HUD 221(d)(4) Checklist

Winston Rowe and Associates Construction Lending

If you’re interested in taking out a HUD 221(d)(4) loan, you’ll want to make sure you have all the required documentation.

Below is the complete HUD 221(d)(4) Checklist which is taken directly from HUD’s Application Requirements Checklist:

1. PRE-APPLICATION

    Exhibits Required for the Pre-application Review

        Narrative Description of Proposed Project.

        Form HUD-92013, “Application for Multifamily Housing Project,” including developer’s summary cost figures.

        Resumés showing experience of owners/sponsor and key principals.

        Resumés of Lender’s underwriter, appraiser, and/or market analyst if not submitted prior to the pre-application.

        If Sponsor is nonprofit, resumé of Housing Consultant, if any, and Form HUD-92531, “Standard Contract for Housing Consultant Services.”

        If Sponsor is nonprofit, Form HUD-3433, “Request for Preliminary Determination as a Nonprofit Sponsor and/or Mortgagor” and supporting documents.

        If Sponsor is non-profit, Developer’s Agreement or another document showing relationships and work responsibilities of all parties associated with the transaction.

        Preliminary sketch plans, consisting of:

            Site plan.

            Typical unit and building layouts.

            Ground floor and typical floor plans.

            Wall section plan.

        Market Study with comparables (See Chapter 7 and Appendix)

        Appraisal Exhibits. Forms HUD-92273 and HUD-92274, dated no more than 120 days prior to the date of submission of the pre-application package. See Chapter 7 and Appendix 7. If the processing calls for tax credit and/or bond financed applications, a HUD-92264T must also be included.

        Photograph(s) of the property and immediate area.

        Evidence of site control.

        Location map or maps.

        If commercial space involved, show estimated percentage of total square feet and estimated total income.

        If pre-application is under Section 220, evidence that property is in eligible area (See Chapter 3, section 3.7)

        Copy of ground lease, if any.

        If state or local grants or loans are anticipated a part of the project, evidence that such funds will be available.

        Phase I Environmental Site Assessment.

        Environmental Report.

2. Additional Exhibits at Pre-Application for Substantial Rehabilitation.

    “As is” sketch plans in addition to preliminary sketch plans listed in 7, above.

    Mortgagor’s architect’s basic work write-up, including summary cost estimates of major trade item groups if a partial (non-gut) rehabilitation.

    LBP and asbestos test reports for projects constructed prior to 1978. (See Chapter 5 and Chapter 9)

    Plans for relocation of existing residents affected by work.

    Financial statements for the property for the past three years.

2. APPLICATION FOR FIRM COMMITMENT

Multifamily-FHA-HUD-Loans-Application

    Exhibits Required for Application for Firm Commitment for Sections 220 and 221(d) Make any changes necessary in the pre-application exhibits and resubmit any exhibit that is changed. In addition:

        Transmittal letter.

        Application for Multifamily Housing Project (Form HUD-92013) with fee of $3 per $1000 of mortgage.

        Narrative Summary and Underwriter’s Recommendation.

        Intergovernmental review. See HUD Processing Office to determine State Single Point of Contact and whether review is required for state where property is located.

        Byrd Amendment (Lobbying Certification and disclosure). See 24 CFR Part 87.

        Form HUD-92013 – Supplement for Sponsor, mortgagor, each principal of the mortgagor and general contractor and disclosure of prior legal action relevant to mortgage financing, outstanding delinquent Federal Debt.

        Completed Form HUD-92264 Multifamily Summary Appraisal Report with technical analysis and standard certifications (see Section 11.2.J.) by all Lender third party analysts, and Form HUD 92264-A Supplement to Project Analysis.

        Form 2530, “Previous Participation Certification” for all parties designated on page 1 of Instructions for this Form (see Section 8.3). Also applies to Lessees.

        Verification of social security or employer identification number.

        Organizational documents creating mortgagor entity, if applicable.

        If Sponsor is nonprofit, Developer’s Agreement (if not submitted at pre-application)

        Form HUD-3434 – Certificate of Relationships and nonprofit motives, and Form HUD3435-Certificate of Contractural Relationship.

        Site control document (sales contract).

        Affirmative Fair Housing Marketing Plan (Form HUD-935.2).

        Equal Employment Opportunity Certification.

        Certification from Mortgagor’s Architect (See Chapters 5.5 (B.8) and 5.6).

        Report prepared by Lender’s architectural analyst (See 5.6(B.2)).

