Assess your strengths and weaknesses
Establish business and personal goals
Assess your financial resources
Identify the financial risks
Determine the start-up costs
Decide on your business location
Do market research
Identify your customers
Identify your competitors
Develop a marketing plan
Select a lawyer
Choose a form of organization (proprietorship, partnership, or corporation, for example)
Create your business (register your name, incorporate the business, etc.)
Select an accountant
Select a banker
Set up a business checking account
Apply for business loans (if applicable)
Establish a line of credit
Select an insurance agent
Obtain business insurance
Get business cards
Get furniture and equipment
Obtain a business license or permit (if applicable)
Get a federal employer identification number (if applicable)
Get a state employer i.d. Number (if applicable)
Send for federal and state tax forms
Join a professional organization
Set a starting
Executive Summary/Mission Statement: the heart of a business plan. Sets priorities and provides the foundation for the full plan. (The who, what, when where, and why or our business.)
Market Demographics/Local Business Climate (within 50 miles): What type of area (suburban, rural or urban), local community economy and major industries in which the business operates.
The Company: Basic information about the company; its past, its present and its future. This section includes the operations concept. What types of local support training? How many hours each week?
The Product/Service: Describe the products and/or services best suited by your business. What makes the concept special and attractive?
Finances: Include cash flow projections, profit and loss statements and balance sheets. Set income goals based on current monthly needs plus 50% to accommodate savings, taxes and business expenses.
Strategic Direction: Determine short term (30, 60, 90 days), mid-term (1 year +), and long term (2 – 3 years) objectives and how to prioritize efforts in each stage.
Example of a business plan:
Mission Statement: To live in, resale, lease out and/or assign residential real estate in United States. The houses will be priced at reasonable rates and will be marketed to a qualified buyer ranging in age 25 to 59.
The Company: “Stealth Educational Services Investments” will be operated as a sole proprietorship, owned and operated John Michael. The local address is: 123 Oak Street, Anytown, USA 12345.
Short Term Objectives: Goals (30, 60, 90 days)
Purchase start-up materials: business cards, office supplies, etc.
Open bank account for business
Interview realtors for team
Work with local team of mortgage brokers
Monthly Income:
Need: $5,000
Want: $10,000
Time Focus:
50% Locating properties
30% Researching at the courthouse
20% Making offers and fixing up properties
Long Term Objectives: Goals (after first year)
Monthly Income:
Need: $6,000
Want: $10,000
Time Focus:
50% Locating and researching properties
50% Making offers and setting up investment properties
[addsig]
you could try forming a LLC and looking for individual investors to generate the capital you would need for a down payment...check the local laws because there are resrictions on soliciting investors that im not very clear on...
the growth rate is usually about a mile per year so if development is that close your going to have to act quick...
if time is of the essence you should try putting an option on the property while you seek financing, knowledge etc...
good luck with all you do
~Andrew
Before deciding HOW to buy it, I would recommend your determining IF doing this deal would be economically feasible and therefore, IF you should buy the property.
Feasibility is going to depend on several factors--value of the lots given location, realistic sale value of the new construction on a lot, costs of installing site improvements (eg, streets, curbs, sidewalks), number of lots possible--all of this balanced against the price the seller wants and the terms that he is willing to grant a buyer.
I most definitely will look into your book, Nancy, and am afraid that this one will probably pass me by before I have the knowledge to act on it.
I was hoping that maybe I could tie the property up (if it has profit in it as a development) and partner with a Developer and split the profits, but I don't know how to do the numbers on that kind of property yet and I don't want to bring in a partner who realistically wouldn't even need me for the deal.
You are undertaking a major project and to do this many key factors must be in place first.
You will need to research how must land is truly available for development by checking easements; rights-of-way; Caveats; and covenants of the subject property along with any building schemes, notices of permits, etc. which may affect the property.
Having a property rezoned can be a major project if the property is in a restrictive county.
And the other factor will be the infrastructure and your project impact in the community.
You will need to know:
What is the Zoning and Official Community Plan land-use designation for the property.
Current regulations on the use, density and building dimensions permitted on your property.
If the property is located on unstable soils, you may be required to undertake a geotechnical assessment before constructing a new structure.
Be sure to check city and county Tree Removal Bylaws as some time ago I did a development that caused me a little grief since the law protected trees 4 inches and above from unnecessary removal.
If you do not have the funds or technical skills to this project, You will need to partnerup up with a developer who has them. Parties sign a development agreement; the owner contributes the land and the developer brings in the construction and management skills, funds to develop and its goodwill. The developer will construct buildings, market, sell, and realize proceeds. A part of construction or sale proceeds will go to the owner; the balance to the developer. They will jointly sell the units to individual purchasers.
This will not be an easy undertaking for you, just be sure you are ready for a major roller coaster ride when you set out to develop land.
I do not want to discourage you but if this will be your first time in developing taking on a project of this size can be vary troublesome.
I have always suggested to my students to learn all they can about developing land, learn all the city, county and state rules and regulations on developments and most importantly have a source of funds in place and a lot of it as the numbers will run up vary fast on you.
A book that has been vary helpful in this process is called Getting Financing & Developing Land by Michael C. Thomsett
Thank you for the valueable input. I will most definitely be checking out the book.
That is exactly the response I was looking for, it gives me a general outline of the process, and anything left out I'm sure I can learn along the way.
i think thats going to be way too broad of a question for anyone to answer...
no matter what your doing, its not going to be 'simple'...
