Property Development Business Plan [Sample Template]

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A property development company is a company that is involved in buying land, financing real estate, building, or having builders build and develop projects for commercial purposes.

Property development companies renovate and re-lease existing buildings, purchase raw land, and sell developed land or parcels to others. They are involved in developing a property from beginning to end. A report released by the National Association of REALTORS® shows that over 5.64 million existing homes were sold in 2020.

Also, according to data from the U.S. Census Bureau, 822,000 newly constructed homes were sold in the same year. In 2019, 64.9 percent of families owned their primary residence, according to the Federal Reserve’s Survey of Consumer Finances.

Steps on How to Write a Property Development Business Plan

1. Executive Summary

Vintage Group© Property Development Company, Inc. is an American-based and licensed real estate cum property development company. Our head office will be located in a standard and centrally located facility in the heart of New York City, New York.

We will engage in property development projects for a wide range of clients. We will work towards becoming one of the largest property development companies in New York and the whole of the United States of America. Jason Theodora is the founder and CEO of Vintage Group© Property Development Company, Inc.

Company Profile

a. Our Products and Services

Vintage Group© Property Development Company, Inc. will be involved in;

Houses and housing estate developments
Apartments and other residential developments
Commercial developments
Industrial developments
Other developments (Investment Properties)
Real estate consultancy and advisory services

b. Nature of the Business

Our property development company will operate the partnership business model. We will work with investors who are willing to partner with us to grow their investment portfolios in the real estate market.

c. The Industry

Vintage Group© Property Development Company, Inc. will operate under the real estate sales and brokerage industry.

d. Mission Statement

Our mission is to be at the forefront of buying property and partnering with landowners, then develop a plan for what to build or rebuild on that property. We will bring in investors and predict how much money the new homes or businesses will bring in.

e. Vision Statement

Our vision of to be listed among the top three property development companies in the whole of New York.

f. Our Tagline (Slogan)

Vintage Group© Property Development Company, Inc. – The Genius of Property Development!

g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)

Vintage Group© Property Development Company, Inc. will be formed as a Limited Liability Partnership (LLP).

h. Our Organizational Structure

Chief Executive Officer
Project Manager
Company’s Lawyer/Secretary
Admin and HR Manager
Head of Construction and Renovation
Business Developer/Sales and Marketing
Accountant
Customer Service Executive/Front Desk Officer

i. Ownership/Shareholder Structure and Board Members

Jason Theodora (Owner and Chairman/Chief Executive Officer) 51 Percent Shares
Hilary Kings (Board Member) 14 Percent Shares
Harrison Williams (Board Member) 10 Percent Shares
Rachael Abraham (Board Member) 10 Percent Shares
Stella Norman (Board Member and Secretary) 10 Percent Shares.

SWOT Analysis

a. Strength

Ideal location for property development (thriving real estate market)
Highly experienced and qualified employees and management
Access to finance from business partners
Robust relations with property owners and properties investment moguls
Good returns on investment for investors.

b. Weakness

Financial Constraints
Our business will be competing with well-established property developers and other home remodeling companies
Inability to retain highly experienced and qualified employees longer than we want

c. Opportunities

New York is a thriving market for property development companies and the real estate industry.
Good support structure for property development companies.

i. How Big is the Industry?

The market size, measured by revenue of the real estate sales and brokerage industry is put at $156.2 billion in 2023 hence it will be safe to safe the industry is amongst the biggest industries in the United States of America.

ii. Is the Industry Growing or Declining?

All available data points to the fact that the real estate and brokerage industry is growing. The market size of the industry is expected to increase 0.4 percent in 2023.

iii. What are the Future Trends in the Industry

The real estate sales and brokerage industry is changing, and players in the industry are improvising. No doubt, technology and climate change (the go green initiative) will change the landscape of the industry going forward.

iv. Are There Existing Niches in the Industry?

No, there are no existing niche ideas when it comes to the property development business. This is because the property development line of business is a subset of the real estate and brokerage industry.

v. Can You Sell a Franchise of your Business in the Future?

Vintage Group© Property Development Company, Inc. has plans to sell franchises in the nearest future and we will target major cities with thriving real estate markets in the United States of America.

d. Threats

The arrival of new property development companies within our market space
Unfavorable government policy and regulations.
Community resistance
Liability problems
Continuously changing consumer demands especially as it relates to style and design of properties et al.

i. Who are the Major Competitors?

New World Development Co. Ltd
Wheelock and Company
AvalonBay Communities
Greystar Real Estate Partners
Wood Partners
Mill Creek Residential
Continental Properties Company, Inc.
Trammell Crow Company
The JBG Companies
Lowe Enterprises
Simon Property Group
General Growth Properties
SITE Centers
Kimco Realty Corp
Brixmor Property Group
Panattoni Development Co.
McDonald Development Co.
USAA Real Estate Co.
LaSalle Investment Management
Gibraltar Syndication & Development Company

ii. Is There a Franchise for Property Development Business?

