Realistic Business Plan for the IRS

I would like to start a commercial real estate business. In order to satisfy the IRS that this endeavour is a business not a hobby (until I turn a profit), I’ve been advised to put together a business plan containing revenue and expense projections. Most of the information I can get on line seems very optimistic about how much money I can make.

I’d like an experienced perspective on what to expect in my first year or two. I’m interested in MHP and apartment buildings. And, would start with smaller properties ($500K - $1million).

What’s the ratio of deals reviewed to properties looked at to contracts offered to land a property when you are just starting out?

What’s a reasonable revenue target for my first year?

What’s the best way to figure out how much capital I need in the business to support that revenue target?

Any thing I should know but am not smart enough to ask yet? ;D

Thanks for the help.