Do you want to start a real estate firm and need to write a plan? If YES, here is a sample real estate wholesaling business plan template & feasibility report.
Real estate wholesaling is a niche idea in the real estate industry. The truth is that whether you are an accredited investor or a real estate rookie, refining and mastering your real estate wholesaling business is a legitimate way of expanding your investment portfolio.
It is worthy to mention that before you can start a real estate wholesaling business in the united states of America, you must apply for a license and in some cases, you may be required to pass an exam in the industry. Plus, you need to register an LLC because you need an LLC to wholesale properties in the United States.
It is also very important to state that businesses need business plans to project and tag along. Writing a business plan to many might come as a herculean task because of the many technical areas that may likely appear gray.
It is for that reason that business plan templates can be drawn from the internet and even from business books, so that you can have an idea of what it is like to draw up a business plan for yourself. You too can now write your own business plan by fixing in the appropriate details of your business after you have gone through the sample real estate wholesaling business plan template below.
A Sample Real Estate Wholesaling Business Plan Template
1. Industry Overview
The real estate industry is one of the many industries that is a major contributor to the growth of the economy of many nations of the world and real estate wholesaling is one of the many businesses in the value chain of the real estate industry.
A real estate wholesale business is a business that purchases a property from a home seller, and then turns around and resells the property to a home buyer for a profit. Usually, a real estate wholesaler sells the home at a price that will cover both all the expenses incurred and provide enough profit to compensate for the time invested in the deal.
Basically, real estate wholesalers sell their properties to investors and the fact that you are going to be selling to investors, means that the first critical factor in a successful real estate wholesaling business is that you understand that they want to buy properties below their current market value.
A smart investor understands that a successful real estate investment begins with a purchase below real current value. In other words, some profit exists the moment you leave the closing table. The real estate industry is highly regulated in the United States of America and anyone who aspires to become a real estate wholesaler must apply and obtain a license before they can legally operate in the industry.
But as a lawyer, you can handle real estate deals in some states in the US and make your commission without operating as a licensed real estate agent. In order to obtain a license as a real estate agent in the US, you are required to write and pass your state’s real estate exams.
The practice in the United States of America is that a real estate wholesaler is required to disclose to prospective buyers and sellers the nature of their relationship within the transaction and with the parties involved in the deal. Just like all other investment vehicles, there are potential down sides that you need to look out for as a real estate wholesaler. One of the major risks in real estate wholesaling business is a sudden down turn in the economy.
Another factor that is a major concern to the real estate wholesaling business is the cost increase as a result of inflation, currency devaluation and economic challenges. Unforeseen delays on the part of government agencies, litigation and also delays from contractors could lead to substantial cost increase especially if the project is heavily dependent on bank loans.
If perhaps during this period there is a change in the supply and demand dynamics of the property sector, the project could be affected negatively.
Lastly, it is not necessary to be a licensed real estate agent to wholesale real estate; all you need is to be the principal buyer or seller in the respective transaction. Most states require licensed agents to disclose their position as a licensed real estate professional when they enter into a contract with a buyer or seller.
2. Executive Summary
Oak® Real Estate Wholesaling Co., Inc. is a licensed US based real estate wholesaling business. Our head office will be located in West Sacramento, California. Although our Head Office will be located in West Sacramento, but we will have our branch offices in major cities in all regions of the United States of America – within the first two years of operation.
We would have set up our offices in the following locations; Los Angeles, Florida, North Dakota, Boston, Dallas and Washington. Oak® Real Estate Wholesaling Co., Inc. will work towards becoming one of the largest real estate wholesaling companies in the United States of America with active presence in major cities.
We are quite aware that real estate wholesaling business requires robust network with home sellers and home buyers cum property investors, which is why we have perfected plans to connect and network with these stakeholders.
As part of our plans to make our customers our number one priority and to become the leading real estate wholesaling company in the United States of America, we have perfected plans to secure highly sellable properties that can favorable compete with the best in the industry.
Oak® Real Estate Wholesaling Co., Inc. will be owned majorly the Mr. Jack Barry. Jack Barry is a property guru that has worked with top Real Estate Companies in the United States of America for many years prior to starting his own business.
