real estate business planning 2024

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• Writing a Business Plan

Writing a business plan may seem a daunting task as there are so many moving parts and concepts to address. Take it one step at a time and be sure to schedule regular review (quarterly, semi-annually, or annually) of your plan to be sure you on are track to meet your goals.

Why Write a Business Plan?

Making a business plan creates the foundation for your business. It provides an easy-to-understand framework and allows you to navigate the unexpected.

Quick Takeaways

• A good business plan not only creates a road map for your business, but helps you work through your goals and get them on paper
• Business plans come in many formats and contain many sections, but even the most basic should include a mission and vision statement, marketing plans, and a proposed management structure
• Business plans can help you get investors and new business partners

Source: Write Your Business Plan: United States Small Business Association

Writing a business plan is imperative to getting your business of the ground. While every plan is different – and most likely depends on the type and size of your business – there are some basic elements you don’t want to ignore.

Latest on this topic

NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles ( E ) are available only to NAR members and require the member's nar.realtor login.

Defining Your Mis​sion & Vision

Writing a business plan begins by defining your business’s mission and vision statement. Though creating such a statement may seem like fluff, it is an important exercise. The mission and vision statement sets the foundation upon which to launch your business. It is difficult to move forward successfully without first defining your business and the ideals under which your business operates. A company description should be included as a part of the mission and vision statement. Some questions you should ask yourself include: 

• What type of real estate do you sell?
• Where is your business located?
• Who founded your business?
• What sets your business apart from your competitors?

What is a Vision Statement ( Business News Daily , Feb. 21, 2023)

How to Write a Mission Statement ( The Balance , Jan. 2, 2020)

How to Write a Mission Statement ( Janel M. Radtke , 1998)

Using a SWOT Analysis to Structure Your Business Plan

Once you’ve created a mission and vision statement, the next step is to develop a SWOT analysis. SWOT stands for “Strengths, Weaknesses, Opportunities, and Threats.” It is difficult to set goals for your business without first enumerating your business’s strengths and weaknesses, and the strengths and weaknesses of your competitors. Evaluate by using the following questions:

• Do you offer superior customer service as compared with your competitors?
• Do you specialize in a niche market? What experiences do you have that set you apart from your competitors?
• What are your competitors’ strengths?
• Where do you see the market already saturated, and where are there opportunities for expansion and growth?

Strength, Weakness, Opportunity, and Threat (SWOT) ( Investopedia , Apr. 21, 2023)

How to Conduct a SWOT Analysis for Your Small Business ( SCORE , Apr. 28, 2022)

SWOT Analysis Toolbox ( University of Washington )

Setting ​Business Goals

Next, translate your mission and vision into tangible goals. For instance, if your mission statement is to make every client feel like your most important client, think about the following:

• How specifically will you implement this?
• Do you want to grow your business?
• Is this growth measured by gross revenue, profit, personnel, or physical office space?
• How much growth do you aim for annually?
• What specific targets will you strive to hit annually in the next few years?

What are Business Goals? Definition, How To Set Business Goals and Examples ( Indeed , Mar. 10, 2023)

Planning and Goal Setting for Small Business ( U.S. Small Business Administration )

• Regular work goals.
• Problem-solving goals.
• Innovative goals.
• Development goals

Establishing a Format

Most businesses either follow a traditional business plan format or a lean startup plan.

Traditional Business Plan

A traditional business plan is detailed and comprehensive. Writing this business plan takes more time. A traditional business plan typically contains the following elements:

• Executive Summary
• Company description
• Market analysis
• Organization and management
• Service or product line
• Marketing and sales
• Funding request
• Financial projections

Lean Startup Plan

A lean startup plan requires high-level focus but is easier to write, with an emphasis on key elements. A lean startup plan typically contains the following elements:

• Key partnerships
• Key activities
• Key resources
• Value proposition
• Customer relationships
• Customer segments
• Cost structure
• Revenue stream

Creating a Marketing Plan

You may wish to create a marketing plan as either a section of your business plan or as an addendum. The Marketing Mix concerns product , price , place and promotion .

• What is your product?
• How does your price distinguish you from your competitors—is it industry average, upper quartile, or lower quartile?
• How does your pricing strategy benefit your clients?
• How and where will you promote your services?
• What types of promotions will you advertise?
• Will you ask clients for referrals or use coupons?
• Which channels will you use to place your marketing message?

Your Guide to Creating a Small Business Marketing Plan ( Business.com , Mar. 22, 2023)

10 Questions You Need to Answer to Create a Powerful Marketing Plan ( The Balance , Jan. 16, 2020)

Developing a Marketing Plan ( Federal Deposit Insurance Corporation )

Forming a Team

Ensuring the cooperation of all colleagues, supervisors, and supervisees involved in your plan is another important element to consider. Some questions to consider are:

• Is your business plan’s success contingent upon the cooperation of your colleagues?
• If so, what specifically do you need them to do?
• How will you evaluate their participation?
• Are they on-board with the role you have assigned them?
• How will you get “buy in” from these individuals?

How to Start a Rock-Solid Real Estate Team ( The Close , May 26, 2020)

Don’t Start a Real Estate Team Without Asking Yourself These 8 Questions ( Homelight , Jan. 21, 2020)

Implementing a Business Plan and Reviewing Regularly

Implementation and follow-up are frequently overlooked aspects to the business plan, yet vital to the success of the plan. Set dates (annually, semi-annually, quarterly, or monthly) to review your business plans goals. Consider the following while reviewing:

• Are you on track?
• Are the goals reasonable to achieve, impossible, or too easy?
• How do you measure success—is it by revenue, profit, or number of transactions?

And lastly, think about overall goals.

• How do you plan to implement your business plan’s goals?
• When will you review and refine your business plan goals?
• What process will you use to review your goals?
• What types of quantitative and qualitative data will you collect and use to measure your success?

These items are only a few sections of a business plan. Depending on your business, you may want to include additional sections in your plan such as a:

• Cover letter stating the reasoning behind developing a business plan
• Non-disclosure statement
• Table of contents

How To Write a Business Proposal Letter (With Examples) ( Indeed , Mar. 10, 2023)

How To Implement Your Business Plan Objectives ( The Balance , Aug. 19, 2022)

The Bottom Line

Creating a business plan may seem daunting, but by understanding your business and market fully, you can create a plan that generates success (however you choose to define it).

Real Estate Business Plans – Samples, Instructional Guides, and Templates

9 Steps to Writing a Real Estate Business Plan + Templates ( The Close , Apr. 17, 2023)

How to Write a Real Estate Business Plan (+Free Template) ( Fit Small Business , Jun. 21, 2022)

The Ultimate Guide to Creating a Real Estate Business Plan + Free Template ( Placester )

Write Your Business Plan ( U.S. Small Business Administration )

General Business Plans – Samples, Instructional Guides, and Templates

Business Plan Template for a Startup Business ( SCORE , May 12, 2023)

Guide to Creating a Business Plan with Template (Business News Daily, Feb. 21, 2023)

Nine Lessons These Entrepreneurs Wish They Knew Before Writing Their First Business Plans ( Forbes , Jul. 25, 2021)

How to Write a Business Plan 101 ( Entrepreneur , Feb. 22, 2021)

Books, eBooks & Other Resources

Ebooks & other resources.

