| Do you need a real estate development business | | | | government regulations, economy, and short-term |
| plan? You will if you want to obtain financing for your | | | | & long-term trends. If you have performed any |
| project. The first thing any lender or private investor will | | | | feasibility studies, you will want to include it as well as |
| want to see is your real estate development business | | | | the source of the feasibility study. |
| plan. This plan is specific for development of real | | | | The Marketing Plan |
| estate. Your business plan will tell your story in an | | | | The main objective of any developer is to sell the |
| organized and concise manner. It will provide all of the | | | | homes, the stores or the hotel. And this can only be |
| critical information needed to judge your project. A | | | | accomplished with a well thought out marketing plan. |
| well-written and professional looking business plan is | | | | Who will handle your sales efforts? Will they be |
| crucial for your success in obtaining financing. | | | | in-house or out-sourced? How will the pricing/leasing |
| Most real estate developers make the mistake of not | | | | room rate be determined? Will there be any brand or |
| creating a good business plan or even getting | | | | strategic partnerships involved? What is your |
| professional assistance in developing their business | | | | marketing budget (in a table format). |
| plan. They will use the excuse of not having enough | | | | The Competition |
| time or they can't find the data. Don't let that be your | | | | Any lender or investor in your project will want to feel |
| excuse! All a real estate development business plan | | | | comfortable that you know who your major |
| really is, is the answers to a bunch of questions! You | | | | competitors are. They will want to know that you have |
| will learn what to include in your real estate | | | | done a thorough competitive analysis. Name and |
| development business plan. | | | | describe all key competitors. What are their strengths |
| Executive Summary | | | | & weaknesses? How will your project compare? |
| The Executive Summary should provide a complete | | | | What are your projects strengths & |
| overview of your project & company. This will | | | | weaknesses? |
| include: | | | | The Management Team |
| - Brief description of the overall project. For example, | | | | In this section, you will want to go into further detail |
| develop a 4 star, 250 room luxury hotel in downtown | | | | about the principals involved. You will need to highlight |
| St. Louis, Missouri. | | | | the team's relevant experience and previous |
| - Brief overview of the company - Is it a corporation, | | | | successful projects? |
| LLC, etc? Who are the owners and/or board | | | | Well what if this is your first project? |
| members? Brief company history & experience | | | | Then you want to make sure that you have an |
| level. | | | | excellent support team in place. These team members |
| - Brief summary of the market & demand.How | | | | should have the experience that you are lacking (team |
| large is the market and at what stage of development | | | | members doesn't necessarily mean company |
| is the market currently in? | | | | ownership). These team members can be legal, |
| - Brief summary of the competition and what | | | | accounting, construction, architecture, etc. So for this |
| separates you from them? | | | | section of the real estate development business plan, |
| - Brief description of key Management team members. | | | | you will want to include: |
| - Key financials - total acquisition & construction | | | | - Resumes/biographies on all principals & |
| costs, nature & use of funds, future revenue | | | | management team members |
| & expenses. | | | | - Organizational chart |
| The Executive Summary should be brief and an outline | | | | - Board of Directors |
| to your overall business plan. Now lets take a look at | | | | The Financials |
| the specifics in the real estate development business | | | | Since the primary objective of your business plan is to |
| plan. | | | | obtain financing, you will want to address what type of |
| The Company | | | | financing you are seeking and how much capital is |
| This part of the business plan should give full details | | | | needed. You will want to state how much money you |
| about how and when the company was formed. It | | | | have on hand (and where did you get it from) and |
| should indicate the legal structure of the company, as | | | | how much money you have spent to date. |
| well as where it is licensed. A key piece of information | | | | Everything that you have put into your real estate |
| about the company is the company owners. Name all | | | | development business plan up to now should support |
| of the principals and their percentage of ownership. | | | | your financial assumptions and projections. You will |
| Project Description | | | | want to include a statement that shows a breakdown |
| This section of the plan is where you explain your | | | | of construction and acquisition costs. You will want to |
| project in detail. Remember, you are selling your | | | | include an Income statement that will outline income |
| project so that you can get the funding you need! Is | | | | and expenses for the next five years after |
| this a hotel development project? Is this a luxury, | | | | construction. It should follow GAAP (Generally |
| single-family home community project? Is this a | | | | Accepted Accounting Principles) and contain specific |
| multi-tenant shopping center? Give all the details about | | | | revenue & expense categories. You will want to |
| the project. For instance, lets continue with our hotel | | | | include a Balance Sheet and Cash Flow Analysis. |
| example. You will want to name the other amenities | | | | Now that you know what to include in your real estate |
| that will be located at the hotel, such as swimming pool, | | | | development business plan, make sure that your |
| tennis courts, the number of conference rooms, etc. | | | | business plan presents itself in a professional manner. |
| How many of the rooms will be suites? What other | | | | - Use a table of contents, with numbered pages. |
| features & benefits will your project have? | | | | - Make sure that the writing style is simple and |
| You will also want to address where you currently are | | | | conversational. |
| in the project. Has the land been purchased or | | | | - Don't use long or complex sentences. |
| optioned? Where are you in the permitting process? | | | | - Paragraphs should be short & simple. |
| Has the architecture plans been drawn? How much | | | | - Use graphics & pictures but don't get carried |
| time & capital has been spent on your project to | | | | away. |
| date? | | | | - Use charts & tables to back up your data. |
| The Market | | | | - State all sources of your data and studies. |
| In this section you will provide the market type & | | | | - Proofread your real estate development business |
| size, current & potential growth rate, and relative | | | | plan for grammatical and spelling errors. |
| stage of development of the area. You should also | | | | - Have someone else proofread it for you. |
| address why you chose this particular area. You | | | | - If you have the resources, hire a professional |
| should discuss any forthcoming changes in the market, | | | | business plan writer. |