Appendix The appendix to your credibility kit is just what the name implies, a collection of added features. Technically, the appendix is optional and may frequently be absent in a very simple credibility kit, such as one you might distribute to investor colleagues or to a potential client. These types of recipients likely have no interest in your business plan or your financial projections for your business so it is best not to include this, as it will just be seen as fluff.

When it comes to more professional types of relationships, such as those with a banker or any number of private lending sources, these same kinds of appendix items all of a sudden become more useful. Why is this? It's pretty simple, really. The second group is in a position where you are seeking money from them and the stakes are a little higher. Sure, the same fundamental components of a credibility kit are still helpful, but they will likely want to see more. For example, if you are seeking private lenders to pursue REO properties (those taken back by the bank), some market statistics for the volume and pricing for these kinds of homes would be very useful in presenting your cases to a would be lender. Similarly, sales statistics for these kinds of homes in your area are also useful, as most lenders are rightfully curious about how long they will have their money floating around and tied up in your properties.

Business plans and financial projections are what I like to call the 3^rd level of what you might include in an appendix section of your credibility kit. Colleagues, clients, and even private lenders may not want or need to see this information but a banker sure would. Even if they don't specifically ask for this kind of information, it adds a solid professional touch to your presentation and, in today's day and age where money to lend seems pretty tight, every little boost you can give yourself will help. My suggestion here is to prepare the previously discussed components of your kit and have them ready to present to all clients. This would represent your so-called core part of your kit and will be the most widely used. Your appendix should be designated for specific types of recipients only and the fact that this extra information is included in an appendix section makes it easy to either add or leave off, depending upon who is getting your kit. The remainder of this section discusses one of the most common and most critical parts of an appendix that being the business plan.

For other parts of the appendix that I have discussed, I suggest working with a local realtor for much of the market research data, keeping real estate clippings from your local paper so they can be scanned into a digital form, and tabulating your short and long term growth projections into a spreadsheet. Sure, these things may take a little time and effort, but it is well worth it. I can teach you everything you need to know about starting in real estate investing. After you know the basics, I'll work with you to ensure your time and passion for making money in this business will be richly rewarded.

Section 7: Testimonials (optional) Testimonials add a lot of value in many sales settings and, that said, they are optional here in your credibility kit. While a testimonial from a past client may add value to present or future clients (from the standpoint of working deals), many readers may not need to see validation from other people that you are the real deal. If your kit has done a good job of summarizing your business, that will often be enough. If you choose to use testimonials, keep them brief and don't overdo it. Your readers want to be compelled but may not want to feel like they are reading a sales pitch so be modest with this section. Should you choose to use testimonials, make sure you get permission from the source and only use as much information about the source as they feel comfortable with. Some readers will see a testimonial signed Dave N. as hokey, so, if a testimonial source is hesitant to allow you to offer more about them (e.g. a full name, phone number, etc.), you must decide whether or not the value of the testimonial is enough to still use it. Along a similar train of thought, I'm also asked about the need to have a list of references and I feel the same way about them as I do about testimonials. If you have a sterling reference and want to include it then, by all means, do so. Just understand that most readers will not dismiss you if you don't have them so rest assured. After all, this isn't a job resume, so it doesn't need to have all the things a resume would. Additionally if you have any other letters of recommendation, newspaper articles, interviews, etc. that will enhance your image to the readers then show it off here. It can't hurt and can only help build your credibility.

Section 8: Summary Any good proposal needs to start and end on a good note and a credibility kit is no different. A short statement to the reader, thanking them for their time spent in reading through it and welcoming them to contact you for more information, is usually all that is necessary here and it gets the reader thinking about the next step before they set your kit down. This little step alone can be a difference maker so take it to heart and think about what you'd like to see if you were reading one if that helps you prepare the exact content. An example summary statement is shown below. You'll see that the example shows a signature and this final touch can really carry some weight so please give it some consideration.