3. Our Products and Services
Oak® Real Estate Wholesaling Co., Inc. is set to run a standard real estate wholesaling business within the scope of the real estate industry in the United States of America. Our intention of starting a real estate wholesaling business is to make profits from the industry and we will do all that is permitted by the law in the US to achieve our aim and ambition.
Our business offerings are listed below;
- Purchase a property from a home seller, and then turn around and resell the property to a home buyer for a profit
4. Our Mission and Vision Statement
- Our vision is to become one of the top 5 real estate wholesaling companies in the United States of America within the first 10 years of starting Oak® Real Estate Wholesaling Co., Inc.
- Our mission and values are to help people, investors, businesses, property owners and clients in the United States of America realize their dreams of buying and selling properties, in the United States of America.
Our Business Structure
Our company’s structure is not entirely different from what is obtainable in the real estate industry, as a matter of priority, we have decided to create a structure that will allow for easy growth for all our employees and we have also created platforms that will enable us attract some of the best hands in the industry.
Oak® Real Estate Wholesaling Co., Inc. is fully aware of the modus operandi in the real estate industry, hence adequate provision and competitive packages has been prepared for independent sales agents. Our marketing department will be responsible for managing this aspect of our business structure.
Below is the business structure of Oak® Real Estate Wholesaling Co., Inc.;
- Chief Executive Officer
- Company’s Lawyer / Secretary
- Admin and HR Manager
- Head of Acquisition and Disposition
- Business Developer / Sales and Marketing
- Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Officer – CEO (President):
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Reports to the board
Company’s Lawyer/Secretary/Legal Counsel
- Responsible for drawing up contracts and other legal documents for the company
- Consult and handle all corporate legal processes
- Develop company policy and position on legal issues
- Research, anticipate and guard company against legal risks
- Represent company in legal proceedings (administrative boards, court trials et al)
- Play a part in business deals negotiation and take minutes of meetings
- Responsible for analyzing legal documents on behalf of the company
- Prepares annual reports for the company
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversee the smooth running of the daily office activities.
Head, Acquisitions and Dispositions
- Manages overall acquisitions and dispositions
- Identifies and analyzes acquisition opportunities; negotiates acquisitions.
- Responsible for identifying opportunities to acquire properties, possibly within a designated geographic region.
- Assists in the sourcing and acquisition of property for development; conducts market research; contacts brokers and owners about property acquisition opportunities; assists in negotiations with sellers and other parties.
- Identifies and analyzes disposition opportunities; negotiates dispositions.
- Responsible for identifying opportunities to dispose of properties, possibly within a designated geographic region.
- Assists in the disposition of property; conducts market research to determine the value of properties; contacts brokers and potential buyers; assists in structuring sales transactions and negotiations with buyers.
- Identify, prioritize, and reach out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contact
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Document all customer contact and information
- Represent the company in strategic meetings
- Help increase sales and growth for the company
Sales and Marketing Officer
- Lists the property for sale to the public
- Markets space; finds tenants; participates in lease negotiations.
- Provides potential buyers with a real property condition disclosure (if required by law) and other necessary forms.
- Prepares necessary papers describing the property for advertising, pamphlets, open houses, etc.
- Holds an open house to show the property.
- Serves as a contact available to answer any questions about the property and schedule showing appointments.
- Ensures that buyers are pre-screened and financially qualified to buy the property. (Sellers should be aware that the underwriter for any real estate mortgage loan is the final say)
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managers with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Front Desk/Customer’s Service Officer
- Receives Visitors/clients on behalf of the organization
- Receives parcels /documents for the company
- Handles enquiries via e-mail and phone calls for the organization
- Distribute mails in the organization
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the line manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s properties that are put – up for sale, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
- Handles any other duties as assigned by the line manager
6. SWOT Analysis
The fact that real estate wholesaling business is a very rewarding business does not mean that there are no challenges in the industry. Starting a real estate wholesaling business in the United States of America comes with its own fair share of challenges, you would have to abide by the law and also compete with loads of entrepreneurs in the real estate industry.
In order to compete favorably in the real estate industry, we have been able to hire the services of a tested and trusted business and HR consultant to help us conduct critical SWOT analysis for us. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Oak® Real Estate Wholesaling Co., Inc.;
Some of our strengths that we will be bringing to the table in the real estate industry is our robust relations with properties investment moguls in the whole of the United States of America, our access to funding, and also we have a team of experts who have cut their teeth in the industry. Our commission structure and relationship with freelance real estate agents in California and other state in the US will also count towards our advantage.
