Article - Real estate investment planning

July 2010

To succeed in the real estate investing business it is necessary to develop an investment plan to help you determine the viability of your investments. Your success depends on creating a blueprint that will boost your confidence and swell your lead base. It is correctly said that the essence of winning is planning and when your real estate investment business plan is well conceived and well executed, it is sure to steer your real estate investing to greater heights of success.

A successful real estate investment plan needs to be well thought out, thoroughly researched and written down. It is also very important to share it with all concerned. Whether you have a one man business or a company of any size, your investment plan should have continuity, focus, dedication and a determined follow through approach.

Crafting a solid plan for your real estate investment company requires mapping out your objectives. A determination of where you are heading, who your competitors are, what your field of operation is and how you figure in the larger picture of the business will help you attain a narrowed down and clear focus. The outline of your plan will emerge when you answer these questions:

What segment of the real estate market is best for investment?

For an answer you will need to look into options like resale properties, residential/commercial properties, apartments, single homes, condominiums etc. You may encounter overlapping of choices as it is possible for you to operate in more markets than one. Also important in answering this question is what skill set you have. Are you a rehabber, a wholesaler, a lease option, etc.

What area or region should I concentrate on?

Once you determine your market segment(s) you need to decide upon whether you want to operate just in some neighborhoods or have a presence in a larger area such as a city, town or the whole county. This is necessary to let you determine what to aim for at a later stage.

What are the market conditions?

Having determined your market you need to conduct thorough research to obtain correct details of the market, data relating to recent growth, annual sales figures, average home prices and prices for different categories of homes. All in all, you must have complete information to make an objective appreciation of your specific market.

Who are the competitors?

Your strategy must include identifying your competitors. You should know if they are established players and how long have they been in the business. Other relevant information will include data on the state of their market share. Is it declining, constant or is it growing? How progressive/aggressive is their approach? You must also find out the strengths of the management of competing companies.

What are my organization's strengths and weaknesses?

It is of paramount importance to determine your own strengths and weaknesses. This will later let you use your strengths to your advantage after taking your company's structure into consideration. A true assessment is possible only through honest and objective expressions and frank criticism by the company as a whole which includes you and your partners as well. If the assessment lacks honesty it is sure to hamper success in the future.

However, the ultimate success of the plan will depend on the wisdom of keeping goals realistic, monitoring results and reviewing the plan to make necessary changes periodically in line with existing conditions and future expectations.

Source: Kyle Edginton

Dy Associates is an Oakland Real Estate company specializing in commercial, home and investment property in the Oakland and East Bay Area. We provide real estate services including buyer agent, seller agent, short sales, commercial and investment aquisitions, loan facilitation, hard money lending, proerty management. Articles are provided as information only. We do not provide legal or general investment advice.