5 Steps to a Successful Real Estate Planning Process

The real estate planning process can be a scary process if you are new to this world. We’re going to break down the real estate planning process into five easy to follow steps to make the entire process simple. However, before we dive into the steps, let’s examine the four types of commercial and industrial real estate where IAG Commercial can assist our clients:  data centers, commercial, industrial, and land.

Commercial Real Estate

Commercial real estate is property used exclusively to provide workspaces for businesses. Commercial real estate consists of office space, retail space, restaurants, hotels, convenience stores, and strip malls. Some multi-family projects can also be classified in this category of  commercial real estate.

Industrial Real Estate

Industrial real estate is for industrial purposes. Industrial property comes in all shapes and sizes and can house a wide range of different businesses. Industrial real estate is flexible in that it can serve as office space for small businesses such as medical device companies. But it can also be used for large companies that need warehouse and production space. Some examples include storage warehouses, shipping, power plants, or factories.

Land Investment

Land generally consists of a property with no buildings on it.  Depending on the location, land can be purchased to develop commercial real estate, residential real estate, or industrial real estate. Land can also exist for agriculture (farming and ranching).  

Each type of real estate investment comes with its own set of risks and benefits. No matter what category of real estate you choose to invest in, it's imperative to choose investments wisely by first knowing those strengths and weaknesses. Done right, investing in real estate can be lucrative, and provide long term wealth. Investing in real estate is a way to diversify your investment portfolio and provide an additional income source. If chosen correctly, many real estate investments won't require showing up whenever a tenant calls for help.

The trouble with real estate investing is that many people interested in real estate investment don't know where to start. Investing in real estate takes planning and careful implementation. Creating a plan or road map is an essential part of beginning your real estate investing career. The purpose of this plan is to avoid potential pitfalls while also ensuring your investment ventures have a chance to succeed.

Planning to invest in real estate calls for strategizing a few critical steps to be successful. This planning process includes knowing your future goals and financing strategies. Once finished, the planning process creates an outline for your investment future with unlimited potential. The real estate planning process becomes a living document and each step outlined in the process should propel you forward to your ultimate goal.

The four steps to a successful real estate planning process include:

  1. Investment Strategy
  2. Real Estate Investment Goals (short and long term)
  3. Financing
  4. Back-up Plan

Investment Strategy

There are many types of real estate investment strategies. There are business strategies such as fix and flip, wholesaling, stabilized income or value-add. The type of strategy you choose will determine your short- and long-term goals. You can also combine strategies to experiment with what kind of approach is best for you and your future income goals. Before determining your real estate investment goals, you must complete your due diligence and research the types of real estate investment strategies available to you.

Real Estate Investment Goals

Real estate investment goals outline the outcome of your overall investment plans. Writing down your goals helps you map out the steps you need to take to get to your ultimate investment goals. You should outline two types of goals —short term goals and long-term goals. Short term goals are the small actionable steps that take you through to your long-term goals. Long term goals outline your future real estate investment plans. For example, a long-term goal could be that you want to be a part of the ownership of ten office buildings.. What steps do you need to take to own those ten office buildings (we need to focus on larger opportunities and we do not deal with residential homes)? These steps are your short-term goals.


The type of real estate investment strategy you choose to invest in depends on your financial situation. Unlike other types of funding, it's relatively common to use some financing to help you with your real estate investments. Commercial properties for investment purposes typically require a minimum of 25% as a down payment and a debt coverage ratio of around 1.2:1.0.  Discuss life insurance companies, CMBS and commercial lenders (banks).

Back-Up Plan

Businesses fail every year (remember Jen, we are targeting mid. to large companies). However, by creating a back-up plan, new real estate investors are prepared for possible worst-case scenarios. By preparing for this event, crucial strategies are set in place so you can address them if something happens to go wrong with your investment. This part of your real estate planning process should answer the "what if" questions. For example, if you own a retail property, you need to be able to answer the question, what will happen if the pandemic continues and tenants cannot continue to pay their rent?? This type of issue needs to be addressed as you go through the real estate planning process.

Taking the time to complete a thorough real estate plan ensures you've researched everything you need to know before you begin investing in real estate. The real estate planning process helps you on the path towards a better financial future.  By definition, any investment strategy requires a willingness to accept some risk.  Diversifying this risk will help weather the storms of life!


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