        Resumés of Lender’s architectural reviewer and cost reviewer, if not submitted prior to the application.

        Owner-architect agreement on A1A Form B 181 and Amendment.

        Legal Survey Form HUD-92457, Surveyors Report.

        Engineering and specialty reports, if not covered under environmental report.

        Contract drawings and specifications. (See Appendix 5-L)

        Municipal services and other utilities’ assurance letters.

        Off-site improvements/construction (description). (See Appendix 5I(M))

        Cost estimate package (listed in Section 6.2(B.1).

        Identity of Interest disclosure (see Chapter 6, Sections 6.2 and 6.5F) and the 50-75 percent rule disclosure (see Section 14.15M).

        Resumé of the general contractor and Schedule of jobs (work) in progress (See Chapter 8.4).

        Soils report and foundation analysis.

        HUD multifamily appraisal with all supporting documents:

            Rental Housing Income Analysis and Appraisal, Form HUD-92264

            Estimates of Market Rent by Comparison Form HUD-92273

            Operating Expense Analysis Worksheet Form HUD-92274

        If relevant, tax credit certification.

        If supplemental grants and/or loans are part of project financing, provide commitment letter.

        Certification approving release of banking and credit information.

        Evidence of last arms-length transaction and price.

        Personal Financial and Credit Statement, Form HUD-92417 (see Section 8.3).

        Credit reports current within 30 days of the application date.

        Requests for verification of deposits for each bank reference included on Form 92013 Supp.

        HUD-92264A Supplement to Project Analysis.

        Financing plan (sources and uses statement for tax credit projects).

        Environmental report if updated from report submitted at pre-application.

        Resumé of management agent.

        Form HUD-9839 A,B, or C Management Certification.

        Form HUD-9832 Management Entity.

        Management Plan and Sample Lease.

        Management Agreement, if any.

    Additional Exhibits for Substantial Rehabilitation

        Detailed scope of rehabilitation work resulting from joint inspection by Lender and mortgagor (see Section 5.16).

        Lead-based paint reports and asbestos test reports for projects built before 1978.

        Cost estimate package (see supplemental instructions in Section 6.6.)

How Do Commercial Construction Loans Work

Winston Rowe and Associates Commercial Construction Loans With No Upfront Fees

What are construction loans?

A construction loan is a type of bank-issued short-term financing, created for the specific purpose of financing a new home or other real estate project. A traditional mortgage, also called a permanent loan, will help you buy an existing house. However, if you need to build a new house from the ground up, especially if you also need to purchase the raw land, that’s where a construction loan can help.

How do construction loans work?

The loan can be applied for by anyone who is investing their time and money in construction or related expenses. An individual homeowner, a contractor, or a small business owner can use construction loans to finance their construction project. If you already own the land, the equity that you have in that property can be used as your down payment for your construction loan.

Many borrowers ask how a construction loan turns into a mortgage. After the house is complete and the term of the loan ends (usually only one year), the borrower can refinance the construction loan into a permanent mortgage. Alternatively, the borrower can apply for a new loan (often called and “end loan”) to pay off the construction loan.

Does the borrower make monthly payments on a construction loan? Yes, however interest payments on this loan might only be required while the construction project is still underway. Unlike a lump sum loan, construction loans are similar to a line of credit, so interest is based only on the actual amount you borrow to complete each portion of a project rather than all at once. Some construction loans may require the balance to be paid off entirely by the time the project is complete.

More than just for the actual building, a construction loan can also be used to pay for equipment used in construction, building materials, or for hiring employees.

Here are some uses and things to know about construction loans:

New construction: If you are an individual or small business owner who is looking for funding to build a new home for yourself or a client, then you can apply for a short-term construction loan. This type of loan can be used to pay for the construction of new buildings. Construction loans have high-interest rates owing to the risk involved.

Builders or homeowners who want to build custom homes generally look to a construction loan. After completing the project, you can refinance the loan into a mortgage, or you can repay it by taking a new loan from another financial institution.

Expect a big down payment: Construction loans generally require a large down payment of around 20-25% of the total cost of the project, usually the cost of construction and mortgage.

Thorough application process: When you apply for a construction loan, you’ll be asked to provide the details of your construction project, including like the total amount of funding required, details about the builder, a detailed project timeline, the floor plans or construction drawings, the cost of materials, and the cost of labor.. (We’ll talk about applying for a construction loan in more detail later.)