Example Summary Statement In closing, I sincerely thank you for your time and attention in reading through the summary of my business that I've provided to you. I hope you have found it informative and that reading it has helped you get a better feel about what my business has to offer and how we might possibly be able to work together in the future. Should you have any questions, please don't hesitate to contact me at 555-555-5555 or simply send me an email at my business@businessname.com. I look forward to the opportunity to answer your questions and also look forward to the possibilities that lie ahead. Best regards. John Q. Investor

A quick note to add to my credibility – my newest book was just published! To check it out, please click on the link found at www.realestateinvestorcoach.com. You will also see it available at www.amazon.com, type in "Brian Evans Make Money."

One of the first things you need to realize as a real estate investor is that you don’t have to master all of the skills in running a successful business on your own. Forget for a moment the image of the solitary and committed entrepreneur, however nostalgic that may seem to you. Every great entrepreneur in history had a good support team around him or her, even if the team didn’t get all the notoriety in the end. Why should you be any different? I have confidence that each and every one of you reading this has the potential for greatness and step one to reaching that milestone is the recognition that you’re not alone.

Your professional team is absolutely essential to the general flow, success and longevity of your business. After all, your clients (present and future) won’t expect you to have all the answers or expect you to be able to do everything, even if you don’t realize that just yet. I’ll say this and forgive me if I repeat it later: it’s OK to say ‘I don’t know’ as long as you mention that you know where to find the answer. Stated another way, it’s far better to defer a question you get from a client to one of your team members than to just make up an answer in fear of saying ‘I don’t know’. Deals fall apart when such things happen so don’t let this happen to you.

For starters, let’s establish the framework for your professional team and then talk about the numerous attributes of having one. Depending on where you may have received some of your real estate education, you may see a team referred to as a wealth team or power team, but I’m talking about the same thing here. Your team is the assembly of professionals who handle the aspects of your business that you either (a) don’t have the background or expertise to handle yourself or (b) choose not to spend time working on yourself. Either rationale is valid and the important thing is to establish a competent team.

So, who comprises your team? There are a couple of ways to think about this. How you do so depends on who you are and how your business is organized. For example, are you currently working on real estate investing as a part-time venture? If so, then having some core elements of a professional team will likely be sufficient to help you get started. If your business is a full-time pursuit, then your team assembly will likely be a more comprehensive undertaking. Below is a list of team members with an asterisk next to those that I find essential for all real estate investors, even those who are part-timers and/or just getting started in the business.

Real Estate Agent Accountant or CPA Financial Planner

Inspector Banker(s) Hard Money Lender

Contractor/Handyman Mortgage Broker Assistant (Live or Virtual)

Real Estate Attorney Appraiser Support Network/Mentors

Title Company/Closing Attorney Private Mortgage Lender

Property Management Company

How about that for a list? Some of this will of course seem perfectly logical and I don’t want you to look at the list as a daunting task if you’re new to the business. This is part of what it means to be a real estate investor. In the weeks ahead, we’ll look at each team member and the assets they can bring to your investment business.

You can still preview the tools I am giving away for Free by going here:

www.freemakemoneygift.com/Invitation.html

To better understand the psychological nature of real estate investing, you first need to understand the nuances of the real estate market, and how the opinion of the market differs between investors and the rest of the universe. Consumers might use the following terms or phrases to describe the current real estate market: bleak, dismal, sluggish, and catastrophic.

Investors, on the other hand, might use a slightly different set of descriptions for the exact same real estate market, because we will always view market conditions different from the majority. Examples include: opportunistic, a rare gem of possibility, a millionaire maker, ripe for the picking and a never-ending opportunity.

The truth, for investors, is that there has rarely ever been a market condition that is better than the one you are experiencing right now. Like the hundred year flood, you may never see the likes of this again in your business lifetime and it represents a rare and exciting opportunity for people like you and me. The public, influenced as you know by the popular media, sees things differently and in a much more pessimistic light. As real estate investors, you have an amazing opportunity in front of you, and in the spirit of building a multi-million dollar business, you also have to bear in mind that your view of the market is dramatically different than the one your clients will have. This is a gap that needs to be bridged if you are to have optimum success.

