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Flipping through late-night infomercials recently, I saw two real estate get-rich quick schemes, and I couldn’t help but wonder–why do people still fall for those old scams? Has anyone really talked a seller out of his home for no money down with owner financing lately?

Real estate infomercials do great harm to beginning investors, who waste hundreds of dollars on old information. Worse yet, those beginners soon get discouraged and miss out on the true (and profitable) adventure of real estate investing.

One of the most popular late night infomercial shows tells beginners that it’s possible to make a fortune by buying houses with no money down and then renting them out to cover the monthly payments. It’s true that you can buy a home for no money down, but the requirements include having good credit, good income, and the home should be owner-occupied.

Rentals don’t normally qualify for no money down financing. Institutional lenders aren’t supposed to make no money down loans on investment properties, and even if you could buy an investment home with no money down, the monthly payments would generally eat up the rent.

Late-night scammers also claim that investors can get owners to pay the closing costs, including the down payment. But when a lender asks where your down payment will be coming from, saying, “the seller” is not the right answer! Today’s sellers are also fairly savvy, and understand that with no money invested in a property, a buyer could easily walk away and leave them with a home that’s been ruined by careless tenants.

Another TV program offers a bogus system for buying houses at ridiculous prices, but think about it: has anyone bought a home, free and clear, for $345.00 at a tax sale recently? Hordes of investors flock to the tax sales in the area where I live, bidding up the prices of foreclosure properties far beyond a few cents on the dollar. It just doesn’t happen.

Today, another real estate investment scam is popular in Southern California. Here’s how it works: a young person we’ll call Charles charged $4,000 on his credit card to hire a real estate “mentor,” after the mentor wined and dined him at a fancy Beverly Hills restaurant.

In exchange for the fee, the mentor instructed Charles to find distressed houses by driving around the area and writing down the addresses of ugly houses in nice neighborhoods. Once Charles had given him the addresses, the mentor obtained the owner’s address and sometimes a phone number. Then it was up to Charles to call the owners and talk them into selling their houses for no money down, and carrying the paper (mortgage), too!

I met Charles when he called me about buying a property that my husband and I had on the market for $1.2 million. When I asked him how such a young man was going to make the payments on $1.2 million home, he told me that he planned to rent the house out for enough to make the payments.

As a real estate investor myself, I tried not to laugh at his naivete, and after talking to Charles and listening to his frustration about trying so hard to follow his mentor’s advice, I offered to help him find a property, and I’m happy to say that Charles now owns his own home. But he’ll still have to spend years paying off a $4,000 credit card bill.

If you want to make money as a real estate investor, a good first step is to buy your own home, like Charles did. You can do that for no money down if you have good credit, or for a relatively little amount of money down if your credit is poor. Once you’ve purchased your own home, fix it up and then either sell it or refinance it and use your profits as the down payment on an investment property.

Don’t pay hundreds of dollars for out-dated methods that may have worked in the middle of last century! They’re a waste of your time and money. Real estate investing is truly a great way to make a fortune, but you must stick to tried-and-true proven strategies, ones that work in today’s real estate market.

Copyright ? Jeanette J. Fisher

Probate is something you do not want your family to go through. At the time of death, a loved one’s estate can be thrown into the hands of the court if the will is not present and validly signed and notarized. A will is the key to the final wishes of a person and real estate is one of the major holdings affected by the person’s death. This is especially important for people who have living relatives and spouses who will be directly affected by the probate of a piece of real estate. In order to avoid the probate of real estate, five simple steps can be followed.

o If there is no will, get one. As our population ages, wills are often drawn up and filed in order to prevent the states from taking over any and all assets upon death. A will offers guidance for the courts and law officials as to the proper path of dividing the remaining estate belongings after death. If there is no will in place, the state can decide to hold the financial and physical belongings of the deceased for months or years before settling on a plan of action.

o Review beneficiaries. The beneficiaries on all real estate related documents and financial documents should be reviewed on a regular basis. Every year at the earliest, with a more common schedule of review falling every five years. This is especially important for younger families who may have children born into the families as the years pass. Divorces and remarriages are also proper times to review beneficiaries for any changes that may need to take place.

