We all have goals, but are they clearly identified? Will they help us succeed? How many goals do you have? You should have more then one, in fact you should have many goals. They should be clear, detailed and very specific.
So what's your goal?
To be financially independent.
No I said be specific. It should also have a time frame.
OK, I want to be financial independent through real estate by 2015.
Better, but it has to be detailed, and very specific.
I want to be financially independent using multi-unit rental property, having a total positive cash flow of $5000/month before the end of 2015.
It's important that your goal can be measurable so that you know exactly what you are reaching for. The more detail the goal is, the easier it will be to recognise if you've reached it or not.
Good goal! So what are your other goals?
What do you mean? I just gave you my goal. That's what I want to do.
What are the shorter term goals? The end of 2015 is in about 3 years, so what are your goals for this year?
It's good to have a goal, but to make sure you stay on track you'll need to have shorter term goals along the way to lead you to your greater goal. This is setting the map, figuring out what will need to be done.
OK let's see, I aim for about $75 - $100 positive cash flow per door a month for rental properties. Therefore $5000 divided by $75 is about 66 doors. In 3 years that would be 22 doors a year.
So that could be 6 four-plexes, or 4 six-plexes and so on. Of course it can be a combination of different size properties.
At this point I would evaluate your goal. You want your goal to be challenging but if you have a family, the time you will need to dedicate to your goal may not be feasible. Don't loose focus on what is truly important in life.
You're right, I don't think with my work and family commitment that this goal will be feasible. What do I do.
Make adjustments. Either to the length of time you are giving yourself, or the measurable amount you have set up.
So if I lower my goal to $4000 per month and give myself until 2016. Then, I would need 53 doors by 2016. That would be 13 doors a year; 3 four-plexes, or 2 six-plexes.
Perfect! You have your long term goal for 2016 and your yearly goal. What other goals do you have?
More goals?? OK, I will purchase a six-plex in the next three to four months.
Remember, we are trying to set a road map to reach our goals. We need to have a clear vision of how we will accomplish this.
Wonderful! So what are your immediate task?
We now have our short term, clear, measurable goal. Now, how do we attain it. Make a list of the task you will need to accomplish to reach that short term goal.
Locate a cash flowing property, find investors, purchase said property, collect rent.
How? Don't forget to give yourself a time frame.
Locate Cash flowing Property:
Every week, look through MLS listing and request income and expenses information for rental properties.
Daily, look for responding email and run numbers. If they work, send an offer.
Do the due diligence (property management will be established by now)
Every week, attend an event with networking potential. Hand out business cards to prospective investors and collect business cards from prospective investors.
As soon as possible, post an add on kijiji or craig's list advertising investment opportunities.
Build a contact list.
Send out an investment summary to your contact list.
Arrange a meeting or presentation to interested parties.
Purchase Said Properties:
As soon as possible, start contacting mortgage brokers, insurance companies, lawyer, and property management.
Send pertinent information and applications.
Set up payment arrangement with property management. (Deposit only debit card, e-transfer, direct deposit)
If there is any repairs that need to be done prior to renting, have property management make such arrangements.
If there are any vacancies, have the property management advertise and fill unit.
Do you see it? The map, the road ahead? By following these steps to set up our goals, you know exactly what you need to do. Make sure those goals are written down, and visible. You want them to be on your mind. I have my longest term goal written on my bathroom mirror. Every time I brush my teeth it's there. Reminding me what I am trying to accomplish. Above my work station, I have a white board with my immediate tasks, I cross them off as I accomplish them and I rewrite the whiteboard at least monthly. It also has my deadlines, such as financing clause date, closing date, ect. It's a big whiteboard.
It is important to stay accountable. To re-evaluate when closer goals come to terms. If you have reached them, great for you, you may be on the right track. You may want to make sure your goals are challenging enough.
If you haven't reached them, write down what was accomplished then either re-evaluate and reset your goals to be more manageable or see which task should be done differently in the future. If you failed reaching your goal, don't despair. You want to stay accountable but don't be so hard on yourself that you will make yourself quit.
So tell me, do you have goals?