The following eBooks and digital audiobooks are available to NAR members:

20 Minute Manager: Creating Business Plans Gather Your Resources, Describe the Opportunity, Get Buy-in (eBook) E

The Straightforward Business Plan (eBook)

Business Plan Checklist (eBook)

The SWOT Analysis (eBook)

The Business Plan Workbook (eBook)

Start-Up! A Beginner's Guide to Planning a 21st Century Business (eBook)

Complete Book of Business Plans (eBook)

How to Write a Business Plan (eBook)

The Easy Step by Step Guide to Writing a Business Plan and Making it Work (eBook)

Business Planning: 25 Keys to a Sound Business Plan (Audiobook)

Your First Business Plan, 5 th Edition (eBook)

Anatomy of a Business Plan (eBook)

Writing a Business Plan and Making it Work (Audiobook)

The Social Network Business Plan (eBook)

Books, Videos, Research Reports & More

As a member benefit, the following resources and more are available for loan through the NAR Library. Items will be mailed directly to you or made available for pickup at the REALTOR® Building in Chicago.

Writing an Effective Business Plan (Deloitte and Touche, 1999) HD 1375 D37w

Have an idea for a real estate topic? Send us your suggestions .

The inclusion of links on this page does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this page complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.

7 Fundamentals of a WORKABLE Real Estate Business Plan

Your real estate business plan is your greatest predictor of success…

…because when done correctly, it serves as your guide for the entire year. Let me show you how to bring more certainty to what you can achieve.

Our industry is going through a monumental shift, leaving much uncertainty in the air. However, with a powerful real estate business plan in hand, you can navigate these turbulent waters with confidence. No matter which direction the market takes, your finely tuned real estate business plan will keep you on track and unfazed. Let it be your guiding light that illuminates the way forward, ensuring unwavering certainty in your journey.

That’s why I hosted a webinar called “ Make It or Break It: Business Planning for a Turbulent Year and Beyond ,” which is dedicated to helping you create a real estate business plan for success. 

In this blog, I’m giving you a sneak peek inside, sharing seven fundamental elements that make up a truly effective real estate business plan. Take some time to think about each of them before you listen to the webinar!

I can’t stress how important it is that you begin thinking about this stuff NOW and do it in the correct way. So with that said, let’s dive right in…

Real Estate Business Plan Fundamentals

No. 1: purpose.

Begin with your “What?” It is a fundamental principle that the universe cannot give you what you want if you don’t even know what you want.

So what do you want? But more than that, what does it look like? In ten years, what do you hope to build? “Selling some houses to make some money” is not a mission; it’s just a thing you want to do, and it won’t fuel you to achieve anything truly special.

If you haven’t already realized what your purpose is, you can discover it by listing out what you value, because your mission statement should reflect the physical manifestation of your values. And if you need help here, in the webinar I’ll show you what my top five values are in order to give you an example to work off of.

No. 2: Motivation

Now that you know what you want, WHY do you want it?  

The fact of the matter is that you will get tired and there will be times when you feel like getting complacent or not following through. In order to have a guaranteed way of refueling yourself and staying on track, you need to be very honest about what motivates you.

Fear of letting down my family, those who work for me, and the agents I serve is what honestly motivates me. These answers sound like what you’d hear from a LOT of people, but the truth is, sometimes people deceive themselves about what actually motivates them. This requires deep introspection. If money, lots of vacations, or status are what really inspire you to work at your best, you need to know that.

Once you know what or who you’re doing it for, it’s time to put an accountability plan in place, because no one can stay self-motivated all the time – that’s just not how people work. And unless your spouse is a professional business coach who can look at your numbers and hold you truly accountable, they don’t exactly count.

No 3: Units & Goals

What if I told you that you could bring increased predictability to your business , even with uncertain market conditions? That’s the power of tracking and measuring , and in next week’s webinar, I’ll help you dig into all the most important metrics to know.

It’s about getting very specific about what’s possible and breaking it down into an equation you can follow for success. When you set overly ambitious goals without reason or a guide to reaching them, then those aren’t real goals – they’re hopes and wishes.

No. 4: Marketing & Lead Gen

Identifying how you’ll attract new business and committing to your plan is one of the most crucial steps toward making the new year a successful one:

• What marketing are you currently running?
• What marketing are you planning to run?
• And most importantly, what marketing can you afford to run?

Your marketing budget and action plan are vital to a successful real estate business plan, but they must have a thoughtful strategy behind them. Look through what’s showing you the best results and what lead-generation pillars can complement or integrate with what you’re already doing.

Maybe there are areas where you spent too much money or ones where you would have benefited from investing significantly more. We need to get your budget dialed in and then align it with the action items you need to be hitting yearly, quarterly, monthly, weekly, and daily. Join me for the webinar and we’ll give you the template to figure all of this out.

No. 5: Operations  

Just because someone is running a business doesn’t mean that they always understand how it works. If you keep doing the same procedure over and over and have inconsistent results with it, there is something wrong with the procedure.

Our goal in this section is to prepare you and your team (if you have one or are planning to build one) with all the tools, resources, and SYSTEMS you need to get more done with less effort. If your SOPs aren’t already completely locked down, you want to pay extra attention to this section of your business plan. 

No. 6: Finances  

Isn’t it interesting how people who don’t budget their money always seem to struggle with it, no matter how much they make? Well, you’re not going to be that person.

Your real estate business plan should have an exact breakdown of what happens with every commission check, covering your taxes, expenses, and every other aspect of your financial plan. You’ll want to work on paying off debts, making wise investments, and having money set away in case you need it (REMEMBER THAT SHIFTING MARKET?).

No. 7: An Important Exercise  

I’m going to hold back here because we covered this exercise at length during our “Make It or Break It: Business Planning” webinar , and broke it down step by step. Get access to this important business planning webinar , and be sure to take notes because this is an exercise that should be done annually for every business plan you craft. 

How About Access to a Business Planning Webinar?

As a real estate professional, solving problems for a profit is what it’s all about. And with the inevitable challenges that the next 12 months will bring, it’s more crucial than ever to be equipped and prepared. That’s why our recent business planning webinar , “Make It or Break It: Business Planning for a Turbulent Year and Beyond,” was a massive hit. 

With access to this on-demand business plan webinar, you’ll gain immediate access to our acclaimed seven-point business plan template, essential tips on fostering the right mindset to conquer today’s volatile market, engaging Q&A sessions, and more insights from Tom Ferry. 

Don’t miss this chance to arm yourself with the knowledge and tools to thrive. Unlock your access to the full video, business plan, and more.

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Creating a comprehensive business plan is essential for real estate agents who want to stay organized, maximize productivity and win market share. Here are 9 steps an agent should take to design a dynamic strategic plan.

1. Define Your Mission Statement

Take some time to reflect on why you are in this business. What are your primary reasons? What benefits will you provide to your potential clients? What do you hope to accomplish by taking on this responsibility?   

2. Define Your Target Audience or Niche Think about what types of clients you want to work with. It could be a category of people (such as new homeowners) or a specific niche (such as retirement communities). Will extra resources or measures be needed to reach them?

3. Evaluate Your Resources

Will you be working by yourself? Determine if it would make sense to hire an assistant or another agent to help manage lead generation. If you have a team, create a flow chart with each member’s responsibilities. That will help you to see who is doing what and identify any gaps to fill.

4. Set Clear Goals

A great model to follow is SMART goals : specific, measurable, achievable, relevant.

Include both short- and long-term objectives, such as annual income targets and the number of transactions you aim to complete.

5. Establish Budget and Financial Projections

Create a detailed budget that accounts for business expenses, such as licensing fees, marketing and advertising, office space and transportation.

