be transformative.

They offer a lot of real estate business plan examples and templates, streamlining the process of crafting a comprehensive plan.

Click to jump ahead: 

• 5 real estate business plan examples

How to write a real estate business plan?

• Wrapping Up

5 Real estate business plan examples

As I have said before, a well-crafted business plan is a key to success. Whether you’re a seasoned agent or just starting out, examples of effective real estate business plans can offer invaluable insights.

These examples showcase a range of strategies and approaches tailored to various aspects of the real estate market. They serve as guides to structuring a plan that addresses key components like market analysis, marketing strategies, financial planning and client management, ensuring a solid foundation for any real estate venture.

Real estate business plan example

There are various elements in a real estate business plan that must be integrated. Incorporating these elements into a real estate business plan ensures a comprehensive approach to launching and growing a successful real estate business. 

What are they?

• Executive summary: The executive summary is a concise overview of the real estate business plan. It highlights the mission statement, outlines the business goals and provides a snapshot of the overall strategy. 
• Company overview: An overview on the history and structure of the real estate business. It includes the company’s mission and vision statements, information about the founding team and the legal structure of the business. 
• Service: Here, the business plan details the specific services offered by the real estate agency. This could range from residential property sales and leasing to commercial real estate services. The section should clearly articulate how these services meet the needs of the target client and how they stand out from competitors.
• Strategies: A very crucial part of the plan outlines the strategies for achieving business goals. It covers marketing strategies to generate leads, pricing strategies for services, and tactics for effective client relationship management. Strategies for navigating market shifts, identifying key market trends and leveraging online resources for property listings and real estate listing presentations to help with lead generation are also included.
• Financial plan: The financial plan is a comprehensive section detailing the financial projections of the business. It includes income statements, cash flow statements, break-even analysis and financial goals. Besides, a financial plan section also outlines how resources will be allocated to different areas of the business and the approach to managing the financial aspects of the real estate market, such as average sales price and housing market trends.

Read Also: 7 Best Business Plan Software for 2023

Real estate investment business plan example

A real estate investment business plan is a comprehensive blueprint that outlines the goals and strategies of a real estate investment venture. It serves as a roadmap, ensuring that all facets of real estate investment are meticulously considered.

Creating a business plan for real estate investment is a critical step for any investor, regardless of their experience level Typically, these plans span one to five years, offering a detailed strategy for future company objectives and the steps required to achieve them.

Key components:

• Executive summary: Snapshot of the business, outlining its mission statement, target market, and core strategies. It should be compelling enough to attract potential investors and partners.
• Market analysis: A thorough analysis of the real estate market, including current trends, average sales prices and potential market shifts.
• Financial projections: Detailed financial plans, including income statements, cash flow analysis, and break-even analysis.
• Strategy & implementation: Outlines how the business plans to achieve its goals. This includes marketing efforts to generate leads, pricing strategies and client relationship management techniques.
• Legal structure & resource allocation: Details the legal structure of the business and how resources will be allocated across various operations, including property acquisitions, renovations and management.

Real estate agent business plan example

A real estate agent business plan is a strategic document that outlines the operations and goals of a real estate agent or agency. It is a crucial tool for communicating with potential lenders, partners or shareholders about the nature of the business and its potential for profitability.

A well-crafted real estate agent business plan will include

• Where you are today: A clear understanding of your current position in the market, including strengths, weaknesses and market standing.
• Where you aim to be: Sets specific, measurable goals for future growth, whether it’s expanding the client base, entering new markets or increasing sales.
• How can you get there: Outlines the strategies and action plans to achieve these goals, including marketing campaigns, client acquisition strategies and business development initiatives.
• Measuring your performance: Defines the key performance indicators (KPIs) and metrics to assess progress towards the set goals, such as sales figures, client satisfaction rates and market share.
• Course correction: Establishes a process for regular review and adjustment of the plan, ensuring flexibility to adapt to market changes, shifts in client needs and other external factors.

For real estate agents, a comprehensive business plan is not just a roadmap to success; it is a dynamic tool that keeps them accountable and adaptable to market changes.

Realtor business plan example

A realtor business plan is a comprehensive document that outlines the strategic direction and goals of a real estate business. It’s an essential tool for realtors looking to either launch or expand their business in the competitive real estate market. The plan typically includes details about the company’s mission, objectives, target market and strategies for achieving its goals.

Benefits of a realtor business plan and applications:

• For launching or expanding businesses: The plan helps real estate agents to structure their approach to entering new markets or growing in existing ones, providing a clear path to follow.
• Securing loans and investments: A well-drafted business plan is crucial for securing financing for real estate projects, such as purchasing new properties or renovating existing ones.
• Guideline for goal achievement: The plan serves as a guideline to stay on track with sales and profitability goals, allowing realtors to make informed decisions and adjust strategies as needed.
• Valuable for real estate investors: Investors can use the template to evaluate potential real estate businesses and properties for purchase, ensuring they align with their investment goals.
• Improving business performance: By filling out a realtor business plan template , realtors can gain insights into the strengths and weaknesses of their business, using this information to enhance profitability and operational efficiency.

A realtor business plan is more than just a document; it’s a roadmap for success in the real estate industry. 

Writing a real estate business plan is a comprehensive process that involves several key steps. Here’s a detailed guide to help you craft an effective business plan :

• Tell your story : Start with a self-evaluation. Define who you are as a real estate agent, why you are in this business and what you do. Develop your mission statement, vision statement and an executive summary​​.
• Analyze your target real estate market : Focus on local market trends rather than national or state-wide levels. Examine general trends, market opportunities, saturations, and local competition. This step requires thorough research into the real estate market you plan to operate in​​.
• Identify your target client : After understanding your market, identify the niche you aim to serve and the type of clients you want to target. Create a client persona that reflects their specific needs and concerns​​.
• Conduct a SWOT analysis : Analyze your business’s Strengths, Weaknesses, Opportunities and Threats. This should reflect a combination of personal attributes and external market conditions​​​​.
• Establish your SMART goals : Set specific, measurable, attainable, realistic and timely goals. These goals could be financial, expansion-related or based on other business metrics​​​​.
• Create your financial plan : Account for all operating expenses, including marketing and lead generation costs. Calculate the number of transactions needed to meet your financial goals. Remember to separate personal and business finances​​.
• Revisit your business plan to monitor & evaluate : Treat your business plan as a living document. Plan periodic reviews (quarterly, semi-annually or annually) to check if your strategies are advancing you toward your goals​​​​.
• Defining your mission & vision : Include a clear mission and vision statement. Describe your business type, location, founding principles and what sets you apart from competitors​​.
• Creating a marketing plan : Develop a marketing plan that addresses the product, price, place and promotion of your services. Determine your pricing strategy, promotional methods and marketing channels​​.
• Forming a team : Ensure the cooperation of colleagues, supervisors and supervisees involved in your plan. Clarify their roles and how their participation will be evaluated​​.

Related: 15+ Business Plan Examples to Win Your Next Round of Funding

Wrapping up

The journey to a successful real estate venture is intricately linked to the quality and depth of your business plan. From understanding the nuances of the real estate market to setting strategic goals, a well-crafted business plan acts as the backbone of any thriving real estate business. Whether you’re developing a general real estate business plan, focusing on investment, working as an agent, or operating as a realtor, each plan type serves its unique purpose and addresses specific aspects of the real estate world.

The examples and insights provided in this article serve as a guide to help you navigate the complexities of the real estate industry. Remember, a real estate business plan is not a static document but a dynamic blueprint that evolves with your business and the ever-changing market trends.

Crafting a strategic real estate business plan is a crucial step towards achieving your business goals. So, start shaping your vision today with Venngage.

Explore venngage business plan maker & our business plan templates and begin your journey to a successful real estate business now!

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How to Plan, Start and Grow a Real Estate Business: The Definitive Guide [2024]

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What is a real estate business?

A real estate business involves buying, selling, managing, operating, or investing in land and buildings. Real estate can also include natural resources below or above the ground, such as crops, minerals, or water.

Are you ready to take the leap and start your own successful real estate business? It can be challenging but don’t worry; we’ve got your back.

Our team has substantial experience in the real estate industry. We’ve bought and sold numerous houses, I’ve held a real estate broker’s license for many years, and I have mentored hundreds of people looking to get involved in real estate. And we’ve helped thousands of entrepreneurs and small businesses in the industry get started, operate, and grow their real estate businesses.

We’re excited to share our expertise with you through this guide. It has actionable insights, tips, and best practices to help you plan, start, and grow a successful real estate business.

Starting a business can be overwhelming, but we have everything you need to know here. So, let’s get started!

How to Start a Real Estate Business in 13 Steps:

Develop and refine your idea, write a business plan, hire an experienced business attorney, decide your legal business structure.

• Set up accounting and bookkeeping

Assess your finances

• Get a license

Purchase business insurance

Crunch the numbers, create a strong brand identity, build an online presence, create a sales plan, join a team, grow your business.

• Is a real estate business profitable?

The real estate market is enormous. For example, here are the relevant statistics you should know for the residential real estate market:

• 5.64 million existing and 822,000 new homes were sold in 2020, according to the most recent statistics from the National Association of Realtors.
• The Association of Real Estate License Law Officials (ARELLO) estimates about 2 million active real estate licensees in the United States. Nearly 1,400,000 are active members of The National Association of Realtors (NAR).
• According to NAR, the typical realtor is a 54-year-old white female who attended college and is a homeowner.
• According to NAR, Realtors’ median gross income was $54,330 in 2021 (an increase of more than ten thousand dollars compared to 2020).
• Over 106,548 real estate brokerage firms are operating in the U.S. (based on the most recent census numbers from the 2017 economic censuses).

According to the National Association of Realtors, annual sales have increased for over a decade. Sales declined in 2022 but are expected to rebound quickly.

Don’t be intimidated by the competition. Over the long term, a real estate career can be a lucrative small business.

People interested in how to start a successful real estate business often ask:

• How do you start a real estate company?
• How much does it cost to open a real estate business?
• How much do real estate business owners make?
• How successful is a real estate business?
• How do realtors get clients?
• Do I need a license to work in real estate as a realtor and broker?
• How do I name my real estate business?
• What does a realty company do?

So, if you have real estate business ideas , let’s take a look at each of the steps you should take to start a real estate business:

Real estate is an enormously competitive field. The chances are that your area already has at least one or two successful and popular real estate brokers and real estate companies actively engaged in the marketplace.

To have the best chance at success when starting a real estate business, you need to consider your strengths, weaknesses, and any areas you are particularly interested in or experienced with.

To develop and refine your business idea , you should be deeply familiar with the area you’d like to set up your real estate business.

Knowing the towns and surrounding areas where you’ll be helping people buy real estate is critical to running a real estate business. Still, it can also influence how you present yourself in the marketplace.

To pick your physical business location, look at the other realtors and real estate companies in the area to determine what your competition is doing in the marketplace and take stock of how these existing businesses are approaching things.

How do your natural strengths differentiate you from the other real estate businesses in the area?

Consider the following questions when starting your real estate business and refining your business idea. Getting outside opinions on some of these can be helpful – don’t be afraid to ask someone you trust what they think about your answers to the following:

• What skills set me apart?
• What is the purpose of my business?
• Who am I providing a service or product to?
• What is the maximum figure I can safely spend on this real estate business?
• Do I need outside capital? How much?
• What kind of work/life balance am I looking to achieve?
• What are my expectations for starting a real estate business?

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Find a niche for your real estate business

When starting a real estate business, consider what niche is right for your real estate company to give yourself a leg up on the competition.

You may have many business ideas, but narrowing your ideas is essential.

Do you want to sell to a particular group or segment of the population? Or perhaps you want to concentrate within a specific city area or specialize in buying and selling condos?

Maybe you want to be the area expert in short sales, only focus on rental property management , or perhaps you are your state’s go-to resource for landlord/tenant laws.

You’ll have a better chance of success starting with a specific target audience .

Ensure you set up your real estate business to meet a specific niche’s needs to avoid overspending and underwhelming all of your potential customers.

This is true for any small business, not just the real estate business. Our definitive guide on how to start a business suggests that aspiring entrepreneurs choose a niche for the best chance at success.

Competition is hard enough – make it easier to stand out with a specialty when you start a real estate company.

Here are some real estate business niches to consider when starting a real estate business:

• Residential real estate
• Resort and vacation homes
• Income properties (homes purchased by a real estate investor to generate income through rental or leasing)
• Commercially zoned real estate properties
• Property management
• Rental Property

You also should decide if you want to be a listing agent (help people sell homes) or exclusively represent real estate buyers.

You can also start other types of real estate businesses. Here are examples of real estate businesses beyond brokerage and related services:

• Buy and Hold investor
• Cleaning service provider
• Construction contractor
• Fix and Flip investor
• Home inspector
• Home repair service provider
• Home stager
• House sitter
• Money Lender
• Real Estate online training course expert
• Real estate photographer
• Private equity manager
• Property manager
• Real estate app developer
• Real estate blogger
• Real estate crowdfunding
• Real estate investing club
• Real estate marketing agency
• Real estate podcaster
• Real estate syndication
• Vacation rental service provider
• Vacation rental host

Although a business plan isn't mandatory, it can help crystallize your ideas.

A business plan outlines the financial and operational goals of your business . The business plan takes your business ideas, defines your company’s objectives, and provides specific information that shows how your company will reach those goals.

Your business plan doesn’t need to be 100 pages long. 100-page business plans are not standard in the real estate business. Keep your business plan short, and focus on the essential details. There are several great one-page business plan templates you can use.

Studies show that entrepreneurs who take the time to write a business plan are 2.5 times more likely to follow through and get their business off the ground. The work that goes into creating a business plan also helps new entrepreneurs build skills that will be invaluable later.

A traditional business plan has the following sections:

• An executive summary . This section summarizes the entire business plan, which is generally written last. Anyone reading your business plan will read this first, which is essential.
• An industry overview . This business plan section briefly overviews your business’s industry sector. It includes key players, industry trends, and estimates of industry sales.
• Market research and analysis . This looks at the target market for your product or service. A thorough real estate investment market analysis breaks down your market segments, geographic location, and needs. This section shows anyone reading that you thoroughly understand the people you plan to sell to or serve.
• Competitive analysis . Who are your direct and indirect competitors? How do they meet your target market needs, and how will you differentiate your product or services?
• Sales and marketing plan . What is your unique selling proposition ? What is your value proposition? How will you promote your business and persuade your target audience to buy? What are your marketing strategies? This section goes into detail on questions like these.
• Management plan . This section outlines your legal and management structure. It shows who your leadership team is and what your staffing needs will be. If you plan to seek funding, describe your advisory board here.
• Operating plan . This section includes your business location, facilities, equipment, and what kind of employees you’ll need. Any suppliers, manufacturing processes, and other operating details also appear here.
• Financial plan . This section is for all things financial. Three critical financial documents of any business go here: an income statement, a balance sheet, and a cash flow statement. And you’ll want to include your anticipated startup costs and any non-standard business models you plan to pursue. This is especially important if you’re talking to a real estate investor about investing in your real estate business.
• Appendices and Exhibits . Any information that helps support your business idea goes here, including target market studies, legal agreements, photos of your products, and more.

