how to write a business plan for property development

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A Sample Property Development Business Plan Template

A property development company is a company that is involved in buying land, financing real estate, building, or having builders build and develop projects for commercial purposes. Property development companies renovate and re-lease existing buildings, purchase raw land, and sell developed land or parcels to others. They are involved in developing a property from beginning to end.

A report released by the National Association of REALTORS® shows that over 5.64 million existing homes were sold in 2020. Also, according to data from the U.S. Census Bureau, 822,000 newly constructed homes were sold in the same year. In 2019, 64.9 percent of families owned their primary residence, according to the Federal Reserve’s Survey of Consumer Finances.

Steps on How to Write a Property Development Business Plan

1. executive summary.

Vintage Group© Property Development Company, Inc. is an American-based and licensed real estate cum property development company. Our head office will be located in a standard and centrally located facility in the heart of New York City, New York.

We will engage in property development projects for a wide range of clients. We will work towards becoming one of the largest property development companies in New York and the whole of the United States of America. Jason Theodora is the founder and CEO of Vintage Group© Property Development Company, Inc.

Company Profile

A. our products and services.

Vintage Group© Property Development Company, Inc. will be involved in;

b. Nature of the Business

Our property development company will operate the partnership business model. We will work with investors who are willing to partner with us to grow their investment portfolios in the real estate market.

c. The Industry

Vintage Group© Property Development Company, Inc. will operate under the real estate sales and brokerage industry.

d. Mission Statement

Our mission is to be at the forefront of buying property and partnering with landowners, then develop a plan for what to build or rebuild on that property. We will bring in investors and predict how much money the new homes or businesses will bring in.

e. Vision Statement

Our vision of to be listed among the top three property development companies in the whole of New York.

f. Our Tagline (Slogan)

Vintage Group© Property Development Company, Inc. – The Genius of Property Development!

g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)

Vintage Group© Property Development Company, Inc. will be formed as a Limited Liability Partnership (LLP).

h. Our Organizational Structure

i. Ownership/Shareholder Structure and Board Members

SWOT Analysis

b. Weakness

c. Opportunities

i. How Big is the Industry?

The market size, measured by revenue of the real estate sales and brokerage industry is put at $156.2 billion in 2023 hence it will be safe to safe the industry is amongst the biggest industries in the United States of America.

ii. Is the Industry Growing or Declining?

All available data points to the fact that the real estate and brokerage industry is growing. The market size of the industry is expected to increase 0.4 percent in 2023.

iii. What are the Future Trends in the Industry

The real estate sales and brokerage industry is changing, and players in the industry are improvising. No doubt, technology and climate change (the go green initiative) will change the landscape of the industry going forward.

iv. Are There Existing Niches in the Industry?

No, there are no existing niche ideas when it comes to the property development business. This is because the property development line of business is a subset of the real estate and brokerage industry.

v. Can You Sell a Franchise of your Business in the Future?

Vintage Group© Property Development Company, Inc. has plans to sell franchises in the nearest future and we will target major cities with thriving real estate markets in the United States of America.

i. Who are the Major Competitors?

ii. Is There a Franchise for Property Development Business?

Well, for now, there are no known franchise opportunities in the property development business.

iii. Are There Policies, Regulations, or Zoning Laws Affecting Property Development Business?

Yes, there are county or state regulations and zoning laws for the business. Zoning laws are found in virtually every municipality in the United States, affecting land use, lot size, building heights, density, setbacks, and other aspects of property use.

In addition to that, it is important to state that in the United States, government agencies and departments routinely grant variances to rules and regulations. Often, you only have to fill out a short form. In other cases, your request may have to be publicly heard before your city council, zoning board, or other body. Please check with your zoning or planning department to find out what options are available to you.

Marketing Plan

A. who is your target audience.

Our target market comprises adults above 18 years old who have the finance to do business with us.

ii. Level of Educational

We don’t have any restriction on the level of education of those we are ready to work with as investors or buyers of the properties we develop.

iii. Income Level

The income level of those we are looking to do business with will be between $70,000 and above $124,000.

There is no restriction when it comes to the ethnicity of the people we are looking to partner with.

There is no restriction when it comes to the language spoken by the people we will partner with.

vi. Geographical Location

Anybody from any geographical location will be welcome to partner with us or do business with our company.

Vintage Group© Property Development Company, Inc. will not restrict any investor or client from partnering with us or doing business with us based on their lifestyle, culture, or race.

b. Advertising and Promotion Strategies

i. Traditional Marketing Strategies

ii. Digital Marketing Strategies

iii. Social Media Marketing Plan

c. Pricing Strategy

When working out our pricing strategy, Vintage Group© Property Development Company, Inc. will make sure it covers profits, insurance, premium, license, and economy or value and full package for each property,

In all our pricing strategy will reflect;

Sales and Distribution Plan

A. sales channels.

Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, strategic alliances in the real estate and brokerage industry, and freelancers to help refer clients to us.