In part because of the difference in perception about the market and in part for reasons I’m about to describe, it is the unfortunate truth that investors, as a group, often get a bit of a bad rap and have a questionable reputation in the world of real estate. Why is that? I can think of several reasons that are worth discussing:

Greed

Jealousy

Ignorance

Dishonesty

Lack of Credibility

First, you have the greed factor. Basically, in a nutshell, what I’m referring to here is the small percentage of real estate investors who let their pursuit of power, money, and glory get in the way of running an ethical business. Ultimately, the emphasis should be on creating outcomes that benefit all parties. We’ve all come across examples of greed in this business, and if you haven’t, you will. It could appear as the slumlord that maintains slovenly apartment units to better line his or her pockets with revenue from rents. It could appear as the scam artist who dupes others into sinking funds into phantom projects that never actually materialize. It could appear as the heartless person who promises the world to a client in pre-foreclosure and then leaves them stranded at the eleventh hour. I could go on and on.

These select few make a bad name for the rest of us and it is an unfortunate reality for those of us who wish to run our business the right way. There’s not much you or I can do about it. Real estate is a commodity from which tremendous profits can be realized, and as a result, some greedy people are going to get into the mix. What you can do is recognize how these people affect the reputation of real estate investing as a business and place extra emphasis on building a reputable business that will show the true colors of your craft.

Second, you have the issue of jealousy. I might be going out on a limb or sparking a little controversy here but some of the current reputation for real estate investing as a profession comes from that which is explained by real estate agents and brokers. It is unfortunate, but some (not all) of your real estate brethren are often working against you either consciously or subconsciously. If these select few would simply take the time to learn something new, and open their eyes to the many unconventional and creative opportunities that real estate offers then they would truly understand why you choose to be a real estate investor, rather than a real estate agent. There are hundreds of differences between selling houses for a commission, and buying and selling houses for equity and profit. Personally, I’ll take the equity and profit any day of the week.

Should real estate investors to be alarmed? Not necessarily. Rather, it is important to be aware of the preconception that exists in this business. Credibility must be built in spite of this obstacle, rather than simply expecting that things you can’t control will somehow change.

Third, you have the issue of ignorance, not as much on the part of your colleagues but on the part of the general public. I’m not suggesting the public is ignorant in a general educational sense. What I am suggesting is that the general public is very unlikely to be up to speed with the kinds of concepts and techniques that you will be utilizing as a real estate investor. For example, the majorities of homeowners only buy and sell a few homes in their lifetime and in doing so utilize realtors who are pretty much driving the transactions based on conventional wisdom. We as investors on the other hand are trained to buy and sell properties as a business and perhaps have completed dozens if not hundreds of deals or more. That said, while this type of ignorance may impact the reputation of investing as a profession, it also opens a key door of opportunity for you to really establish a local name for yourself and your business that will literally make believers out of your clients.

Next, is the unfortunate issue of a few dishonest investors out there who threaten what you do on a daily basis. Whether it’s an unscrupulous developer who cuts corners or abandons a project, or foreclosure investors who skim equity or take funds up front from clients and then disappear, the bottom line is the same. Like any industry, real estate investing has its share of “bad apples” and unfortunately, these people get more attention than the good ones. The media loves a story where some evil investor scams an innocent consumer because; (a) it’s negative, and (b) people pay attention to that kind of stuff. My commentary on the media aside, it’s important that you recognize what your clients are likely hearing or reading and how it relates to what you do for a living. You do not want to let yourself become defensive about it but understand that your reputation will in part be built upon showing clients that you do not fall into the “bad apple” category.

Last on my list of things that give investors a poor reputation is a simple lack of true knowledge & professionalism. In short, some of your investor colleagues just don’t know what they are doing and this can impact the overall perception of what you do as a business. While I can’t oversee proper education for all investors, I think (in fact I know) that this can work to your advantage. Where other investors fall short, you will finish. Where other investors are weak, you will be strong. Business is about survival of the fittest and, even though some investors may damage the reputation of the business as a whole by not being very good at what they do, that can and should be seen as a great opportunity to establish your own reputable foundation and build from it.

I will continue this topic next week. Until then, check out my set of tools that when used correctly will easily make you stand out as the educated, smart, and confidant investor. Using the same techniques with the integrity and honesty with which we should all do business, I have created a very successful and highly profitable investment company.