Well, for now, there are no known franchise opportunities in the property development business.

iii. Are There Policies, Regulations, or Zoning Laws Affecting Property Development Business?

Yes, there are county or state regulations and zoning laws for the business. Zoning laws are found in virtually every municipality in the United States, affecting land use, lot size, building heights, density, setbacks, and other aspects of property use.

In addition to that, it is important to state that in the United States, government agencies and departments routinely grant variances to rules and regulations. Often, you only have to fill out a short form. In other cases, your request may have to be publicly heard before your city council, zoning board, or other body. Please check with your zoning or planning department to find out what options are available to you.

Marketing Plan

a. Who is Your Target Audience?

i. Age Range

Our target market comprises adults above 18 years old who have the finance to do business with us.

ii. Level of Educational

We don’t have any restriction on the level of education of those we are ready to work with as investors or buyers of the properties we develop.

iii. Income Level

The income level of those we are looking to do business with will be between $70,000 and above $124,000.

iv. Ethnicity

There is no restriction when it comes to the ethnicity of the people we are looking to partner with.

v. Language

There is no restriction when it comes to the language spoken by the people we will partner with.

vi. Geographical Location

Anybody from any geographical location will be welcome to partner with us or do business with our company.

vii. Lifestyle

Vintage Group© Property Development Company, Inc. will not restrict any investor or client from partnering with us or doing business with us based on their lifestyle, culture, or race.

b. Advertising and Promotion Strategies

Host Themed Events That Catch Attention.
Tap Into Text Marketing.
Make Use of Bill Boards.
Share Your Events in Local Groups and Pages.
Turn Your Social Media Channels into a Resource
Develop Your Business Directory Profiles
Build Relationships with players in the real estate and brokerage industry.

i. Traditional Marketing Strategies

Marketing through Direct Mail.
Print Media Marketing – Newspapers & Magazines.
Broadcast Marketing -Television & Radio Channels.
OOH Marketing – Public Transits like Buses and Trains, Billboards, Street shows, and Cabs.
Leverage direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.

ii. Digital Marketing Strategies

Social Media Marketing Platforms.
Influencer Marketing.
Email Marketing.
Content Marketing.
Search Engine Optimization (SEO) Marketing.
Affiliate Marketing
Mobile Marketing.

iii. Social Media Marketing Plan

Start using chatbots.
Create a personalized experience for our customers.
Create an efficient content marketing strategy.
Create a community for our target market and potential target market.
Gear up our profiles with a diverse content strategy.
Use brand advocates.
Create profiles on the relevant social media channels.
Run cross-channel campaigns.

c. Pricing Strategy

When working out our pricing strategy, Vintage Group© Property Development Company, Inc. will make sure it covers profits, insurance, premium, license, and economy or value and full package for each property,

In all our pricing strategy will reflect;

Cost-Based Pricing
Value-Based Pricing
Competition-Based Pricing.

Sales and Distribution Plan

a. Sales Channels

Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, strategic alliances in the real estate and brokerage industry, and freelancers to help refer clients to us.

Vintage Group© Property Development Company, Inc. will also leverage the 4 Ps of marketing which are place, price, product, and promotion. By carefully integrating all these marketing strategies into a marketing mix, we can have a visible, in-demand service that is competitively priced and promoted to our customers.

b. Inventory Strategy

The fact that we will need the required building materials means that Vintage Group© Property Development Company, Inc. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse. We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.

c. Payment Options for Customers

Here are the payment options that Vintage Group© Property Development Company, Inc. will make available to her clients;

Payment via bank transfer
Payment via credit cards
Payment via online bank transfer
Payment via check
Payment via mobile money transfer
Payment via bank draft

d. Return Policy, Incentives, and Guarantees

At Vintage Group© Property Development Company, Inc., we develop properties and the nature of products (properties) we offer does not accommodate return policy, but we will guarantee our investors of good returns on their investment (ROI). Our Operating Margin targets for housebuilders across the economic cycle will be placed at 15-20 percent on Gross Development Value (GDV).

e. Customer Support Strategy

Our customer support strategy will involve seeking customers’ feedback. This will help us provide excellent properties, return on investment (ROI) and customer service to all our clients and investors, it will help us understand their needs, experiences, and pain points. We will work with effective CRM software to be able to achieve this.

Operational Plan

Our operational plan will cover capacity planning, location planning, layout planning, quality planning, and methods planning.

Overall, we plan to expand our revenue by 50 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting grants and fundraising strategies that will enable us to boost our properties and service offerings.

a. What Happens During a Typical Day at a Property Development Business?

