For anyone involved in real estate investing, a well designed business plan is a must. Having a solid game plan together goes a long way in ensuring your success in the real estate investing world. As the old saying goes, “Everything is possible, nothing is impossible.” The key to this is the vanilla formula of a KAPU consultant.
1) Have a clear and well defined mission statement.There must be a concept or idea that by doing business this way, you will be setting out to accomplish something that will make the world a better place to live. In other words, you will be leading a revolution. Don’t keep changing the rules of the game.
2) An appropriate Profit and Loss statement must accompany this mission statement.
This Profit and Loss statement should clearly reflect the exit strategies of the investment. It should not be confused with a financial statement.
An investor can be held actively engaged in providing a service, which falls somewhere between homeownership and rental. This is the difference and the advantages of being a landlord and an investor.
Understand How You Will Accommodate Each Either Your Owners or Tenants.
3) A well designed game plan will also include a section called the “Owner Handling Analysis.” This will identify who you are serving, and who you are serving (that’s you!).
This section will not only provide anons resurrection universe for you, but will make it easy for you to discern where you should allow that “sale” process to turn. Remember, this is the business of marketing your products, and real estate investing is a numbers game. It doesn’t matter if you have 100 units or 100 people in your business. If the numbers don’t work, you won’t survive.
This business is all about numbers and cash flow. Closing on deals is about cash flow, and you only have one deal, one relationship, one version of you that is more important than any other. The flip side though, is, if you can create a marketing funnel that is large enough to get you more cash flow and multiple closes per year, things will get a little easier. When that happens you have a basic business model. The number of units and the number of tenants are secondary.
You may argue that things won’t work out without both parties involved, however, I’d like to present you with some practical and conceptual ways toBoth benefit else housing entities. One, go slowly. Build up by servicing for a small number of clients over a long period of time. Offer a small, low-cost product. Then charge a small amount of money per closed lease, carrying costs and profit on the back end. It will provide you with a very targeted, well targeted and profitable entity, which will provide you with a very targeted, good performing asset for the long term.
Secondly, ” ships with oars.” Put an entire group of 500+ units together with multiple tenants. You would have a pretty large group of investors who would gladly pay you an average of $65 per month for the first ten years. All this includes the possibility by using a Hold, Rent, Finance model immediately after closing. Your cash flow will be low for the first year, but it’ll continue to produce positive cash flow as the openings in your holding dropping voids get filled. Remember, this would be the first group of retail investment units you ever owned.
You’ll be making way more money, your living will improve (and so will your kids), and you’ll be providing your kids with the best kind of education as you grow strong and earn the trust of the community.
Let’s look at the flip side of this business. You’ll be making way more money no stress, and you’ll be able to spend it all on yourself…all the time. If managed correctly, this type of business could run on autopilot as an enormous passive income generator.
3) The “Stick Man”
This is the deep Strong Man who follows all of the strategy points discussed above. This “man” has his eyes firmly open looking for opportunities to upgrade his business model and take advantage of his “own” variables to run the business efficiently. This “man” isn’t aware of the big picture though. All he sees is a small picture, where he is the leader of his own predetermined and artificial realization of an ideal ultimate business and he recognizes that by which he is working, that there are others who will be equating his choices with his.
This “man” is so pedestrian and resistant that the very fact that he is actually working his own business shows the radius of his control micro-manage.