The 3rd Element – Business Opportunity (Warren Buffet Essential Elements to a Real Estate Investing Business Plan)

Warren Buffet is known for purchasing stock in companies, or entire businesses for that matter, whom have a significant market share in their industry.

As his portfolio includes companies such as Gillette, GEICO, Coca-Cola, American Express, and the Washington Post, he has a broad reach over a number of industries that help expand and grow the investment portfolio of Berkshire Hathaway.

How this translates to you as the solo, investment business entrepreneur is you need to identify the particular price points of properties in your target area, determine how inventory there are in the vicinity, project the probability of how much of this inventory you can buy at a substantial discount (with a minimum 15% profit margin at today’s Fair Market Value or Retail Price), and precisely how you can expand your business into other cities and markets over the next 24 months.

Give yourself permission to go BIG.  Then abstract from that the projected profit margin from your business and you’ll see just how large (and profitable) this can be for you.

Simply put, make sure that the properties you are purchasing or investing in have a significant position in their neighborhoods. For example, if you are buying residential properties, make sure that you’re buying in a place where there is a demand for residential rentals or purchases.

If you are purchasing an investment property, make sure that there is a local clientele in place for that property and describe those items here.  (Tip: spreadsheets help..you’ll have fun with it…go to your local Chamber of Commerce and get a “Business Relocator Kit” which will have this statistical and demographical information).