Read this definitive guide to writing a business plan for actionable insights and free downloadable business plan templates.

Find a mentor who can help review your business plan and answer other questions about starting a real estate business. Many seasoned realtors and brokers seek help with their real estate businesses or potential future partners.

Do market research

When starting a real estate business, you should understand the real estate market you’re entering before you dive into your business plan.

Business planning and market research help build a more successful real estate business.

Who are your direct competitors? Who are the top real estate sales agents working in your target niche? What makes them stand out from the rest of the competition?

When you start, much of the work relies on information gleaned from market research. Don’t skip this step even if you think the information you know about the industry is common sense. You will need the data from your market research to make informed decisions.

When starting a real estate business, you must undertake two major market research types: primary and secondary.

Primary market research is an essential first step. You’ll need to find the answers to questions like:

• What factors do potential clients consider when purchasing real estate, like a residence, business real estate, or land?
• What do they think is working, and what needs improvement in their current location?
• What do they like and dislike about the location they are currently in?
• What is their current mortgage/rent? Do they feel it’s reasonable and has good value?

You answer these questions by talking to potential customers. Surveys, focus groups, one-on-one interviews, conversations on social media, and questionnaires are the tools of choice for primary market research.

Business ideas can be fun, but most won’t survive the scrutiny of careful market research.

And don’t forget to talk to potential competitors too. You might get lucky and find a mentor who might be getting ready to retire.

Secondary market research is information pulled from existing sources.

You can identify competitors and define your real estate business market segments or demographics using currently available data. Leverage social media to find competitors. Critical attributes like age range, lifestyle, and behavioral patterns are data points that divide your target customers into segments .

Once you have this information, you’ll repeatedly refer to it as you build and launch your business. Make sure you spend a decent amount of time collecting data so your decisions are based on solid market research.

Plan for all of the necessary legal and logistical business considerations, and you’ll create a strong foundation for the prosperous future of your successful real estate business.

Can marketing psychology help you increase revenues?

Savvy marketers incorporate one or more psychological principles into marketing campaigns, content marketing, business strategy, and sales strategy. Here is everything you need to know about the principles and theories that can supercharge your marketing and influence people to buy your products or services.

Here's what you need to know to hire a good lawyer for your real estate business.

We’ve met and have sat across the table from many lawyers who are deal-killers. Overzealous and often inexperienced, they focus on the wrong issues and forget that their client needs the deal to move forward. When you talk with lawyers you’re considering hiring, ask them about one or two complicated negotiations and how they overcame obstacles.

Don’t make price your main criterion for hiring a lawyer.

Often, the least expensive lawyers are also less experienced – especially in the areas where you may need help. Paying a cheaper hourly rate might feel good initially, but in the end, you may end up paying far more than if you hired an experienced (more expensive) lawyer in the first place.

Ensure your business lawyer is familiar with the real estate business’s peculiarities and has experience representing other agents or brokers.

The best time to start a relationship with a lawyer is before you start your real estate business. A good lawyer will help you find the proper business structure for the company – and split ownership interests if you have co-founders – in ways that will protect everyone and give you flexibility.

There are many different types of legal structures for various business entities. For new business owners starting a real estate business, choosing the best one for them can feel overwhelming.

Real estate also has special business requirements to consider.

Most real estate agents are self-employed business owners affiliated with a licensed real estate brokerage firm. In this case, real estate licensees (agents) run independent businesses under a licensed managing broker’s supervision.

Opening your brokerage has some similar considerations but with an expanded focus. Opening your real estate brokerage firm in most states also requires a particular real estate license.

In both cases, you are starting a business.

Brokerage-seeking entrepreneurs select one of four legal business structures : sole proprietorship, partnership, limited liability company (LLC), or corporation. Here’s a basic breakdown of each:

• Sole proprietorship – this is the most basic business entity. A sole proprietorship means one person is solely responsible for a business’s profits and debts.
• Partnership – a partnership is a shared responsibility between two or more people who hold personal liability for a business.
• Limited Liability Company (LLC) – a structure that permits owners, partners, or shareholders to limit personal liability but includes tax and flexibility benefits associated with a partnership.
• Corporation – this is an entity legally considered separate from its owners. Corporations can own property, be held liable, pay taxes, and enter contracts.

Hire an expert to form your company and save time. Our trusted partners can help: Northwest ($39 + state fee) or Bizee ($199 + state fee) . We recommend Northwest. After evaluating the leading registration companies, Northwest stands out as our top choice due to its competitive pricing, exceptional customer support, and commitment to privacy. Pay just $39 + state fees and you'll get a free year of registered agent service, articles of organization, privacy, and client support from local experts.

Most real estate agents who work as independent contractors under the umbrella of a real estate brokerage firm operate as sole proprietors.

Additionally, single-owner real estate brokerage firms are also sole proprietorships.

If you start a business independently and opt not to incorporate or form an LLC , you are a sole proprietor by default. It’s easy and quick to form an LLC. For example, if you’re starting an LLC in Texas, this comprehensive guide on how to form an LLC in Texas can help you get started quickly.

Sole proprietorship and partnerships are the most accessible business forms because they form naturally. You don’t have to declare either one. Once you or you and one more person start selling goods or services, you’re automatically a sole proprietor or partner.

Companies and corporations require more effort to set up, but each has distinct financial and business benefits.

Consider your future business goals. You want to choose a business structure to accommodate your real estate business’s growth and expansion.

Once you decide on your legal business structure, register with the government (typically your state and sometimes your municipality) and the IRS.

Your business structure determines the forms you need and where to register.

You can find a complete list of the forms for each entity type on the SBA website . You can also find state-specific tax obligations  on the same site.

You may sometimes need federal, state, or local licenses and permits to operate. The SBA’s database lets you search for licensing requirements by state and business type. And remember to contact your municipality to see if local licensing or registration requirements exist.

You may also need to get a Tax ID, also known as an employer identification number (EIN), from the IRS.

This is not required if you’re a sole owner and don’t have employees. But you might want to get an EIN anyway to keep your personal and business taxes separate and ensure you can quickly hire when the time comes to expand your business.

The IRS has a helpful checklist to help you decide whether you need an EIN to run your business. If you do need an EIN, you can register online for free.

And if the name under which you’ll operate your real estate business differs from the business’s legal name, you may need to register a DBA or “assumed name” in your state. To learn more, here are the DBA requirements for U.S.U.S. states and territories.

Set up business accounting and bookkeeping

Understanding your business's cash flow is important and necessary for tax-filing purposes. Here's what you need to know about accounting and bookkeeping for your real estate business.

Business accounting is how your business records, organizes, interprets, and presents financial information. Accountants analyze the financial condition of a business to help the business owner make better decisions.

Bookkeeping is recording, organizing, storing, and retrieving financial information related to your business.

Accounting and bookkeeping do overlap. The main difference is that bookkeeping is how you record and categorize financial information. In contrast, accounting uses information through analysis, business strategy, and tax planning.

You’ll need to set up real estate accounting software to keep track of your finances when starting a real estate business.

Start by hiring a bookkeeper

A great bookkeeper is not the same as an accountant. Many business owners hire a bookkeeper with simple goals: keep me organized, pay my bills, and prepare for the work handed to the accountant.

Typically, bookkeepers are less expensive than CPAs (certified public accountants) and can be trusted to record and organize your day-to-day business and real estate transactions, keep your bank accounts balanced, produce simple reports, and assist with keeping your financial records in order.

Many real estate businesses will regularly use an outside bookkeeper, paid hourly, in the office to handle all entries, pay all the bills, and manage invoicing and receivables. Having help with this aspect of managing a small company can be indispensable, and the time it can free for a busy owner is invaluable.

Review your accounting processes annually and make adjustments

When starting a real estate business, do not underestimate the importance of a periodic review of your bookkeeping, accounting, and tax strategies. You neglect to look hard at the systems you have in place and the people managing those systems at your peril.

Are you doing your accounting most productively and cost-effectively? Does your CPA have the right real estate industry knowledge level to advise? Does your tax preparer have the skills and expertise to keep you (and your real estate investors) on the right side of the law? And finally (the big one), can you find ways to reduce your expenses while maintaining high-quality controls?

Take the time to reconsider your overall accounting strategy and find ways to strengthen and improve it.

When you start a real estate business, assessing your finances is crucial. These numbers include tracking your sales and commissions - but a smart real estate business owner must account for much more than sales and commissions alone.

Here's what you need to know about business finance and how to crunch the numbers for your new business.

Business finance uses your company’s financial information to help you manage your money and make your business operations profitable and sustainable. These must be in order, especially if your business has real estate investors.

You have many business financing options.

That’s important because you need to determine how you’re going to fund your new business and how you’ll grow it. You’ll have trouble building a sustainable, profitable business if you don’t understand the numbers.

Be extra careful to conserve your funds when starting a business. Don’t overspend.

Some purchases will be necessary and make sense for your business, but others, like expensive and unnecessary equipment, will threaten your small business’s survivability.

The good news is that most real estate agents and real estate brokers can run their businesses without considerable costs until they build a book of clients and can spend a bit more on equipment and supplies.

Today, most marketing and sales materials are sent digitally, saving much money on color printing costs.

You’ll need to set up a bookkeeping and accounting system to keep track of your finances. We talked about this above. This is important to understand your business’s cash flow and for tax-filing purposes. Your accounting and bookkeeping system will include income, expenses, capital expenditures, profit, loss, EBITDA, etc.

Get a real estate license

Whether working in New York, California, Texas, Illinois, or another state, you will need the appropriate license for your real estate business.

A real estate license

If you are entirely new to the business, you must get your real estate license before working as an official Realtor.

A real estate license in most states allows you to sell residential real estate. You’ll need separate certifications to sell business real estate (known as commercial real estate).

There are four basic steps you need to complete to get your real estate license and start working as a Realtor:

• Take the real estate pre-licensing course for your state. You’ll need your real estate pre-licensing course to take your state’s real estate exam. This grants you a real estate license. You’ll need to study the topics covered in the exam, including fair housing laws, property ownership types, fiduciary responsibilities, titles, deeds, contracts, and other necessary aspects of real estate law. Every real estate pre-licensing course will cover the rules and regulations for your state and the federal real estate laws in effect for all 50 states.
• Pass the real estate licensing exam. The exam length varies from about 1.5 hours to 3.5 hours based on the state you’re in. In most states, you must correctly answer 70% to 75% of the questions to pass. The state exam will cover the same topics in your pre-licensing courses. Most states have multiple-choice exams that test national real estate principles and laws and state real estate principles and rules.
• Submit your real estate license application.  Submit your license application to your state’s real estate board when you pass your exam. If there are application fees, you will need to include those. Be prepared for the possibility that your state may require all real estate license applicants to submit fingerprints for a criminal background check.
• Find a real estate broker to work for. Now that you’ve successfully passed your real estate exam, submitted your application for a license to your state’s real estate department, and paid any necessary fees, you must find a real estate broker to work for. Having your license associated with a licensed real estate brokerage is necessary to start working as a real estate agent . This is a critical decision that requires research and careful thought. Consider the benefits involved should you choose to work with a franchise brokerage or the benefits of working with a boutique brokerage instead.

A broker license

The basic steps for obtaining a real estate broker license are the same in most states:

• You’ll need a real estate license. You must complete the aforementioned education, pass your state’s licensing exam, and have thoroughly followed up with submitting your application and any necessary fees.
• Experience.  Realtors must typically have at least 2 to 4 years of experience working in the real estate industry before they are eligible to apply for a broker license. Additionally, some states require a real estate agent to complete a minimum number of real estate business transactions before becoming eligible for a real estate broker’s license.
• Education. Broker applicants in every state are mandated to complete pre-licensing education, which can vary from 45 to 90 hours before they are permitted to apply for a broker’s license.
• Broker’s exam. You must pass the broker licensing exam. The broker’s exam is lengthier and more comprehensive in every state than the exam for a real estate agent. It is essential to prepare well and study all the necessary materials, and there are courses available  to help you master the information on this in-depth exam.
• Application and Fees.   Complete the broker license application and pay any applicable fees. The fees range from $150 to $200, depending on your state.

You would be surprised how many new business owners forget to protect themselves and their businesses by purchasing insurance before starting their business.

It doesn’t help to buy insurance after starting your real estate business and incur claims.

Business insurance can cover property damage, theft, intellectual property lawsuits, and other incidents. Those can be very costly to small businesses, and you must protect yourself and your new business. This is especially true in real estate, where transactions include advice, guidance, and large amounts of money.

As a real estate services provider, you’ll want liability insurance to protect against possible claims. Your clients depend on your expertise and management; an unhappy client can always sue you if something goes wrong.

You’ll need workers’ compensation and unemployment insurance if your real estate business employs people. Coverage varies by location, and many general liabiliG.L. (GL) policies will cover workers’ compensation.

Here’s a good read on the different insurance types you should consider as a real estate business owner.

When you start a new business, even a home-based real estate business, understanding the numbers involved is crucial.

These numbers include tracking your sales and profits – but an innovative business must account for much more than sales alone.

Real estate sales tend to ebb and flow with the economy. That means you must prepare for inconsistent revenue’s ups and downs. You must know how much income you need to cover when things are leaner.

Plan for health and life insurance costs, and include potentially unpaid vacation time in your budget. Everyone needs a break at some point, and your budget needs to account for that.

When launching a brokerage of your own, or even if you’re starting as a newly licensed realtor, your business costs may include the following:

• your branding (logo, business cards , and real estate website)
• any license or permit fees
• fees for tools you use to market on social media and to build your web presence and social media presence
• deposits and rent for a physical work location if you plan to lease your workspace
• basic infrastructural costs like phone and internet service, invoicing software , etc.
• marketing and advertising costs, including the cost of marketing materials
• equipment costs or leases
• salaries or wages for any employees

Once you know how much it will cost to get you started, compare that with your funds. Then plan how you’ll make up any difference.

You’ll still incur costs no matter how small your business is, so pay careful attention to your budget.

Run calculations to determine how much it will cost to create your business. These numbers allow you to plan and consider your fees and what you should charge.

Real estate agents and brokers often market their services based on their brand and personality.

Crafting a memorable brand identity is crucial for any real estate professional.

As we’ve previously discussed ,

…your brand is your company’s public identity. Ideally, your brand should embody the best (and most essential) attributes of your company.

A brand represents how people know you and your business. It affects how customers perceive your reputation or the reputation of your company.

A strong brand is more important than ever in today’s competitive real estate market.

Ask yourself these important questions:

• What identity/personality do I want my real estate brand to project?
• Who will want my products or services?
• What can clients get from my services that they can’t get anywhere else?
• What can clients get from working with me  that they can’t get anywhere else?
• What are my brand values?
• What is the most important part of my customers’ experience?