Look out for paperwork: Until recently, it was hard to find lenders offering construction loans online. If you know you want to apply for a construction loan, you might find it easiest to visit your local bank or regional credit unions and ask for information in person. These institutes will be aware of the local property and construction market, and should be able to help you create a plan for your application.

Types of construction loans

Construction Mortgage Loans: This is a loan you can use to finance the purchase of land, or construction of a home on land you already own. These loans are usually structured so that the lender pays a percentage of the completion costs and you, the builder or developer, pay the rest.

During construction, the lender will release your funds in a series of payments, called “draws.” Typically, the lender will require an inspection between draws to check that the project is proceeding as planned. As the borrower, you are responsible for paying interest on the amount of funds you use.

This is different from a term loan, where you get a lump sum payment at once, and then pay back interest on the whole amount. Once your construction is complete and your interest paid, you’re responsible for repaying the entire loan amount by the due date. Generally, construction loans have short terms because they reflect the amount of time it would take to build the project; a year-long term is common.

Construction-to-Permanent Loans: Also called the CP loan, construction-to-permanent loans are another option for financing the building of a new home. CP loans offer some extra convenience to borrowers by combining two types of loans in a single process.

During construction, if you have a construction-to-permanent loan, you only pay interest on the outstanding balance, at an adjustable rate determined by the lender and pegged to the prime rate. The prime rate is a widely-used benchmark based on the federal funds rate, which is set by the Federal Reserve, meaning that if the Fed raises rates, then the interest rate on your construction-to-permanent loan will rise, too.

When the construction phase is over, the C2P loan converts into a standard 15- or 30 year mortgage where you pay principal and interest.

An advantage of construction-to-permanent loans for small business owners and homeowners is that instead of having to get a loan for the construction phase and then a second for financing the finished project, you can get two loans at once. In this scenario, you only close once and pay one set of closing costs.

Commercial Construction Loans: If you’re thinking bigger and planning to construct a multi-family home or apartment building, high-rise, multi-unit retail center, commercial office building, or other type of larger project, then you should probably be looking for a commercial construction loan.

Lenders for modern commercial construction loans for apartments and similar big projects are extremely risk-avoidant, and will expect a developer to shoulder most of the risk by covering up to 90% of the cost of the project. If you’re involved with this type of commercial project, you’ll need to be prepared with a lot of cash on hand to fund the construction yourself.

Why get a construction loan?

Purchase Equipment and Materials: You can use a construction loan to buy material and equipment that will be used in the construction of the new home.

Expanding a Company’s Facility: If you are a small business owner with a physical location and you need to build a new office or remodel an existing one, then you can use construction loans to finance your construction project.

Hiring and Training Employees: You can use the funds from a construction loan to hire new employees for construction purposes. You can also finance education and training costs for those employees with your construction loan.

Overcoming Damage or Disaster Expenses: If your office or commercial property is damaged by unforeseen circumstances like an earthquake or other disaster, you can use construction loans to make necessary repairs.

How can you get a construction loan?

Is it harder to qualify for a construction loan? Yes, construction loans are harder to get than a typical mortgage. Most lenders consider construction loans risky (because there is no asset to secure the loan), so you’ll face some stiff requirements if you decide to apply. Here’s what many lenders require for a construction loan:

Down payment: To get a construction loan, you’ll need to make a down payment of 20% or more of the cost of the total project. This means that you will need to be prepared to start the project with your own funds or assets before a lender will agree to loan more. If you already own the land, for example, it’s likely that you will be able to use that toward the down payment amount.

Talk to your lender about this. The particular amount of your down payment will depend on the cost of your project, the land, and what you plan to do with the funds. Lenders require high down payments as a way of making sure you’re invested in the project and won’t vanish if things go wrong during construction.

Strong personal credit: Anytime you apply for a construction loan, you’ll need to provide the lender with your personal credit history–even if you are applying as a small business. The lender will almost definitely want to see your personal FICO score and your business credit history, too.

Financial documents: Typically, a prospective lender will analyze your current and past debt and payment history, as well as any other loans or liens you may have on your property. Whether this loan is for your own home, or for a small business construction project, you’ll be asked to provide financial statements, tax returns, and proof of other assets.

Good reputation: Whether you are the builder, or you are working with a builder, know that the lender will scrutinize the builder’s reputation. Any public information is fair game for making this judgement call: vendor and subcontractor reviews, online reviews, and previous work history.