o Keep your documents safe. It is very important to keep all documents in a safe and secure place. When real estate enters probate, there will be a need for quick recall of all related financial documents. If these documents are kept within a safety deposit box in the names of both parties involved in the relationship or the real estate, the documents will be available for immediate withdrawal upon death.

o Will the real estate to trust. In order to avoid the probate proceedings and possible costly court dollars, leave the real estate you own to a spouse or a loved one in trust. This helps to alleviate any legal proceedings and stops the chance of the loved one from having to pay a huge inheritance tax on the real estate.

o Know the laws. Each and every state has differing laws regarding real estate probate. If you own property within the state you reside there will be different laws for that real estate than the real estate you may own outside of the state. Knowing these laws and following all laws and regulations regarding the avoidance of probate will help your loved ones pass the time after your death outside of a court room or attorney’s office.

Real estate probate is something that no one wants to be a part of. These legal proceedings can take weeks, months or even years depending upon the overall value of the real estate and the affected parties involved. The probate of real estate can be costly and time consuming, so learning the laws and following these tips is essential to avoiding the troublesome task of real estate probate.

Without a doubt, 2007 was one of the worst real estate years many had seen in quite some time. In fact, many people have begun to compare the current real estate market crash to the crash of the 1980s. While it does not appear that prices will improve this year, there are indications that the market may begin to experience some recovery next year. This could mean an improvement in prices which have appeared to be in free fall for the last few months. One of the reasons that it is anticipated that prices will begin to improve in 2009 is the fact that many experts have anticipated the market will bottom out in 2008. At first glance, this can certainly seem to be frightening news; however, it is important to keep in mind that the market really cannot begin to recover until it does bottom out.

In understanding the recovery of the market it is important to look at the factors that resulted in the current real estate market slump. There are actually several factors that led to the current slump. One of the most important factors is the fact that prices in several areas throughout the country doubled between 2000 and 2005. In some cases, those prices even tripled. As a result, there were a record number of people who were unable to afford homes, especially first-time home buyers. As the number of buyers able to purchase real estate began to dwindle, resulting in price and sales declines throughout the country.

As headlines have proclaimed recently, subprime loans also contributed to the recent debacle. During the last few years, a large percentage of the number of loans that were made were issued to buyers with credit scores that were below average. Additionally, a large number of loans were made to buyers with minimal down payments. Approximately two years ago real estate prices stopped rising. At this time, a number of buyers who had snapped up houses in red hot markets suddenly discovered that the balance of their mortgage exceeded their home’s values.

The rate of defaults began to escalate at this point. Before long, foreclosures also began to increase as a direct result. As more and more foreclosures hit the market, the inventory in many markets began to spiral out of control. As more homes hit the market, prices began to drop even more. To make matters even worse, economic growth began to stall and massive layoffs in many areas further fueled defaults and foreclosures.

While it has taken some time, assistance is now being provided to homeowners; which is anticipated will help to stave off the increasing rate of foreclosures. Overall, this is anticipated to help stabilize the rapidly rising inventory of homes for sale throughout the nation.

It is important to keep in mind that while headlines appear to be constantly blasting news about the softening real estate market, there are actually some markets in the country where prices have continued to rise rather than decline. On average, real estate prices nationwide are approximately 5% less than they were last year; however, many of the metro areas in the nation are still experiencing price increases. This is largely due to first-time home buyers who can still afford to purchase properties and retiring homeowners who are selling their home sand then either moving into a retirement community or purchasing smaller properties. These markets include Salt Lake City, Utah; Charlotte, North Carolina; Beaumont, Texas and Bismarck, North Dakota.

Discount! Flat Fee! Sounds like a good deal, right? Well, maybe not when it comes to selling your home. Yes, a discount real estate agent can save you money, but will he sell your house? There are many reasons why you may want to avoid going to the discount route.