Your answers to these questions (and others like them) will build your brand’s core. All of your future branding and rebranding decisions should expand on these ideas. Your business name , company logo , and real estate website design should all grow from the concepts you laid out here.

Far too many real estate companies have identical logos. Be sure your real estate logo is unique.

And don’t forget about real estate signage. Leave dull signs to others and instead get real estate signs that sell.

It’s a good idea to review your answers to the questions you answered periodically to ensure you can relay your brand value in person – and ensure the answers still apply.

Whenever you make personal appearances, carry business cards and brochures for people who want to learn more about your services.

And don’t forget to showcase your brand identity on social media consistently .

Before you delay building a strong brand identity for your real estate business because you might not have a considerable budget, rethink that plan.

You don’t have to spend thousands of dollars building a strong brand identity. Here are a few pricing guides that can help you identify the sweet spot for pricing:

• How much should a logo design cost?
• How much does a business card cost?
• How much should a brochure design cost?
• How much does website design cost?

The above guides cover free, cheap, affordable, and expensive options. You’ll find a price point that will fit your budget, regardless of the size of your budget.

You can learn more about the nuts and bolts of establishing and maintaining a consistent brand identity in Grow Your Small Business with Consistent Branding .

The web is an essential sales and marketing tool for all small businesses; real estate agents and brokers are no exception.

According to a study on homebuyers, 90% start their search online, and 40% contact a real estate agent after researching the web.

A web presence isn’t optional – you must be on the Internet to compete in the real estate market and build a successful real estate business. And since real estate services are typically local,  learn how to use Google My Business for your real estate business .

Customers choose real estate services based on the brand, the real estate professional behind the brand, and that person’s reputation. Your business website is often the first contact point between you and potential clients. Make that first impression a good one with a well-designed site by learning how to build a real estate website or by hiring a website designer and a developer to do that for you.

Ensure that your  website design truly embodies your real estate brand. Visitors should understand who you are, your services, qualifications, and reputation.

Your real estate website design and marketing copy should project your personal or broker’s brand voice and identity. Here are some suggestions:

• If you work as a real estate agent, include a photo and bio. Homebuyers want to know the person behind the site.
• Be authentic and avoid marketing “happy talk.” Speak the same language as your customers.
• Include high-quality examples of sales you’ve closed, and include social proof wherever possible.
• Give site visitors an easy way to get in contact with you.
• Show your listings with high-quality photos. Don’t hesitate to spend a few dollars on real estate photo editing services to maximize the impact of the images in your real estate listings.
• For your listings, consider including virtual house tours. This will help busy buyers assess your listings and save you time because people typically only want to see properties they’ve already put on a shortlist.
• Consider adding floor plans to your listings. Adding a floor plan to a real estate listing can increase click-throughs from buyers by 52%.

Aim to create a site that builds your brand, establishes your approach and style, and communicates your value proposition. As with other personality-driven fields (like real estate sales and other creative services), people are not just buying your services but purchasing a relationship with you.

Building a strong social media presence is key to connecting directly with your audience and drawing more visitors to your website. Create a presence by building a social media calendar and employing a real estate chatbot . The chatbot can assist clients in finding their perfect properties and maintain ongoing communication. These strategies will greatly enhance your brand’s visibility and foster trust with potential clients.

Remember that after you talk to people, whether in person or on social media, they’ll head to your website for more research.

When purchasing something as important as a home, trust is critical. Make sure everything about your brand conveys that you’re a trustworthy authority.

Finally, a robust website design powered by strategic SEO and well-planned strategies will lend credibility and legitimacy to your business. To learn more about great website design, check out Grow Your Small Business With These 7 Website Design Best Practices .

Market research remains a valuable tool every business owner should use when starting a new business venture.

When you’re ready to open your real estate business, having a well-researched plan will save you time, stress, and money in the long run. Your sales and marketing strategies will lay out your game plan to build your real estate brand and help create word-of-mouth referrals for your real estate company.

When creating a sales plan , understand your choices and consider which will work best for your business.

Start with the big one: how will you sell your real estate business services?

Real estate is often a personal, intimate service, so a hands-on approach is more effective and successful. Your website can help you generate leads, but your success is based just as much on the customers you say no to as the ones you say yes to.

What does this mean? It means getting up from the computer and on the phone.

A quick call with a potential client can establish whether you fit their needs well. It saves you and your customer time and effort if there isn’t a good match.

This pre-work leads to the second part of your sales plan: the in-person consultation. You want to meet with your clients so that you can work out in advance their needs, expectations, and any critical factors.

This phase’s ultimate goal is for your client to commit to working with you to buy or sell real estate.

Of course, here’s where the real work starts! No matter what service or product you offer, one crucial thing to remember is the post-sales experience.

A crucial part of your sales plan is what happens after you’ve completed the work. Post-sales customer care can be a place where you differentiate yourself from your competitors.

Many real estate agents and brokers find their clients through word-of-mouth from happy new homeowners. Create a great sales experience with your clients to increase the likelihood that you’ll get plenty of word-of-mouth referrals.

Word-of-mouth is a powerful marketing tool, especially for real estate agents. As we  wrote :

In fact, customers referred to a product are more valuable. A Wharton School of Business  study found that referred customers have a 16% higher lifetime value and are more loyal.

Consider your sales plan to capitalize on every opportunity to close the sale and generate future ones.

The first step in choosing to join or starting your brokerage is understanding the pros and cons of the two basic real estate brokerages: franchise and boutique brokerages.

National Franchise Brokerages

The first type of brokerage in the real estate business is called franchise brokerage.

Franchise brokerages work under the umbrella of large national companies. These companies grant brokers the right to use their company name, branding, and business plan. The franchise receives these benefits, and the larger company gets a percentage of every real estate deal closed by that office.

The same model works in industries that support real estate brokerages. For example, you can buy a franchise , run your own mortgage brokerage service, and offer your real estate clients mortgages.

Most franchisees are independently owned. However, each franchise brokerage must follow the corporate office’s rules and regulations.

There are many advantages to working for a franchise brokerage. The larger companies provide vast resources for marketing and branding, easy name recognition, and a larger online traffic percentage.

There are drawbacks, as well.

Ironically, the major drawback of working for a national franchise is their advantage’s flipside: their size.

In particular, new agents may find the impersonal nature of a large franchise to be off-putting. The consequent lack of mentoring and professional development can make breaking into a highly competitive market an added challenge. You can still find a mentor at a national brokerage, but it’s more complicated.

Boutique Brokerages

A small company usually owns boutique brokerages in the real estate business. A single broker manages them, and the agents in that brokerage typically work closely together.

There is an inherent advantage to ensuring each agent is working at their best, which means that newer agents can benefit from more experienced agents’ extra attention and direction.

Boutique brokerages are also more flexible with branding regulations. Agents have a creative license to build a brand without as many constrictions, which can help new agents create a standout brand for themselves from the start.

The primary disadvantage of working with a boutique brokerage is that the available budget for marketing materials and other resources is likely significantly lower than that of a big chain. Brand recognition may be harder to achieve and will be limited to the areas the boutique serves. Agents may find it challenging to maintain their reputation in other areas should they decide to do so, given the lack of brand awareness in other locations.

Brokerage as a Service (BaaS)

BaaS, or Brokerage as a Service, offers aspiring real estate professionals a one-stop solution for all their business needs. By providing a comprehensive package of essential tools and services, BaaS streamlines the process of entering the real estate industry, making it easier and more efficient than ever before.

The model typically includes a range of services, such as:

• Licensing and training
• Marketing and branding
• Listing management
• Transaction coordination
• Support and mentoring

BaaS offers several key advantages, making it an attractive option for newcomers and seasoned professionals.

• Lower costs : Traditional brokerage models often come with high fees and expenses. BaaS provides a cost-effective alternative with lower upfront costs and a pay-as-you-go structure that helps agents manage their budgets.
• Access to technology : BaaS platforms offer cutting-edge tools, including CRM systems, marketing automation, and data analysis. These resources can give agents a competitive edge in the market.
• Flexibility : BaaS providers allow agents to choose from various service packages, ensuring they only pay for their needed services. This flexibility makes it easy for agents to scale their businesses as they grow. And because agents are not attached to a physical office, they can work from anywhere.
• Support and mentorship : BaaS platforms often include access to experienced real estate professionals, offering invaluable guidance and advice to help agents navigate the industry.

While BaaS has many advantages, it also has trade-offs compared to other real estate models. Here are the key ways BaaS is better and worse than other models.

Why BaaS is better:

• Streamlined processes : BaaS simplifies launching a real estate career, allowing agents to focus on their clients and sales.
• Lower barriers to entry : The reduced costs and comprehensive support offered by BaaS make it easier for new agents to break into the market.
• Increased efficiency : The advanced tools and technology available through BaaS help agents manage their time and resources more effectively.

Why BaaS is worse:

• Less autonomy : Some agents may find the structured nature of BaaS restrictive, preferring the freedom of traditional models. However, if autonomy is important, you can choose white-label sponsorship plans that offer the benefits of a traditional brokerage and the freedom to build your brand.
• Limited customization : BaaS platforms may not offer the same level of customization and personalization as traditional brokerages.

Here are some actionable insights to help you get the most out of BaaS:

• Choose the right BaaS provider : Research different providers and select one that aligns with your goals, values, and desired level of support.
• Leverage the technology : Make the most of the tools and resources provided by your BaaS platform. This will help you work more efficiently and stay ahead of the competition.
• Network with other agents : Engage with your peers on the BaaS platform and learn from their experiences. This will help you develop your skills and expand your network.
• Invest in your brand : Don’t rely solely on the BaaS provider’s branding . Develop your personal brand to create a unique identity and stand out in the market.
• Seek mentorship : Take advantage of the support and guidance experienced professionals offer on your BaaS platform. Their insights can be invaluable in helping you navigate the industry

Real estate is a challenging industry to enter. Competition is fierce, and there's plenty of it.

Getting started can feel daunting, especially if you're fresh from earning your real estate sales agent or broker's license. Where to begin?

Networking is an essential marketing tool in any real estate professional’s toolkit. It should be a critical part of your marketing plan. Making connections and establishing credibility is crucial, but remember to choose quality connections over quantity.

Consider a targeted approach to finding people at networking events to help you realize your goals and build your sphere of influence based on those connections. You want to build a diverse network of individuals and businesses who can provide advice, assistance, sales leads , or help you “level up.”

Set up a CRM

Successful real estate businesses run on relationships. How well you track these connections and manage your contacts can dramatically affect how successful your business is and how quickly you grow your business.

What you need is a customer relationship management system or sales CRM .

Use a robust sales CRM to organize your leads, contacts, and network connections. As we said in our look at the Top 9 CRM for Small Business :

A customer relationship management system is a way to track and analyze all of the interactions you have with your customers and potential clients.

By collecting customer information, you can simplify and scale engagement by capturing all of the communications your company has with its customers.

You never know where your next referral or customer may come from. CRM allows you to shape the customer experience and optimize your interactions so you’re always ready for that next lead.

Contact your leads

Once you start tracking your leads in a CRM, you should reach out and engage with them. Studies  show that the longer a lead sits unanswered, the lower the possibility that it can be converted into a sale: from 80% if you reach out immediately to 20-35% if you wait 30 minutes or more.

However, before you contact a lead, do some research. Look at their prior real estate transactions. Have some questions ready, and be prepared to answer some, too. Write down answers to some of the common questions. Above all, be positive and open-minded.

The focus is on quality instead of quantity. Spend the time to create rapport with potential clients and talk to them like a friend. You are there to help.

And remember that while email is a common choice for business communication, real estate clients often prefer text messaging . To effectively reach potential clients, consider embracing a variety of personalized communication channels. Remember, tailoring your approach can significantly boost your conversion rates.

Ask for Referrals

Referrals are a significant source of leads for real estate businesses. Once you’ve established a successful relationship with a customer, don’t hesitate to ask for a referral.

Often, if you do your job well, no additional effort is required to get a referral. People are generally happy to share a positive experience working with someone. A brief reminder at the end of doing business with a customer can help nudge someone who might otherwise forget.

However, satisfied clients are just one source of referral business.

In addition to friends and family, business associates and people in your social and professional networks can help expand your pool of referrers.

When asking for a referral, don’t beat around the bush. A straightforward request is, “I would appreciate your help growing my business. Would you feel comfortable leaving me a review or referring anyone you know who needs my services?”

Many resources are available for making such a request, especially on the Internet. Consider using email campaigns featuring enticing perks or freebies for the first few clients to refer your business (remember to use an email address that matches your real estate business name and not just a personal email). Even, if you’re not an experienced email marketer, you can use AI writing tools to easily create engaging email copy.

You can also reach out to existing clientele through social media platforms, an easy and more personal way to engage with your connections.

When starting your own real estate business, there's much to consider.

But with this guide, you have a proven step-by-step plan that shows you how to start your own real estate business.

Top Resources for Real Estate Agents and Brokers

Here are helpful resources for real estate agents and brokers:

Inman News (leading independent real estate news service)

Realtor.org (official membership site for the National Association of Realtors (NAR)

Realty Times (leading news and advice site for real estate consumers and professionals)

Frequently Asked Questions on Home Inspections from the Society of Home Inspectors.

Tips for Selecting a Real Estate Professional – from the Federal Trade Commission.

Institute of Real Estate Management (international communication of real estate managers).

National Mortgage News (up-to-date information about the mortgage industry)

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How to Plan, Start, & Grow a Real Estate Business: 27 Essential Tips

Published: February 21, 2024

Starting a real estate business isn’t for the faint of heart, but there’s hope for 2024. It’s expected that housing prices will soften in certain parts of the country , and despite what we’re hearing, experts are not predicting a housing market crash .

If the real estate world is calling you, don’t be put off. Here’s a down-to-earth look at how to start your own real estate business, plus advice for avoiding mistakes that hijack momentum as you grow.

In this article:

It’s Never Too Late to Start Your Business

How to start a real estate business, how to start in real estate, how to grow your real estate business, common professional pitfalls (and how to avoid them).

For many new real estate agents , real estate is their second, third, or even fourth career.

Whether you’re a solo agent or new to a team, if you have dreams of outperforming the average real estate agent salar y ($44,507 per year), you need to start thinking like a business owner — and that means planning.

Free Real Estate Planning Template

Use this free template to plan the marketing, sales, and growth for your real estate business.

• Company Overview
• Territory Overview
• Market Penetration Strategy

You're all set!

Click this link to access this resource at any time.

• Craft your ideal personal plan.
• Write a real estate business plan.
• Build a consistent marketing plan.
• Get a website.
• Prospect consistently.
• Nurture leads.
• Have good time management.

1. Get a CRM.

Barry Jenkins is the broker-owner of the #2 Better Homes and Gardens Real Estate Team in the United States. He’s also a guy who hates inefficiency. “I, to a fault, like to make things easy. The reason my business is so successful is that it was built on the core principle of leverage.”

