Do you need a business plan?
Well we thought the same thing when getting started! To be honest my business plan has come in handy more times than I can count! It just keeps me organized and was a good way to get started. Since it is my significant other and I investing together when we disagree on anything we can just go back to plan and use it as an impartial guide to what we are doing. I would say definitely draft one, but don’t view it as a one and done. It is a living document that you can feel free to edit as you pease.
There is a great post in the BP getting started guide to drafting your own plan here: here: https://www.biggerpockets.com/real-estate-investing/business-plan
Finally, make sure that every person you work with sees this! Your agent, contractors, new partners, lenders, etc. It will let them know who you are and that this isn’t a hobby to you. ITS A BUSINESS
See below for the one I sent to agents when getting started. This has been changed substantially since I got started so if you’re interested in seeing the current one feel free to reach out with a colleague request and I’ll be happy to send it over and help out with your’s where I can! At first the numbers were more of a shot in the dark, but now that I’ve learned more I can have much more meaningful numers. The plan also give an agent or someone else the opportunity to let you know that your thoughts are overly aggressive or if they are spot on.
Angotti Real Estate Business Plan for Agents
Mission Statement: Our purpose is to buy and hold multi-family cash flowing
property in the Pittsburgh, PA. We aim to own 25-50 multi-family properties with
positive cash flow. We aim to provide safe, well-maintained, and modern housing for
professional and respectful tenants in B neighborhoods.
What we are looking for in an agent
- Experience in the South Hills of Pittsburgh
- Currently invests in buy and hold property or has experience doing so
- Ability to assist in evaluating deals and estimating rent
- Earn $25,000 per month in passive income.
- Rent B class properties or C class that can be easily converted to B class.
- Buy and hold multi-family 2 and 3 unit properties.
- Greater than 15% Cash on Cash Return for Each Property
- LLC The Business and avoid litigation after initial FHA deals
- Minimize turnover of renters
- Buy potential value add properties
- Buy and hold multifamily properties.
- Purchase value-add properties and those where the rent can be easily
improved (carpet=> Laminate, modernize lighting, paint, etc.).
- 3 Years – 4 Properties
- 5 Years – 8 Properties
- 7 Years – 15 Properties
- 10 Years – 25 Properties
- Beyond – 50 Properties
- Pittsburgh, PA
- B Class Properties or C class into B class easily
- Middle Income Renters
o Consistent Job History
o 3Times Income to Rent
o No derogatory references
- w/in 15 miles of Dormont
- 1 and 2 bedroom units in duplex or triplex
- Maximum Loan to Value: 75%
- Cash Flow Requirement: $300/mo +
- Cash on Cash Return: 20%
- Max Purchase Price: 10-20% below market value
- Max Rehab Amount: $7,000