~Andrew
You will need all the following in place first
Assess your strengths and weaknesses
Establish business and personal goals
Assess your financial resources
Identify the financial risks
Determine the start-up costs
Decide on your business location
Do market research
Identify your customers
Identify your competitors
Develop a marketing plan
Select a lawyer
Choose a form of organization (proprietorship, partnership, or corporation, for example)
Create your business (register your name, incorporate the business, etc.)
Select an accountant
Select a banker
Set up a business checking account
Apply for business loans (if applicable)
Establish a line of credit
Select an insurance agent
Obtain business insurance
Get business cards
Get furniture and equipment
Obtain a business license or permit (if applicable)
Get a federal employer identification number (if applicable)
Get a state employer i.d. Number (if applicable)
Send for federal and state tax forms
Join a professional organization
Set a starting
Now it's time to prepare a business plan
[addsig]
Now you need the following in your business plan:
Executive Summary/Mission Statement: the heart of a business plan. Sets priorities and provides the foundation for the full plan. (The who, what, when where, and why or our business.)
Market Demographics/Local Business Climate (within 50 miles): What type of area (suburban, rural or urban), local community economy and major industries in which the business operates.
The Company: Basic information about the company; its past, its present and its future. This section includes the operations concept. What types of local support training? How many hours each week?
The Product/Service: Describe the products and/or services best suited by your business. What makes the concept special and attractive?
Finances: Include cash flow projections, profit and loss statements and balance sheets. Set income goals based on current monthly needs plus 50% to accommodate savings, taxes and business expenses.
Strategic Direction: Determine short term (30, 60, 90 days), mid-term (1 year +), and long term (2 – 3 years) objectives and how to prioritize efforts in each stage.
Example of a business plan:
Mission Statement: To live in, resale, lease out and/or assign residential real estate in United States. The houses will be priced at reasonable rates and will be marketed to a qualified buyer ranging in age 25 to 59.
The Company: “Stealth Educational Services Investments” will be operated as a sole proprietorship, owned and operated John Michael. The local address is: 123 Oak Street, Anytown, USA 12345.
Short Term Objectives: Goals (30, 60, 90 days)
Purchase start-up materials: business cards, office supplies, etc.
Open bank account for business
Interview realtors for team
Work with local team of mortgage brokers
Monthly Income:
Need: $5,000
Want: $10,000
Time Focus:
50% Locating properties
30% Researching at the courthouse
20% Making offers and fixing up properties
Long Term Objectives: Goals (after first year)
Monthly Income:
Need: $6,000
Want: $10,000
Time Focus:
50% Locating and researching properties
50% Making offers and setting up investment properties
[addsig]
you could try forming a LLC and looking for individual investors to generate the capital you would need for a down payment...check the local laws because there are resrictions on soliciting investors that im not very clear on...
the growth rate is usually about a mile per year so if development is that close your going to have to act quick...
if time is of the essence you should try putting an option on the property while you seek financing, knowledge etc...
good luck with all you do
~Andrew
Before deciding HOW to buy it, I would recommend your determining IF doing this deal would be economically feasible and therefore, IF you should buy the property.
Feasibility is going to depend on several factors--value of the lots given location, realistic sale value of the new construction on a lot, costs of installing site improvements (eg, streets, curbs, sidewalks), number of lots possible--all of this balanced against the price the seller wants and the terms that he is willing to grant a buyer.
Well Aaron, my guess is that the first person you need on your team is Nancy Chadwick, buy her book on land development.
I most definitely will look into your book, Nancy, and am afraid that this one will probably pass me by before I have the knowledge to act on it.
I was hoping that maybe I could tie the property up (if it has profit in it as a development) and partner with a Developer and split the profits, but I don't know how to do the numbers on that kind of property yet and I don't want to bring in a partner who realistically wouldn't even need me for the deal.
Thanks for the input.
You are undertaking a major project and to do this many key factors must be in place first.
You will need to research how must land is truly available for development by checking easements; rights-of-way; Caveats; and covenants of the subject property along with any building schemes, notices of permits, etc. which may affect the property.
Having a property rezoned can be a major project if the property is in a restrictive county.
And the other factor will be the infrastructure and your project impact in the community.
You will need to know:
What is the Zoning and Official Community Plan land-use designation for the property.
Current regulations on the use, density and building dimensions permitted on your property.
If the property is located on unstable soils, you may be required to undertake a geotechnical assessment before constructing a new structure.
Be sure to check city and county Tree Removal Bylaws as some time ago I did a development that caused me a little grief since the law protected trees 4 inches and above from unnecessary removal.
If you do not have the funds or technical skills to this project, You will need to partnerup up with a developer who has them. Parties sign a development agreement; the owner contributes the land and the developer brings in the construction and management skills, funds to develop and its goodwill. The developer will construct buildings, market, sell, and realize proceeds. A part of construction or sale proceeds will go to the owner; the balance to the developer. They will jointly sell the units to individual purchasers.
This will not be an easy undertaking for you, just be sure you are ready for a major roller coaster ride when you set out to develop land.
I do not want to discourage you but if this will be your first time in developing taking on a project of this size can be vary troublesome.
I have always suggested to my students to learn all they can about developing land, learn all the city, county and state rules and regulations on developments and most importantly have a source of funds in place and a lot of it as the numbers will run up vary fast on you.
A book that has been vary helpful in this process is called Getting Financing & Developing Land by Michael C. Thomsett
[addsig]
JM,
Thank you for the valueable input. I will most definitely be checking out the book.
That is exactly the response I was looking for, it gives me a general outline of the process, and anything left out I'm sure I can learn along the way.
Best wishes,
Aaron H
Coeur d'Alene, Idaho