In order to bring that principle to life, Barry uses his CRM as a true lead conversion machine . A CRM is a Customer Relationship Management system that helps you organize your contacts and come up with actionable insights. With it, you can walk leads through relevant nurture campaigns based on lead source or automate the entire transaction process.

Get HubSpot's Free CRM for Your Real Estate Business

This is incredibly useful in real estate because the home buying process is so long with many different steps, multiplied across many agents and even more leads and customers.

Using a CRM to achieve boss-level organization is how Barry and his team sold 240 homes in a year. And it’s not all about the front end, either. Barry also uses his CRM to send automated onboarding drips to new team members and keep the business admin completely streamlined so that nothing important ever falls through the cracks.

2. Craft your ideal personal plan.

Before you set the right financial goals for your business, you need clear financial goals for your life.

Commissions are great, but — let's face it — we all came into this business wanting something bigger and better than what we had.

Consider the following questions:

• What time do you want to start work?
• What time do you want to finish?
• How do you want to feel each day?
• How much money do you want to make?

Top tip for defining your personal plan: Think about the real why. Running a successful real estate business is more about the impact on our lives or our families' lives and less about earning cash. Get to the real motivator behind work.

3. Write a real estate business plan.

Start writing your real estate business plan, paying special attention to the things that set you apart from other businesses in your area. Give it some real thought. This is where your personal and business identities can really come together to make profit-driving magic.

Start with these questions:

• How does selling real estate make a meaningful difference for you, your prospects, and even the world?
• What are the values and principles that drive your real estate business?
• How are those different from the real estate business next door?
• What are the three to five things you are going to own completely in the business?
• Who will take care of the rest?

Even if you’re just looking to take administrative work off your plate by hiring your first virtual assistant, it's critical to create that big-picture vision to keep your team inspired and avoid repeating unproductive patterns.

Top tip for writing your business plan: While creating that big-picture plan, make sure you also pay attention to the details. Writing your plan is an opportunity for you to explore ideas and see what’s feasible.

Featured Resource: Free Business Plan Template

Be the agent who’s always there, and you’ll automatically beat the herd.

8. Have good time management.

If you’re like most of us, a big part of the dream is to have more time and energy for the things that really light you up.

But most agents who set out to build a real estate business haven’t built that into the plan. They end up with a revolving door of team members and have to outwork the business problem du jour. But it doesn’t have to be that way.

For experts in automation, a motivating factor is saving time. By eliminating manual work through automation, you can free up time to focus on the activities that actually drive revenue.

The ability to do marketing automation further underscores your need for a CRM, which ends up acting as the engine that supports your efforts.

Top tip for introducing automation: Start with low-risk tasks that you don’t want to handle.

Don't forget to share this post!

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Powerful and easy-to-use sales software that drives productivity, enables customer connection, and supports growing sales orgs

BUSINESS STRATEGIES

How to create a real estate business plan

• Nirit Braun
• 10 min read

A real estate business plan is a strategic document that outlines the objectives, strategies and tactics a person or a team will employ when starting a business in the real estate industry. This comprehensive and clear plan not only defines the business' mission, vision and goals but also delineates the steps necessary to achieve them.

When starting a business, especially in a dynamic and competitive sector like real estate, a well-crafted business plan becomes an indispensable tool for success. Beyond helping business in their first steps to understanding how to start a service business , a business plan provides a structured framework that helps entrepreneurs make informed decisions, allocate resources effectively and stay focused on their objectives. By articulating the business' value proposition, rental business ideas , target market, competitive landscape and revenue streams, the plan offers a holistic understanding of the venture's potential and challenges.

Looking to kick off your real estate business? Create a business website today with Wix. These real estate agent websites can help you get started.

In this section, we'll break down the key components involved in crafting a successful real estate business plan in six steps.

Executive summary

Company and domain name

Market analysis and research

Operations plan

Marketing and advertising plan

Financial plan

01. Executive summary

An executive summary is a concise overview of your entire real estate business plan. It serves as a snapshot that captures the essence of your venture, highlighting its key components and objectives. A well-crafted executive summary should provide a clear understanding of your real estate business' purpose, market opportunity, strategies and potential for success. It's typically the first section of the business plan and should be written after the rest of the plan has been completed.

To write a clear executive summary for a real estate business, follow these steps:

Start with a brief introduction: Describe your business’ mission, vision and the services you intend to offer. Highlight what sets your business apart in the competitive real estate landscape.

Summarize the market demand: Explain what kind of opportunity you aim to address with this type of business . Mention key trends in the real estate industry that support the viability of your venture.

Identify your target audience: Whether it's first-time homebuyers, property investors or commercial clients, briefly describe their demographics and needs.

State the unique value you offer to clients: This could be exceptional customer service, a specialized focus or innovative technology solutions.

Outline your key real estate marketing strategies : Highlight how you plan to reach and engage your target market.

Provide a high-level overview of your projected financials: Include revenue projections, startup costs and funding requirements.

Introduce the key members of your team: Highlight how their skills contribute to the success of the real estate business.

Example of an executive summary for a real estate business: “ABC Realty is a dynamic real estate agency that specializes in helping first-time homebuyers navigate the complex property market. With a strong commitment to providing personalized guidance and support, we aim to simplify the buying process and empower our clients to make informed decisions. Our target market consists of young professionals and families looking for their dream homes in urban areas. Leveraging the latest technology and data analytics, we offer a seamless search experience that matches buyers with their ideal properties. Our marketing strategy involves a mix of social media engagement, local partnerships and educational workshops to establish our brand as a trusted resource in the real estate industry. Backed by a team of experienced agents and industry professionals, we are well-positioned to make homeownership dreams a reality while achieving sustainable growth and profitability. Our projected financials indicate a steady upward trajectory, with a goal of reaching profitability within the first two years.”

02. Company and domain name

Knowing how to name a business is crucial for a real estate venture and a key step before you register your business . It shapes your brand identity, influences client perceptions and establishes trust.

Additionally, selecting a suitable domain name for your real estate website is crucial for online visibility and accessibility. Your online presence should be in top form taking into account that 97% of homebuyers search for their homes online. Here's how to approach these decisions:

Company name

Should reflect your business' values and services

Keep it concise, memorable and easy to spell

Check for trademark conflicts to avoid legal issues

Consider using the free business name generator from Wix for inspiration

Be inspired by these real estate business name lists.

Domain name

Align it closely with your company name if possible

Choose a domain extension (.com, .net, .org) that's commonly recognized

Keep it short and free of complex words or hyphens

Ensure it's easy to pronounce and type

Learn more: How to make a website

03. Market analysis and research

Incorporating comprehensive market analysis and research into your business plan is essential for understanding the competitive landscape and formulating an effective business strategy. Conduct market research to identify trends, competitors and potential gaps in the market. Analyze your target audience's preferences, behaviors and pain points to tailor your services and marketing efforts accordingly.

Understanding the market dynamics allows you to position your real estate business strategically and offer unique value propositions that resonate with clients.

04. Operations plan

An operations plan outlines the logistical aspects of your real estate business, ensuring its smooth day-to-day functioning. This section should cover:

The physical location of your business office or headquarters

The size and layout of your office space

The equipment and technology required to run your real estate business

The roles, responsibilities and qualifications of your team members

05. Marketing and advertising plan

In the competitive real estate industry, a robust marketing and advertising plan is vital for attracting clients and establishing your brand presence. Your plan should encompass various marketing strategies , including:

Social media marketing, search engine optimization (SEO) and online advertising

Creating valuable content like blog posts, videos and guides

Establishing partnerships with local businesses and industry associations

Hosting events and workshops that educate clients about real estate trends

You’ll also need to develop a suite of brand assets to use in your marketing efforts, starting with a company logo. You can use a free logo maker or real estate logo maker to get a professional design in minutes. Learn how to make a real estate logo that suits your brand.

06. Financial plan

The average cost to start a real estate brokerage can range from $10,000 to $200,000 , so odds are you will need to secure financing. The financial plan outlines your real estate business' financial projections, funding requirements and path to profitability. It should include all your startup costs including starting an LLC , licensing, office setup, marketing materials and technology needs.

Next, estimate income based on property sales, commissions and other revenue sources. Alongside this outline ongoing operational costs, such as rent, salaries, marketing and utilities. Then take the time to specify how your business will be funded initially, whether through personal savings, loans or investor contributions. Finally, predict when your real estate business is expected to reach profitability based on your revenue and expense projections. You can include within this the exact ways to make money as a real estate agent .

Real estate business plan examples

Here are two templates for hypothetical real estate businesses, each including the main parts discussed in our how-to steps.

Real estate business plan template 1: ABC Realty

ABC Realty is a forward-thinking real estate brokerage focused on serving residential clients in urban areas. With a mission to simplify the home buying process for first-time buyers, we aim to provide personalized guidance and a seamless search experience. Our market research indicates a rising demand for affordable housing solutions and our team's expertise positions us well to address this need. Leveraging digital platforms and local partnerships, we're dedicated to establishing a brand known for trust, transparency and professionalism. Our financial projections show steady growth, with profitability projected within 18 months.

Company name: UrbanNest Realty

Domain name: www.urbannestrealty.com

Market analysis: Our research reveals a growing trend of Millennials seeking starter homes in urban areas.

Competitive landscape: Competitor analysis highlights the need for tailored customer service and simplified processes. We will tap into this by offering comprehensive support and leveraging technology to streamline transactions.

Location: A prime urban location with easy accessibility.

Premises: A modern office space designed for client consultations and agent collaboration.

Equipment: State-of-the-art computers, customer relationship management (CRM) software and virtual tour technology.

Staffing: Agents, property management experts and administrative staff.

Digital marketing: Social media campaigns, targeted online ads and search engine optimization.

Content marketing: Regular blog posts on home-buying tips, neighborhood insights and market trends.

Networking: Partnerships with local lenders, moving companies and interior designers to provide added value.

Events and workshops: Monthly homebuyer seminars and virtual property tours.

Startup costs: $60,000 (licenses, office setup, marketing materials)

Revenue projections (first year): $300,000

Revenue projections (section year): $500,000

Expenses: Monthly rent, salaries, marketing expenses and administrative costs

Funding: Personal savings and a small business loan

Profitability timeline: Projected within 18 months

Real estate business plan template 2: Empire Investments

Empire Investments is a dynamic real estate investment firm specializing in commercial properties. With an aim to provide high-value investment opportunities, we focus on acquiring and enhancing properties with substantial growth potential. Our strategy involves leveraging market trends, identifying undervalued assets and optimizing their value through strategic renovations and management. Our team of seasoned professionals ensures a comprehensive approach to portfolio management, driving investor returns. Our financial outlook is promising, with steady revenue growth projected over the next five years.

Company name: Empire Investments

Domain name: www.empireinvestmentsre.com

Market analysis: Our research highlights an increasing demand for mixed-use properties in urban areas.

Competitive landscape: Competitor analysis reveals a gap in the market for value-add properties. We'll focus on acquiring underperforming assets with the potential for repositioning and strong cash flow.

Location: Central business district for easy access to commercial properties.

Premises: A professional office space for meetings and deal analysis.

Equipment: Advanced financial analysis tools and property management software.

Staffing: Investment analysts, property managers, legal experts and administrative support.

Networking: Building relationships with commercial brokers, property managers and industry experts.

Content marketing: Thought leadership articles, market reports and investment guides.

Webinars and seminars: Monthly webinars on commercial real estate investment strategies.

Direct marketing: Targeted outreach to potential investors based on investment preferences.

Startup costs: $150,000 (licenses, office setup, due diligence expenses)

Revenue projections (first year): $1,000,000

Revenue projections (second year): $2,000,000

Expenses: Office overhead, salaries, marketing campaigns and property management costs

Funding: Combination of private equity, investor capital and personal investments

Profitability timeline: Positive cash flow projected within the first year, substantial returns expected over five years

Top benefits of writing a real estate business plan

Starting a business in real estate requires careful planning and a well-structured business plan offers a multitude of benefits that contribute to the venture's success. A business plan helps you in the following ways:

Attracting investors and funding: A well-developed business plan serves as a persuasive tool to attract potential investors and secure funding. It outlines the business's unique value proposition, market opportunities and growth strategies. By clearly articulating the revenue model and projected financials, entrepreneurs demonstrate their preparedness and potential returns, increasing the likelihood of obtaining an investment and raising money for a business .

Resource assessment: Writing a business plan helps entrepreneurs understand the resources, supplies and staff required to launch and operate the real estate business. This comprehensive assessment ensures that nothing is overlooked, from property acquisition and renovation costs to marketing expenses and administrative needs. By listing these requirements, entrepreneurs can plan for adequate funding and efficient resource allocation.

Strategic direction: A business plan outlines the business's short-term and long-term goals, providing a strategic direction for the real estate business. Entrepreneurs can define their target market, geographic focus and property types, enabling them to make informed decisions aligned with their objectives. This clarity prevents aimless pursuits and helps maintain focus on strategies that align with the business' vision.

Risk mitigation: A well-structured business plan anticipates potential challenges and outlines strategies to mitigate risks. Entrepreneurs can identify industry-specific challenges, such as market fluctuations or regulatory hurdles and devise contingency plans. By acknowledging these risks upfront, entrepreneurs can proactively address them and adapt their strategies as needed.

Operational efficiency: The business plan details the organizational structure, roles and responsibilities required to run the real estate business smoothly. Defining these elements helps entrepreneurs allocate tasks effectively and ensure that the right people are in place to execute the business strategies. This clarity enhances operational efficiency and minimizes the potential for confusion or overlaps.

Measurable progress: A business plan sets clear milestones and metrics to measure the real estate business' progress. Entrepreneurs can track key performance indicators (KPIs) against the projected goals, enabling them to assess their success and identify areas for improvement.

Real estate business plan FAQ

What is a business plan in real estate.

A real estate business plan is a document that outlines your goals and strategies for starting or growing a real estate business. It should include a market analysis, a business model, an operational plan and a financial plan.

Which real estate business is most profitable?

Can you become a millionaire from owning real estate, is it a good idea to start a real estate business, how do i organize my real estate business, want to create another type of business plan.

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Success From the Start: Developing a Powerful Realtor Business Plan

12 Minute Read

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The Ultimate Guide for Real Estate Agents to Create a Realtor Business Plan Template

Antonio Del Cueto, CPA

May 14, 2024

"By failing to prepare, you are preparing to fail," Benjamin Franklin's famous words ring especially true in the high-stakes world of real estate. This timeless piece of wisdom underscores the undeniable importance of a structured approach to any ambitious endeavor, particularly in crafting a realtor business plan .

In the competitive real estate market, success often hinges not just on what you do, but on how well you plan your actions. In this blog, you will unleash the essentials of creating a powerful realtor business plan that aligns your ambitions with actionable strategies, setting you on a path to success.

Further reading: Charting Your Course: Crafting a Winning Real Estate Business Plan

Why You Need a Real Estate Business Plan

Standing out isn't just an option. It's a necessity. A well-crafted business plan isn't merely paperwork. It’s your guide to discovering a successful niche in this competitive field.

