REI Plans & Goals
Hello!!!
I just would like to get a feel of how other investors out there are making plans and setting goals? What kind of goals have you set and how do you plan for them?
I guess I am asking this question because I am having a hard time creating my own plan and I would like to get a feel for what everyone else is doing out there.
Any comments or suggestions will be greatly appreciated!!
Thanks again TCI members & guests!!
Chris G 
Well my goal for the first year of REI is too really just learn as much as possible about RE investing with no real monetary goal in mind.
My partners and I just ventured into REI in the last 2 months and we are on our way to incorporating and buying a few properties by the end of the year. We hope to have at least 3 income properties by December. As for paying off bills or buying a new car or anything like that, I've put that on hold personally to engulf myself on the ins and outs of REI.
I hope my comments made sense, really my goal for the first year is just to invest (reinvest any profits) and learn from experience so I can set my long term goal (at least monetary goals) in REI.
1st. Never have to work for anyone again
2nd. Have 100% passive income (not landlording income)
3rd. Own multi's of 100+ units and commercial property that facilitates #2.
When you are goal setting, it is important to establish achievable and measurable short term goals that complement your long term goals.
For example, every year my short term goal is to increase my net worth by 5%. There are several actions I can take to do this within my "hold for long term rental income" investment strategy.1. Increase my mortagage principal payment to payoff loans faster. (higher cash flow after loan is paid off)
2. Use 1031 exchange to relinquish appreciated properties and acquire multiple properties as replacements. (higher cash flow from multiple properties and minimizing vacancy exposure over a single property).
3. Planned rental increases, year to year, increase cash flow.
4. On-going cash flow performance analysis identifies marginal cash flow producers. Exchange out of these into higher cash flow generators.Now, what if I had simply told you that my long term goal is to have a $5 million net worth by age 65? Doesn't that seem out of reach? Does it still seem out of reach now that you know my short term goal, and the actions I can take to achieve it?
Why did I pick $5 Million? It is arbitrary. I have been self-unemployed for the past five years, with my unearned income more than meeting my comfortable lifestyle needs. It is also reasonably achievable, while having more money than Donald Trump is a bit unrealistic goal.
Now, some may say that my 5% target is too easy and may be an underachievement. I might agree, because I am already 11% ahead of my net worth at the end of 2003. Consider, that each year, as your net worth increases so does the actual dollar amount needed to meet your goal. If you are already worth $1 million, then you need to add $50K to your net worth to keep pace with just a 5% target increase. Remember that my net worth increases, when I have more money left over at the end of the year than was needed to meet my lifestyle needs. (I tend to discount property appreciation because it is not dependable and predictable). So, some spending discipline is also needed for me to achieve my target.
In many postings in these forums, I have called landlording a "Get Rich Slowly" investment vehicle. Now you see why. [ Edited by DaveT on Date 02/27/2004 ]