As a newbie in the real estate wholesaling/real estate industry, we might have some challenges competing with big time property developers and other real estate wholesalers that have been in the industry for many years; that perhaps is part of our weakness.
The opportunities in the real estate industry especially as a real estate wholesaling company is massive and we are ready to take advantage of any opportunity that comes our way.
Some of the threats that we are likely going to face as a real estate wholesaling company are unfavorable government policies, and global economic downturn; global economic downturn usually affects spending power and the real estate industry is known to encounter decline in sales and profits during this period. There is hardly anything we can do as regards these threats other than to be optimistic that things will continue to work for our good.
7. MARKET ANALYSIS
- Market Trends
The market trends in the real estate wholesalers is that there are no fixed profits projections when engaging in a real estate wholesaling deal. The profit you stand to gain as a real estate wholesaler depends on loads of factors amongst which are your attention to details, ability to turn a slum or a run down facility into an edifice and knowing exactly when to buy over property, the kind of renovations to be done on the property and the right time to sell the property.
If you are able to get all the above stated factors right as a real estate wholesaler, your gains will always be far more than your loss.
Another obvious trend that is common with real estate wholesalers in the United States of America is that most of them are improvising on more means of making money and as matter of fact they are also acting as property developers amongst many other functions that they are involved in.
One thing is certain for every real estate wholesaler; if they are hardworking, creative and proactive, they will always generate enough income to meet all their overhead and operational cost, keep their business going without struggle and make reasonable profits from all business deals that they are involved in.
8. Our Target Market
Our target market is the whole of the United States of America and we have put plans in place to recruit freelance agents (brokers) nationally to represent our business interest wherever they are located in the United States of America. Below is a list of the people and organizations that we have specifically design our products and services for;
- Home Owners who are interested in selling off their home
- Properties Owners who are interested in selling off their properties
- Foreign investors who are interested in owning properties in the United States of America
- Managers of public facilities
Oak® Real Estate Wholesaling Co., Inc. might be a new entrant into the real estate industry in the United States of America, but the management staff and board members are considered gurus. They are licensed investors in the United States property market.
These are part of what will count as a competitive advantage for us. We have people on board who are experts at finding properties that are far below current market value that can meet your buyers’ needs and still have room for profit in the middle.
Another competitive advantage that we are bringing to the industry is the commission model (our commission structure). We know that freelance brokers would work for the highest bidder which is why we designed a commission structure that will be a win – win for all parties.
Lastly, our employees will be well taken care of, and their welfare package will be amongst the best in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our objectives.
9. SALES AND MARKETING STRATEGY
We are mindful of the fact that there are competitions in the real estate market in the United States of America, hence we have been able to hire some of the best business developers to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall goal of the organization. The training is not restricted to only our full – time employees but also all our freelance brokers that are scattered all over the United States of America.
Our goal is to become one of the top 5 leading real estate wholesaling companies in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force in the industry. Oak® Real Estate Wholesaling Co., Inc. is set to make use of the following marketing and sales strategies;
- Introduce our business by sending introductory letters alongside our brochure to stake holders in the real estate industry and also property owners and potential clients through the United States of America
- Promptness in bidding for properties that are put up for sale
- Advertise our business in real estate / properties magazines and websites
- List our business on yellow pages (local directories)
- Attend real estate related expos, seminars, and business fairs et al
- Create different packages for different category of clients in order to successfully sell our homes / properties to them
- Leverage on the internet (social media platforms) and our official website to promote our business
- Places highly visible “For Sale” sign on any property that we put up for sale
- Encourage word of mouth marketing especially when we have a home for sale.
Sources of Income
Oak® Real Estate Wholesaling Co., Inc. is established with the aim of maximizing profits in the real estate industry. Although we a real estate wholesaling company, but part of our work force are also licensed real estate agents hence we intend generating additional income from diverse means in the real estate wholesaling line of business.