Lead generation is your most important priority. A comprehensive, well-designed, multi-faceted marketing campaign is crucial for your business to succeed. As part of your budgeting step, be sure to include this important category and analyze if it makes sense to do in-house or to off source.  

6. Create Strategic Action Steps  

A great customer relationship management (CRM) system will help you run your business with maximum productivity.

• It allows you to organize all your contacts and their detailed information in one place. It also lets you rank contacts by importance and informs you when and how those clients and leads should be contacted.
• It has functionality that creates detailed reports so you can track your transactions and expenses. It should also be able to generate reports, so you know if you are on target to meet your financial goals and what to do to reach them.   
• It helps you stay aligned with your goals, to-do lists and calendars. A CRM can also create action steps based on your goals and current progress and can generate your priority list.

7. Create a Plan for Evaluation and Review

Regularly review your progress and adjust your business plan as needed. Use key performance indicators (KPIs) to see if you are hitting your benchmarks and if you need to adjust your plan.

8. Consider Support and Accountability

Consider working with a real estate coach to help you strategize and implement measures so you can reach your goals. A coach will also help you deal with issues head on to keep you accountable and on task.

9.  Commit to Continuous Learning

Commit to ongoing professional development by attending training seminars and staying updated on industry trends.

Buffini & Company – We’ve Got You!

Buffini & Company’s coaches have already been working to establish systems and resources in place to help get their clients ready and positioned for a strong 2024 selling season. To learn more about how a coach can help you take full advantage of the extraordinary year to come, schedule a free Business Consultation .

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Real Estate Business Planning for 2024: Your Path to Success

As we step into the promising landscape of 2024, real estate professionals are gearing up to set their business goals and strategies for the year ahead. Whether you’re an experienced agent or just starting in the industry, effective business planning is key to navigating the ever-evolving real estate market. In this blog post, we’ll explore essential tips to help you create a robust business plan for a successful 2024.

1. Reflect and Analyze Your 2023 Performance

Before you set your sights on 2024, take a moment to look back at 2023. What were your biggest sources of leads? How effective was your marketing strategy? What worked well, and what needs adjustments? Reflecting on the past year’s performance can provide valuable insights into areas where you excelled and areas that may require improvement.

For newer agents, finding leads may be a primary focus. Building relationships within your existing network can be a powerful way to generate leads. Consider connecting with people you naturally engage with, such as those from your place of worship, former colleagues, fellow parents from your kids’ sports teams, or even your social media contacts.

2. Set Clear and Measurable Goals

One of the fundamental components of your business plan is goal-setting. Start by writing down your goals for 2024, making them visible in your workspace. Prioritize your personal life, ensuring that you allocate time for your family. It’s essential not to put your loved ones last on your list.

Next, create a comprehensive business plan that outlines the specific targets you aim to achieve throughout the year. Consider factors like how many contacts, listings, and sales you’ll need to meet your monthly, quarterly, and annual financial goals. Having clear, measurable objectives will provide you with a roadmap to track your progress and stay motivated.

3. Craft a Strategic Work Schedule

Your daily and weekly work schedule plays a crucial role in supporting your goals. Assign priority to activities that directly contribute to your income. These income-producing activities may include lead generation, client follow-up, contract writing, roleplaying, and skill development. Prioritize these activities in your schedule to maximize your earning potential.

4. Develop a Targeted Marketing Plan

In today’s real estate landscape, a well-thought-out marketing plan is essential. Identify the primary sources of business that work best for you. These sources could include social media marketing, geographic farming, targeting expired listings, or focusing on new-home construction. Create tailored marketing plans for each of these sources to maximize your reach and effectiveness.

5. Balance Professional and Personal Growth

Achieving success in real estate is not solely about professional growth; it’s also about maintaining a balanced personal life. Outline both professional and personal growth plans in your business strategy.

Professional growth goals may encompass activities such as reading regularly, enrolling in relevant courses, obtaining professional designations, or attending industry-related seminars and conferences. These pursuits enhance your skills and knowledge, positioning you as a more valuable asset to your clients.

On the personal front, it’s crucial to set goals that prioritize your well-being and happiness. Dedicate quality time to your loved ones, pursue hobbies or interests, and establish a savings plan to secure your financial future.

As you embark on your journey in real estate for 2024, remember that effective business planning is the foundation of your success. By reflecting on past performance, setting clear goals, crafting a strategic work schedule, developing targeted marketing plans, and balancing personal and professional growth, you can create a robust business plan that guides you towards achieving your aspirations. Here’s to a prosperous and fulfilling year ahead in the world of real estate!

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What Is A Real Estate Business?

Top 5 benefits of a real estate business, types of real estate businesses, 10 steps to start a real estate business, common mistakes to avoid, is real estate a profitable business.

Are you considering diving into the world of real estate in 2024? If so, understanding how to start and successfully manage a real estate business is crucial. This comprehensive guide is designed to walk you through the process, whether you’re a beginner or a seasoned investor looking to expand your portfolio. Real estate business opportunities are abundant and can offer substantial financial rewards if approached correctly. In this article, we’ll explore the foundational steps you need to take to build a thriving real estate business in today’s market.

At its core, a real estate business involves purchasing, managing, and selling real estate properties for profit. This can include residential homes, commercial properties, and even land. A successful real estate business doesn’t just focus on buying and selling; it encompasses market analysis, investment strategies, property management, and customer relations. The diversity in the real estate business model allows for various approaches, whether you’re interested in long-term rental income, flipping houses, or developing properties from the ground up.

Steady Income Stream: One of the most attractive aspects of a real estate business is the potential for a consistent and steady income, primarily through rentals. This can provide financial stability and a cushion against market fluctuations.

Property Value Appreciation: Over time, real estate typically appreciates in value. This long-term appreciation can result in significant profit when properties are sold.

Tax Advantages: Real estate investors benefit from various tax deductions, including depreciation, mortgage interest, and property tax deductions, which can significantly reduce tax liability.

Diversification of Investment Portfolio: Investing in real estate is an excellent way to diversify your investment portfolio , reducing risk and improving overall financial health.

Inflation Hedging: Real estate is often considered a hedge against inflation. As living costs rise, so do rental incomes and property values, helping to protect your purchasing power.

Understanding the different types of real estate businesses is essential for anyone looking to enter this field. Each type offers unique opportunities and challenges, and choosing the right path can significantly impact your success in the real estate business. Let’s explore some of the most common types:

Real Estate Wholesaler: Real estate wholesaling involves finding and contracting undervalued properties and then selling those contracts to potential buyers, usually other investors. Wholesalers profit from the difference between the contracted price and the sale price. This type doesn’t typically require significant capital, making it an attractive entry point for many newcomers to the real estate business.

Real Estate Flipper: Flipping properties is a well-known real estate business model. It involves purchasing properties, often in need of repairs or renovation, and then selling them at a higher price for a profit. This type requires a keen eye for potential, knowledge of renovation costs, and the ability to act quickly in competitive markets.

Buy and Hold: This long-term investment strategy involves purchasing properties and holding onto them for a considerable period. Investors typically earn money through rental income during the hold period, with the potential for significant capital gains when the property is eventually sold. This type of real estate business is often praised for its potential to generate passive income.

Real Estate Developer: Developers take on larger projects, often involving the purchase of land and the construction or significant renovation of buildings. This type of real estate business can be highly lucrative but also involves more significant risks and requires substantial capital and expertise in project management, construction, and market analysis.

Real Estate Agent: Real estate agents facilitate the buying and selling of properties for clients, earning a commission on the transactions. This role requires strong interpersonal skills, a thorough understanding of the real estate market, and often, a license to practice.

