How do you prepare for success in your fix-and-flip investment business? Do you know exactly how you plan to achieve your goals? Can you communicate your house flipping business plan to others?
Legendary UCLA basketball coach John Wooden famously taught his players “failing to prepare is preparing to fail.” Wooden’s teams were always fastidiously prepared, and it paid off in a big way, with an astonishing 10 national championships.
If you don’t have a house flipping business plan for your fix-and-flip business yet, or if you want to make sure your current business plan is the best it can be, here’s what you should know:
What are the benefits of having a house flipping business plan?
Creating a business plan will give you a clear map that sets out your specific businesses goals and the steps needed to meet them. A house flipping business plan can be both a progress report and a guide, giving you an easy check on what you’re doing well and what needs improvement.
In addition, your house flipping business plan is an important part of building relationships with the people you’ll need to help you succeed. Industry professionals want their business partners to take their relationships seriously. Your business plan should highlight the steps you will take to achieve success, demonstrating that you’re strategic about your investments and that you know what it takes to meet your goals.
What should a fix-and-flip business plan include?
Depending on the scope of your investment strategy and goals, your business plan can take various forms and include different sections. However, there are several critical features every quality business plan should include:
- Executive Summary
The executive summary is a summary of your overall company and its plans. This section should introduce potential partners to the key members of your team and give an overview of your company, its goals and what strategies you’ll use to succeed.
Generally, it’s best to write your executive summary after you’ve completed the rest of your business plan. Use the summary to draw readers in and highlight your qualifications.
- Market Strategy
Your market strategy will show a firm understanding of how your company does its homework prior to investing in a given market. Showcase your expertise about the region(s) in which you plan to invest, and include results you may have already achieved there.
- Lead Generation Plan
A fix-and-flip investment business thrives on new leads for investment properties. Laying out your plan to generate these leads — whether through referrals, networking or another source — will show that you know how to both build a business and keep it running.
- Due Diligence
How does your company determine a project’s viability? Do you have protocols in place that include property inspection, estimating scope and cost of improvements and performing market comp analysis?
How will you secure the financing needed to purchase and rehabilitate your properties? This section of your business plan is an excellent opportunity to demonstrate existing relationships with fix-and-flip lenders and other capital investors.
- Project Management
There is no time to waste in completing a fix-and-flip project. As your property sits unfinished or unsold, holding costs eat away at your profits. What strategies does your company use to ensure your contractors stay on schedule? What contingencies are in place for keeping your project on track? What quality control protocols are in place to ensure that finishes, materials and work product are up to your specifications?
- Exit Strategy
Finally, every business plan should demonstrate how you plan to conclude your investment project. In short, how will you sell your property once you’ve finished the “fix” portion of your fix-and-flip project? Showing that you have a plan to find buyers for each investment property is critical, as well as having a contingency plan in place for properties that do not sell within a given timeframe.
Ready to put your business plan to work?
- If you’re 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.
- If you are just getting started drafting your company’s plan, download our free sample business plan template opens in a new window to use as a guide.
- If you are ready to explore financing options for future flips, start your fix-and-flip financing journey with Anchor Loans here opens in a new window. We can fund your next fix-and-flip investment in as little as five to 10 days.