We have successfully built a vibrant real estate network that covers the whole of the United States of America so as to help us build a profitable business. Below are the sources we intend exploring to generate income for Oak® Real Estate Wholesaling Co., Inc.;
- Purchase a property from a home seller, and then turn around and resell the property to a home buyer for a profit
10. Sales Forecast
As long as there are people living in the United States of America, there will always be need to acquire properties or move into new homes et al. Businesses need facilities to operate from and families need shelters hence the demand for the services of real estate wholesalers to help them solve these needs especially when they are operating on a low budget.
We are well positioned to take on the challenges that are synonymous to real estate wholesalers in the United States, and we are quite optimistic that we will meet out set target of generating enough income/profits from the first month of operations.
We have been able to critically examine the real estate market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below is the sales projection for Oak® Real Estate Wholesaling Co., Inc., it is based on the location of our real estate wholesaling business;
- First Fiscal Year (FY1): $2 million
- Second Fiscal Year (FY2): $5 million
- Third Fiscal Year (FY3): $7 million
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and any major competitor offering same additional services as we do within the locations where we have a strong business presence. Please note that the above projection might be lower and at the same time it might be higher since some factors are beyond our control.
11. Publicity and Advertising Strategy
We have been able to work with our consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the real estate industry by storm which is why we have made provisions for effective publicity and advertisement of our company.
Below are the platforms we intend to leverage on to promote and advertise our real estate wholesaling business;
- Place adverts on both print and electronic media platforms
- Place our flexi banners with our company’s logo and contacts in every property we put up for sale
- Maximize our company’s website to promote our business
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, LinkedIn, Google+ and other platforms (real estate online forums) to promote our business and list our properties for sale and for lease.
- Install our Bill Boards in strategic locations
- Distribute our fliers and handbills in targeted areas from time to time
- Attend landlord and residence association meetings with the aim of networking and introducing our business.
- Ensure that all our workers wear our branded shirts and all our vehicles are well branded with our company’s logo et al.
12. Our Pricing Strategy
Part of our business strategy is to ensure that we work within the budget of our potential clients to sell excellent properties to them. Since we are not directly in control of the pricing system in the real estate industry, we can only abide by what is obtainable when it comes to pricing structure.
- Payment Options
At Oak® Real Estate Wholesaling Co., Inc. our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions.
Real estate deals usually involve huge amount of money. Here are the payment options that we will make available to our clients;
- Payment by via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will help us achieve our plans without any itches and we will also pay our freelance sales agents (real estate brokers) with same platforms.
13. Startup Expenditure (Budget)
From our market survey and feasibility studies, we have been able to come up with a detailed budget on achieving our aim of establishing a standard real estate wholesaling business in the United States and here are the key areas where we will spend our startup capital;
- The total fee for incorporating the business in the United States of America – $750.
- The budget for permits and license – $2,000
- The cost for hiring business consultant – $2,500.
- The cost for acquiring computer Software (Accounting Software, Payroll Software, CRM Software, Microsoft Office, QuickBooks Pro, and real estate software) – $7,000
- The budget for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $5,400.
- The cost for payment of rent for a suitable Office facility with enough space in West Sacramento, California for 12 months at $1.76 per square feet in the total amount of – $165,600.
- The cost for office remodeling (construction of racks and shelves) – $95,000.
- The cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $15,000
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
- The cost of launching our official website – $600
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $5,000
Going by the report from our research and feasibility studies, we will need about $250,000 (Two Hundred and Fifty Thousand USD) to set up a real estate wholesaling company in West Sacramento, California, US.
Generating Funds/Startup Capital for Oak® Real Estate Wholesaling Co., Inc.
Oak® Real Estate Wholesaling Co., Inc. is majorly owned by Mr. Jack Barry and his immediate family members, but they will welcome other investors in the real estate industry to partner with them. These are the areas Health Is Oak® Real Estate Wholesaling Co., Inc. intends to generate its startup capital;
- Generate part of the startup capital from personal savings
- Generate part of the startup capital from investors (Business Partners)
- Apply for loan from the bank
N.B: We have been able to generate about $100,000 (Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Oak® Real Estate Wholesaling Co., Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our homes a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Oak® Real Estate Wholesaling Co., Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Acquiring of Office Facility in West Sacramento, California: Completed
- Conducting Feasibility Studies: Completed
- Generating capital from the CEO / President and Business Partners: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the needed furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with key players in the industry (networking and membership of relevant real estate bodies): In Progress
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