1. Market Research and Niche Selection

The first step in starting a real estate business is conducting thorough market research. This involves understanding the latest trends, identifying potential niches, and analyzing demographic data to determine where the best opportunities lie. Whether your interest lies in commercial real estate, residential properties, or a specific type of investment like fixer-uppers, choosing the right niche is crucial. It’s about understanding where you can add the most value and what type of real estate business aligns with your skills and resources.

2. Crafting a Comprehensive Business Plan

A detailed business plan is your blueprint for success. It should outline your business goals, target market, financial projections, marketing strategy, and operational plans. This plan will not only guide your initial steps but also help attract investors or secure financing. It should be a living document, adaptable to changes in the market or your business.

3. Legal Setup and Compliance

Setting up your business legally is critical. This includes selecting the right business structure, such as an LLC or corporation, which can impact your taxes and liability. Ensure that you obtain all necessary licenses and permits and understand the real estate laws and regulations in your area. Compliance is key to building a sustainable and reputable real estate business.

4. Financing Your Business

Securing the necessary funding is one of the most challenging aspects of starting a real estate business. This may involve tapping into personal savings, obtaining a bank loan, or finding investors. Understanding your financial needs and options is essential, as is a solid budgeting plan that accounts for both expected and unexpected expenses.

5. Building Your Brand and Online Presence

In today’s digital age, having a strong brand and online presence is crucial. This involves creating a professional website, engaging in social media marketing, and possibly running online advertisements. Your brand should reflect the values and mission of your real estate business, and your online presence should make it easy for potential clients and partners to find and interact with you.

6. Networking and Relationship Building

The real estate industry is built on relationships. Networking with other real estate professionals, potential clients, and investors is essential. Attend industry events, join real estate forums, and consider partnering with other businesses. Building strong relationships can lead to new opportunities and referrals.

7. Property Acquisition

Acquiring the right properties is the heart of your real estate business. This involves not just finding properties but also assessing their potential for profit, whether through rental income, resale, or development. It requires a good understanding of the market, negotiation skills, and an eye for properties that offer good value.

8. Effective Marketing and Sales Techniques

Marketing your properties effectively is key to your success. This could involve a variety of strategies, from digital marketing campaigns to traditional advertising and hosting open houses. Understanding your target audience and how to reach them is crucial. Sales skills are also important, as you’ll need to negotiate deals and close sales effectively.

9. Managing Properties and Client Relations

If your real estate business involves property management, doing this efficiently is essential. This includes regular maintenance, dealing with tenants, and ensuring a steady income flow from your properties. Good client relations are also crucial; satisfied clients are more likely to provide repeat business and referrals.

10. Growth and Expansion

Lastly, consider how you’ll grow and expand your real estate business. This could involve diversifying into different types of real estate, expanding into new geographic areas, or scaling up your investments. Continuous learning and adapting to market changes are vital for long-term success.

Overlooking Market Research: Failing to conduct thorough market research can lead to poor investment decisions. Understanding the market is key to identifying profitable opportunities.

Neglecting Legal and Tax Aspects: Ignoring the legal and tax implications of real estate transactions can lead to significant issues. Ensure compliance and take advantage of available tax benefits.

Poor Property Management: Ineffective property management can result in high vacancy rates and low profitability. Effective management is vital for maintaining property value and income.

Failing to Plan for Scaling: . Without a clear plan for growth, expanding your real estate business can be challenging. Strategic planning helps in scaling your business successfully.

Real estate has traditionally been viewed as a highly profitable venture. It offers various pathways to profitability, whether through long-term rental income, short-term property flipping, or large-scale development projects. However, success in the real estate business requires strategic planning, market understanding, and the ability to adapt to changing market conditions.

Starting a real estate business in 2024 offers exciting opportunities for both novice and seasoned investors. By following these 10 steps, understanding the potential for profit, and avoiding common pitfalls, you can build a successful and sustainable real estate business. Remember, the key to success in real estate lies in thorough planning, continuous learning, and adaptability to market changes.

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Real Estate Business Plan

Things to Consider Before Writing a Real Estate Business Plan

Be specific.

The real estate industry is broad when it comes to work and what you can do. It can either be a source of primary or passive income. At the same time, you might be involved in the industry as an investor, agent, or builder. Decide what you want to do and plan on that basis.

Do your research

The trends of the real estate business change constantly, hence doing your research and updating it constantly is a crucial part of your profession.

As your knowledge and expertise is your greatest asset in this industry, keep expanding it to stay at the top of things.

Build a team of skilled professionals

Having a team you can build your real estate business with is essential.

Select a group of individuals with a diverse set of talents ranging from good communication skills to brilliant analytical skills. Given the dynamics of the real estate business, you never know what skills might come in handy in your business journey.

Be ready for change

As we have constantly discussed, real estate is a dynamic industry. Change is the only constant you’ll have in this business.

Thus, it is important for everything from your plan and way of doing business to be change-friendly.

Sources of Funding for a Real Estate Business

Gaining funds is one of the major reasons for writing a business plan. And here are a few good funding options for your real estate business:

A traditional loan is one of the most basic options for getting funded. You can opt for this if you have a good credit score.

Non-bank mortgage lending

This is a good option if you don’t want to go through a lot of paperwork.

The asset-based mortgage

For this, the lenders look at the rental value of your property and provide a loan on that basis. It is a good option if you don’t want or can’t get a loan based on your personal assets or income.

Above all, it is essential to plan your business to figure out your funding requirements and the right way to fulfill the same.

Write Your Business Plan

If you have enough connections, and the ability to find places for people that have attributes they want and need then a real estate business can be a profitable one for you.

A business plan helps you get funded, explain your ideas to the stakeholders of your business, and make better decisions.

Hence, planning is an important aspect of starting or growing your business.

It has been created using Upmetrics online business plan software that helps you create dynamic and customizable plans anywhere and at any time.

Our sample real estate business plan can help you with writing a well-rounded business plan for your business. It can act as a guide and prevent you from getting stuck in a certain section for too long.

Real Estate Business Plan Outline

This is the standard real estate business plan outline which will cover all important sections that you should include in your business plan.

• Market Opportunity
• Demand for Housing
• Financing & Investment Forecast
• Introducing Kegan
• Business Model
• Short Term Goals
• Long Term Strategies
• Keys to Success
• Contemporary Living for the 21″ Century
• The Complete Package
• Pricing Strategy
• Implementation Strategy – Action Plan
• Target Market Overview
• Housing Shortage Overview in Saudi Arabia
• Housing Shortage Overview in Riyadh
• Housing Prices
• Kegan Home Prices
• Market Positioning & Brand
• Marketing Strategies
• Sales Strategies
• Sales Process
• Competitive Landscape
• Competitive Advantages
• Rashid Bin Said
• Director of Construction
• Member name
• Chief Accountant
• Director of Marketing & Sales
• Other Staff
• Independent Directors
• Solid Balance Sheet
• Impressive Cashflow
• Financial Summary
• Financial Assumptions
• Income Statement (Five-Year Projections)
• Balance Sheet (Five-Year Projections)
• Cash Flow Statement (Five-Year Projection)

After getting started with Upmetrics , you can copy this sample real estate business plan into your business plan and modify the required information and download your real estate business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Download a sample real estate business plan

Need help writing your business plan from scratch? Here you go;  download our free real estate business plan pdf  to start.

It’s a modern business plan template specifically designed for your real estate business. Use the example business plan as a guide for writing your own.