First of all, the selling tactics of a discount representative can be well… somewhat lacking. Not always, but you will often have to do your own marketing and advertising. A flat fee broker will charge you an up-front fee. For this, you may get your home listed on an MLS site, which may be viewed only by a limited audience, because of listing regulations. That may be the extent of the marketing. Some companies purposely omit MLS sites from the marketing, because if another agent gets involved, the commission has to be shared. This eliminates a lot of prospective buyers for your home. Other companies may put up a sign in the yard, advertise in the paper and magazines, and work with contract negotiations. Because the companies vary so widely on the services they offer, you really have to do your homework to make sure you get what you need. Some discounters offer a price list of services they offer.

Now, if you hire a traditional real estate agent, you pay nothing up front. Yes, you will sign a contract with him, but he makes no money until he sells your home or, if for some reason, you default on the contract (which does have an expiration date). And, this is good motivation to get your house sold. Traditional agents and firms offer a variety of marketing tools for the seller. They will get the home into the local trade magazines, hold open houses, print MLS sheets, place the home on the Internet at local and national sites and some areas even have local television programs. Many will even come in, and stage your home for you or at least give you a list of things to do, to help get the house sold. You get all this and you haven’t paid a penny for it.

Hmmm. sounds like a lot of work right? Do you really want to do that yourself? Yes, a traditional representative makes about 6% commission which he usually splits with the buying agent. That is a lot of money, especially, in making the houses more expensive. But, what if you have a hard time selling the home yourself or through a discount firm? Every month it doesn’t sell, costs you money anyway. Traditional agents will often set a time frame within which they must sell your house. If they do not, you are free to seek a different broker and you are not out any money for the attempt.

Now, there are ways to save money and still use the traditional method of selling. There are many ways to negotiate down the commission fee. For example, if your agent happens to bring you a buyer, he will usually knock a percent or two off the commission. Or, if you agree to sell and buy with him, he will reduce the rates for the repeat business. Talk with him and see what he is willing to do for you.

This is not to say that all discounters are the same and that you will not get a great service from them, just a caution of what to expect. If you still decide to opt for the discount route, be sure to get everything in writing- fees, services, etc. However, your best bet is to hire someone who really wants to get your house sold. Discounters are concerned with the quantity of clients to off-set the discounts. Traditional real estate agents focus on quality and getting a sold sign in your yard. Do not sacrifice quality work for savings. The old adage is true: Sometimes you do get what you pay for. And that’s not necessarily a good thing!

There are two sides to real estate development feasibility study: The Cost Side & The Income Side.

I am going to concentrate in this article on The Cost Side.

Having told you that a feasibility study is vital when applying for finance, it is however, just another cog in the wheel of the property development process.

To help you come to grips with the term, feasibility study, it might help you if I call it a, Financial Analysis, of all the costs and income revenue that tell you if your development will produce a profit.

Where To Start?

When you are at the very beginning of preparing a feasibility study – I mean when you are just thinking about buying the land on which you propose to develop a building, your initial cost figures are liable to be a bit ‘rubbery.’

They’re general – they are not exact and can’t be exact, because all you know at the beginning is the ‘asking price of the land.’

Hopefully the land cost will be less than the asking price after you complete the buying negotiation. Can you see that there is going to be a difference in just that first item of the feasibility study – land cost?

OK – if you accept that, you’ll also accept that the associated land costs will also vary. Items like conveyance costs, legal charges, stamp duty, adjustment of utility charges and other costs.

That should demonstrate to you that a feasibility study goes through several stages.

The first stage uses figures that are the ‘best’ figures you have available at the time. The last stage is when all your cost figures are firm and final.

But as you are only at the stage of deciding to buy the land or not, you figures are “general and loaded with safety” – in dollar terms.

Let’s be clear about what I mean here. For the land cost you would use the full asking price and all the associated costs, at full calculation for your initial entry in the feasibility study. Then if you negotiated a lower price you are safe.

If you first feasibility study shows a satisfactory profit return for the risk of doing the development, you will proceed and gain legal control of the land.

Well, to gain control, you must have concluded a negotiation on the land sale price – so you have now “firmed up” on one of the cost items. Hopefully it is lower than, or the same as the figure you allowed in the feasibility study.