Are you a broker or an agent? A solid plan serves as your roadmap, helping you navigate challenges and seize opportunities efficiently. It keeps you focused, ensuring every decision and marketing effort propels you towards your goals.

Set Your Real Estate Business Goals

Setting clear, achievable goals is fundamental in shaping your real estate career. It’s about knowing your destination before you start the journey. For a new real estate business, common goals might include:

• achieving a certain income goal through average commission per sale
• expanding client reach through strategic lead generation
• enhancing brand visibility with open houses and robust social media content.

These targets not only keep you on track but also ensure that you’re aligned with your clients’ needs and local market demands. As you create your plan, remember to consider listing expenses and other costs that could impact your financial milestones.

Realtor Business Plan Template

Using a real estate business plan template can make this process more efficient. A good template will guide you in structuring your plan to cover all necessary aspects, such as developing a client avatar, managing listing photos, and crafting strategies for buyers and sellers.

Key components of the template should help you identify what makes the biggest impact, such as referral systems, new listing strategies, and relationship management . To ensure you’re on track, don’t forget to include a vision statement and a review schedule.

Crafting Your Real Estate Agent Business Plan

Creating a robust real estate agent business plan is vital. It's time to create a comprehensive blueprint that not only guides you through daily tasks but also helps you grow into a successful real estate agent.

Your plan should encompass various strategies to help expand your reach and meet financial goals. You'll need to include a detailed marketing plan , identify key price points, and outline anticipated expenses to consider.

Calculate Your Budget and Resources

Start by estimating all startup costs, including office space, licensing, and technology. These are key investments that lay the foundation for your business. Allocate your budget strategically to areas that drive client acquisition, like marketing, ensuring you prioritize effectively.

Develop realistic financial projections to guide your business, helping you understand when you’re on track or need to pivot. This process is vital for any real estate broker aiming to reach financial goals and expand their business. Don’t panic and take the time to review your finances regularly.

Leveraging Local Demographics for Niche Targeting in Your Real Estate Business Plan

Identifying niche markets through demographic analysis.

Identify your niche market through thorough demographic analysis. Gather and analyze local demographic data to spot emerging lifestyle and consumer trends.

This insight allows you to match property types with the specific needs of different demographics, pinpointing untapped or growing niches. This helps create a focused and effective brokerage that caters to specific client segments.

Customizing Marketing Strategies to Reach Your Ideal Client

In crafting marketing strategies for your real estate brokerage, develop messages that resonate with your target demographic. Select appropriate marketing channels that ensure maximum reach and engagement with your ideal clients.

Engaging actively with the community and leveraging client testimonials are powerful ways to build trust and a strong reputation. This tailored approach will enhance your brokerage's visibility and appeal within your chosen niche.

Enhancing Services to Meet Demographic-Specific Needs

To better serve your target market in real estate, offer specialized services tailored to their specific needs. Build strategic partnerships that enhance your service offerings and create added value for your clients. Continuously update your knowledge and certifications to stay relevant and informed.

Adjust your business strategies based on market conditions and client feedback to ensure you’re always aligned with their needs. This approach helps you grow your real estate business and positions you as a trusted advisor who can make it happen. Remember to review your strategies periodically.

Integrating Technology and Real Estate

Virtual reality (vr) home tours.

VR home tours significantly boost client engagement by allowing potential buyers to explore properties remotely. This saves time and reduces business expenses, making it an integral part of creating a real estate business plan. By integrating VR tours, you successfully transform how you showcase homes.

Drone Photography

Drone photography showcases unique property features, elevating listing attractiveness and potentially boosting conversion rates. Investing time to identify the best tools is essential for any agent looking to improve their sales strategy. This method helps you craft listings that stand out in a competitive market.

AI-Driven CRM Systems

AI-driven CRM systems are revolutionizing how many agents manage their relationships and lead generation. These systems automate routine tasks, allowing you to focus more on personalized service and less on admin. They help you craft a strategy that integrates personal and business goals, keeping you flexible and informed about your progress.

Financial Strategies Beyond the Basics

Leveraging real estate investment trusts (reits).

REITs provide a straightforward path for investing in real estate through collective funds. These funds own and manage properties, returning profits as dividends. By understanding REITs, you can enjoy benefits like steady income and capital appreciation without the complexities of direct property management. These benefits make REITs an attractive option for diversifying your portfolio and gaining exposure to different real estate sectors.

Integrating REITs into your financial plan can create a roadmap to success. Invest the time to identify which REITs best align with your financial goals and track your progress annually. REITs offer flexibility and require less capital than buying property directly, making them a practical choice for many investors.

Sustainable Practices in Real Estate

Understanding the value of sustainable real estate.

Sustainable real estate is not just a trend. It's a smart investment. These properties offer long-term benefits such as reduced energy costs and maintenance savings. They often have regulatory advantages, including tax incentives and easier compliance with building codes, increasing their value. As environmental standards tighten, these green features significantly boost property values, making them highly desirable in the market.

Marketing Green Homes Effectively

In marketing green homes, it's vital to highlight key sustainable features clearly. Create a plan that uses educational marketing to explain the benefits and potential savings associated with features like solar panels and energy-efficient appliances.

Showcasing relevant certifications can also enhance credibility. As you learn strategies on effectively promoting green properties, your marketing efforts can lead to generating more leads—so stay flexible and adapt your strategies as needed.

Further reading: Learn How Real Estate Accounting Services Streamline Property Management

Building a brand in real estate, setting goals for your brand.

First, take the time to identify clear objectives for your real estate brand. Calculate expected returns to understand the impact of your strategies and conduct a thorough year-end review to know if you’re meeting your targets. This step is fundamental in crafting a guide to creating a successful business plan for real estate. It helps pinpoint areas you need to focus on to enhance your brand's growth.

Effective Storytelling in Marketing

Effective storytelling is key to engaging your audience. Craft relatable stories that resonate, incorporating client testimonials to build credibility. Always ensure your stories reflect the true essence of your brand. Certainly, don’t exaggerate or mislead.

Content Marketing Strategies in Real Estate

Elevate your content marketing by hosting informative podcasts and producing engaging videos. These lead-generating tools help establish you as a knowledgeable source in the real estate market.

Utilize visual platforms to showcase the unique aspects of properties you’re marketing. As a relationship manager, it's important to continuously adapt and innovate your strategies to stay relevant and appealing to your audience.

Key Takeaways

• Download the 2024 business planning guide : Make sure to access the latest resources tailored to your industry for informed decision-making and strategic planning.
• Year in real estate : Reflect on the trends, challenges, and successes of the past year to inform your business strategy for the upcoming months.
• Word of warning : Be cautious of potential pitfalls or market shifts and integrate contingency plans into your business strategy to mitigate risks.
• Connect with people : Network with a diverse group of professionals, including clients, fellow realtors, lenders, and industry experts, to expand your knowledge and opportunities.
• Know in the comments : Engage with your online community by encouraging feedback, questions, and discussions to build relationships and foster trust in your expertise.

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4 ways to invest in real estate

Key takeaways

• There are quite a few ways to go about investing in real estate.
• Owning your own home can be considered a real estate investment. So can buying an investment property and becoming a landlord.
• For many investors, real estate investment trusts (REITs) and/or real estate-focused mutual funds or ETFs might provide a more beginner-friendly way to get started.

Investing in real estate is often touted as a way to potentially earn extra income and help build wealth over time. But there’s more than one way to do it, and when you hear people talking about investing in real estate, they could be referring to any or all of a few approaches.

The good news is that you don’t have to be a magnate to be a real estate investor. In fact, you can get into the game with as little as a dollar. Read on for 4 ways to invest in real estate—plus how to tell which of these ways might be right for you.

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1. Investing in real estate by buying a home

Becoming a homeowner is one way to become a real estate investor. Homeowners often build equity in the home over time as they pay down their mortgage. Any potential increase in your home’s value after you purchase it can add to the value of your equity.

For many people, their home makes up the biggest slice of their net worth. For example, suppose you have $300,000 of equity in your home and an investment portfolio worth $200,000 (and no other assets or liabilities). In that case, real estate makes up 60% of your net worth.

Of course, becoming a homeowner is more than just an investing decision. Here are some of the considerations.

Pros of buying a home

• Build equity. Paying a month's rent buys a roof over your head for that period, but nothing more. Paying your mortgage also lets you build equity, or ownership value, in your home over time.
• Potential inflation hedge. As an owner, you may benefit from any potential increases in your home’s value. Although it’s never guaranteed that real estate will rise in value over time, over long periods real estate has historically been a strong hedge against inflation.
• Potential tax advantages. You may be able to deduct mortgage interest on your taxes (provided that you itemize your deductions). If your home rises in value while you own it, there are also tax rules that can help you keep more of those gains when you sell. (Read more about taxes when you sell your home .)
• Security, pride, and peace of mind. The nonfinancial benefits of owning a home can be substantial. Owning where you live means you don’t have to worry about a landlord raising rent or not renewing your lease—and that you can paint the walls whatever color you want. It can mean more predictability in your housing costs, if you have a fixed-rate mortgage, and more power and control over the place you call home.

Cons of buying a home

• High up-front cost. There’s no sugarcoating it: Buying a home can take a lot of money, and the difficulty of getting a large enough down payment together keeps many people out of the housing market. (Read more about how much down payment you really need , plus how to save for a down payment .)
• High ongoing costs. High mortgage rates have made homeownership even more expensive for new buyers in recent years. Property taxes, insurance, maintenance, and repairs only add to the bill.
• Significant commitment and responsibility. For some people, owning where they live isn’t the right lifestyle choice. If you’re unlikely to live in the same place for several years or you don’t want the headaches of repairs and maintenance, then you might decide it isn’t for you.
• No guarantees in your home's value. A dip in the broader real estate market or just in your local market could hurt the value of your home. If a downturn occurs when you need to sell, it's possible you won't recoup your original purchase price.

Is buying a home right for you?

Buying a home is not just an investing decision—it’s a budgeting and lifestyle decision too. Whether it’s right for you may depend on your finances, how long you’re planning to stay in one place, the cost of buying versus renting in your area, and other factors. Take a deeper dive into whether buying or renting is right for you .

2. Investing in real estate with REITs

Real estate investment trusts (REITs) are kind of like stocks, but for the real estate market.

They’re companies that own, operate, or finance real estate—like apartment buildings, shopping centers, offices, data centers, and more—but in many cases with shares that trade on exchanges, like stock. When you buy a stock, you become a partial owner in the underlying company. Similarly, when you buy a share of a REIT, you become a partial owner of the REIT’s underlying properties.

They offer a way to put real estate investing within reach of ordinary people.

Pros of investing in REITs

• Low up-front cost. Buying one share of a REIT is much more achievable for many investors than buying an entire property. If you invest with a broker that offers fractional shares , then you may even be able to start with as little as $1. (Learn more about fractional shares with Fidelity .)
• Potential to earn ongoing income. REITs are generally set up to pay out regular dividends to their investors. Many REITs act as landlords to underlying tenants, and so pass most or all of the rent they receive on to their investors. That said, it’s important to be aware that those dividends aren’t guaranteed, and a REIT can always reduce its dividend payments.
• Potential tax benefits. Most corporations face what’s called “double taxation,” because the company itself pays taxes on its income, and investors also pay taxes on their dividends and realized gains. REITs, however, qualify for special tax rules that most often allow them to pay no corporate income tax 1 (though REIT investors still generally owe taxes on any dividends and realized gains).
• Professional management. By investing in a REIT, you can access the potential benefits of real estate investing without the headaches of managing real estate. Choices like what properties to buy, what to do if a tenant is missing rent payments, or what to do if a property floods are in someone else’s hands.

Cons of investing in REITs

• Requires research. Just as with buying individual stocks, if you’re going to invest in individual REITs you need to do some work to understand the REITs universe and choose specific investments.
• Time and cost to build a diversified portfolio. While you could get started with as little as one share or $1, that doesn’t mean that you should . Instead, even just within the portion of your portfolio that you have earmarked for REITs, you’ll probably want to diversify—meaning you invest in a range of different REITs with different attributes. This increases the cost, both in dollars and in time, of building and maintaining a portfolio of REITs. And again, while a fully diversified portfolio may include some REITs, it may generally also include stocks and bonds, with diversification across many industries, sectors, and regions.
• Subject to potential market volatility. Because REITs trade on exchanges like stocks, they can be subject to market fluctuations in the same way that stocks are.
• Comes with unique risks. There is no guarantee that the issuer of a REIT will maintain the secondary market for its shares, and redemptions may be at a price that is more or less than the original price paid. Changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry.

Is investing in REITs right for you?

Investing in individual REITs might be right for you if you want to take a hands-on approach to real estate investing, but you don’t have the financial means or interest to buy investment properties. Just remember the importance of diversifying your portfolio across different types of investments, and also diversifying within the portion of your portfolio that's dedicated to REITs. Investors interested in learning more can explore Fidelity's real estate investing resources.

3. Investing in real estate with mutual funds or ETFs

Another option for investing in REITs is to buy one or more mutual funds or ETFs that hold REITs. Mutual funds and ETFs are professionally managed portfolios that combine your money with that of other investors, and invest it in a basket of securities. (Learn more about the basics of funds , including differences between mutual funds and ETFs.) They can offer a way to invest in a diversified, professionally managed portfolio of real estate without having to research a lot of individual REITs.

Pros of investing in real estate mutual funds and ETFs:

• Diversification among many REITs. When you buy one share of a mutual fund or ETF, you become a partial owner of the fund or ETF’s underlying portfolio. Because most REIT funds and ETFs own dozens or even hundreds of individual REITs, these investments can provide broad diversification within the real estate sector.
• Lighter lift on research and initial investment. Because they offer that diversification potential, you may be able to achieve your real estate investing goals by investing in just one or a few REIT funds or ETFs. That can mean less research, time commitment, and financial commitment on your end.
• Professional management. With a mutual fund or ETF, one or more professional portfolio managers handles the work of choosing the actual underlying REITs in the portfolio, plus, in the case of actively managed funds, monitoring the portfolio and making changes as needed.

Cons of investing in real estate mutual funds and ETFs:

• Still requires research. While it may take less research than choosing individual REITs one by one, you’ll still need to do some work to understand the universe of REIT mutual funds and ETFs, and to choose what funds or ETFs to invest in.
• Ongoing expenses. Mutual funds and ETFs can’t offer that professional management for free. Rather, they typically charge an expense ratio, which comes out of your investment. These can vary widely, so make sure to research expenses and costs closely if you decide to go this route.
• Depends on fund management team. As with buying individual REITs, with funds and ETFs a lot of the control is out of your hands. You can decide what fund or ETF to invest in, but you can’t control the exact decisions they make with your money while you’re invested.

Is investing in real estate mutual funds or ETFs right for you?

REIT mutual funds and ETFs might be right for you if you’re just getting started in the world of real estate investing. They can let you invest in a professionally managed portfolio and help you start to build your investing research skills.

