When creating a business plan for LLC's under the market research, how did you approach this section as regards to the tenants/ target customers criteria. (for example, age group(s), occupations, renting to families vs, renting to singles). Am aware there are fair housing laws, though we have to list something for detail in case the bank want to view our business plan in order to get loans.
Hi Anthony, I'm new to investing but from my knowledge of all the case studies in business school, the market research section could just include overview of your target area (you could even break it down to a specific neighborhood), including the details you listed, and then rental data (i.e. what is the profile of renters in that area, types of homes and rent ranges). You could also call a local bank or credit union and ask to speak with a commercial lender and see what they say.
And now that I've said all this, I have something on my to do list for tomorrow!
The key is to show you know your market, the demographic the property will attract, the rent levels in the area, etc. The bank wants to know its money is safe. That you have a property that is fit for purpose. A 1 bedroom condo in an area of family homes might not work so well. A family home in an area with no schools would also be a challenge.
@Anthony Duann I handled this be describing occupant needs and property attributes rather than demographics. So, for example, I would say of a 3 BR detached house that it would work for a household of three people requiring two BR and an office, or a household of three people each requiring a BR. That places the attention on how the property can function for occupants rather than what the occupant "looks like". Hope this is helpful.