Setting Goals For Yourself?

Question

I'm curious to know how many people on the forum set goals for their RE investment business?

In addition, do you set yearly goals, or longer term goals than that?

I'm in the process of setting goals and plans for myself, but much farther out than normal, I would like to set RE Goals out to 20 years to reach my desired net worth.

I've realized that setting high goals for yourself aren't a bad thing, I set my real estate related goals to more than double what I expected I could do, and so far for 2008 I'm at about 70% of my goal which isn't bad at all becuase I surpassed my low goal half way through the year.

Anwell T. · Answer

One element I would like to add is risk management.  If you are close to your financial goals, than you do not want to take any unnecessary risks and be highly leveraged.  If you have a long time horizon and are far from your desired goals, than you may have to opt for a more aggressive investing strategy, depending on your risk preference.

Brandon Schlichter · Answer

I wish I had funds to buy some of the stuff I'm seeing.

I'm not sure where you're at Mike in terms of investing in areas, but I've got 2 wholesalers that send me 1-2 properties a week that need little work around $20k, and run $650 a month in rent (Although it requires that I buy in Columbus, which isn't a bad thing).

Michael Rossi · Answer

Yes, I surpassed my 5 year goal at about the 4 year point.  My goal for this year was to stabilize my business and to not buy any additional properties.  I'm not having as much luck with that goal, as people keep calling wanting me to buy their properties at a HUGE discount and I bought one a couple of months ago.  It was a 2 bedroom, 1 bath house that needed almost nothing to be rent ready.  I paid $20K for it and an almost identical house literally across the street recently sold for $52K.  It's already rented out.  So, my goal for the rest of the year is to NOT BUY ANYTHING ELSE!  Of course, with the economy cratering, if someone makes me a RIDICULOUS deal, I don't know if I'll be able to resist.

Mike

Brandon Schlichter · Answer

I was hoping you would chime in Mike :)

I think the backwards looking thing is what I was looking for, I've always figured that that would be the best way.

I've heard several gurus, like you said, say to write it everywhere, but my company says to break it down and determine the steps you need to take every day to achieve that goal.

For you Mike, did you meet your goals? From my understanding, you're no longer buying properties, and just keeping them up at the moment (Which is great).

Michael Rossi · Answer

The key with goals is to start with the long term goal and work backwards.  For example, let's say that you wanted to have a cash flow of $10,000 per month from your rental business in 10 years without doing any of the management or maintenance yourself.  Let's assume that you will be able to obtain $100 per unit per month of positive cash flow.  Therefore, to have a $10,000 monthly positive cash flow in ten years, you would need to acquire 100 units over that 10 year period.  To determine your yearly goal, divide that by 10, which would mean that you need to acquire 10 units per year.
            
            I am not a believer in most of the silly guru advice that is often given on "goals".  For example, I've heard gurus say that they write their goals on the bathroom mirror so that the goals are the first thing they see in the morning and the last thing they see before going to bed.  THAT'S JUST PLAIN STUPID!  If you can't remember than you need to acquire 10 rentals per year, you are NOT going to make it in any business!!!  BTW, I wouldn't make it anyway if I wrote on the bathroom mirror - my wife would KILL ME!  I've also heard the gurus advocate having a coach that will hold you accountable for your goals.  Again, if you need someone else to push you toward your goals, you are NOT suited to being in business and quitting now would almost certainly be the best goal for that person!  Another thing I've heard the gurus say that I think is silly is having hourly and daily goals.  A person can easily become so caught up in writing goals (on paper, on the mirror, on sticky notes, etc) that they never do anything to actually meet those goals.
            
            Oops, this post turned into a rant.
            
            Mike

Bob Roemer · Answer

I agree with Dave, have short term and long term goals.  Both can used not only as a way to track the steps being taken, but using the "metrics" can be a great motivational tool.  It is good to see how your business is tracking to fulfill the lifestyle results you  want, while accomplishing what you want to do for the year.

I'm in the process documenting my goals; 1 yr, 5 yr, and 10 yr.

Ryan Davies · Answer

I have a vague goal of financial independence, but no specifics on that.

i deal with the day to day decisions to make the short term goals happen, assuming this will make the long term goals occur as a direct result.

For the short term goals, I focus on the next property and look no further than that. I save for it, make it happen, try to make it profitable, then start again.

Stephanie Tautkus · Answer

I do.  I have a weird thing though, my brain will not stop working my goals change.

I started out and bought 2 duplexes and 1 cottage all at the same time. I bought a few more duplexes and went on vacation in Southern Utah.  My goals changed.  I wanted to retire to the southwest; then I decided I didn't want to be too old to enjoy my retirement there so I thought hotel.  All the sudden I thought campground.  I didn't want to deal with linens and a toilet in every room.  I gave myself 2 years to locate a campground and sell off my real estate.  I did it in one.  Now my goal is an apartment complex.

Probably way TMI but there ya go.