In the first feasibility study you will allowed a figure for the fees of the design consultants.

People like the architect, the engineer and so on. Well now you have to engage them to create the initial design for you and again this is a negotiation that will either be within your feasibility study allowance or not.

The next major item in your feasibility study will be the constructions cost.

If your development comprises ten town homes, that are aimed at the luxury end of the owner occupier market, your market knowledge may tell you that you should allow $180,000 per to town home or $1.8 million to build all ten.

Your design team will have to design well within those cost parameters and after the initial design is complete in preliminary format, you will need to get a few master builders to give you a price.

If you are well within the $1.8 million, then you may decide to leave the $1.8 million figure in your feasibility study. This would be smart if the buider’s figure was say, $1.7 million.

The extra $100,000 acts as a safety buffer as you are only pricing off non-detailed preliminary design plans.

Now. let’s say it’s your intention to sell all these town homes at a profit, so you have allowed some marketing costs to cover sales commissions, brochure printing etc. in your feasibility study.

At this stage the biggest figure is the sales commission and so you have been out talking to agents and so you have a good idea that your figures are OK.

At this stage we have wrapped up all of the “major” costs except the finance costs or interest on you borrowed development finance.

By now, hopefully you will have bought my e-book, and know how to go about seeking development finance the correct way and not the dumb way.

So you will not only know the best interest rate, but more importantly, have the correct type of loan and on the correct “terms” – you know the small print stuff.

At this stage everyone I teach wants to buy a software program so that they can get all the calculations done “easy like.”

Well I have a problem with that – I know, and believe, that for you to get to know your development intimately, you have to go to the trouble of doing the feasibility study figures manually – it is only adding, subtracting and multiplying some figures.

It is not difficult and the benefit is that you get to “know” the importance and interplay of each figure on the end result, being profitability.

So a simple spread sheet broken up into months on an XL is all you need.

In month one you buy the land for $286,500 and associated costs of say, $21,700 so you enter a figure of $310 ($308,200 rounded up to $310,000 – you have added a bit of safety in this one item)

Note: never use the full figure allways round up and take off the last three zeros – so $310,000 becomes $310l; $3,500 becomed $3.5 and $800 becomes $8. This makes it easier to read and creates less mistakes.

You then spread the design costs across the page to reflect the negotiated deal you did with the designers.

Then the construction costs – marketing costs and so on. You can divide these individual costs up into a many smaller items as you wish.

But the real thing you are doing is setting out your best estimate of the flow of cash that is required from the Lender and also from your own equity funds – the Cost Cash Flow.

Once you have these figures spread across the page you add then vertically for a total monthly figure – and also horizontally for each item total.

Hopefully the big development cost total in the bottom right hand box is equal to the vertical and horizontal totals.

It is – great; go to the top of the class.

Earlier I mentioned that you will have concluded the terms of your development loan.

Well, let’s say that the Lender has agreed to lend you 80% of your costs. This means you have to provide 20% from your own capital resources.

Having got the monthly totals you can now calculate 80% of each figure, because this is the amount on which you will pay interest.

It is these figures that you now calculate interest on each monthly cash flow and arrive at a total cost of the finance for your development.

You now add the total interest figure to the Cost Total and arrive at what we call the Total Capital Cost of your development.

There are a total of about 44 item headings that make up the Cost Side of a Feasibility Study.

“When you buy real estate, one of the first things you need to consider is how you will keep your investment properly protected. Whether you are purchasing real estate as a place for you to live or you are purchasing it as an investment property, you still want to make sure it is protected from damage or other problems that may occur. Therefore, you will need to buy homeowners insurance as soon as possible.

When you buy homeowners insurance, you will have many options available to you. Among these options will be determining how much coverage you should provide to your home. When making this decision, you will need to take a number of different factors into consideration.

The Basics of Homeowners Insurance

In a nutshell, you will need to make sure that the insurance you buy is enough to cover the cost of replacing the real estate and all of its contents if something were to happen to your home. In addition, house insurance covers the costs if you are found responsible for an injury that someone sustains while on your property. Therefore, you need to have enough coverage in place to keep yourself properly covered as well.

