5 critical elements your bank reads in your real estate business plan

What is a Real Estate Business Plan?

A business plan is a written document that captures the future of your business. It describes what you plan to do and how you plan to do it. In particular, it outlines the goals of your business, the strategies you will use to achieve them, the potential problems you may encounter along the way, and how you can overcome them while highlighting the financial strategies and KPIs.

Why Do You Need a Real Estate or Property Development Business Plan?

When you are trying to get a loan or win over investors, you need a business plan to help you get financing for your real estate or property development business. Your plan can show possible investors that your business is on track and viable. It can illustrate proof of concept and reassure investors that they will see a return. The plan also reassures financial institutions that you'll be able to repay the loan.

This article ????????will discuss five critical elements that need meticulous attention to ensure that your business plan wins the heart of your lenders and investors and you get the desired amount of funding.

1. Executive Summary

The executive summary includes an overview of your plan in one to two pages. Banks need to know who you are, how long you have been running this business, your Company's mission statement, what your target market is, your traction so far, and your implementation roadmap. The executive summary also includes some financial highlights like revenues, net profit projections, and other essential KPIs as per the business model.

2. Business Introduction & Goals

This section in the business plan will talk about the basic details of your real estate business, your vision and mission statement, and the corporate values governing your Company. Further, mentioning your strategic objectives and quantifiable goals will also give your reader a clear indication of what you plan to do with your business and how big your goal is.

3. Market analysis

Marketing analysis provides your readers an insight into how the market is performing and if it offers adequate opportunity. This section will also talk about how your real estate company is compared to others or what your business has that your competitors do not have. The market analysis section will let the banks and investors know what you're bringing to the table. The market analysis often contains SWOT analysis and provides a bird-eye view of the external and internal factors that may influence the business's operations.

4. Business Operational Details

In this section, specifying your business strategies around revenue model, strategic partners, and marketing and sales strategies will help the reader get a 360 view of your real estate operations.?

Further, in the business structure sub-section of your plan, you can incorporate the organizational chart and add details of your key team members, which is a great way to demonstrate the owners' expertise for this business and assure the banks that your real estate or property development company is in the right hands.

5. Financial Information & Use of Proceeds

Financial information receives particular scrutiny from investors and banks. Your readers are interested to know the amount of financing you require and its utilization. Any investor will also like to see if your projected financial performance is up to the mark to keep their investment safe and provide their desired returns. The financial projections should also incorporate actual or projected cash flow, funding sources, a list of financing, projection of expenses, and critical KPI analysis.

A Bank also wants to read if you have personally invested in your business and to know that you will continue to do so. They also want to confirm that you would use the borrowed funds correctly, how much money you need, how your business will use the money, how you will repay the loan and what you will do if your business cannot repay the loan.

Conclusion

A business plan might seem like a pointless extra step to take when you're beginning a real estate company or looking to develop in an existing market. Still, in reality, it has its significance as it guides you and helps you get financing. Bank wants to read a comprehensive, to the point, simple business plan to be assured that your business deserves the financing it requires.?

Are you looking for a professional business writer?

stellarconsultancy.ca can help you make a professional business plan that puts you one step further to win investor and bank funding for your business. We ensure that we understand the requirements of your investors and craft a custom-tailored plan that specifically addresses your investor's concerns and encapsulates the business and market opportunity in a crisp and professional way.?

Schedule a meeting with a professional at this link to get more information.?