The office is open for the day
Documentation and other administrative works are conducted throughout the day
Marketers go out in the field to market our properties and services
If there is an ongoing property development project, the required team and machinery are sent to the field to carry out the project.
The team and machinery return to base (office) after the day’s job
Report for the day is written and submitted to the required authority
The office is closed for the day.

b. Production Process (If Any)

There is no production process when it comes to the property development business.

c. Service Procedure (If Any)

No, there are no defined service procedures for a property development business.

d. The Supply Chain

Vintage Group© Property Development Company, Inc. will rely on key players in the real estate and brokerage industry to refer business deals to us. So also, we have been able to establish business relationships with wholesale supplies of building materials.

e. Sources of Income

Houses and housing estate developments
Apartments and other residential developments
Commercial developments
Industrial developments
Real estate consultancy and advisory services

Financial Plan

a. Amount Needed to Start your Property Development Company?

Vintage Group© Property Development Company, Inc. would need an estimate of $4.5 million to successfully set up a property development company in the United States of America. Please note that this amount includes the salaries of all our staff for the first month of operation.

b. What are the Cost Involved?

Business Registration Fees – $750.
Legal expenses for obtaining licenses and permits – $7,300.
Marketing, Branding and Promotions – $5,000.
Business Consultant Fee – $2,500.
Insurance – $5,400.
Rent/Lease – $200,000.
Other start-up expenses including, commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
Operational Cost (salaries of employees, payments of bills et al) – $100,000
Start-up Inventory – $15,000
Store Equipment (cash register, security, ventilation, signage) – $4,750
Furnishing and Equipping – $80,000
Liquid Cash for Execution of Projects: $3.5 million
Website: $600
Miscellaneous: $2,000

c. Do You Need to Build a Facility? If YES, How Much will it cost?

Vintage Group© Property Development Company, Inc. will not build a new facility; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our facility.

d. What are the Ongoing Expenses for Running a Property Development Company?

Transportation cost
Cost of building materials and supplies
Utility bills (internet, phone bills, signage and sewage et al)
Salaries of employees

e. What is the Average Salary of your Staff? List the Job Position and their proposed salary based on industry rate and your startup capital

Chief Executive Officer – $85,000 Per Year
Project Manager – $72,000 Per Year
Head of Construction and Renovation – $70,000 Per Year
Company’s Lawyer/Secretary – $68,000 Per Year
Admin and HR Manager – $45,000 Per Year
Business Developer/Sales and Marketing – $42,000 Per Year
Accountant – $40,000 Per Year
Customer Service Executive/Front Desk Officer – $30,000 Per Year.

f. How Do You Get Funding to Start a Property Development Company

Raising money from personal savings and sale of personal stocks and properties
Raising money from investors and business partners
Sell shares to interested investors
Applying for a loan from your bank/banks
Pitching your business idea and applying for business grants and seed funding from, government, donor organizations, and angel investors
Source for soft loans from your family members and your friends.

Financial Projection

a. How Much Should You Charge for your Service?

At Vintage Group© Property Development Company, Inc. our fee will be based on the location and type of property we want to develop.

b. Sales Forecast?

First Fiscal Year (FY1): $3.5 million
Second Fiscal Year (FY2): $5 million
Third Fiscal Year (FY3): $9 million

c. Estimated Profit You Will Make a Year?

The ideal profit margin we hope to make at Vintage Group© Property Development Company, Inc. will be between 16 and 20 percent on development costs.

d. Profit Margin of a Property Development Company

Vintage Group© Property Development Company, Inc. will collect developer fees that will range from 5 to 10 percent aside from making profits off every property sold.

Please note in planning our property development project, we will make sure that the bottom line shows a suitable return for the money and effort we put into it.

Growth Plan

a. How do you intend to grow and expand?

Vintage Group© Property Development Company, Inc. will grow our property development company by first opening other offices in key cities in the United States of America within the first five years of establishing the business and then will start selling franchises from the sixth year.

b. Where do you intend to expand to and why? (Geographical locations)

Vintage Group© Property Development Company, Inc. plans to expand first to Los Angeles – California, San Francisco – California, Chicago – Illinois, Washington, D.C., Boston – Massachusetts, Miami – Florida, Seattle – Washington, Dallas – Texas, and Philadelphia – Pennsylvania.

The reason we intend to expand to these geographic locations is the fact that available statistics show that the cities listed above have the highest real estate market in the United States. New York has the highest real estate value in the country at $2.8 trillion.

Exit Plan

The founder of Vintage Group© Property Development Company, Inc. plans to exit the business via family succession. We have placed structure and processes in place that will help us achieve our plan of successfully transferring the business from one family member to another and from one generation to another.