If you invest with Fidelity, you have many options to choose from, including mutual funds and ETFs managed by Fidelity . You can also research mutual funds and ETFs Log In Required offered by all providers, not just Fidelity.

4. Investing in real estate by becoming a landlord

Becoming a landlord means buying a property and renting it out to tenants. It’s what first comes to mind for many people when they hear “real estate investing,” though it can potentially be more work to break into than the options mentioned above.

As with buying a home, becoming a landlord is an investing decision but also a lifestyle decision. So in addition to thinking about whether it’s the right fit for your finances, you need to consider whether it’s the right fit for your personality.

Pros of becoming a landlord:

• Build equity. As with owning the home you live in, owning a property that you rent out offers you the ability to build equity over time as you receive rental income and put it toward paying down the mortgage. And similarly, any increases in the property’s value may add to your equity.
• Potential inflation hedge. Owning an investment property also provides this same possible inflation-hedging benefit as owning your own home.
• Unique potential tax advantages. While the rental income landlords collect is generally taxable as ordinary income, there are tax deductions for a wide range of items—possibly including mortgage interest, property taxes, repairs, and depreciation, that can help reduce the tax bill.
• Long-term potential for cash flow. If rents go up over time, they'll be more likely to fully cover your costs and eventually even create an additional stream of income.

Cons of becoming a landlord:

• High initial cost. Just as with buying a home to live in, you’ll need to build up enough funds for a competitive down payment, plus show that your finances are strong enough to get approved for a mortgage.
• Lack of access to your cash. If something changed in your finances and you needed to free up cash, it might be hard to tap into the money that you have invested in your properties.
• High initial and ongoing effort. While rental income is sometimes referred to as “passive income,” there’s nothing passive about becoming a landlord. In addition to the work of finding, buying, and maintaining your property, there’s the work of finding and vetting tenants, managing your relationship with them, and making sure you’re abiding by any applicable laws and regulations.

Is becoming a landlord right for you?

Buying just one property takes a lot of cash. If you're considering this route, it's important not to neglect key areas of your financial life, like your emergency savings and retirement savings. Becoming a landlord might be the right choice for you if you are on strong financial ground, you understand and are able to take on the risks involved, and you have the necessary interest, temperament, and free time required to successfully manage all the ongoing commitments and relationships involved in being a landlord. (Learn more about whether buying an investment property might be right for you.)

Is real estate investing right for you?

Real estate investing can be rewarding, but in the end it’s just one way to get into the investing game. As mentioned above, keep in mind that most investors would be well served by a broad mix of different investment types spread across different sectors and industries. For many people, it makes sense for real estate to be part of that plan, but only one part.

Learn more about how to start investing , tips for choosing investments , and how to build a diversified portfolio .

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"investor bulletin: real estate investment trusts (reits)," us securities and exchange commission, office of investor education and advocacy, accessed on may 2, 2024, www.sec.gov/files/reits.pdf. this information is intended to be educational and is not tailored to the investment needs of any specific investor. as with all your investments through fidelity, you must make your own determination whether an investment in any particular security or securities is consistent with your investment objectives, risk tolerance, financial situation, and evaluation of the security. fidelity is not recommending or endorsing this investment by making it available to its customers. diversification and asset allocation do not ensure a profit or guarantee against loss. investing involves risk, including risk of loss. fidelity does not provide legal or tax advice. the information herein is general and educational in nature and should not be considered legal or tax advice. tax laws and regulations are complex and subject to change, which can materially impact investment results. fidelity cannot guarantee that the information herein is accurate, complete, or timely. fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. consult an attorney or tax professional regarding your specific situation. exchange-traded products (etps) are subject to market volatility and the risks of their underlying securities, which may include the risks associated with investing in smaller companies, foreign securities, commodities, and fixed income investments. foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. etps that target a small universe of securities, such as a specific region or market sector, are generally subject to greater market volatility, as well as to the specific risks associated with that sector, region, or other focus. etps that use derivatives, leverage, or complex investment strategies are subject to additional risks. the return of an index etp is usually different from that of the index it tracks because of fees, expenses, and tracking error. an etp may trade at a premium or discount to its net asset value (nav) (or indicative value in the case of exchange-traded notes). the degree of liquidity can vary significantly from one etp to another and losses may be magnified if no liquid market exists for the etp's shares when attempting to sell them. each etp has a unique risk profile, detailed in its prospectus, offering circular, or similar material, which should be considered carefully when making investment decisions. stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. investing in stock involves risks, including the loss of principal. a common stock reit is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. a reit is required to invest at least 75% of total assets in real estate and to distribute 90% of its taxable income to investors. stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. investing in stock involves risks, including the loss of principal. illiquidity is an inherent risk associated with investing in real estate and reits. there is no guarantee that the issuer of a reit will maintain the secondary market for its shares, and redemptions may be at a price that is more or less than the original price paid. changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry. because of its narrow focus, sector investing tends to be more volatile than investments that diversify across many sectors and companies. sector investing is also subject to the additional risks associated with its particular industry. changes in real estate values or economic conditions can have a positive or negative effect on issuers in the real estate industry. fidelity brokerage services llc, member nyse, sipc , 900 salem street, smithfield, ri 02917 1146473.1.0 mutual funds etfs fixed income bonds cds options active trader pro investor centers stocks online trading annuities life insurance & long term care small business retirement plans 529 plans iras retirement products retirement planning charitable giving fidsafe , (opens in a new window) finra's brokercheck , (opens in a new window) health savings account stay connected.

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Your 10 Step Guide to Building a Real Estate Investing Business Plan

Savvyinvestor.

• April 22, 2024

• Real Estate Scaling

Real estate empires grow from a blueprint, not last-minute hunches. This guide outlines how to create a real estate investing business plan to help you navigate market dynamics, seek funding, and add to your team so that you can successfully grow your business.

Let’s be honest, the idea of drafting a formal real estate investing business plan probably doesn’t excite you. After all, you got into real estate investing to scout deals and transform properties, not write novels full of financial projections.

But experienced investors know a solid plan spells the difference between profitability and major headaches. It forces clarity on direction and feasibility before you sink hundreds of thousands into property purchases and rehabs.

Think of your business plan as a blueprint for success tailored to your unique investment goals and market conditions. Whether you currently own a few rentals or are launching a full-fledged development firm, a plan guides decisions, aligns partners, and demonstrates viability to secure financing.

So how do you build one effectively without needless complexity? What key strategy areas require your focus? Let’s explore components that set you up for growth while avoiding common first-timer pitfalls. With realistic planning as your foundation, your investing journey can start smooth and stay the course.

What is a real estate investing business plan?

At its core, a real estate investment business plan is simply a strategic guide outlining your intended real estate approach. It defines target markets, preferred project types based on expertise, capital sources, growth strategy, key operational procedures, and other investment specifics tailored to your situation.

View your plan as an evolving document rather than a rigid static rulebook collecting dust. It should provide goalposts and guardrails as markets shift over time and new opportunities appear. You’ll be able to refer back to the plan to confirm that these new opportunities align with proven tactics that yield predictable returns.

Detailed upfront planning provides a sound foundation for confident direction. It protects stakeholders by identifying potential pitfalls and mitigation strategies before costly surprises trip up the stability of your real estate business.

So, it’s worth it to take the time and develop a customized plan aligned to your niche, resources, and risk tolerance. While initially tedious, the practice of putting together your strategic real estate business plan ultimately provides clarity and confidence moving forward.

Importance of having a business plan

Now that we’ve defined what a business plan is, let’s explore why having one matters — especially if you want to grow a successful real estate investment company.

Have you considered what originally attracted you to investing in properties? Whether it was rehabbing flips, acquiring rentals, or simply a lucrative hobby, your motivations and ideal path can get lost in the daily distractions of life. That’s where an intentional business plan provides clarity and conviction moving forward.

Reasons every real estate investor should prioritize planning are:

• Goals and vision : You might be wanting to quit your day job and focus on real estate full time, or you might simply want to generate some extra income on the side. Either way, a business plan forces you to define what success looks like for you.
• Due diligence : Creating a plan forces you to research the real estate markets you want to invest in — analyzing sales, rents, permits, zoning, demographics, and growth projections. This helps you objectively identify high-potential neighborhoods and properties rather than relying on hearsay or intuition.
• Funding and financing : Lenders and potential investors will want to review your business plan to evaluate the viability and profitability of your real estate investment business before offering any financing. A complete plan builds credibility and confidence with stakeholders.
• Guide decision-making : It’s easy to get distracted by the latest real estate seminar or shiny new construction techniques. But sticking to the parameters and strategies laid out in your plan prevents you from making hasty changes or going down rabbit holes.
• Identify potential risks : There are always things that can unexpectedly go wrong: what if interest rates spike and make your loans unaffordable, or your best tenants move out and unreliable folks move in? Brainstorming these scenarios in advance allows you to minimize risks and have contingency plans.
• Systemize operations : As you grow, how will you scale operations? A business plan helps you identify areas that will require attention as your business evolves, like creating maintenance checklists for rentals, standardizing lease agreements, or automating accounting procedures.
• Build the right team : Your business plan provides guidance on the team you’ll need for your business. Know if you require a real estate agent to help you find deals or a property manager to handle tenant complaints at 2 AM.
• Track progress : Your plan helps you compare things like actual rehab costs, rental occupancy rates, cash flow, etc. to your initial projections and determine whether you’re on track.  You can then adjust as needed.
• Maintain strategy : As you scale your operations with new hires or partnerships, you’ll want to maintain direction in alignment with your original business plan. For example, if you are considering new verticals like commercial real estate, does evaluation criteria match your proven risk metrics and return hurdles? A real estate business plan keeps everyone focused on the same goals as your business grows.

What to include in a real estate investment business plan

A good real estate investing business plan covers everything from business goals to financing strategy. Here are the ten key elements you should include:

1. Executive summary

The executive summary provides a high-level overview of your real estate investment business plan. It briefly describes your company mission, objectives, competitive advantages, growth strategies, team strengths, and financial outlook.

Think of it as the elevator pitch for your business plan and write it last after you have completed the full plan. Limit it to 1-2 pages at most.

Make your executive summary compelling and motivate investors or lenders to learn more. Be sure to also summarize your past successes and experiences to build credibility.

2. Company description

The company description section provides background details on your real estate investment company. Keep this section brief but use it to legitimize your business and team.

• Business model : Explain your core business model and investment strategies. Will you primarily flip properties, buy and hold rentals, conduct wholesale deals, or use another approach?
• Company history and achievements : Provide a brief timeline of your company’s history, including its formation, past projects, key milestones, and achievements.
• Legal business structure : Identify your corporate structure, GP/LP or sole proprietorship.
• Office location : Provide your company’s office address, which lends you credibility. If you are initially working from home, consider establishing a local PO Box or virtual address.
• Founders and key team members : Introduce your founders and key team members. Highlight relevant real estate, finance, management expertise, and credentials.
• Past projects : Provide an overview of any successful prior real estate projects your company or founders have executed.
• Competitive advantages : Explain unique resources, systems, or other strengths that give your company an edge over competitors. These could be proprietary analytic models, contractor relationships, deal access, or specialized expertise.
• Technologies and tools : Discuss technologies, software programs, or tools your company uses to streamline processes and optimize operations.

3. Market analysis

The market analysis section validates whether your real estate investment strategy makes sense in a given area.

Conduct detailed research from multiple sources to create realistic real estate investment market projections and identify potentially profitable opportunities.

Outline why certain neighborhoods, property types, or price points pique your interest more than others.

Your market analysis should dig deep into factors like:

• Local sales and rental price trends : Analyze pricing history and current trends for both sales and rents. Look at different property types, sizes, and neighborhoods.
• Housing inventory and demand analysis : Research the balance of supply and demand and how that impacts prices. Is the market undersupplied or oversupplied?
• Market growth projections : Review forecasts from real estate analysts on expected market growth or decline in coming years. Incorporate these projections into your analysis.
• Competitor analysis : Identify other real estate investors actively acquiring or managing properties in your target areas. Look at their business models and strategies.
• Target neighborhood and property analysis : Provide an in-depth analysis of your chosen neighborhoods and target property types. Outline positive attributes, risks, and opportunities.
• Demographic analysis : Analyze the demographics of potential tenants or homebuyers for your target properties. Factors like income, age, and family size impact demand.
• Local construction and renovation costs : Research materials and labor costs for accurate budgets and understand the permitting process and timelines.
• Regional economic outlook : Factor in projections for job growth, new employers, infrastructure projects, and how they may impact the real estate market.

4. SWOT analysis

SWOT stands for strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis means stepping back from day-to-day business to assess your broader position and path from a strategic lens.

Internal strengths for your real estate investment business may include an experienced team skilled in major rehab projects, strong contractor relationships, or access to private lending capital. Weaknesses might be limited staff for handling tenant maintenance issues across a growing rental portfolio or only having a small number of referral partners for deal flow.

External opportunities can come from accelerating population growth and development in your target market, new zoning favorable to multifamily housing, or record-low mortgage interest rates. Threats could be rising material prices that hurt your flip margins, laws imposing restrictions on non-primary residence owners, or an oversupply of new luxury rentals, allowing tenants to be choosy.

The SWOT analysis highlights strengths to double down on and risks to mitigate in the real estate market.

5. Financial projections

The financial plan helps for both internal preparation and attracting investors. For real estate companies, the financial plan section should cover:

• Startup costs : Include the expected startup costs involved to start your investment project, such as getting licenses and permits or paying for legal fees.
• Profit and loss forecasts : Create projected profit and loss statements that outline what you think your revenues and expenses will be over the next 3-5 years.
• Cash flow projections : Put together projected cash flow statements that show expected cash flow for each month.
• Return on investment projections : Project your company’s expected ROI over time under the different investment scenarios.
• Funding requirements : Based on your forecasts, detail exactly how much capital you will need to start and operate your business until it is profitable. Specify whether you plan to use debt or equity financing.

6. Investment strategy

The investment strategy outlines your niche — will you focus on flipping, buying rentals, commercial properties, or a blend? Define any geographic targets like certain cities or Postal/ZIP codes backed by your research on growth potential.

Specify your criteria for ideal investment properties based on your goals. Decide which factors — age, size, layout, condition, or price point — matter most to you.

You can also use this section to explain how you plan to find deals, whether that’s by scouting listed properties, attending foreclosure auctions, or networking to create off-market opportunities.

Clearly conveying your approach allows lenders and potential private investors to grasp your niche, planned pursuits, and process for finding deals. Having a strong strategy that summarizes how you locate, evaluate and capture deals matching your investing thesis can increase lender and private investor confidence in your ability to execute.

7. Marketing plan

Real estate marketing can’t just be an afterthought; it helps attract profitable deals, financing, and tenants to your business, making it a necessary component of your business plan to prioritize.