The first step you will have to take when you buy insurance is to determine which category of house insurance best suits your needs. You will have six basic forms of coverage to select from. These include:

o HO-1: Basic insurance that only covers very specific perils, such as windstorms, fire, explosion, lightning, theft, riot, smoke, vandalism, and volcanic eruptions.

o HO-2: A broader form of homeowners insurance that covers more perils than HO-1 and includes coverage for items such as damage from frozen pipes, falling objects, weight of ice and snow, faulty electrical units, and faulty heating systems.

o HO-3: This is the broadest form of homeowner’s insurance. Rather than naming those things that are covered, it names specific hazards that are not covered. These typically include flood, earthquake, and war.

o HO-3 and HO-4: These forms of coverage are not associated with real estate that you buy but with rental units.

o HO-8: If you buy older real estate that has been beautifully restored or if you restore it yourself, it may be more valuable than what a typical homeowner’s policy would cover. Therefore, you can purchase this type of policy in order to increase the amount you would be paid if the home were damaged.

In addition to these basic policies, you can also buy additional coverage that can be added on to your policy to cover specific types of disasters.

Deciding the Amount of Coverage Needed for Your Real Estate

In the past, experts recommended that buying enough coverage to cover 80% of the cost of rebuilding your real estate. This was because experts felt it was unlikely that a home would actually be completely destroyed. Disasters such as Hurricane Katrina, however, proved that this was untrue. Therefore, it is best to buy enough coverage to pay for 100% of your home.

Your insurance agent will be able to do some calculations to determine the replacement value of your home. Nonetheless, it is a good idea for you to do some comparison shopping in order to come up with a figure of your own as well. You should be able to get an idea of the basic replacement cost by talking to your local builder’s association and finding out the construction cost per square foot of a home. Then, add on additional costs for extras such as a Jacuzzi or central air.

When you buy your policy, you will have to choose from replacement cost insurance and cash value policies. Cash value policies will pay you for the current cash value of your real estate, minus depreciation. Replacement value insurance, though more expensive, will pay you the amount it costs to rebuild your home.

Taking Care of Possessions and Liability Issues

When you buy homeowners insurance, you are covering more than just the real estate. You also need to consider the replacement costs for your possessions. An insurance agent will typically offer coverage that is equivalent to 50% to 75% of the value of the real estate. If you like to buy very nice things, however, this coverage may not be enough. In order to make this determination, you will need to take an inventory of your possessions. While this is tedious, it will come in handy if disaster does strike.

In addition to covering your real estate and your possessions, you also need to cover yourself when you buy house insurance. This is where liability coverage comes in. In most cases, a policy will provide $100,000 to $300,000 worth of coverage. You will need to take several things into consideration when determining how much liability coverage is enough. This includes your income, the equity you have built into your home, your investments, the value of your assets, and the value of your business if you have started one. You will then subtract all of your debts from this amount in order to determine your value. Make sure you buy enough liability insurance to cover your personal value.

Determining how much homeowners insurance coverage you should buy can be a time consuming process. It is well worth the time, however, as you can sit comfortable knowing that you are covered if disaster strikes. “

Getting a survey before you close on any real estate is very important.

Some people actually buy real estate without having a survey done. It is not a requirement from the financial institute,
so does that mean you don’t need one?

By getting a survey you will not only get a blueprint of your property you will get your property lines marked out for you.
Most importantly, you will find out if there are any infringements on your property like a neighbors fence, a neighbors tree, a neighbors driveway, etc.

A survey can tell you many things.

It will disclose any easements you might have on your property.
Easements can be a fire lane or an access road for the local Power Company. These easements cannot be blocked, built on in anyway to prevent the lanes from being accessed. You could have a city or county easement on your road front property anywhere from two to ten feet into your yard you might not know of. This gives the city or county use of this property for power lines, phone line and even city water drainage. Although you might have to mow this lawn the city has the rights to its use.

A survey will show you if your property has a right of way
for the property behind your property. A right of way is incorporated onto your property and must be available to the property owner behind you to get to and from their property.

