Becoming a full time property rehabber is actually a very
easy process. So why do so many investors get it wrong, or
even worse, do nothing? Simple: NO BUSINESS PLAN!
Make no mistake about it: This is a business!. If you
invest time and capital with the aim of making a profit,
then you are in business, regardless of wether you purchase
one or fifty homes.
Before you commit a single dollar or a minute of your
time, you should step back and have a good think about what
it is that you want to achieve.
When developing your business plan, you may wish to
consider the following questions:
- How many renovations do you wish to complete in one year?
- Do you have sufficient capital/finance to achieve this
target?
- Will you sell for profit or hold?
- Do you wish to create an additional income stream?
Do you wish to do it as a full time job?
Why you need to write a business plan?
To plot the course
- To create the "big picture" - to recognise long term
direction and think about staying in business and not just
starting a business
To create a feasibility study
- Test the viability of your goals
- Is it going to be profitable
- What kind of financing will you need
- Recognise the barriers to your success
Become a better decision maker
- Anticipate problems
- The process of gathering information ahead of time will
allow you to make more informed decisions
- Your plan will provide you with an organised way to face
issues
For a reality check
- The plan will challenge some of your pre-conceived
assumptions
- Your plan will raise questions that will inspire
solutions before you need to face those problems
- It allows you to recognise what will be required of you
- Identifies your strengths and weaknesses and highlights
needed areas of assistance
Guide and measurement tool
The business plan will act as a guide throughout your
development and allow you to measure your progress against
planned expectations. You can make adjustments accordingly.
Your business plan should contain the following elements:
1. Executive Summary:
Include general information about your business; your
objectives; and your Start-Up details.
2. Market Analysis Summary:
Give a brief description of the market that you intend to
work in, and your acquisition strategy.
3. Implementation Plan:
Outlines your renovation strategy and process.
4. Sales Strategy.
5. Sales Projection
6. Projected Profits and/or Losses
7. Financial Plan.
8. Management Summary.
9. Important Assumptions.
10. Summary.
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