Great Format For Residential Real Estate Investment Plans is An Important Step For Raising Capital

Great Format For Residential Real Estate Investment Plans is An Important Step For Raising Capital

Why is great format a big deal for raising capital from equity participants and lenders? Doesn’t it seem like the bankers should only care about the numbers and the facts. Aren’t investors focused on returns and not “soft shoe” items such as business plan format? That is how it would seem, but if you jump to that conclusion you are placing a lot at risk unnecessarily.


Additionally, doesn’t it make sense that investors would consider that the effort and presentation of your business plans may reflect how you like to operate your investments.

You see your business plan is much more than a simple statement of your plan to operate the investment project. Investors are often putting very large sums of capital into an investment. Because of this, your business plan becomes a metaphor for how they may expect you to run your business.

As you can imagine given this context the clarity, detail, organization, and physical attractiveness of the document becomes quite important. Additionally, subtle additions add a great deal to the presentation.

A one page executive summary that clearly describes the investment, the returns, the business differentiators, the expected income and expense, how management will be handled and other key factors is a lot like the oral question period at a beauty contest. Eloquence here means you are worthy of further considerations.

A sharp business plan structure is the swimsuit contest and evening gown contest rolled into one. If the plan is interesting, conservative and crisp you likely are a winner.

A table of contents and footnotes says to the investors or “judges” that this contestant knows his stuff because after all isn’t this hard to do.

In short, you are sending all sorts of subtle messages about your business throughout the plan and its presentation. Accurate numbers tell whether you will be able to manage your business. Clean well spelled documents organized in a logical fashion suggests effective customer service and maintenance.

A complete list of support documents allowing an investor to make a complete decision without looking significantly further supports the idea that you will carry your projects through to their logical completion. Good photos suggest a clean well maintained project. In essence, the business plan represents another form of interview which the principal should exert every effort to produce a complete thorough investment plan that will lead to a successful investment plan for the project and for the supporting investors.

By Robert Holiday

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