Setting Goals For 2007 as a Real Estate Investor

It’s cold outside and the wind is whispering soft melodies. Inside, there’s not much difference. The chilly air cuts deep as you try to stay warm by cuddling up with your fuzzy fleece blanket. The crackling fire in the chimney emits the sound of discomfort. Every now and then, you reach over your rustic couch to grab that ugly blue cup that your mother-in-law sent you for a sip of hot chocolate. You’re thinking, planning, and strategizing of what 2007 will be like.



As a real estate investor or a future investor, this is the time of the year that money is made. Profits are made in your mind first before you step foot into a fixer upper or a commercial strip. Great fortune is found in the goals that you set and those that you put in motion. “If you failed to plan then you planned to fail”. This is the old adage that has inspired so many to great wealth in real estate.
So what are your goals in real estate this year? For those who are not investors yet, the best goal is to get started. Once you decide to get started, then what are your next steps?



If you’ve been investing part-time, maybe this is the year to realize your dream of becoming a full-time investor. What goals should you set to get there?



For some, you’ve been investing as a full-time investor for a few years now. Where do you go from here?



Goal setting as a real estate investor is similar to goal setting in anything else. It’s about knowledge, planning, and execution.



KNOWLEDGE: GETTING MORE EDUCATION

Before you decide to get into anything worthwhile, the first thing to do is to learn more about your interest. Real estate investing is a broad industry. There are many options.



What types of properties do you want to be involved in?

• Fixer upper

• Land development

• Single family homes

• Commercial properties

• Retail strips

• Apartments

• Duplex, Triplex, or Quads

• Land banking

• Cash deals



Where do you find these deals?

• Pre-foreclosures

• Courthouse auction

• REO’s

• Distressed sales

• Private auctions

• HUD homes

• VA homes

• FSBO

• Wholesalers

• MLS

• Bird dogs/Property Locators



How do you buy or control a deal?

• Conventional loans

• VA/FHA loans

• Hard money loans

• Owner financing

• Commercial loans

• Subject to

• Lease optioning

• Sub-prime loans

• Contracts

• Earnest money

• Bridge loans

• Mezzanine loans

• 100% financing

• Creative financing



What exit strategies do you want to implement?

• Wholesale

• Quick flip

• Rental short term

• Rental long term

• Retail

• Owner finance

• Lease Option

• Wholetail



With so many options, one of the best goals you can set for yourself in 2007 is to get more training. Attend seminars, join investment clubs, read books and articles and seek help from seasoned investors. There are many good choices in choosing a place to start your education:

www.thecreativeinvestor.com investor resource

www.gareia.org investor association

www.irca-atlanta.com investor resource

www.investorcoach.net training institute

www.****This URL Not allowed****.com investor club

www.biggerpockets.com investor resource

www.www.n****This URL Not allowed****.com investor club

www.****This URL Not allowed****.com investor resource

www.realestatejournal.com investor resource






PLANNING: HOW TO SET GOALS

Once you make the commitment to get more education, the next step is to think through some specific plans or goals. But how do you go about setting goals.



RULES TO SETTING GOALS:

1) Set goals by writing them down.

By writing down your goals, it serves as a reminder and a reinforcement mechanism.

2) Set performance goals and not result goals.

Results oriented goals can cause anxieties and feelings of failure. Performance goals allow you to live out the goals.

For example: Result oriented goal – Close 1 house each month.

Performance oriented goal – Visit 3 homes each week.

What’s the difference? It’s about control. You can not control if a bank or seller will accept your offer. Whereas, you can control how many homes you go out to view. If you’re viewing 3 homes each week, your chances of closing on a home for the month are pretty good. Remember to set goals that you control.

3) Set goals that you really want.

Your passion for your goals will motivate you when you are discouraged.

If you are excited about your goals, you are more likely to accomplish them.

4) Set both broad goals and specific goals

Goals that are too vague are almost like not setting any goals. However, you do need some broad goals to be the umbrella for your specific goals.

For example: Goal #1 Broad – Take class on how to find pre-foreclosure deals

Goal #2 Specific – Talk to 2 real estate agents each week.

Goal #3 Specific – Send out 500 pre-foreclosure letters/week.

5) Set realistic-high goals.

As with the example above, if you have a job that works you 60 hours/week and you have 3 young children, sending out 500 letters each week might be too much. Maybe a better goal would be to send out 50 letters/week.

6) Set goals that do not conflict with each other.

Set goals that are NOT self defeating.

For example: Goal #1 – Buy $600,000 fixer upper.

Goal #2 – Improve credit score from 515 to 720 in 2 months.

Goal #3 – Put out 5 resumes each week to get a job.

Do you see the problems here? Enough said!

7) Set balanced goals.

All work and no play is not living the balanced life. Set goals that are balanced. Include time for family, career, business, spiritual, fun, and self.





EXECUTION: TAKING YOUR FIRST STEPS

So, now that your goals are written down, what’s next?



ACTIONS TO TAKE:

1) Communicate your goals.

By all means, share your goals with friends and love ones. By expressing your goals, it becomes more true to you. Each time you share your goals, you are a step closer. Beware of “GOAL KILLERS.” They come in the form of close friends, family members, and sometimes strangers.

Goal Killers will tell you…

“More people fail in real estate than those that succeed.”

“I tried buying a house, but it doesn’t work.”

“It’s too hard/complicated/etc.”

“It’s illegal.”

“My best friend was an investor and he lost everything.”

2) Revisit your goals daily

Read through your list of goals regularly. Most goals are not achieved because it is forgotten in the annals of good intentions.

3) Envision your goals as reality.

Envision this: You’re interested in a fixer upper deal in the Edgewood community of Atlanta. The phone rings. It’s your real estate agent. She tells you that there is a new listing on a home for $120,000. Before you can hang up, you rush into your car and start driving. You’re thinking the numbers through. This house has an After Repair Value (ARV) of $250,000. There’s over $130,000 in equity. If the repairs are not too much, you could make a handsome profit. You call your contractor to meet you at the house with your agent. As you approach the house, you realized that the house is less than ½ mile from the new Edgewood Business District. You step out of your car and observe the new construction next to the fixer upper you want to buy. After a quick peruse of the property, the contractor gives you an estimate of the renovation. It needs about $30,000 in repairs. You think through the numbers again. $250,000 minus the house cost of $120,000, minus the repair cost of $30,000, minus your financing cost of $15,000, minus the seller contribution of $7000 to your new buyer once the house is completed, minus your carrying cost of $8,000 for the mortgage, minus any extra unforeseen cost of $10,000 equals your NET PROFIT of $60,000. You give out a BIG smile and tell your agent to submit your offer for the house.



Here’s another vision: You’re sitting at the closing table. You have just signed on the dotted line and the closing attorney with the goofy tie hands over a check to you for $25,000. At last, you finalized your first deal. You then deposit a portion of the check and leave a few “Benjamins” to take your family out to dinner and celebrate.

4) Take baby steps

By taking little steps toward your goals, you make them more real each day without feeling overwhelmed. Live out your goals. Become your goals. They should not be foreign objects.



When the fall of 2007 rolls around, what will the year have been for you? Will you find yourself sitting on that same old rustic couch sipping from that same ugly blue cup that your mother in law sent you? Or will you be lying on your colorful beach towel on the warm sunny sand of the Bahamas, sipping a nice cool martini. 2007 can be whatever you want it to be. If you follow these steps, you are well on your way to achieving your goals. Have a great year investing.