Check it out: www.freemakemoneygift.com/Invitation.html

Welcome friends to one of the most beneficial series of articles on real estate investing that you may ever read. No, I

Supporting Documentation

You must include any documents that lend support to statements made in the body of your company’s business plan. The following is a list of some items for your consideration. Please be aware that this list is not complete and may vary depending on the stage of development of your business.

1. Resumes

2. Credit information, include in Appendix

3. Quotes or Estimates

4. Letters of Intent from prospective customers

5. Letters of Support from credible people who know you

6. Leases or Buy/Sell Agreements

7. Legal Documents relevant to the business

8. Census/Demographic data

Summary

The completed business plan should be bound. For internal purposes, three-ring binders work well. Additions and changes can easily be placed in the binders. For the business plan that is to be circulated to a lender and/or investor, many types of appropriate folders and binders can be purchased at office supply stores.

Once the business plan is completed, it should become an operational tool to measure the success of the business. This plan should be updated as milestones are reached. Often companies will spend enormous time, energy and financial resources to complete this arduous task just for the purpose of obtaining additional capital. The companies that shelve the business plan after its completion and presentation to lenders lose out on the real value of this useful tool in the growth and development of small and large businesses.

Part III: Taking Action

As with any program, a big part of putting your credibility together is committing to taking action to do it. Maybe this guide has been just what you needed to take that next step and start getting your own kit together. If so, then I’m glad I’ve helped fill that void for you and now, you just need to do it. Consider the value of not assembling a credibility kit vs. the perceived benefit of doing nothing and that should be plenty of motivation (if you need any) to get you going.

Are you one of those readers who feels you need more than just having read through this guide to help get your own credibility kit put together? What you need to do right now is think about what else might be holding you back. I mention this simply because many investors choose to do very little (or even nothing) to document their credibility for two simple reasons. Time is one reason and the other is what I like to call ‘writer’s block’. Let me spend a moment elaborating on each.

Time is one of those enigmatic commodities that, on one hand is so very precious, yet on the other seems so limiting at times. Personally, when it comes to your credibility and the kit that will help support it, I don’t buy the argument that you just don’t have the time to do this. It’s just too important! If you legitimately feel you don’t have the time to do anything that is important, then you simply find someone who can do it for you. There just can’t be excuses made regarding time if you aren’t willing to take steps to account for those things you personally don’t have the time to do.

Maybe you are among the many out there who cringe when your child asks you for help with a theme paper they are writing or feel you have trouble enough organizing the garage, much less an important document that will give you professional credibility. I get it and recognize that many of you, however accomplished you may be at talking to clients on the phone, struggle a bit more when it comes to written documents. For many real estate investors, things like cover letters, business plans, and credibility kits can be quite painstaking (or at least very time consuming) and, if this sounds familiar, then you’re certainly not alone

Concluding Remarks

Well, we’ve reached the end of the guide on credibility kit development, but this is only really the beginning, isn’t it? The real question is ‘What are you going to go do now?’ I’d certainly like to think that this guide has been helpful to you in both illustrating how a credibility kit can and will help your business, and in lighting a fire under you to take action and do something about it.

Don’t forget why you are doing this. It’s not for posterity or to have something that looks good sitting on the shelf in your office. The credibility kit is designed for distribution, to be handed out or presented to lenders, prospective partners, colleagues, and especially would be private lenders who need to see that you aren’t just an idea, but rather a tangible business that operates with the necessary seriousness that points to a business that has their act together.

Maybe time is a significant limitation; at least in the way you look at things. Perhaps you are the primary “call center” for your business right now and you are focusing on doing deals, which is great. Perhaps you are among the host of investors who are presently doing this part-time, while still maintaining a primary means of employment. In either case, the importance of the credibility kit is equally essential.

In closing, I hope you have found this guide helpful. My goal has been to increase awareness of the importance of a credibility kit and also increase the number of investors who are out there successfully using them to build their own businesses. I wish you the very best in success.

For many more tips and tools, preview the best real estate investing offer on the planet! You can get everything for only the cost of shipping and handling!

Yes, it’s FREE!

