Goals for 2016
As a real estate investor and enthusiast, it is incredibly inspiring to write this blog post from the castle you see in the photo. It was built in 1510 and has seen some incredible history over the last 500 years including King Henry VIII and Ann Boleyn staying here during their honeymoon. For such an old building, don’t you think the bathroom is pretty modern?
Any chance we will lose the key?
Now that I have lured you in with cool photos and a quick history lesson, it’s time for me to put my 2016 real estate goals on paper to ensure I stick to them. I encourage all of you to write down your goals or business plan to keep you on track over the year, quarter, month or whatever you need to stay focused. Last week I had a two-hour conference call with a mentor of mine discussing what I accomplished this past year and what was to come in the future; short term and long term. If you read my last blog post, you probably noticed that I was all over the place last year from money lending to house flipping and everything in between. If you haven’t read it, have a look here. The biggest struggle I have had over the last week since that call was to define exactly where I will focus my time and energy this year. My main goal for 2016 is to focus my efforts and ensure I am as efficient as possible with the limited time I have available, while still increasing my profits. I won’t say that I want to decrease the amount of time I spend working, but I want to focus MY time on doing the things that make me the most profit and bring in OTHERS to perform the tasks that are holding me back.
Here are the people I will be looking for in 2016 to build my business:
- Project manger – My plan is to interview and hire a GC on the first few projects I do this year, focusing on someone who wants to grow their business as well. If they are a good fit for my business then I will work with them on how we can structure an agreement to align both of our interests and give them some profit sharing moving forward. This will certainly cut into my profits but will allow me to do more projects this year, take me out of the day to day project management, and allow me to find more deals. If any of you reading this have construction experience and want to move to Pensacola and fill this role send me a message and we can discuss it. That is a serious offer – Brandon!
- Accounting – I will offload the accounting, money management, and tax preparation (believe it or not I am still doing my own taxes, this year will be the most difficult yet). I have a meeting in two weeks with a real estate savvy accountant that I met with last year. At that meeting, she told me “you don’t need me.” However, whether I need her or not, I don’t want to do it anymore and it has been holding me back for years. So, now I need her!
- Day to day tasks – I will hire a VA (virtual assistant) to handle the small, repeatable tasks that I do online. These include searching different online sites for properties, FSBO, Craigslist, online foreclosure auctions and input them into my property tracker database. This will allow me to open it up and quickly analyze the ARV (after repair value) and MAO (maximum allowable offer).
- Assistant – Eventually I would like to bring on a part time local assistant (preferably one with their real estate license) and start them on small tasks while working toward bigger responsibilities.
- Real estate agents – Continue to network with local real estate agents to send me leads and properties on and off market. If they send them, I want to make sure they are pitching the deal and the numbers and not just blindly sending me emails with property addresses that I will waste my time analyzing. I am done doing that. However, they will get paid at least one commission on the purchase property and likely two when I go to sell it.
- Marketing – I will continue to do direct marketing and pay someone to send out the letters for me, do the copyright, stuff the envelopes, and mail them out. I will also work on getting someone to take the calls and screen the initial leads. (More on this to come I’m sure)
- MONEY – With this ramp up in house buying and reduced profit margins on each deal, I will need to also ramp up my capital. To do that I will need to continue to network with friends and family, who have money they would like to lend at a great interest rate, backed with real estate or a promissory note (depending on the amount of investment). The lenders I have now are very happy with the return they have seen, some are paid a monthly interest payment while others receive a balloon payment upon project completion. If you know anyone who may be interested, please reach out to me and I can discuss with them the benefits of using their IRA, 401k, or personal savings to crush the market/interest rate they are seeing now.
- Network – Continue to network with wholesalers, other investors, agents, commercial lenders, contractors, etc…
- Education – Continue to take some time out to help new investors learn about real estate and investing for their future. I found that I spent a lot of time last year helping other investors get started in real estate, buy rental houses, discuss what I am doing, etc… I plan to reduce the time I spend on this one-on-one but focus a few hours each Sunday to discuss what I did the previous week on this blog. I will also continue to build my own real estate knowledge by reading books, blog posts, podcasts, and my mastermind group.
- Lending – Continue to lend money inside of my IRA and 401k to other house flippers and investors to match the interest rate I pay on other peoples money.
So, the question you may be asking; “With all of these other people you are bringing on to do the work you have been doing, what will you be doing this year?” I will be focusing on property acquisitions (analyzing ARV, MAO, negotiating price), raising capital, and managing the overall trajectory of the business. If I can use the same amount of time I am spending on all of those other things and focus on these 3 tasks, the sky is the limit this year. If you want numbers, I plan to flip at least twelve properties this year at an average profit of $25k per property. You do the math and keep in mind this will be done part time. If you think this goal is unattainable or too conservative, please let me know in the comments and why.
Thanks for reading my post and if you enjoyed it or have any questions, please leave me a comment, send me an email, and share it on Facebook or directly with someone you think may enjoy reading it.