If you are working with a builder, they should not hesitate to provide evidence of their good reputation, along with the detailed project plans and cost estimates you’ll also need. If you need help finding a qualified builder, check out one of the many National Association of Home Builders chapters closest to you. A trusted local builder with a solid history of successfully completed projects will have an easier time getting a vote of approval from a financial institution in the form of a construction loan.

Specific plans: To qualify for a construction loan, you must have specific and detailed building plans, construction contracts, and cost estimates ready.

Appraisal: It’s challenging to appraise something that does not exist yet! Of course, there are experts who do just that every day. Construction lenders work with appraisers to analyze your project when you apply for a loan. They review the specifications of your construction project and compare it with other existing constructions of similar specifications. They then draw conclusions regarding the possible worth of the construction in the future.

It is very important to get a good appraisal to improve your chances of getting a construction loan approved. You can get an independent appraisal if you want, but your lender will most likely insist on conducting their own.

How do you qualify for an FHA construction loan?

If you have less-than-perfect credit, you may qualify for a construction loan backed by the Federal Housing Administration. FHA construction loans have lower qualification minimums than most banks. As of October, 2020, these FHA requirements were: FICO® score at least 580 = 3.5% down payment FICO® score between 500 and 579 = 10% down payment MIP (Mortgage Insurance Premium ) is required Debt-to-Income Ratio < 43% The home must be the borrower’s primary residence Steady income and proof of employment

First steps toward construction financing

Before making decisions about your potential construction loan, we recommend that you consider a wide range of options. Banks, online lenders, brokers, and subcontractors can each help you through the difficult and stressful process of completing your construction project. On the other hand, if you choose the wrong partners, they can add delays and complexity.

Here are a few more recommendations for getting started:

Shop Around for the Right Lender: You can look around for a lender that will offer all the options that you need. Some lenders will not provide construction loans while some lenders will provide loans with limited options that you do not need. Check out your local banks and credit unions to learn what type of construction financing they offer, and which options are available to you.

A broker is a professional and expert in construction loans, and an experienced one can save you a lot of hassle. They will understand your requirements, explain to you the best options that you have given your budget, and then shop around for the right lender. They may be able to get you better rates than you can negotiate yourself. Brokers understand the financial side of the construction loan as well as the construction side and both their limitations.

Confirm the Lender’s Experience: This might sound obvious, but make sure to choose a lender with experience in construction financing. If their past experience isn’t clear, you can ask them about past construction projects they’ve financed. You can also ask for references of other developers they have helped.

Tap your network and your local community: If you’re looking for help with a construction loan, look locally. Your personal network is always a good place to look for trustworthy recommendations. If you have a good relationship with a local banker or financial institution, that is also a great place to start.

Which bank is the best for a construction loan?

Your choice of the best bank depends on a number of factors, including your borrower profile, who offers a construction loan in the state where you live, your credit rating, and how much money you have to put down on a construction loan.

Winston Rowe and Associates Commercial Construction Lending With No Upfront Fees.

How to Write a Real Estate Business Plan

Winston Rowe and Associates No Upfront Fee Commercial Real Estate Lending

Success in the real estate investing industry won’t happen overnight, and it definitely won’t happen without proper planning or implementation. For entrepreneurs, a real estate investing business plan can serve as a road map to all of your business operations. Simply put, a real estate business plan will serve an essential role in the formation of your investing career.

Investors will need to strategize several key elements to create a successful business plan. These include future goals, company values, financing strategies and more. Once complete, a business plan can create the foundation for smooth operations and outline a future with unlimited potential for your investing career. Keep reading to learn how to create a real estate investment business plan today.

What Is A Real Estate Investing Business Plan?

A real estate business plan is a living document that provides the framework for business operations and goals. A business plan will include future goals for the company and organized steps to get there. While business plans can vary from investor to investor, they will typically include planning for one to five years at a time.

Drafting a business plan for real estate investing purposes is, without a doubt, one of the single most important steps a new investor can take. An REI business plan will help you avoid potential obstacles while simultaneously placing you in a position to succeed. It is a blueprint to follow when things are going according to plan, and even when they veer off course. If for nothing else, a real estate company business plan will see to it that investors know which steps to follow to achieve their goals. In many ways nothing is more valuable to today’s investors. It is the plan, after all, to follow the most direct path to success.