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Getting a Jumpstart on Your 2024 Real Estate Business Plan

The start of a new year gives us an opportunity to establish new goals and get a jumpstart on our plans. With some careful consideration and planning, we can easily set our sights toward success in the upcoming year.

How to update your real estate business plan for 2024

We know it’s sometimes difficult to focus on big-picture items—like marketing your brand—when you’re overwhelmed with a significant to-do list. But we encourage you to schedule a distraction-free day (or two) to focus on the future of your business. 

Here are some questions to ask yourself as you plan the next quarter and year. 

Have I found my niche market?

Some real estate agents have succeeded by narrowing their focus to a specific property type or client. As you think about your future in real estate, consider if this is the right move for you.

Discuss this decision with mentors within your brokerage. Perhaps a service gap needs to be filled in your area. You may be exceptionally skilled with a specific type of client or property. 

If a pattern emerges, research marketing techniques to target these specific clients. For example, do you want to narrow your focus to second homes? Then become the local expert on slip rentals and marinas.

Whatever your demographic is, think about how you will help your potential clients and grow your business with organic referrals.

What are my 2024 business goals?

When you work for yourself, knowing how to set limits within your schedule is challenging. Having specific, measurable goals will help

Here are some goal examples for your real estate business:

• Add X properties/clients from my niche within the first/second/third/fourth quarter of 2024.
• Participate in or sponsor X new local events that cater to my target market.
• Add X social media followers by writing interactive posts and offering helpful niche-focused content.
• Enroll in X hours of continuing education courses focusing on marketing strategies.

As you can see, not all of your goals have to be income-related. 

How should I spend my marketing budget?

Review your goals and what you know about your target demographic. Then, consider the best way to spend your marketing budget to help you meet those goals.

If you have been in the real estate business for a while, measure how much money or time you spent on each marketing strategy. Look at the results of your effort. Ask new clients how they found you so you can determine how much each new client costs.

Need help with your 2024 business goals? Visit https://www.colibrirealestate.com . We offer top-notch continuing education options for your real estate license renewal and to help you grow your business. 

Colibri Real Estate

Colibri Real Estate empowers aspiring and seasoned real estate professionals to start or advance their career through unmatched learning solutions. From qualifying education courses to exam prep and continuing education to professional development, we support your learning throughout your real estate career.

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Jump-start your ‘24 real estate business plan—by getting it done in ‘23

Here’s a Weichert® coaching tip that will serve you well now and next year: Buckle down these last few weeks and finish up next year’s real estate business plan. You’ll go into the holidays knowing that you have a strong plan in place for 2024. Easy to say, not so easy to do? We understand. Our team has some expert advice to jump-start your process. Let’s break it down, literally, by starting with …

J is for Justify .  Quite simply, take stock of and justify to yourself everything that’s in your business plan. Self-reflection can help you identify exactly what you’re trying to achieve and why. Rediscover the benefits and value that you’re hoping to realize or build upon. This step helps to solidify your vision for your business and align your full staff toward collective goals and purpose.

Facts, figures, and trends will guide you, so be sure to include them when building out the justification of your business plan. Remember to also include less measurable elements, too, such as strengthening company culture. Choose initiatives that matter to you. 

When you can justify the elements in your business plan, you ensure that it’s built on solid, relevant ground. 

U is for Unpack. As you continue to work on your business plan, imagine that you’re preparing to go on a long trip. Before you pack for the journey, you need to think about everything that’s going in your suitcase. 

Deconstruct last year’s business plan by plucking out all the main elements. What are you taking with you for your 2024 travels? What can you leave behind? What new objectives do you want to bring along this time? To pack your business plan with the best, most strategic approach, start by unpacking last year’s plan.

BAM , a real estate news and media company, says, “You make mistakes and learn from them. You try things and find what works and what doesn’t (or not without some adjustments). All of it matters. Everything you learn that helps you become a better real estate agent can also come into play when you’re planning for the future. … Incorporate those lessons into a clear and actionable business plan for the next year.” 

M is for Map. The business plan is the map itself, guiding you throughout the year. Here are some integral parts to include:

• What’s your operational budget? Where will you put your dollars to work?
• How will you manage your time?
• How will you increase lead generation?
• What are your marketing plans?
• What systems and tools need to be maintained, phased out, or newly implemented?
• How will you maximize your CRM?
• What leadership opportunities will you create to coach your team?
• How will you nurture development, from them and for yourself?
• Are you considering a franchise opportunity? If so, what steps are you planning to take to help you identify your decision? Take a look at our Weichert franchise guide or talk to our team to help you determine what’s best for you.

In a previous blog about business planning, we also talked about how to jump-start the business planning process by looking at words that begin with “re.” Check it out for more inspiration. You can also map out SMART goals and conduct a SWOT analysis .

P is for Plan.   At Weichert, business planning is so central to the success of affiliates that we’ve developed a formalized system around it. Our team of business consultants works with owners to create their written business plan. Together, they brainstorm, set specific goals, and prepare for a new year of successively higher targets. 

At the agent level, we also encourage offices to hold a formal event we call “Planning Day”, and we provide the support. Affiliates invite all of their agents to join in a lively working session, utilizing Weichert business planning tools. This helps their teams to set income and productivity goals for the year and discuss what they’ll need to do to meet them. Our corporate team provides everything affiliates need to make the most of these sessions, from slide decks to worksheets to promotional materials. Instead of being a daunting task, business planning should actually offer relief. As a concrete, accessible reference point, it can serve as your North Star through the ups and downs that are to be expected. Contact us to hear more about it.

You can also turn to the National Association of REALTORS® for helpful tips on how to write a business plan .

Were you following along? All that spells “JUMP”! Now let’s get even more actionable with a few simple tasks you can “start” right now:

• Give yourself a deadline. For example, make December 15 th your due date to complete the first full draft of your 2024 business plan. Then work backward to put time on your schedule, now until then, to get it done. 
• Make it fun. Maybe you’d prefer to work on your business plan remotely at your favorite coffee shop. Reward yourself with a latte each time you show up to your scheduled working sessions.
• Believe in yourself. A business plan is an extension of you—your passion, your strengths, and your goals for growth. Don’t let the formality of the words “business plan” intimidate you.

To quote Forbes , because we couldn’t agree more, “ Your 2024 plan is not just a financial forecast; it’s about the health of your business. This is a chance to reflect on what worked well last year, what didn’t, and why—and what changes you’ll make next year across all aspects of your business. And remember that success isn’t measured solely in dollars. Instead, review your people, culture, lessons learned, opportunities, projects and innovations to ensure you balance the numbers with the right values and policies to meet your targets.”

Weichert is here for you, every step of the way. We can help you jump-start new growth for your real estate business in 2024—and beyond. Let’s start a conversation .

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6 checklists to amplify your real estate business in 2024

• December 29, 2023

As 2024 approaches, it’s important to take a look back at your real estate year — to reflect on what went well, what didn’t, and what can be improved. Using your reflections, you can chart a clear path forward for your business in 2024.

After your reflection, you’ll want to dive into your end-of-year cleanup in every area of your business. Sound a little bit scary? We promise: it doesn’t have to be! We’ve got you covered with checklists you can use for every major area of your business. These checklists will help ensure your business is up to speed and ready to go for 2024.

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Pivotal Real Estate Trends for 2024

A version of this article appeared in Multi-Housing News on March 27, 2024.

The real estate industry tends to be dynamic, but a spate of recent pivotal regulatory changes is making 2024 particularly important for real estate leaders charged with setting their firms’ goals and strategies. 

