Do you use a house flipping business plan to grow your investing business? Do you have a clear understanding and strategy for achieving your real estate investing goals? Can you communicate the vision for your company and describe the goals of your house flipping business plan to others?
We've all heard that “failing to prepare is preparing to fail.” If you haven't developed a house flipping business plan for your fix-and-flip business yet, or if your current business plan could use improvement, here is some important information:
Why develop a house flipping business plan?
Creating a business plan provides you with a clear map that defines your specific businesses goals and the steps needed to meet those goals. A house flipping business plan can serve as a progress report and a guide, providing an easy checklist of what you’re doing well and what could use improvement.
Also, your house flipping business plan will help with building your B2B relationships. Industry professionals are looking to work with partners who take their business relationships seriously. Your business plan will highlight the steps you're taking to achieves uccess, demonstrating that you are strategic about your real estate investments and that you know what it takes to meet your goals.
What should my fix-and-flip business plan include?
Depending on the scope of your strategy and goals, your business plan will include several key sections. There are several critical features a quality business plan should include:
- Executive Summary
This section summarizes your company's goals and its plans. This section should introduce any potential partners you'll be working with,and give an overview of your company, its goals and the strategies you’ll use to succeed. Generally, it’s best to circle back and complete your executive summary after you’ve completed the rest of your business plan. The summary should draw readers in and it should highlight your team's qualifications and expertise.
- Market Strategy
The market strategy section shows you have a concrete understanding of how to research and how you use due diligence prior to investing in a specific market. Here is where you showcase your knowledge about the markets in which you plan to invest. Be sure to include any past successful results you have already achieved.
- Lead Generation Plan
A real estate investment business thrives on new leads for viable properties. Lay out a clear strategy to generate leads — whether via referrals, networking or other sources. This will demonstrate your know-how in building a real estate investing business and keeping it running smoothly.
- Due Diligence
How does your company determine a fix-and-flip project’s viability? Do you have the protocols in place to inspect properties and can you accurately estimate the scope and cost of improvements? Here is where you can share past success you've had with performing market comp analysis.
How will you find the capital youn eed to buy and rehab your fix-and-flip properties? This section of your business plan should outline any existing relationships you have with lenders and other capital investors.
- Project Management
There is no time to waste in the house flipping business. If your property sits unfinished or unsold, holding costs will eat away at your profits. What strategies will your company use to ensure your contractors stay on schedule? What contingencies are in place to keep your project on track? What quality control protocols are in place to ensure that all finishes, materials and work completed are up to your specifications?
- Exit Strategy
Your business plan should describe how you will conclude your investment project when renovations are completed. How will you sell your property once you’ve finished the “fix” portion of your house flip? Showing that you have a concrete plan to find buyers is critical, as well as having a backup plan in place if any of your properties do not sell within the expected timeframe.
Ready to put your business plan to work?
- Are you an experienced fix-and-flip investor with a business plan already in place? We’d love to see it and discuss ways we can help you meet your goals.
- Are you are just getting started drafting your company’s house flipping business plan? Download our free sample business plan template to use as a guide.
- If you are exploring financing options for current and future flips, start your fix-and-flip financing journey with Anchor Loans here.