Vintage Group© Property Development Company, Inc. will also leverage the 4 Ps of marketing which are place, price, product, and promotion. By carefully integrating all these marketing strategies into a marketing mix, we can have a visible, in-demand service that is competitively priced and promoted to our customers.

b. Inventory Strategy

The fact that we will need the required building materials means that Vintage Group© Property Development Company, Inc. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse. We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.

c. Payment Options for Customers

Here are the payment options that Vintage Group© Property Development Company, Inc. will make available to her clients;

d. Return Policy, Incentives, and Guarantees

At Vintage Group© Property Development Company, Inc., we develop properties and the nature of products (properties) we offer does not accommodate return policy, but we will guarantee our investors of good returns on their investment (ROI). Our Operating Margin targets for housebuilders across the economic cycle will be placed at 15-20 percent on Gross Development Value (GDV).

e. Customer Support Strategy

Our customer support strategy will involve seeking customers’ feedback. This will help us provide excellent properties, return on investment (ROI) and customer service to all our clients and investors, it will help us understand their needs, experiences, and pain points. We will work with effective CRM software to be able to achieve this.

Operational Plan

Our operational plan will cover capacity planning, location planning, layout planning, quality planning, and methods planning.

Overall, we plan to expand our revenue by 50 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting grants and fundraising strategies that will enable us to boost our properties and service offerings.

a. What Happens During a Typical Day at a Property Development Business?

b. Production Process (If Any)

There is no production process when it comes to the property development business.

c. Service Procedure (If Any)

No, there are no defined service procedures for a property development business.

d. The Supply Chain

Vintage Group© Property Development Company, Inc. will rely on key players in the real estate and brokerage industry to refer business deals to us. So also, we have been able to establish business relationships with wholesale supplies of building materials.

e. Sources of Income

Vintage Group© Property Development Company, Inc. make money from;

Financial Plan

A. amount needed to start your property development company.

Vintage Group© Property Development Company, Inc. would need an estimate of $4.5 million to successfully set up a property development company in the United States of America. Please note that this amount includes the salaries of all our staff for the first month of operation.

b. What are the Cost Involved?

c. Do You Need to Build a Facility? If YES, How Much will it cost?

Vintage Group© Property Development Company, Inc. will not build a new facility; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our facility.

d. What are the Ongoing Expenses for Running a Property Development Company?

e. What is the Average Salary of your Staff? List the Job Position and their proposed salary based on industry rate and your startup capital

f. How Do You Get Funding to Start a Property Development Company

Financial Projection

A. how much should you charge for your service.

At Vintage Group© Property Development Company, Inc. our fee will be based on the location and type of property we want to develop.

b. Sales Forecast?

c. Estimated Profit You Will Make a Year?

The ideal profit margin we hope to make at Vintage Group© Property Development Company, Inc. will be between 16 and 20 percent on development costs.

d. Profit Margin of a Property Development Company

Vintage Group© Property Development Company, Inc. will collect developer fees that will range from 5 to 10 percent aside from making profits off every property sold.

Please note in planning our property development project, we will make sure that the bottom line shows a suitable return for the money and effort we put into it.

Growth Plan

A. how do you intend to grow and expand .

Vintage Group© Property Development Company, Inc. will grow our property development company by first opening other offices in key cities in the United States of America within the first five years of establishing the business and then will start selling franchises from the sixth year.

b. Where do you intend to expand to and why? (Geographical locations)

Vintage Group© Property Development Company, Inc. plans to expand first to Los Angeles – California, San Francisco – California, Chicago – Illinois, Washington, D.C., Boston – Massachusetts, Miami – Florida, Seattle – Washington, Dallas – Texas, and Philadelphia – Pennsylvania.

The reason we intend to expand to these geographic locations is the fact that available statistics show that the cities listed above have the highest real estate market in the United States. New York has the highest real estate value in the country at $2.8 trillion.

The founder of Vintage Group© Property Development Company, Inc. plans to exit the business via family succession. We have placed structure and processes in place that will help us achieve our plan of successfully transferring the business from one family member to another and from one generation to another.

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Real Estate Development Business Plan Template

Written by Dave Lavinsky

real estate development business plan

Real Estate Development Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their real estate development companies.

If you’re unfamiliar with creating a business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a real estate development business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your real estate development business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a real estate development business or grow your existing real estate development company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your real estate development business to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Real Estate Development Businesses

With regards to funding, the main sources of funding for a real estate development business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for real estate development companies.