Components of your marketing plan can include:

• Networking:  Actively networking at local real estate meetups puts you directly in front of promising off-market opportunities and partnerships with motivated sellers, lenders and contractors in your community.
• Social media:  Consistently nurturing your social media presence can also pay off to help you find opportunities or potential investors.
• Direct marketing:  Never underestimate old school direct marketing — sending postcards to addresses with outdated “We Buy Houses” signs or calling the For Sale by Owners numbers from public listings can help you reach motivated sellers.
• Listings management:  Note that marketing does not end once you own property. To keep rental vacancies filled, leverage listing sites that can publish your units to a wide audience of prospective tenants.

8. Operations plan

Without systems, real estate investors struggle through renovations plagued by cost overruns, shoddy contractors who never call back, and frustrating tenants who always pay late. The operations component of your plan should consider aspects like:

• Renovations:  Ever lined up a contractor who juggles too many clients and leaves your projects languishing? Create standardized processes for accurate scoping, vetting subs, enforcing deadlines contractually, and maintaining contingency funds.
• Business technologies:  As your portfolio grows, tasks like tracking income, expenses, assets, and communicating with tenants can quickly overwhelm. Identify technologies early on that help centralize details to avoid getting swamped. Look into property management platforms that automate listings, tenant screening, digitized lease agreements, maintenance work order flows, and communications.
• Insurance:  Tenants or contractors can sometimes damage assets. Discuss  landlord insurance  policies to protect you against lawsuits, natural disasters, and major property repairs as you scale up.

9. Team structure

If you plan to grow your team beyond just yourself or a few partners, your business plan should outline your organization’s key roles and responsibilities. This helps you consider what positions you may need to fill as your company scales.

• Partners or co-founders:  These are the main decision-makers and equity holders. Outline their background, skills, and the value they bring.
• Property manager:  This person handles day-to-day management of properties, tenants and maintenance issues.
• Bookkeeper:  You may need daily help managing bank accounts, invoices, taxes, and financial reporting.
• Contractors and project managers : You’ll need trusted renovations, repairs, and landscaping contractors. Dedicated project managers help oversee large jobs.
• Leasing agents : As you grow and add more properties, leasing agents handle showings, applications, and signing new tenants.
• Real estate lawyers : Real estate investing requires proper legal filings and compliance. Lawyers can help you manage this risk.

10. Exit strategies

Every wise investor plans their exit strategy upfront before acquiring a property. Will you aim to flip the asset quickly or retain it as a rental long-term? What factors determine ideal timing and the right profit margin for you to walk away?

Build flexibility into your strategy, as markets move in unpredictable ways. Especially with flips, have contingency plans if your listing gets lowballs or no offers. Be willing to rent short-term, refinance and hold if possible, convert to condos, or just patiently wait until the market changes. Having reserves and backup options allows you to avoid a distress sale.

Also include plans for strategies after a property sale, like possibly reinvest in another property. You may want to use sale proceeds to reduce or clear outstanding debts, enhancing cash flow and financial standing.

Tips for your real estate business plan 

Now that you know what to include, consider the following four tips to help your real estate investment business plan stand out.

1. Be detailed and specific

Resist the urge to gloss over details as you put together your plan. Drill down on the specifics for parameters like:

• Target purchase and rehab costs.
• Timelines for completing projects.
• Minimum profit margins.
• Maximum allowable vacancy rates.
• Minimum cash reserves.

2. Refine and update regularly

Markets change, so don’t create your business plan and file it away. Review your plan regularly to see how market conditions and your actual results compare to projections.

Make adjustments as needed. Tweak your approach if your rehabs are going over budget or your properties aren’t selling as quickly as expected.

Aim to update your full plan annually at a minimum. Even if your overall strategy remains consistent, refresh the details around market factors, financials, tactics, risks, and projections.

3. Seek expert feedback

Before implementing your new real estate investment business plan, seek feedback from advisors who can identify potential issues or weaknesses.

Ask experienced real estate investors in your area to review your plan and provide constructive input. It’s also a good idea to share your plan and numbers with your CPA and legal counsel as well.

4. Keep it simple

While specificity is good, don’t over complicate your business plan to the point where it becomes difficult to follow. You want to inform readers without confusing them.

The goal is for stakeholders, such as co-investors, lenders, and partners, to easily digest your plan and understand it after a quick skim. Make it easy for readers to grasp your reasons behind focusing on a given area or project type based on market conditions and opportunity.

A property investment business plan fit to your goals

After finally finishing your business plan, you’re probably eager to dive into tangible investments rather than tweaking spreadsheets. But in the real estate industry, even experienced investors periodically step back and update strategies.

Approach your business plan as a living document that evolves as the market shifts, as you create new partnerships, or when you need to make changes in strategy. Set reminders to revisit quarterly and confirm your activities of today still align with the vision from day one.

Solid planning is proven to improve outcomes in dynamic industries like real estate investing. Though preparation isn’t glamorous, it pays dividends. Thoughtfully constructing your playbook puts the odds of executing successfully in your favor.

With a solid blueprint backed by your research, you’re now ready to capture the best real estate investment opportunities.

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How to Start a Business: A Comprehensive Guide and Essential Steps

Building an effective business launch plan

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Conducting Market Research

Crafting a business plan, reviewing funding options, understanding legal requirements, implementing marketing strategies, the bottom line.

• How to Start a Business: A Comprehensive Guide and Essential Steps CURRENT ARTICLE
• How to Do Market Research, Types, and Example
• Marketing Strategy: What It Is, How It Works, How To Create One
• Marketing in Business: Strategies and Types Explained
• What Is a Marketing Plan? Types and How to Write One
• Business Development: Definition, Strategies, Steps & Skills
• Business Plan: What It Is, What's Included, and How to Write One
• Small Business Development Center (SBDC): Meaning, Types, Impact
• How to Write a Business Plan for a Loan
• Business Startup Costs: It’s in the Details
• Startup Capital Definition, Types, and Risks
• Bootstrapping Definition, Strategies, and Pros/Cons
• Crowdfunding: What It Is, How It Works, and Popular Websites
• Starting a Business with No Money: How to Begin
• A Comprehensive Guide to Establishing Business Credit
• Equity Financing: What It Is, How It Works, Pros and Cons
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• Starting a Small Business: Your Complete How-to Guide
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• How to Start a Successful Dropshipping Business: A Comprehensive Guide

Starting a business in the United States involves a number of different steps spanning legal considerations, market research, creating a business plan, securing funding, and developing a marketing strategy. It also requires decisions about a business’ location, structure, name, taxation, and registration. Here are the key steps involved in starting a business, as well as important aspects of the process for entrepreneurs to consider.

Key Takeaways

• Entrepreneurs should start by conducting market research to understand their industry space, competition, and target customers.
• The next step is to write a comprehensive business plan, outlining the company’s structure, vision, and strategy.
• Securing funding in the form of grants, loans, venture capital, and/or crowdfunded money is crucial if you’re not self-funding.
• When choosing a venue, be aware of local regulations and requirements.
• Design your business structure with an eye to legal aspects, such as taxation and registration.
• Make a strategic marketing plan that addresses the specifics of the business, industry, and target market.

Before starting a business, entrepreneurs should conduct market research to determine their target audience, competition, and market trends. The U.S. Small Business Administration (SBA) breaks down common market considerations as follows:

• Demand : Is there a need for this product or service?
• Market size : How many people might be interested?
• Economic indicators : What are the income, employment rate, and spending habits of potential customers?
• Location : Are the target market and business well situated for each other?
• Competition : What is the market saturation ? Who and how many are you going up against?
• Pricing : What might a customer be willing to pay?

Market research should also include an analysis of market opportunities, barriers to market entry, and industry trends, as well as the competition’s strengths, weaknesses, and market share .

There are various methods for conducting market research, and these will vary depending on the nature of the industry and potential business. Data can come from a variety of places, including statistical agencies, economic and financial institutions, and industry sources, as well as direct consumer research through focus groups, interviews, surveys, and questionnaires.

A comprehensive business plan is like a blueprint. It lays the foundation for business development and affects decision-making, day-to-day operations, and growth. Potential investors or partners may want to review and assess it in advance of agreeing to work together. Financial institutions often request business plans as part of an application for a loan or other forms of capital. 

Business plans will differ according to the needs and nature of the company and should only include what makes sense for the business in question. As such, they can vary in length and structure. They can generally be divided into two formats: traditional and lean start-up. The latter is less common and more useful for simple businesses or those that expect to rework their traditional business plan frequently. It provides a vivid snapshot of the company through a small number of elements.

The process of funding a business depends on its needs and the vision and financial situation of its owner.  The first step is to calculate the start-up costs . Identify a list of expenses and put a dollar amount to each of them through research and requesting quotes. The SBA has a start-up costs calculator for small businesses that includes common types of business expenses.  

The next step is to determine how to get the money. Common methods include:

• Self-funding , also known as “ bootstrapping ”
• Finding investors willing to contribute to your venture capital
• Raising money online by crowdfunding
• Securing a business loan from a bank, an online lender, or a credit union
• Winning a business grant from a donor, usually a government, foundation, charity, or corporation

Different methods suit different businesses, and it’s important to consider the obligations associated with any avenue of funding. For example, investors generally want a degree of control for their money, while self-funding puts business owners fully in charge. Of course, investors also mitigate risk; self-funding does not.

Availability is another consideration. Loans are easier to get than grants, which don’t have to be paid back. Additionally, the federal government doesn’t provide grants for the purposes of starting or growing a business, although private organizations may. However, the SBA does guarantee several categories of loans , accessing capital that may not be available through traditional lenders. No matter the funding method(s), it’s essential to detail how the money will be used and lay out a future financial plan for the business, including sales projections and loan repayments . 

Businesses operating in the U.S. are legally subject to regulations at the local, county, state, and federal level involving taxation, business IDs, registrations, and permits.

Choosing a Business Location

Where a business operates will dictate such things as taxes, zoning laws (for brick-and-mortar locations), licenses, and permits. Other considerations when choosing a location might include:

• Human factors : These include target audience and the preferences of business owners and partners regarding convenience, knowledge of the area, and commuting distance.
• Regulations : Government at every level will assert its authority.
• Regionally specific expenses : Examples are average salaries (including required minimum wages), property or rental prices, insurance rates, utilities, and government fees and licensing.
• The tax and financial environment : Tax types include income, sales, corporate, and property, as well as tax credits; available investment incentives and loan programs may also be geographically determined.

Picking a Business Structure

The structure of a business should reflect the desired number of owners, liability characteristics, and tax status. Because these have legal and tax compliance implications , it’s important to understand them fully. If necessary, consult a business counselor, a lawyer, and/or an accountant.

Common business structures include:

• Sole proprietorship : A sole proprietorship is an unincorporated business that has just one owner, who pays personal income tax on its profits.
• Partnership : Partnership options include a limited partnership (LP) and a limited liability partnership (LLP) .
• Limited liability company (LLC) : An LLC protects its owners from personal responsibility for the company’s debts and liabilities.
• Corporation : The different types of corporations include C corp , S corp , B corp , closed corporation , and nonprofit .

Getting a Tax ID Number

A tax ID number is the equivalent of a Social Security number for a business. Whether or not a state and/or federal tax ID number is required will depend on the nature of the business and the location in which it’s registered.

A federal tax ID, also known as an employer identification number (EIN) , is required if a business:

• Operates as a corporation or partnership
• Pays federal taxes
• Has employees
• Files employment, excise, alcohol, tobacco, or firearms tax returns
• Has a Keogh plan
• Withholds taxes on non-wage income to nonresident aliens
• Is involved with certain types of organizations, including trusts, estates, real estate mortgage investment conduits, nonprofits, farmers’ cooperatives, and plan administrators

An EIN can also be useful if you want to open a business bank account, offer an employer-sponsored retirement plan, or apply for federal business licenses and permits. You can get one online from the Internal Revenue Service (IRS) . State websites will do the same for a state tax ID.

Registering a Business

How you register a business will depend on its location, nature, size, and business structure.  For example, a small business may not require any steps beyond registering its business name with local and state governments, and business owners whose business name is their own legal name might not need to register at all.

That said, registration can provide personal liability protection, tax-exempt status, and trademark protection, so it can be beneficial even if it’s not strictly required. Overall registration requirements, costs, and documentation will vary depending on the governing jurisdictions and business structure.  

Most LLCs, corporations, partnerships, and nonprofits are required to register at the state level and will need a registered agent to file on their behalf. Determining which state to register with can depend on factors such as:

• Whether the business has a physical presence in the state
• If the business often conducts in-person client meetings in the state
• If a large portion of business revenue comes from the state
• Whether the business has employees working in the state

If a business operates in more than one state, it may need to file for foreign qualification in other states in which it conducts business. In this case the business would register in the state in which it was formed (this would be considered the domestic state) and file for foreign qualification in any additional states.

Obtaining Permits

Filing for the applicable government licenses and permits will depend on the industry and nature of the business and might include submitting an application to a federal agency, state, county, and/or city. The SBA lists federally regulated business activities alongside the corresponding license-issuing agency, while state, county, and city regulations can be found on the official government websites for each region.

Every business should have a marketing plan that outlines an overall strategy and the day-to-day tactics used to execute it. A successful marketing plan will lay out tactics for how to connect with customers and convince them to buy what the company is selling. 

Marketing plans will vary according to the specifics of the industry, target market, and business, but they should aim to include descriptions of and strategies for the following:

• A target customer : Including market size, demographics, traits, and relevant trends
• Value propositions or business differentiators : An overview of the company’s competitive advantage with regard to employees, certifications, and offerings
• A sales and marketing plan : Including methods, channels, and a customer’s journey through interacting with the business
• Goals : Should cover different aspects of the marketing and sales strategy, such as social media follower growth, public relations opportunities, and sales targets
• An execution plan : Should detail tactics and break down higher-level goals into specific actions
• A budget : Detailing how much different marketing projects and activities will cost

How Much Does It Cost to Start a Business?

Business start-up costs will vary depending on the industry, business activity, and product or service offered. Home-based online businesses will usually cost less than those that require an office setting to meet with customers. The estimated cost can be calculated by first identifying a list of expenses and then researching and requesting quotes for each one. Use the SBA’s start-up costs calculator for common types of expenses associated with starting a small business.

What Should I Do Before Starting a Business?

Entrepreneurs seeking to start their own business should fully research and understand all the legal and funding considerations involved, conduct market research, and create marketing and business plans. They will also need to secure any necessary permits, licenses, funding, and business bank accounts.

What Types of Funding Are Available to Start a Business?

Start-up capital can come in the form of loans, grants, crowdfunding, venture capital, or self-funding. Note that the federal government does not provide grant funding for the purposes of starting a business, although some private sources do.

Do You Need to Write a Business Plan?

Business plans are comprehensive documents that lay out the most important information about a business. They reference its growth, development, and decision-making processes, and financial institutions and potential investors and partners generally request to review them in advance of agreeing to provide funding or to collaborate.

Starting a business is no easy feat, but research and preparation can help smooth the way. Having a firm understanding of your target market, competition, industry, goals, company structure, funding requirements, legal regulations, and marketing strategy, as well as conducting research and consulting experts where necessary, are all things that entrepreneurs can do to set themselves up for success.