If the survey conveys a property infringement you can delay the
purchase until the infringement is moved or back out of the deal
if necessary. Easements will not be removed.

A survey can and will give you peace of mind and knowledge about
your property preventing any unexpected surprises later.
Knowledge saves you money and anxiety.

You decide if you should buy real estate without one!

Real estate training is essential for the people who want to become a successful real estate broker. It helps them to learn all about real estate business. Real estate business requires some time, some basic knowledge of the business and skill to perform all transactions. Real estate business will be one of the good carriers for a hard working person. Real estate training suggests them all the ways to achieve their goals.

License is the basic requirement to become a real estate agent. Even it is an essential thing to conduct real estate business. Real estate Internet is the best option to join real estate business. Some states provide online training courses that will help you to complete pre-license requirements. Before joining real estate business people should satisfy some pre-license requirements. They should; be of at least 19 years, be managed a proctored exam, have high school diploma or some equivalent to it, pass a state exam, have completed a least approved course.

Generally real estate training gives some guidelines to understand some real estate basics. They can easily learn about ownership transfer, real estate law and math with the help of real estate training. They are taught how to deal to with real estate transactions during their course. Real estate training enables them to understand the tips and tricks of the real estate contracts. People who want to join some state approved courses should have initial license.

Anyone can be a successful real estate agent after completing real estate training. They can run a successful business only if they have great professional habits, good salesmanship and the enthusiasm to learn more about real estate. Real estate business requires great working skill.

People can learn about real estate business with some related books. They can also join some online courses that provide information via Internet. Nowadays several people are making money in real estate business. Real estate brokers should be kind, knowledgeable, efficient as well as trustworthy. They should know the skill how to attract more customers. They can also take some suggestion from the experienced real estate agents.

Real estate business may be wonderful business but only thing that it requires -real estate training.

Precisely how does a buyer or seller know when a real estate market most favors buyers or sellers? No buyer wants to pay too much and no seller wants to leave money on the table by pricing too low. The answer is in knowing the market absorption rates.

Property absorption rates in any local real estate market are usually considered the best indicators of whether that market is a sellers’ market, a buyers’ market, or a neutral market. The market is the market and favors no one. But knowing the current real estate market cycle is essential for success as either a buyer or seller.

Sellers’ Market – Absorption Rates 1-4;

Neutral Market – Absorption Rates 5-6;

Buyers’ Market – Absorption Rates greater than 7

The easy-to-understand process of calculating absorption rates for local markets will be helpful to anyone trying to figure out the current real estate cycle and how to formulate a winning buying or selling strategy.

For instance, assume there are currently 100 Single Family Home Lots for sale in a large, single family home community. Of these, 70 are priced at, or below, $45,000. Last month, assume that 5 lots sold for $45,000 or less. The absorption rate would then be 70 divided by 5 , or 14.0. An absorption rate of 14.0 indicates a strong buyer’s market and, that in an unchanged market, it will take 14 months to sell all the hypothetical 70 existing lots listed at or below $45,000.

This basic analysis can be used with most of property types including building lots, homes, condominiums, or even commercial properties. There must, however, be a high enough number of actual transactions to permit statistical analysis. The fewer the actual number of transactions the less statistically significant will be the results. Also, remember that within very broad but weak markets, narrow market segments may be showing non-typical strength.

Market absorption is a very useful tool for anyone trying to best determine how to price their property and what the current market says is a reasonable time period for a sale to be concluded. The absorption rate analysis also helps buyers in that in a buyer’s market a low purchase offer is often a winning strategy.

Do you need a real estate development business plan? You will if you want to obtain financing for your project. The first thing any lender or private investor will want to see is your real estate development business plan. This plan is specific for development of real estate. Your business plan will tell your story in an organized and concise manner. It will provide all of the critical information needed to judge your project. A well-written and professional looking business plan is crucial for your success in obtaining financing.

Most real estate developers make the mistake of not creating a good business plan or even getting professional assistance in developing their business plan. They will use the excuse of not having enough time or they can’t find the data. Don’t let that be your excuse! All a real estate development business plan really is, is the answers to a bunch of questions! You will learn what to include in your real estate development business plan.