Many of these changes are associated with legislation that impacts tax credits, depreciation amounts, and reporting requirements, that can affect companies’ cash flow, tax obligations, and compliance activities. They’re worth watching as 2024 proceeds.

Monitoring regulatory and industry changes can help real estate leaders plan appropriately. Below are impactful shifts we’re seeing in real estate this year.

Decreased Returns Jeopardize Leader Retention

Carried interest, also known as a promoted interest or a promote, is a commonly used real estate compensation strategy that gives financial interest in the long-term capital gain of a development to the recipient, typically a partner or C-suite executive. As performance-based fees, promotes align executive compensation with the real estate fund’s returns.

As values in commercial real estate assets decline, investments, and income from promotes are declining as well. This drop in promote value will drive compensation-related decision making in 2024 as C-suite leaders, stakeholders, and partners work to retain senior executives or attract executives looking for new opportunities.

Stakeholders with junior and limited partner roles whose key compensation is tied to the promote structure are also seeing material declines, if not total losses.

General partners and C-suite leaders who want to retain key colleagues are reviewing incentive programs to counteract current market trends and position their firm for the future.

Bonus Depreciation Changes

The slow phase out of bonus deprecation, a core tax-management tool, has reached a turning point for many taxpayers. Bonus depreciation declined to 80% in 2023 and 60% in 2024. However, the US House of Representatives passed the Tax Relief for American Families and Workers Act of 2024—known as HR 702—which includes provisions for extending 100% bonus depreciation. It’s uncertain if the bill will be passed by the Senate and signed into law by President Joe Biden.

If HR 702 isn’t enacted, commercial real estate investors and developers may find value in cost recovery planning opportunities from the Tangible Property Regulations (TPR) and taking advantage of Qualified Improvement Property (QIP). 

TPR applies to anyone who makes expenditures to acquire, develop, improve, repair, or maintain property. It ultimately provides more opportunities to expense eligible capital repair costs, especially for stabilized properties that have been held for a while, rather than having to capitalize and ratably depreciate such costs as improvements. Under IRC Section 162, taxpayers are permitted to deduct amounts paid for repairs and maintenance to tangible real or personal property, if the amounts wouldn’t otherwise be required to be capitalized under IRC Section 263A. While these regulations aren’t new, they’re worth revisiting as cost recovery methods available for tax planning.

QIP encompasses many improvements made to existing commercial buildings, is currently depreciated over 15 years, and is eligible for bonus depreciation. These favorable QIP depreciation provisions can give eligible real estate firms the opportunity to increase depreciation and defer current federal tax liabilities, providing immediate cash flow relief.

New SEC Rules Impact RIA Reporting

Investments in private-fund vehicles have boomed in recent years, including real estate, causing significant changes to the SEC’s Registered Investment Advisor (RIA) guidelines and regulations.

Changes impacting investment advisers registered with the SEC under the Investment Advisers Act of 1940 were released August 23, 2023. They were designed to increase transparency and protect investors in private funds, including real estate funds.

Private funds have become important to financial markets, increasing exposure for direct and indirect investors participating in pension plans, retirement plans, endowments, and foundations. As a result, the SEC is tailoring their rules to address risk and harm to investors and restrict adviser activity contrary to the public interest and protection of investors.

The new rules require private fund advisers registered with the SEC to:

• Provide investors with quarterly statements detailing information regarding private fund performance, fees, and expenses
• Obtain an annual audit for each private fund
• Obtain a fairness opinion or valuation opinion in connection with an adviser-led secondary transaction

The new rules require that all private fund advisers:

• Refrain from activities and practices that are contrary to the public interest and the protection of investors, although some activities may be permitted if the advisor provides disclosures to investors, and in some cases, the advisor must also obtain investor consent
• Refrain from certain types of  preferential treatment  that have a material negative effect on other investors and prohibit other types of preferential treatment to investors unless new certain terms are disclosed in advance of an investor’s investment in the private fund and all terms are disclosed after the investor’s investment

Increased Tax Incentives for Energy Efficient Buildings

As part of the Inflation Reduction Act’s modifications to IRC Section 179D, there’s significant additional value available for real estate owners prioritizing energy efficiency. Beginning in tax year 2023, the maximum IRC Section 179D deduction increased from $1.88 per square foot to up to $5.36 per square foot with inflation adjustments applied annually.

Newly constructed or substantially renovated commercial buildings and multifamily residential buildings that are four stories or higher are eligible for the deduction based on the energy efficiency associated with three building systems:

• Interior lighting
• Heating ventilation and air conditioning (HVAC) and hot water
• Building envelope

Owners and tenants of commercial properties and residential rental buildings of four stories or higher that made improvements after January 1, 2006, are eligible for the deduction.

Under the new rules, a project must achieve a 25% energy cost savings threshold to qualify for any IRC Section 179D deduction. The deduction increases on a sliding scale for each percentage point of energy cost reduction above 25%.

To qualify for IRC Section 179D’s higher deduction tier, additional prevailing wage and apprenticeship requirements must be met. However, for projects beginning construction prior to January 30, 2023, the additional labor requirements for the higher deduction tier are waived.

The Inflation Reduction Act also increased the IRC Section 45L tax credit starting in 2023 and extending through 2032. This credit can be particularly beneficial to residential multifamily developers and single-family home builders who reduce energy consumption in newly constructed residences.

The credit offers a per dwelling unit tax credit up to:

• $2,000 per unit completed through December 31, 2022
• $500–$5,000 per unit for multifamily properties completed January 30, 2023, through December 31, 2032, or potentially up to $2,500 per unit if construction began prior to January 29, 2023
• $2,500–$5,000 per unit for single-family properties completed January 1, 2023, through December 31, 2032

A dwelling unit is generally considered eligible for the IRC Section 45L tax credit if the unit is in a newly constructed or substantially renovated residential building, meets certain energy reduction standards, and is certified by a qualified third party. The IRC Section 45L credit can be claimed on a lookback basis by amending open prior-year tax returns.

Through the end of 2022, single-family home and multifamily developers constructing new residences of three stories or less, not including below-grade parking, could claim the credit. Starting in 2023, IRC Section 45L applies to residential developments and multifamily buildings of any story height.

Qualifying properties include:

• Multifamily properties, such as apartments, townhomes, and duplexes
• Senior housing facilities
• Student housing
• Single-family homes
• Manufactured and mobile home parks

Changes on the Horizon

Real estate leaders are advised to continue monitoring regulatory activity throughout 2024 and beyond as many industry changes will stem from this area.

For example, the Biden Administration has proposed key changes to legislation behind IRC Section 1031 exchanges allowing investors to re-allocate funds from sales of real estate assets into new like-kind properties, delaying taxation on that sale. While like-kind exchanges were not affected in 2023, new legislation may be proposed in Congress.

Also look for further changes and amendments from the SEC. The SEC proposed a new rule addressing how registered investment advisers safeguard client assets. As part of this proposal, the SEC intends to amend certain provisions of the current custody rule for enhanced investor protections.

The SEC also proposed corresponding amendments to the recordkeeping rule under the Investment Advisers Act of 1940 and to Form ADV for investment adviser registration under the act.

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Real estate investors still hot on D-FW, plan to buy more in 2024

D-fw is the darling among investors that report they see the highest returns from the region and find it to be the most attractive for investment this year..

By Anna Butler

8:41 AM on Apr 5, 2024 CDT — Updated at 4:00 PM on Apr 5, 2024 CDT

Investor optimism is heartier in 2024, though it does come with hesitations .