8 Must-Haves in A Real Estate Business Plan

As a whole, a real estate business plan should address a company’s short and long-term goals. Though in order to accurately portray a company’s vision, the right business plan will require more information than a future vision. A strong real estate business plan will provide a detailed look at the ins and outs of a company. This can include the organizational structure, financial information, marketing outline and more.  When done right it will serve as a comprehensive overview anyone who interacts with your business, whether internally or externally.

That said, creating an REI business plan will require a persistent attention to detail. For new investors drafting a real estate company business plan may seem like a daunting task, and quite honestly it is. The secret is knowing which ingredients must be added (and when). Below are seven must-haves for a well-executed business plan:

Outline the company values and mission statement.

Break down future goals into short and long term.

Strategize the strengths and weaknesses of the company.

Formulate the best investment strategy for each property and your respective goals.

Include potential marketing and branding efforts.

State how the company will be financed (and by whom).

Explain who is working for the business.

Answer any “what ifs” with backup plans and exit strategies.

These components are what matter the most, and a quality real estate business plan will delve into each category to ensure maximum optimization.

Vision

A company vision statement is essentially your mission statement and values. While these may not be the first step in planning your company, a vision will be crucial to the success of your business. Company values will not only guide you through investment decisions, but will also inspire others to work with your business time and time again. They should align potential employees, lenders and possible tenants with the motivations behind your company.

Before writing your company vision, think through examples you like both in and out of the real estate industry. Is there a company whose values you identify with? Or, are there mission statements you dislike? Use other companies as a starting point when creating your own set of values. Feel free to reach out to your mentor or other network connections for feedback as you plan. Most importantly, think about the qualities you personally value and how those can fit into your business plan.

Goals

Goals are one of the most important elements in a successful business plan. This is because not only do goals provide an end goal for your company, but they also outline the steps required to get there. It can be helpful to think about goals in two categories: short term and long term. Long term goals will typically outline your future plans for the company. These can include ideal investment types, profit numbers and company size. Short term goals are the smaller, actionable steps required to get there.

For example, one long term business goal could be to land four wholesale deals by the end of the year. Short term goals will make this more achievable by breaking it into smaller steps. A few short-term goals that might help you land those four wholesale deals could be to create a direct mail campaign for your market area, establish a buyers list with 50 contacts, and secure your first property under contract. Breaking down long term goals is a great way to hold yourself accountable, create deadlines and accomplish what you set out to.

SWOT Analysis

SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis involves thinking through each of these areas as you evaluate your company and potential competitors. This framework allows business owners to better understand what is working for the company and identify potential areas for improvement. SWOT analyses are used across industries as a way to create more actionable solutions to potential issues.

To think through a SWOT analysis for your real estate business plan, first identify your company’s potential strengths and weaknesses. Do you have high quality tenants? Are you struggling to raise capital? Be honest with yourself as you write out each category. Then, take a step back and look at your market area and any competitors to identify threats and opportunities. A potential threat could be whether or not your rental prices are in line with comparable properties. On the other hand, a potential opportunity could be to boost the amenities offered at your property to be more competitive in the area.

Investment Strategy

Any good real estate investment business plan requires the ability to implement a sound investment strategy. If for nothing else, there are several exit strategies a business may execute to secure profits: rehabbing, wholesaling and renting — just to name a few. This is where investors will want to analyze their market and determine which strategy will best suit their goals. Those with long-term retirement goals may want to consider leaning heavily into rental properties. However, those without the funds to build a rental portfolio may want to consider getting started by wholesaling. Whatever the case may be, now is the time to figure out what you want to do with each property you come across. It is important to note, however, that this strategy will change from property to property. Therefore, investors need to be able to determine their exit strategy based on the asset and their current goals. The reason this section needs to be added to a real estate investment business plan is because it will come in handy once a prospective deal is found.

Marketing Plan

While marketing may seem like the cherry on top of a sound business plan, marketing efforts will actually play an integral role in the foundation of your business. A marketing plan should include your business logo, website, social media outlets and any advertising efforts. Together these elements can build a solid brand for your business, which will help you build a strong business reputation and ultimately build trust with investors, clients and more.

To plan your marketing, first think about the ways your brand can illustrate the company values and mission statement you have created. Consider the ways you can incorporate your vision into your logo or website. Remember, in addition to attracting new clients, marketing efforts can also help maintain relationships with existing connections. For a step by step guide to drafting a real estate marketing plan, be sure to read this guide.

