Important Assumptions
In the Important Assumptions section you will spell out the assumptions that you used to write your business plan. Letting the reader know about these assumptions is very important because it gives them a clearer picture of your thought process while writing your plan.
This section should be between 1/4 and one page.
Your Assumptions
If you are really straining to think of assumptions you are thinking too hard. Assumptions that you may be using might be something like…
- That interest rates will stay below 10%
- That your average profit per deal is $15,000
- That you will be able to get 100 leads per week
- That your local housing market will continue to appreciate at 6% a year
- Or anything else.
From a lenders perspective, we want to know what assumptions your calculations are taking into effect as well as any other assumptions that may be key to your businesses success. If you are just starting your real estate investing business you will be using many assumptions while writing your business plan. It is these assumptions that you need to clue the reader in about.
Put yourself in the shoes of the reader. When you read through your business plan is there anything that is dependant on something else? Of course there is. Do you clue the reader in on what the item is dependant on (your assumption)?
Take a look at the questions below. They may help you to identify some more assumptions that need to be revealed to the reader.
- What assumptions are you making regarding your target market?
- The availability of future projects?
- The status of interest rates?
- The strength of the resale market?
If you are only using a few important assumptions that is fine. If you are using ten important assumptions that is fine as well. As long as you tell the reader enough information to enable them to see more clearly what you are envisioning.
Click continue to learn how to write the Closing Statement in the final step of Writing a Real Estate Investing Business Plan.