In a U.S. Investor Intentions Survey from CBRE Research released during the first quarter, results show investors’ biggest concerns involve higher-for-longer interest rates , tighter credit availability and loan terms, and differing buyer and seller expectations.

So far this year, interest rates haven’t budged, exacerbating tighter credit availability and loan terms.

But Dallas-Fort Worth continues to be a bright spot for investors. Survey results showed the region was the strongest-performing market in the country for total property returns.

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Investors also reported in the survey they felt D-FW is the most attractive market in the country for investment.

More than half of the investors said they planned to buy more in 2024 than they did in 2023. Nearly three quarters expect to sell the amount or more than they did year over year.

The majority of investors project transaction activity to pick up in the second half of 2024, both for the market as a whole and for their firms and companies.

Already in North Texas, developers are priming sites to finance projects in a better capital markets environment, and investment firms are readying for potential distress in the market among the potentially overleveraged.

Companies, such as Dallas-based CBRE, are hiring accordingly as well. The commercial real estate services and investment firm tapped Kelly Whaley to lead its investor services business in the D-FW market. Whaley will lead investor leasing, capital markets and property management in the role, with an emphasis on institutional clients.

Those moves anticipate potential rate cuts teased on Wednesday by Federal Reserve chair Jerome Powell during a speech at Stanford University.

Further survey results showed investors had a preference for multifamily real estate , followed by industrial and logistics.

While D-FW is projected to taper construction in both asset classes compared to previous years, it will still add more than most metros in the U.S.

The majority of respondents to the investor intentions survey were developers, owners and operators. Other respondents included those involved in real estate funds, private equity funds and real estate investment trusts, among others.

Anna Butler , Real estate reporter . Anna is a real estate reporter for The Dallas Morning News. She previously served as managing editor and real estate editor of the Dallas Business Journal. She is a graduate of Wake Forest University. A seventh generation Texan, Anna grew up in Austin.

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How to navigate the real estate market in an ever-changing climate.

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Craig Goodliffe, CEO & Founder of Cyberbacker .

According to recent reports , the U.S. real estate market is being battered by the perfect storm. Mortgage rates are high, property prices are high, and housing stock is historically low, creating challenges for anyone looking to put money into the market.

Experts have offered a variety of opinions on how long it will be before this storm abates. Some say it could be another three years , while others have suggested the clouds will lift by 2025 (paywall).

Regardless of which timeline you choose to believe, keep in mind that there will always be another storm. The age-old adage that says “the only thing constant is change” definitely applies in the real estate market. Consequently, improving your success with real estate both now and in the future depends on learning how to navigate in a storm.

With over 15,000 hours coaching in real estate since starting in the industry in 2003, my experience has helped me teach clients how to navigate this shifting landscape of a post-pandemic world. The following are steps that can be taken to mitigate the impact of an ever-changing real estate climate.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024, know what is happening now..

Bad data never leads to good results. At best, it will lead to confusion, but at worst, it will lead to calamity.

An ever-changing climate means old data can become bad data very quickly, so staying informed with the most recent data is a critical part of making sound decisions. This includes tapping into resources that allow you to stay up to date on interest rate fluctuations, sales volumes, median sales prices and other market trends.

Moving beyond common market data to key economic indicators can further enhance your understanding of the state of the market, including tracking local indicators like job growth, wage growth, population growth and migration trends. For commercial property, the performance of real estate investment trusts (REITs) can provide valuable insights into market trends.

Staying in touch with a network of others who are active in real estate can be extremely valuable for understanding and navigating the market, which can include both personal contacts and experts in the field who regularly share information through social posts, blogs and other outlets. Their experiences will allow you to see the real-world impact of the data trends you are observing.

Adopt an ‘uncertainty mindset.’

Engaging in real estate will involve the same basic processes, regardless of what is happening in the market, including focusing on value, managing risk, building a sustainable portfolio and making moves based on market trends. Investors should continue to focus on these factors during times of uncertainty, but they may need to shift to a different mindset for these processes to be effective.

For example, what qualifies as “valuable” during a stable market can be very different from what earns that label in an unstable market. Stable markets allow investors to focus on appreciation as a key value factor, but in unstable markets, investors will be better off shifting their focus from short-term appreciation potential to long-term stability, such as opportunities for consistent rental income even during economic downturns.

Adopting an “uncertainty mindset” also changes the way you approach diversification. In a stable market, the primary goal of diversification is optimizing returns. In an unstable market, diversification is focused on mitigating risk.

Have a plan, but stay flexible.

Start by building a strategy that acknowledges and addresses all of the factors that will flow from the market’s instability. Without a plan, you’ll be much more likely to succumb to decisions driven by impulse, which will very rarely be the best decision.

However, don’t be overly resistant to updating your strategy as the market evolves. An effective strategy will be empowering, not limiting, and new opportunities can emerge as instability jostles the market—don’t be afraid to take advantage of them.

Your strategy should outline your long-term goals. Being flexible will allow you to stay focused on those goals when market conditions change. Don’t let pressure or fear knock you off course, but also remember that setting a new course based on rational decision-making that acknowledges a new reality can be critical for achieving your goals in an uncertain market.

Exercise patience above all else.

When the market is evolving rapidly, it can be easy to lose sight of the fact that real estate is a long-term endeavor. Do everything you can to avoid getting caught up in the moment.

Patience in the face of fast fluctuations can keep you from falling victim to fear-driven decisions. Impatience, on the other hand, will tend to shift your focus to short-term gains and can push you toward potential opportunities based on FOMO rather than a healthy assessment of how those opportunities align with your goals. In the end, impatience will only cloud your judgment.

The best investor in real estate or any other market will always be an educated investor, so make sure you know the market first by keeping a close eye on key indicators. Then make sure you know yourself—what you want to achieve and how you plan to achieve it. That knowledge will help you to navigate with a steady hand no matter how unstable the market becomes.

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Leaked document: Amazon expects to save $1.3 billion by slashing office vacancies, terminating leases early, and other moves

• Amazon aims to save $1.3 billion by reducing office vacancies over the next three to five years.
• Natural lease expirations and early lease terminations are part of the plan.
• This is part of a larger cost-cutting strategy that includes shuttered projects and layoffs.

Amazon expects to save roughly $1.3 billion in the coming years by radically reducing office vacancies , according to a person familiar with the matter and an internal document obtained by Business Insider.

To get there, Amazon is letting certain leases naturally expire, stopping the use of some office floors, and negotiating early lease terminations for some buildings, the person said. They asked not to be identified, citing private matters.

Amazon has an office-vacancy rate of 33.8%, this person said. Amazon expects that rate to drop to 25% in 2024 and to 10% over the next three to five years. The change would save the company about $1.3 billion in annual operating expenses, according to the internal document.

The company's office-vacancy rate of almost 34% is the result of slower growth and layoffs, the person familiar told BI.

Getting this down to about 10% in the coming years will be another blow to the commercial real-estate market, which is already reeling from the remote-work boom, overbuilding, and retrenchment by big companies such as Google and Meta.

The rating agency Fitch recently warned that prices have yet to bottom out, so the plunge in US office values could match or exceed 2008's real-estate collapse.

Amazon's office retrenchment is part of a broader, ongoing cost-cutting strategy, which includes shuttered projects , scaled-back expansion plans , and the largest layoffs in company history .

In an email to BI, Brad Glasser, a spokesperson for Amazon, said it's normal business practice to review the company's real-estate portfolio.