Financing Plan

Writing the financial portion of a business plan can be tricky, especially if you are just starting your business. As a general rule, a financial plan will include the income statement, cash flow, and balance sheet for a business. A financial plan should also include short- and long-term goals regarding the profits and losses of a company. Together, this information will help when making business decisions, raising capital and reporting on business performance.

Perhaps the most important factor when creating a financial plan is accuracy. While many investors want to report on high profits or low losses, manipulating data will not boost your business performance in any way. Come up with a system of organization that works for you and always ensure your financial statements are authentic. As a whole, a financial plan should help you identify what is and isn’t working for your business.

Teams & Small Business Systems

No successful business plan is complete without an outline of the operations and management. Think: how your business is being run and by whom. This information will include the organizational structure, office management (if any), and an outline of any ongoing projects or properties. Investors can even include future goals for team growth and operational changes when planning this information.

Even if you are just starting out, or have yet to launch your business, it is still necessary to plan your business structure. Start by planning what tasks you will be responsible for, and look for areas you will need help with. If you have a business partner, think through each of your strengths and weaknesses and look for areas you can best complement each other. For additional guidance, set up a meeting with your real estate mentor. They can provide valuable insights to their own business structure, which can serve as a jumping off point for your planning.

Exit Strategies & Back Up Plans

Believe it or not, every successful company out there has a backup plan. Businesses fail every day, but by creating a backup plan investor can position themselves to survive even the worst-case scenario. That’s why it’s crucial to strategize alternative exit strategies and back up plans for your investment business. These will not only help you create a plan of action if something does go wrong, but will also help you address any potential problems before they happen.

This section of a business plan should answer all of the “what if” questions a potential lender, employee, or client might have. What is a property remains on the market for longer than expected? What if a seller backs out before closing? What if a property has a higher than average vacancy rate? These questions (and many more) are worth thinking through as you create your business plan.

The impact of a truly great real estate business plan can last for the duration of your entire career, whereas a poor plan can get in the way of your future goals. The truth is: a real estate business plan is of the utmost importance, and as a new investor it deserves your undivided attention. Again, writing a business plan for real estate investing is no simple task, but it can be done correctly. Follow our real estate investment business plan template to ensure you get it right the first time around:

Write an executive summary that provides a bird’s eye view of the company.

Include a description of company goals and how you plan to achieve them.

Demonstrate your expertise with a thorough market analysis.

Specify who is working at your company and their qualifications.

Summarize what products and services your business has to offer.

Outline the intended marketing strategy for each aspect of your business.

Executive Summary

The first step is to define your mission and vision. In a nutshell, your executive summary is a snapshot of your business as a whole, and it will generally include a mission statement, company description, growth data, products and services, financial strategy, and future aspirations. This is the “why” of your business plan, and it should be clearly defined.

Company Description

The next step is to examine your business and provide a high-level review on the various elements, including goals and how you intend to achieve them. Investors should describe the nature of their business, as well as their targeted marketplace. Explain how services or products will meet said needs, address specific customers, organizations or businesses the company will serve, and explain the competitive advantage the business offers.

Market Analysis

This section will identify and illustrate your knowledge of the industry. It will generally consist of information about your target market, including distinguishing characteristics, size, market shares, and pricing and gross margin targets. A thorough market outline will also include your SWOT analysis.

Organization & Management

This is where you explain who does what in your business. This section should include your company’s organizational structure, with details the ownership, profiles on the management team and their qualifications. While this may seem unnecessary as a real estate investor, the people reading your business plan may want to know who’s in charge. Make sure you leave no stone unturned.

Services or Products

What are you selling? How will it benefit your customers? This is the part of your real estate business plan where you provide information on your product or service, including benefits it has over competitors. In essence, it will offer a description of your product/service, details on its life cycle, information on intellectual property, as well as research and development activities, which could include future R&D activities and efforts. Since real estate investment is more of a service, it’s critical for beginner investors to identify why their service is better than others in the industry. It could include experience.

Marketing Strategy

Generally speaking, a marketing strategy will encompass how a business owner intends to market or sell their product and service. This includes a market penetration strategy, plan for future growth, channels of distribution, and a comprehensive communication strategy. When creating a marketing strategy for a real estate business plan, investors should think about how they plan to identify and contact new leads. They should then think about the various options for communication: social media, direct mail, a company website, etc. The marketing portion of your business plan should essentially cover the practical steps operating and growing your business.

Winston Rowe and Associates is a national consulting firm you can review them on line at www.winstonrowe.com