Executive Summary

The Executive Summary should provide a complete overview of your project & company. This will include:

Brief description of the overall project. For example, develop a 4 star, 250 room luxury hotel in downtown St. Louis, Missouri. Brief overview of the company – Is it a corporation, LLC, etc? Who are the owners and/or board members? Brief company history & experience level. Brief summary of the market & demand.How large is the market and at what stage of development is the market currently in? Brief summary of the competition and what separates you from them? Brief description of key Management team members. Key financials – total acquisition & construction costs, nature & use of funds, future revenue & expenses.

The Executive Summary should be brief and an outline to your overall business plan. Now lets take a look at the specifics in the real estate development business plan.

The Company

This part of the business plan should give full details about how and when the company was formed. It should indicate the legal structure of the company, as well as where it is licensed. A key piece of information about the company is the company owners. Name all of the principals and their percentage of ownership.

Project Description

This section of the plan is where you explain your project in detail. Remember, you are selling your project so that you can get the funding you need! Is this a hotel development project? Is this a luxury, single-family home community project? Is this a multi-tenant shopping center? Give all the details about the project. For instance, lets continue with our hotel example. You will want to name the other amenities that will be located at the hotel, such as swimming pool, tennis courts, the number of conference rooms, etc. How many of the rooms will be suites? What other features & benefits will your project have?

You will also want to address where you currently are in the project. Has the land been purchased or optioned? Where are you in the permitting process? Has the architecture plans been drawn? How much time & capital has been spent on your project to date?

The Market

In this section you will provide the market type & size, current & potential growth rate, and relative stage of development of the area. You should also address why you chose this particular area. You should discuss any forthcoming changes in the market, government regulations, economy, and short-term & long-term trends. If you have performed any feasibility studies, you will want to include it as well as the source of the feasibility study.

The Marketing Plan

The main objective of any developer is to sell the homes, the stores or the hotel. And this can only be accomplished with a well thought out marketing plan. Who will handle your sales efforts? Will they be in-house or out-sourced? How will the pricing/leasing/room rate be determined? Will there be any brand or strategic partnerships involved? What is your marketing budget (in a table format).

The Competition

Any lender or investor in your project will want to feel comfortable that you know who your major competitors are. They will want to know that you have done a thorough competitive analysis. Name and describe all key competitors. What are their strengths & weaknesses? How will your project compare? What are your projects strengths & weaknesses?

The Management Team

In this section, you will want to go into further detail about the principals involved. You will need to highlight the team’s relevant experience and previous successful projects?

Well what if this is your first project?

Then you want to make sure that you have an excellent support team in place. These team members should have the experience that you are lacking (team members doesn’t necessarily mean company ownership). These team members can be legal, accounting, construction, architecture, etc. So for this section of the real estate development business plan, you will want to include:

Resumes/biographies on all principals & management team members Organizational chart Board of Directors
The Financials

Since the primary objective of your business plan is to obtain financing, you will want to address what type of financing you are seeking and how much capital is needed. You will want to state how much money you have on hand (and where did you get it from) and how much money you have spent to date.

Everything that you have put into your real estate development business plan up to now should support your financial assumptions and projections. You will want to include a statement that shows a breakdown of construction and acquisition costs. You will want to include an Income statement that will outline income and expenses for the next five years after construction. It should follow GAAP (Generally Accepted Accounting Principles) and contain specific revenue & expense categories. You will want to include a Balance Sheet and Cash Flow Analysis.

Now that you know what to include in your real estate development business plan, make sure that your business plan presents itself in a professional manner.

Use a table of contents, with numbered pages. Make sure that the writing style is simple and conversational. Don’t use long or complex sentences. Paragraphs should be short & simple. Use graphics & pictures but don’t get carried away. Use charts & tables to back up your data. State all sources of your data and studies. Proofread your real estate development business plan for grammatical and spelling errors. Have someone else proofread it for you. If you have the resources, hire a professional business plan writer.