Detailed Business Plan in REI

[Brian Bern]

I'm still a REI newby. I purchased my home last March and have since made a new years resolution to buy my first rental in 2008. I've read many of the forums on biggerpockets, have already read as many motivational books I need, and now I am into the nitty gritty books with the details of running a business. The book I am reading through at the moment is from the Smart Start Series, How to Start a Business in Colorado. I believe a lot of the essentials apply to REI, but not all of it.

My question to the biggerpockets community is how important is it to have a detailed business plan going into REI's? I understand the importance of analyzing each property before going forward with a deal, but do many of you have a business plan for your corporation as a whole, or is it more of a property by property analysis?

[Christian Malesic]

I say absolutely!

I, maybe, am a strange animal (though the more I hang around on this site, the more I feel as though I have found kindred spirits). I am building an empire (in my mind). The plans I have for my business are grand. Often, I need to reign my goals back to fit reality - that is done through a thorough business plan.

What's more, I am continuously amazed when bankers tell me I have the most prepared presentation of anyone who has ever come before them. I do not believe my presentations are that grand. I give them a copy of my 30 or so page business plan spirally bound at Kinko's with a color cover. They want tax returns out the ying-yang. They want my wife and mine personal for three years, my brother and his wife's personal for three years, the company's for three years, and P&L plus Balance Sheet. Instead of handing them a pile of papers. I get binders from Office Max, Pocket Holders, and Labels. I put it all together in an easy to read, easy to find professional package. And.... I GET THE LOAN!

Why do a Biz Plan?: First, to get your head right and know you better. Then to get the loan! This is definitley a use other people's money business.