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

U.S. Small Business Administration. " Calculate Your Startup Costs ."

U.S. Small Business Administration. “ Fund Your Business .”

U.S. Small Business Administration. “ Grants .”

U.S. Small Business Administration. “ Loans .”

U.S. Small Business Administration. “ Pick Your Business Location .”

U.S. Small Business Administration. “ Choose a Business Structure .”

Internal Revenue Service. “ Do You Need an EIN? ”

U.S. Small Business Administration. “ Get Federal and State Tax ID Numbers .”

U.S. Small Business Administration. “ Register Your Business .”

U.S. Small Business Administration. “ Apply for Licenses and Permits .”

U.S. Small Business Administration. “ Marketing and Sales .”

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Principal Real Estate Income Fund Announces Notification of Sources of Distribution

D ENVER, May 31, 2024 /PRNewswire/ -- The Principal Real Estate Income Fund (NYSE: PGZ) announces the sources of a distribution paid on May 31, 2024 of $0.1050 per share to shareholders of record at the close of business on May 16, 2024, pursuant to the Fund's managed distribution plan. This press release is issued as required by an exemptive order granted to the Fund by the U.S. Securities and Exchange Commission and includes the notice below sent to shareholders regarding the source of the distribution.

Statement Pursuant to Section 19(a) of the Investment Company Act of 1940

The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted thereunder. In accordance with generally accepted accounting principles ("GAAP"), the Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the current distribution as well as the fiscal year-to-date cumulative distribution amount per share for the Fund.

Current Distribution from:Per Share ($)%Net Investment Income0.051849.33 %Net Realized Short-Term Capital Gain0.00000.00 %Net Realized Long-Term Capital Gain0.00000.00 %Return of Capital or other Capital Source0.053250.67 %Total (per common share)0.1050100.00 %Fiscal Year-to-Date CumulativeDistributions from:Per Share ($)%Net Investment Income0.336445.77 %Net Realized Short-Term Capital Gain0.00000.00 %Net Realized Long-Term Capital Gain0.00000.00 %Return of Capital or other Capital Source0.398654.23 % Total (per common share)0.7350100.00 %

The Fund estimates that it has distributed more than its income; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund's investment performance and should not be confused with 'yield' or 'income'.

The timing and character of distributions for federal income tax purposes are determined in accordance with income tax regulations, which may differ from GAAP. As such, all or a portion of this distribution may be reportable as taxable income on your 2024 federal income tax return. The final tax character of any distribution declared in 2024 will be determined in January 2025 and reported to you on IRS Form 1099-DIV.

The amounts and sources of distributions reported in this 19(a) Notice are only estimates and not for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Presented below are return figures, based on the change in the Fund's Net Asset Value per share ("NAV"), compared to the annualized distribution rate for this current distribution as a percentage of the NAV on the last day of the month prior to distribution record date.

Fund Performance & Distribution Information

Fiscal YTD (11/1/23 – 4/30/24)Annualized Distribution Rate as % of NAV^11.34 %Cumulative Distribution Rate on NAV^6.62 %Cumulative Total Return on NAV*20.54 %Average Annual Total Return on NAV for the 5 YearPeriod Ended 4/30/2024**-3.22 %

^ Based on the Fund's NAV as of April 30, 2024.

*Cumulative fiscal year-to-date return is based on the change in NAV including distributions paid and assuming reinvestment of these distributions for the period November 1, 2023 through April 30, 2024.

**The 5 year average annual total return is based on change in NAV including distributions paid and assuming reinvestment of these distributions and is through the last business day of the month prior to the month of the current distribution record date.

While the NAV performance may be indicative of the Fund's investment performance, it does not measure the value of a shareholder's investment in the Fund. The value of a shareholder's investment in the Fund is determined by the Fund's market price, which is based on the supply and demand for the Fund's shares in the open market. Past performance does not guarantee future results. Shareholders should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Fund's Managed Distribution Plan.

Furthermore, the Board of Trustees reviews the amount of any potential distribution and the income, capital gain or capital available. The Board of Trustees will continue to monitor the Fund's distribution level, taking into consideration the Fund's net asset value and the financial market environment. The Fund's distribution policy is subject to modification by the Board of Trustees at any time. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.

Please retain this document for your records.

ALPS Advisors, Inc. is the investment adviser to the Fund.

Principal Real Estate Investors LLC is the investment sub-adviser to the Fund. Principal Real Estate Investors LLC is not affiliated with ALPS Advisors, Inc. or any of its affiliates.

ALPS Portfolio Solutions Distributor, Inc. is the FINRA Member.

PRE000416 5/31/2025

View original content: https://www.prnewswire.com/news-releases/principal-real-estate-income-fund-announces-notification-of-sources-of-distribution-302158914.html

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The best investment apps help you achieve wealth-building goals while diversifying your portfolio and providing the accessibility and convenience of mobile trading for the everyday investor. 

Here are the best investment apps available to traders, as chosen by Business Insider's editors in 2024.

Best Investing App Overall

E*TRADE is a one-stop shop for investing and the overall best app. Whether a seasoned investor or a beginner, you'll find what you want with this investing app. E*TRADE is also a great stock trading app for eliminating all stock and ETF trading fees.

E*TRADE's Core Portfolios is an app for trading stock and other assets if you're not interested in self-directed investments. After you fill out a risk profile to share your goals, time horizon, and risk tolerance, you'll get a recommended tax-sensitive portfolio of ETFs . E*TRADE also offers socially responsible ETFs and smart beta ETFs.

In addition to a more customized portfolio, these plans include one-on-one advising with a financial consultant.

What to look out for: While you can open an account and choose a Core Portfolio with $0 down, you'll need to fund the account with at least $500 to start investing. 

E*TRADE Review

Best for Automated Investing

Betterment Investing is one of the strongest stock apps and robo-advisors for low-cost trading, account flexibility, CFP access, and goal-based investing. It offers stock ETFs, bond ETFs, and cryptocurrencies. 

Betterment Investing offers cryptocurrency portfolios, socially responsible portfolios, tax-loss harvesting, personalized retirement plans, and options for charitable giving. You can use the investment app's goal-building strategies, such as retirement savings and income, creating a financial safety net, meeting cash goals, and building toward a major purchase.

What to look out for: You won't be able to access ongoing advisor access with a basic Betterment digital account, and only account holders with at least $100,000 get unlimited access with Betterment premium. Otherwise, ongoing financial guidance must be purchased for around $299 per session. 

Betterment review

Robinhood Investing is a top app for beginner investors looking for commission-free trading options for US-exchange-listed stocks, ETFs (and fractional shares of both), options, and cryptocurrencies. The stock trading app doesn't have a minimum account size requirement for stocks, ETFs, and options trades. 

For access to larger instant deposits, research reports from Morningstar, and NASDAQ market data, investors can upgrade to Robinhood Gold for a $5 monthly fee. The membership includes up to $50,000 in instant deposits, plus $1,000 of margin and a 5.00% interest on any excess margin used.

What to look out for:  Despite being one of the best investment apps for beginners, Robinhood doesn't offer a robo-advisor or automated features. Only hands-on traders should open an account with this investment app.

Robinhood review

Best Investment App for Mobile

Acorns invest.

As one of the best stock trading apps for beginners, Acorns Invest is the best investing app for mobile traders seeking automated trading strategies and customized ETF portfolios. The simplified trading platform provides account holders with beginner-friendly charting tools, easy portfolio diversification, and ESG portfolios. 

Acorns' easy-to-use interface is designed mainly for the convenience of investing through a mobile device. Users can open a regular individual brokerage account , IRA, custodial account, emergency fund, and cash account on the same platform.

What to look out for: Although fairly low-cost, Acorns is more expensive than some beginner-friendly investing apps. It requires at least a $3 monthly fee, and it offers plans up to $9 a month. 

Acorns Invest review

Best Investment App for Portfolio Customization

M1 Finance offers some of the best-advanced features in an investment app. It offers brokerage accounts, cash management accounts, and lending, all under the same roof. On the investing end, you can trade stocks and ETFs on your own or choose from among 60 different curated portfolios, thanks to its Pies feature.

The investing app's Pies gives you two options: build your investment strategy with stocks and ETFs or choose from pre-built pies (also known as Expert Pies). With M1 Finance's Expert Pies, you can sift through multiple portfolios to find the Pie that best aligns with your personal goals (like general investing, responsible investing, retirement investing, and more). 

Suppose you want to leave the maintenance of your portfolio to the professionals. In that case, you can use the investment app's auto-invest settings to schedule portfolio contributions and have M1 Finance automatically rebalance your investments when necessary.

You can access much more with an M1 Plus subscription. This includes a morning and afternoon trading window (standard M1 users' trades only execute during a morning window), custodial accounts, smart transfers, and more.

What to look out for: You can only invest in stocks, ETFs, and cryptocurrencies with M1 Finance. If you want to diversify your portfolio outside of these investment types, you may need to consider other investment platforms.

M1 Finance review

Ellevest is one of the best investing apps that encourages you to build an investment philosophy around your goals. Your access to these goals can vary based on your chosen membership plan.

Then, this female-forward online adviser takes it a step further and considers your gender, lifespan, and earning potential to create a custom portfolio of mostly ETFs. You can also opt for a socially responsible allocation if that's important to you.

As a  fiduciary , Ellevest automatically rebalances and regularly updates your performance forecast, taking into consideration fees, taxes, and the occasional market crisis to show you whether you're on track to meet each of your goals — and what you can do to make up for it if you're not.

What to look out for: You'll have to spring for the higher-tier offerings if you want more specific guidance for your goals beyond "build wealth." Ellevest does not offer automated tax-loss harvesting, which can be valuable for investors with higher balances. As with any investment app that charges monthly fees rather than per-account advisory fees, it's important to note how much of your balance they represent.

Ellevest review

Vanguard is an undeniable leader in investing as one of the top online brokerages. The stock trading app offers a large selection of investment options, self-directed brokerage accounts, and managed account options. But Vanguard is the best investment app for retirement plans, such as a traditional or Roth IRA. 

Vanguard offers SEP IRAs, 401(k) rollovers, individual 401(k)s, and SIMPLE IRAs . With a retirement account, you'll get access to numerous ETFs, such as Vanguard Total Stock Market ETF and Vanguard Total Bond Market ETF. You can also access Vanguard's All-in-One retirement funds.

On top of multiple retirement account options, Vanguard provides investors with a handful of retirement tools and additional resources, including tax loss harvesting features and ESG investing options. 

What to look out for: Vanguard's managed accounts, including its robo-advisor, are pricier. It also doesn't have many options for advanced traders. 

Vanguard review

Wealthfront

Wealthfront is an investment app for folks looking for socially responsible investing options, tax-loss harvesting, and low-cost automated trading. This investment app is fairly low-fee with only a $1 ($500 for automated investing) minimum. It also has a low-cost bond ETF portfolio. 

Socially responsible investing portfolios through Wealthfront are great for long-term investing goals. Moreover, these portfolios rely on Blackrock funds that track ESG indices. Socially responsible investing is available through Wealthfront's self-directed brokerage account and the investment app's robo-advisor. 

Wealthfront also offers IRAs, smart beta investing, US direct indexing, auto-rebalancing features, and a handful of crypto selections. 

What to watch out for: Wealthfront's robo-advisor platform has a higher minimum than competitor investment platforms. Plus, there's no ongoing human advisor access.  

Best Investment Apps Frequently Asked Questions (FAQs)

How much money you need to start investing with an app varies by platform and the kind of account you're opening. Some investment apps for beginners don't require any minimum investment, while others may require much higher minimum requirements. 

Yes. Like any investing platform, investing apps come with a degree of risk, as there's no guarantee that your investments will succeed. To mitigate this risk, you can invest in low-risk investments like bonds. Also, you can diversify your portfolio. 

Investment apps are regulated by the Financial Industry Regulatory Authority (FINRA) to ensure investment platforms are upholding industry standards and ethical business practices. 

To choose the best investment app for you, consider your investment goals, risk tolerance, and time horizon. You should also consider the kind of investments you wish to trade, your investment style, and other features you need.

Why You Should Trust Us: Our Expert Panel on The Best Investment Apps

Investing feels more accessible than it's ever been. Whether you prefer a hands-off approach or love to pore over market research and make trades — or fall somewhere in between — the best investment apps and stock trading apps can make it that much easier to reach your goals.

Our list of best apps for investing skews toward so-called robo-advisors — which use an algorithm to manage your investments — because, in many ways, these types of stock trading apps feel more accessible to average investors; fees and balance minimums are generally low, and your big-picture goals can help create an individualized and diverse portfolio that doesn't require much ongoing maintenance.

But we've also included a few of the best online brokerages that offer both active trading and automated portfolios. 

We interviewed the following three investing experts to inform our picks for the best investment apps:

• Brian Fry, CFP, founder at Safe Landing Financial
• Charlotte Geletka, CFP, CRPC, managing partner at Silver Penny Financial Planning
• Kaysian Gordon, MBA, CFP, CDFA, CPA, wealth manager at Clarus Group

What are the advantages and/or disadvantages of using an investment app?

"Using an investment app helps you better understand your financial situation. An app can greatly help to track progress toward financial goals and investment performance. [A disadvantage is that] using an app might lead to more trading instead of focusing on investing toward your financial goals."

Charlotte Geletka:

"An investment app can be great for keeping informed and up to date, but it can also allow you to make impulse decisions so proceed with caution."

Kaysian Gordon:

"It depends on how much guidance you're looking for. A robo-advisor can create a portfolio based on a series of questions you have answered. However, we know that as humans, we're way more complex than what a robo-advisor can provide."

Who should consider using an investment app?

"DIY investors should work with an investing app that best suits their situation. Whether that's the ability to trade investments online, have a robo-advisor, or [get] access to a call center. Every platform offers similar but different resources. The key is finding the one that works best for you."

Any other advice for those interested in investment apps?

"Choose the platform that simplifies the investing and rebalancing process and offers the best transparency. Find the app that provides the best user experience and greatest value to your unique financial situation."

"It goes back to doing the research and looking at the things that are important to you."

Our Methodology: How We Reviewed The Best Investment Apps

People may have varying risk capacities and financial goals they're working toward, but you'd be hard-pressed to find someone who doesn't prefer a cheaper way to invest. Therefore, the cost was a huge factor in determining our list. 

Personal Finance Insider's rating methodology for investment platforms examines companies that offer platforms that keep fees to a minimum (generally below 0.50% of assets under management, or AUM, for balances under $100,000) and offer a high-quality experience. In some cases, that means access to free financial planning tools — or financial planners themselves — and clear and easy-to-understand investment options.

We compared nearly two dozen brokerages, placing heavy weight on their advisory and trading fees, investment philosophy, investment options, and available account types. User experience is also important, so we looked at each brokerage's accompanying mobile app and scoured reviews on the Apple Store and Google Play to find out what regular users think of the product. 

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