Please don't make this classic business mistake.

Some real estate investors, including many seasoned investors, fall into the trap of foolishly thinking that lots of enthusiasm and making a bunch of promises to Private Lenders is all it takes to have Private Lenders open up their checkbooks to get the financing they need to fund their deals.

Guess what? Unless you've approached your favorite aunt and uncle for money, most Private Lenders will want to see a business plan. Private Lenders are not going to make their decisions based solely on the promises you make, no matter how excited you might be about becoming the next Donald Trump. They realize talk is cheap.

When you're trying to obtain financing for you your deals, a well thought out business plan will improve your standing in the eyes of potential lenders. And that's a good thing because if you expect the Private Lenders to part with their money, you need to earn their confidence.

First, you will build a case for your real estate investing business by preparing a 'lender-ready' business plan. A lender ready business plan is a plan that has been professionally prepared from the lender's perspective. For example, most Private Lenders will want to know what your business is really attempting to achieve. You're going to buy fixer-uppers, rehab them and then resell them. How? They'll want to know how they're going to get their money back. They'll want a high rate of return; yet minimize their investment risk.

If your business plan addresses, among other things, this type of information important to Private Lenders, most Private Lenders will conclude that you are an appealing investment choice.

OK. So you're convinced you to need to prepare a business plan. But you'll want to make sure your plan includes the 'right stuff' to get the funding you need to get the deals.

In a nutshell, here are some areas you'll need to address in a real estate business plan so you can offer prospective Private Lenders a complete view of your business, as well as provide you with a tool you can use to gain a distinct advantage over your competition. We will use some excerpts from actual business plans submitted to Private Lenders that has empowered us to unlock the full profit potential of our real estate investing business.

1. Executive Summary.

The executive summary may be the most important part of your business plan. It is the first part Private Lenders will read, and it may be the only part that some individuals will read. The executive summary is a synopsis of the key points of the entire business plan. Its purpose is to explain the fundamentals of the business in a way that both informs and excites the reader to continue reading the entire plan.

Casa Bonita Properties, LLC (?CBP? or 'the Company?) is a start-up real estate investment firm that directs, coordinates, and profits from buying undervalued single-family residences, quickly making value-enhancing renovations to the properties, and then selling the properties in the greater San Antonio metro area. The Company focuses on searching for and buying run-down, bargain-priced houses known as fixer-uppers. Through a systematic rehabilitation (rehab) or renovation process, CBP quickly adds value by completing repairs cost-effectively. These repairs will enhance the value and marketability of the homes. Once the rehab process is completed, the Company resells the property to its target market, low-to-moderate income families.

2. Company Summary.

When you prepare the company summary, you should describe the company's current strategies.

The Company has a well-defined and systematic approach for acquiring prospective properties. By applying a selective acquisition strategy, the decision to purchase a property is an objective one based on the property's potential profitability. Arbitrary purchases based on emotions or guesswork are not part of the equation. Consequently, there is never a need to rely on 'gut feel' or to take a 'seat of the pants' approach to purchasing target properties. Once a house is purchased, the property will be transformed into an attractive home by making value-enhancing improvements through a systematic rehabilitation (rehab) process. Once the rehab is completed, the homes will be resold through a 'for sale by owner' program in order to reduce the expenses of sale and position the properties at aggressive pricing levels to facilitate shorter marketing times, reduced carrying or holding costs, and increased profitability.

3. Adding-Value Rehab Strategy.

In this section, you will have the unique opportunity to truly communicate to your prospective Private Lenders your rehab plan for transforming a junker into a jewel. The neighborhood eyesore will become the best looking home in the neighborhood. In this section, you get to detail for your Private Lenders exactly how you will pull it off.

The fundamental rehab strategy is to add value to each property purchased by renovating and transforming each property to the neighborhood's market standards or quick sale condition by including the appropriate 'sizzle' features to enhance marketability.
The rehab plan developed for each property will pay particular attention to curb appeal, the kitchen, and the bathrooms. These areas of the house are critical to the overall success of each project. All other areas of the house will be cosmetically improved to produce a quality product that is aesthetically appealing to prospective buyers.

Enthusiasm is good. Promises are necessary. And when it comes to real estate investing, cash is king. But Private Lenders are not going to part with their cash based on your adrenaline and your potential.

By now, I?m sure you can see that preparing a business plan for your business is a process. Your business plan must include those elements that will hold it together. There must be a definite idea behind your plan. Your message to your Private Lenders must be logically presented. It must have a continuity that carries the Private Lender along without a break. And finally, your business plan should have content that convincingly demonstrates to your Private Lender that you're the right person to make the whole thing work.

This type of lender-ready business plan will win over many a skeptical Private Lender. It has worked for me and it will work for you if you prepare a professional lender-ready business plan. You will achieve financial success that other investors will only dream about.

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