"We're constantly evaluating our real-estate portfolio based on the dynamic and diverse needs of Amazon's businesses by looking at trends in how employees are using our offices," Glasser said in a statement. "In some cases, employees may move buildings to increase collaboration and drive better utilization of our workspaces. In other cases, we may take on additional space where we're currently limited or make adjustments where we have excess capacity. The changes we've already made are improving vacancy rates, and we expect to see further progress as we continue to learn and iterate on our portfolio."

Hubs and hibernations

Amazon is also trying to increase office density by mandating that employees relocate to central "hubs," as BI previously reported . Moving more employees to the same locations theoretically means the company can use less office space in non-"hub" locations.

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Last year, Amazon started requiring most employees to be in the office at least three times a week and forced some remote workers to relocate closer to their central "hubs." Those who refused to comply were told to take a " voluntary resignation ," and managers were given leeway to terminate them if the noncompliance continued, as BI reported .

Obviously, if more employees work in the office, a company's office-vacancy rate should fall.

The person familiar with the matter also said that "hibernations" — shutting down an entire floor or building to save on HVAC and lighting expenses — would help reduce office costs for Amazon. These locations would remain in Amazon's office portfolio during hibernation, the person added.

Glasser stressed that plans for efficient office-space use are unrelated to the company's RTO, or return-to-office, policy.

"To suggest that this is about anything else — such as our expectations for working in the office — is at best a misunderstanding and at worst intentionally misleading," he told BI.

Internally, Amazon is aware of how last year's RTO policy caused confusion and frustration among some employees, people familiar with the plans told BI. The rushed announcement meant that some offices weren't ready to accommodate employees, these people said.

On top of that, most of the office-space planning is still done manually, using spreadsheets, instead of more sophisticated software tools, one of the people said, which has further complicated the process.

Amazon continues to trim costs in other areas. The company cut up to 160 jobs on its advertising team on Tuesday, as BI reported . The Alexa team, meanwhile, is overhauling its back-end system to further reduce operational costs. One Medical, the healthcare company Amazon acquired for $3.9 billion, has been under pressure to save more .

Amazon staff have been unsuccessfully protesting the RTO mandate since last year. Over 30,000 employees signed an internal petition , arguing that most were hired as fully remote workers during the pandemic. But Amazon's leadership rejected the petition , and Andy Jassy, the CEO of Amazon, later warned employees that "it's probably not going to work out for you at Amazon" if they continued to refuse to comply.

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram ( +1-650-942-3061 ) or email ( [email protected] ). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

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99 Cents Only to close all 371 stores and wind down its business

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99 Cents Only Stores will close all 371 of its stores and wind down its business operations after more than four decades, the City of Commerce discount chain announced Thursday.

“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” interim Chief Executive Mike Simoncic said in a statement. “Unfortunately, the last several years have presented significant and lasting challenges in the retail environment.”

He cited multiple factors, including the “unprecedented impact” of the COVID-19 pandemic, shifting consumer demand, persistent inflationary pressures and rising levels of shrink — an industry term that refers to loss of inventory attributed to reasons such as shoplifting, employee theft and administrative errors.

Combined, those issues “have greatly hindered the company’s ability to operate,” Simoncic said.

99 Cents Only has stores in California, Arizona, Nevada and Texas and has about 14,000 employees. The privately held company said it had reached an agreement with Hilco Global to liquidate all of its merchandise and dispose of fixtures, furnishings and equipment at its stores. Sales are expected to begin Friday.

Hilco Real Estate is managing the sale of the company’s real estate assets, which are owned or leased.

99 Cents Only may turn into 99 cents mostly

Chain is expected to announce some items won’t stay under $1.

Sept. 5, 2008

The announcement by 99 Cents Only reflects a larger weakness in the dollar-store category, said Brad Thomas, equity research analyst at KeyBanc Capital Markets.

Dollar Tree, a Chesapeake, Va., retailer, announced last month that it was closing 600 of its Family Dollar stores this year and an additional 370 in the next few years, he noted.

“It’s been trying times for many, many retailers,” he said. “What’s interesting is that what started out as a boon to retailers in the pandemic, with all those stimulus checks, quickly turned into a very troublesome time.”

Rising wages, inflation and higher losses due to shrinkage have reduced profits for retailers in a deep-discount sector where margins are already extremely low.

99 Cents Only, with its large base of California stores, has been under particular wage pressure, he said. And it’s at a disadvantage compared with larger chains such as market leader Dollar General, which has a store count close to 20,000 — “a sales base and a store base that is multiple times larger than 99 Cents,” Thomas said.

Last week, Bloomberg reported that 99 Cents Only was considering a bankruptcy filing as it contended with a liquidity shortfall.

Founded in Los Angeles in 1982 by David Gold , 99 Cents Only popularized the single-price retail concept. At the time, dollar stores were seen as dumping grounds for undesirable products, but the Gold family made the stores bright and well-organized, with good-quality merchandise including groceries and household supplies.

“It was an instant success,” Howard Gold, one of David Gold’s sons, recalled Friday; he and his three siblings all worked at 99 Cents Only. “People thought it was government-subsidized because they couldn’t believe the prices.”

For years, it remained one of the few true “dollar” stores, with items priced at 99 cents or less or grouped to sell for a total of 99 cents.

That changed in 2008 when, faced with fast-rising inflation, soaring food and fuel prices, and a higher minimum wage, 99 Cents Only announced that it was straying from its long-standing price strategy.

Three years later, the company announced that it had agreed to be sold in a deal valued at about $1.6 billion, as investors eyed dollar stores that had grown in popularity during the Great Recession. In 2013, Howard Gold and the rest of the family management team departed the company.

Today, with stores scattered around Los Angeles County — among them in Hollywood, Silver Lake, Mid-Wilshire, Santa Monica, Thai Town, North Hollywood and Glendale — the closure of 99 Cents Only will leave a number of large vacant properties in prime locations.

“It’s very sad on many levels, and I’ll just leave it at that,” Gold, now retired and living in Studio City, said of the decision to close the chain his father built.

Other major retailers have also announced store closures in the region lately, including REI in Santa Monica , Macy’s in Simi Valley and several Rite Aid locations .

99 Cents Only did not respond to requests for comment.

Nicolas Kolesnikow, a retired teacher who lives in Westchester, said he was shocked to hear the chain was going out of business. He shops at a 99 Cents Only about four blocks from his house several times a week.

“It’s almost like a corner store for me,” said Kolesnikow, 82.

He might stop by and pick up milk if he runs out, and for longer trips will buy household items and produce such as tomatoes, cucumbers and cilantro before visiting a traditional supermarket with a larger selection.

Kolesnikow said he noticed that some products had become much more expensive in the last year, though there were still bargains.

“I found their prices were working their way up to regular prices,” he said, “and there were fewer shoppers.”

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Andrea Chang is a wealth reporter for the Los Angeles Times. She was previously a Column One editor, the deputy Food editor and an assistant Business editor, and has covered beats including technology and retail. Chang joined the paper in 2007 after graduating from the Medill School of Journalism at Northwestern University. She grew up in Cupertino, Calif.

Laurence Darmiento covers wealth and dealmakers in Southern California for the Los Angeles Times. He joined the paper in 2015 as an assistant business editor and has overseen finance, real estate and Washington business coverage. Darmiento previously had been the managing editor of the Los Angeles Business Journal and was a reporter for the Los Angeles Daily News and other outlets. A New York native, he is an alumnus of Cornell University.

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