REI Goals For 2008

May 5, 2008 · 10 comments

Now that my introduction is out of the way, it’s time to get down to business. And the first order of business is to define my goals so that I can track my progress and adjust as necessary.

By the time we settle down on the east coast, it will be mid-year, leaving only six months to accomplish any goals I lay out for 2008. Additionally, if you include all the tasks and time associated with acclimating to a new city, helping the fiancée with her business, planning a wedding, getting married, and taking a honeymoon, I won’t have the opportunity to devote full-time to my REI business in the second half of 2008.

That said, I will try to devote at least 25-30 hours per week on average to the business (which will likely translate to 50 hours some weeks and 10 hours other weeks), and I am defining some very realistic goals – based on that amount of available time – for the remainder of 2008:

  1. Buy My First Piece of Real Estate (Personal Residence)
  2. While more a personal goal than a business goal, the benefits of buying a personal residence as my first piece of real estate will provide me a deal of knowledge about the tactical aspects of real estate acquisition. Proceeding through a first RE deal will help me understand the entire acquisition process — locating properties, negotiation, due diligence, the lending process, and the closing process.

  3. Create a Formal Business and Management Structure
  4. This goal is all about setting up a formal structure that will provide both tax and legal benefits for my investing activities. As I expect that I will be building multiple businesses over the next couple years, ensuring that I get this part right the first time is very important; I plan to work with several accounting and legal professionals to ensure this goal is carried out correctly.

    Specifically, this goal will include:

    • Define my business structure
    • Register my business structure
    • Create a plan for accounting and management of the business
    • Set up bank account(s), credit card(s), and other services as necessary
    • Understand and plan for tax implications and expense accounting
  5. Complete my Business Plan
  6. I wouldn’t even consider buying my first investment property without completing a full Business Plan for my RE business. This should include my business goals, strategies, tactics, and risks. It should go into detail about investment criteria and how I will potentially work with outside investors and supporting team.

  7. Build a Reliable/Aggressive Team
  8. To be successful, I need to build a strong supporting team. At the very least I need to identify (and retain) the following team members:

    • Certified Public Accountant (CPA)
    • Attorney
    • Real Estate Agent
    • Property Management Company
    • Insurance Agent
    • Title Company
    • Property Inspector

    I will create a set of criteria and questions used to judge the ability of each team member to support the company and make us successful. I will use that criteria and question list to find the most complementary team members.

  9. Identify an Investing Location Using Formal Analysis
  10. While I’ve already identified the area where I will be living (Atlanta), it’s not yet clear exactly where I will be investing. It would certainly be convenient to invest in the Atlanta metro area (and if at all possible, I will), but the decision on where to invest should be based on much more than just where I live.

    I will do some formal analysis of various location criteria to determine my primary investing location(s). If Atlanta proves to be my preferred investing location, I will do more formal local analysis to provide direction on which specific local areas I should be targeting.

  11. Purchase At Least 10 Units of Investment Property
  12. Once I identify an investing location, it’s time to start buying property. Unfortunately, until I actually start trying to locate and acquire property, I have no baseline to determine how many units I can/should expect to acquire over a given period of time.

    Additionally, being new to REI, I don’t want to rush into large investments just for the sake of owning units. Instead, I will acquire properties at whatever pace feels natural, and only when I find properties that meet my criteria.

    All that said, I think it’s important that I state a goal for how many units I plan to own by the end of the year. Based on the fact that I don’t yet know if I will be buying single family homes, duplexes, triplexes, 4-plexes, apartment buildings, or apartment complexes, I don’t want to be too specific with this goal. But, I think it’s reasonable to set a goal of 10 units (where a unit could be a single family home, half of a duplex, or single apartment unit, etc) for the remainder of the year.

    I will likely revisit this goal as I continue to learn and gain experience.

Those are my RE investment goals for 2008; I will communicate all progress and obstacles here on the blog throughout the year, and have even created a separate section of the website to track these goals and my progress against them (this section is linked to from the main navigation bar at the top of each page).

10 responses to “REI Goals For 2008”

  1. Ryan says:

    Good luck. I’m looking forward to reading about your progress. Judging from what I know about you thus far, you’ll reach — and probably exceed — all of these expectations.

  2. Teja says:

    Might I suggest that you spend some time in a property manager’s office seeing how that end of the business works? I also have some suggestions, if you want them, on vetting a property management company, based on my experience as a HOA President and attorney; and some things to watch out for if you are considering buying foreclosed properties.

  3. I am excited that I have made a decision to flip property, but on the other hand I am scared and hesitant.

    Currently I have made some serious decisions regarding by business and myself;which is going to change my family’s dependence on me.

    But I am determined to make it work. I am already in the process of writing goals and with your assistance I will start and complete my business plan this month

  4. Jason says:

    Thanks for sharing you goals with me this info does help the beginner like myself. I am enjoying your site very much.

  5. Ned Carey says:

    Wow, I bookmarked this site back when this was posted. It looks like I have a lot of catching up to do. Did you reach the 2008 goal of 10 properties? That was a pretty aggressive goal. 2008 was not a great year to start, since you are still at it I guess it has gone pretty well.

  6. J Scott says:

    Hey Ned,

    Wow, reading that post really took me back… 🙂

    Ultimately, as you can see from the blog, we decided to focus on single family houses. The apartment market here in Atlanta isn’t great (not much transaction volume and tough to find great deals), so we figured we’d focus on houses until the commercial market turned around.

    In the past 3 years, we’ve bought and sold 24 houses, at an average profit of about $20K. We also hired our first full-time employee. While this isn’t as many units as I was predicting/hoping, but we also got married and had two kids in that time period, so things have been pretty busy in this household. August is our 3-year anniversary of buying our first house, and I hope to post a recap of the first three years and also some goals for the next 1-3 years…

  7. Ned Carey says:

    Congratulations on the 24 properties. That’s impressive without having 2 kids. I’ll watch for the recap.

  8. kim says:

    How long did it take you to formulate all your goals? How did you come up with so many? I’m asking because I’m having a hard time pinpointing my own goals. Besides making extra money to help my parents buy their own house, I really cant think of more specific goals. But I know I want more out of this real estate adventure than just making more money.

  9. J Scott says:

    Hi Kim,

    The key is to work backwards from your financial goals to determine your business goals. For example, let’s say your financial goal is to earn an extra $20,000 each year. And let’s say you want to focus on Mobile Homes to start. If you do an analysis of the typical mobile home deal in your area, you may find that it can generate about $2000 per year. So, to make your $20,000, you’d need to do about 10 mobile home deals each year. That’s exactly what I did — I determined my ultimate financial goal and worked backwards. That helped me generate the list of things I needed to accomplish to achieve that goal.

  10. Kim says:

    Thanks J!

    I guess I forgot to click the “notify me” button, so I never rec’d an email about your response to this post. But, I’m here now…and thanks for the advice. I actually found another niche to make the extra money and help me learn about real estate as well – Leads Generating for investors (I’m now expanding that part of the business to other States). So far, I’m doing well in that aspect. But, I haven’t given up on the house flipping/holding side. I implemented your advice in my leads generating business, having an end goal and working backward. Will definitaly look into implementing this in my buy/hold business. 🙂

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