How to Write a Business Plan for a Real Estate Development Business

If you want to start a real estate development business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of real estate development business you are running and the status. For example, are you a startup, do you have a real estate development business that you would like to grow, or are you operating an established real estate business that you would like to sell?

Next, provide an overview of each of the subsequent sections of your plan.

Company Overview

In your company overview, you will detail the type of real estate development business you are operating.

For example, you might specialize in one of the following types of real estate development businesses:

In addition to explaining the type of real estate development business you will operate, the company description needs to provide background on the business.

Include answers to questions such as:

Industry Analysis

In your industry or market analysis, you need to provide an overview of the real estate industry.

industry growth outlook

While this may seem unnecessary, it serves multiple purposes.

First, researching the real estate development industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of real estate development business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other real estate development businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other types of properties for sale, leasing another facility versus purchasing one from you or hiring an in-house development team.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a real estate development business, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of real estate development company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide renovation services, sell newly developed land, or finance real estate deals?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your real estate development company. Document where your company is situated and mention how the site will impact your success. For example, is your real estate development business located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your real estate development marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your real estate development business, including answering calls, planning and managing projects, billing clients and collecting payments, and scheduling meetings with prospective and current clients.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sell your X number of properties, or when you hope to reach $X in revenue. It could also be when you expect to expand your real estate development business to a new city.

Management Team

To demonstrate your real estate development business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing real estate development businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your management team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a real estate development business or successfully running their own real estate company.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you charge a development fee of 5%? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your real estate development business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a real estate development business:

business costs

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of previous real estate developments you’ve been involved in.

Writing a business plan for your real estate development business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the real estate development industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful real estate development business.

Real Estate Development Business Plan Template FAQs

What is the easiest way to complete my real estate development business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your real estate development business plan.

How Do You Start a Real Estate Development Business?

Starting a real estate development business is easy with these 14 steps:

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Other Helpful Business Plan Articles & Templates

Business Plan Template For Small Businesses & Entrepreneurs

How Do You Write a Property Development Business Plan?

Property development is an exciting and rewarding industry to enter. Your project begins with an idea and the impetus to turn that idea into something physical, be it a residential, commercial, or an industrial property. The first step is learning how to write a property development business plan. This is how you lay out your plans logically and pave the way for a successful project. Without a business plan, the project may easily seem gargantuan; once you’ve written it down and broken it up into manageable steps, it’s easier to tackle.

What Is a Property Development Business Plan?

A business plan is a document which describes what kind of business you want to build, and it breaks down how you will go about doing that. When it comes to a property development business plan, the first misconception is that it’s set in stone. It is a working document which evolves as your thought process progresses, and you clarify each aspect of the project. It lays out the framework to get your thoughts in order and adjust them as you go.

What Does a Regular Business Plan Consist Of?

Writing a business plan needn’t be an immense task. In fact, many people recommend keeping it short and basic to begin with, and then fleshing it out where necessary.

A general business plan consists of:

What is Different for Property Development?

A property development business plan is similar to a general business plan; it’s just more skewed to this particular industry. You will think more about the particulars of the property development industry . Your business plan will consider which aspects will affect your business that do not ordinarily impact other businesses.

Your property development business plan will cover:

Additional Considerations When Writing

Your property development business plan also needs to take into account factors such as who you are writing it for, is it for investors, third parties or banks? You need to speak directly to them and ensure that the plan is researched and convincing to investors. If you show your property development business plan to a third party, you may want to consider asking your reader to sign a confidentiality agreement.

Now that you have a clearer idea of how to write your property development plan, you can get going. Once it is complete, you can get on to the practical stuff, such as figuring out which property development software to use, finding the right property to develop, speaking to architects, and designing the ideal space.

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COMMENTS

Property Development Business Plan Template
A business plan provides a snapshot of your property development business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans. Why You Need a Business Plan
A Sample Property Development Business Plan Template
Steps on How to Write a Property Development Business Plan 1. Executive Summary Vintage Group© Property Development Company, Inc. is an American-based and licensed real estate cum property development company. Our head office will be located in a standard and centrally located facility in the heart of New York City, New York.
Real Estate Development Business Plan Template ...
For a real estate development business, your marketing strategy should include the following: Product: In the product section, you should reiterate the type of real estate development company that you documented in your company overview. Then, detail the specific products or services you will be offering.
How Do You Write a Property Development Business Plan?
Your property development business plan will cover: Your business’s structure, be it sole trader, trust, partnership, or company. Your funding strategy The type of property you want to develop Your development strategy Your construction strategy Where you want to develop the property How long the project will take to complete
Write your business plan
Executive summary. Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.