Go here: www.freemakemoneygift.com/Invitation.html

Personnel

The success of a business can often be measured by its employees. Seventy percent of consumers will go elsewhere if they don’t receive prompt and courteous service. You must consider the following questions in completing this section of the business plan:

1. What are your current personnel needs (full or part-time)? How many employees do you envision in the near future and then in the next three to five years?
2. What skills must your employees have? What will their job descriptions be?
3. Are the people you need readily available and how will you attract them?

Financial Data

At the heart of any business operation is the accounting system. It is important to have a certified public accountant establish your accounting system before the start of business. At times, there is a tendency to do it yourself. Remember that an incredible number of businesses fail due to managerial inefficiencies. Leave it to the trained professional to help you in the area of accounting and legal matters. If your business can’t afford a public accountant to establish your books, then you are undercapitalized. You need to secure additional resources before starting.

One of the first steps to having a profitable business is to establish a bookkeeping system that provides you with data in the following four areas:

• Balance Sheet – indicates what the cash position of the business is and what the owner’s equity is at a given point (the balance sheet will show assets, liabilities and retained earnings).
• Break-Even Analysis – is based on the income statement and cash flow. All businesses should perform this analysis without exceptions. A break-even analysis shows the volume of revenue from sales that are needed to balance the fixed and variable expenses.
• Income Statement – also called the profit and loss statement, is used to indicate how well the company is managing its cash, by subtracting disbursements from receipts.
• Cash Flow – this projects all cash receipts and disbursements. Cash flow is critical to the survival of any business.

If the goal of your business plan is to obtain financing, you will be required to generate financial forecasts. The forecasts demonstrate the need for funds and the future value of equity investment or debt repayments. This exercise is critical in obtaining capital for your business. To obtain capital from lending institutions you must demonstrate the need for the funding and your ability to repay the loan.

The forecast that you generate should cover a three to five-year period. This is a period in which realistic goals can be established and attained without much speculation. Forecasts should be broken down in monthly increments.

Projections and forecasts are an integral part of your financial portfolio. Carefully and accurately state your assumptions. Honesty is the best policy! Over-optimism and over-inflation can lead to failure.

We are getting close to the end of the business plan, stay tuned for more…….

Have you planned your investment strategy for 2010? You can possess the most effective and successful money making real estate investing tool on the planet!

Go here: www.freemakemoneygift.com/Invitation.html

The Competition

Understanding your competition’s strengths and weaknesses is critical for establishing your product or service’s competitive advantage. If you find a competitor is struggling, you need to know why, so you don’t make the same mistake. If your competitors are highly successful, you’ll want to identify why. You’ll also want to explain why there is room for another player in the market.

Analyzing your competitors should be an ongoing practice. Knowing your competition will allow you to become more motivated to succeed, efficient and effective in the marketplace.

Operations

Now that you have had an opportunity to really sell your idea and wow potential investors, the next question on their mind is how will you implement the idea. What resources and processes are necessary to get the ball rolling? This section of the plan should describe the purchasing, staffing, equipment and facilities required for your business.

You’ll want to provide a roll out strategy as to when these requirements need to be purchased and implemented. Your financials should reflect your roll out plan.

In addition, describe the vendors you will need to build the business. Do you have current relationships or do you need to establish new ones? Who will you choose and why?

The Management Team

For most investors, the experience and quality of the management team is the most important aspect they evaluate when investing in a company. Investors must feel confident that the management team knows its market, every detail of the product or service, and has the ability to implement the plan. In essence, your plan must communicate management’s capabilities in obtaining the objectives outlined in the plan. If this area is lacking, your chances for obtaining financing are bleak.

If your team lacks in a critical area, identify how you plan on compensating for the void. Whether it is additional training required or additional management staff needed show that you know the problem exists, and provide your options for solutions. You should include the following four areas:

1. Personal history of the principals
2. Work experience
3. Duties and responsibilities
4. Resources available to your business

On, Wednesday I will continue outlining the business plan. Please check out the following offer I have decided to extend well into the New Year for those that want to possess the most effective and successful money making real estate investing tool on the planet!

Go here: www.freemakemoneygift.com/Invitation.html

Sample Business Plan Outline

Author