Real Estate Investor Magazine South Africa November 2018 | Page 62

INVESTOR INTELLIGENCE
4 Steps on How to
Create a Real Estate
Investment Business Plan
BY GARRETT SUTTON
W
e’ve all heard the expression, “Those who fail
to plan, plan to fail.” In real estate, this saying
certainly holds true. It’s essential that you de-
velop a workable plan and start building a team of experts
before you get started, so that you start off on the path to
success. For those of you just getting started, you’re wonder-
ing where to begin. The answer is, with taking a good, hard
look at your financial affairs in order to develop an accurate,
comprehensive financial report card.
1. Prepare Your Financial Report Card
You can’t move forward until you determine where you are
right now. Unfortunately, this basic premise is overlooked
by many investors, and it’s a crucial foundation for success.
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NOVEMBER/DECEMBER 2018 SA Real Estate Investor Magazine
Start creating your financial statement by developing
an income statement that lists your monthly income and
expenses. Most of us are checkbook-driven; we put our
paychecks into our checking accounts, pay bills with that
income throughout the month, and, if we’re lucky, we have
enough income each month to pay those bills. The income
statement will show you your monthly financial activity.
Next, you’ll create a balance sheet, which lists your assets
and liabilities.
Your assets, as you’ll recall, are the things that generate
wealth for you, such as investments, savings accounts, shares,
retirement annuities policies, mutual fund investment, real
estate, or a business that you own.