The superpower of goal setting has been well referenced and put across so before you skip over over this detail because you’ve heard it all before I’d like you to consider how well you are doing it. I’m a firm believer that you don’t truly empathize something until you are arranging it.
If you are an appetent goal setter you will want to read this to learn some specifics linked with real estate investing. If you are not a average goal setter please read on and consider that setting goals really is a powerful tool, does have some magic trick about it, and is serious to your investing success.
Take the following good example. In 1953, research workers interviewed the graduating class of Harvard University about their career goals for the future. It was found that only 3% had written goals and specific plans for attaining them. Twenty years later the researchers re-interviewed the class of ’53. They discovered that while all students had shared the best education money can buy, the 3% with written plans for the future were praiseworthy more, in financial terms, than the other 97% merged. Whilst this only seen financial or career goals I think it illustrates the actual power of written goals.
I’m charmed to put up some goal setting fundamentals here but for the sake of briefness, all I’ll say is that your goals should be: special, strategic, realistic, in writing and have a deadline. Know also that they will develop over time so you don’t need to worry about getting them perfect; just start out with something!
With respect to real estate, you need to first figure out what your primary investing objective is:
i) rapid cash / equity ii) cash rate of flow iii) capital outgrowth
Note: There is a discussion regarding the function of these different objectives in the handbook Investing Secrets of the Property Masters Unwrapped.
Let’s say, for the sake of an example, that you want to focus on cash flow attributes. Look At the difference in the following goal statements:
I want to invest in some real estate that will accessory my income and help me retire faster. or I will gain sufficient property in the next 12 months to produce an average of $4,000 per year of additional income.
That’s much better because it is getting specific, is certainly strategic and has a deadline. It is also realistic and in writing. But when you go to see a realtor or other masses who will help you acquire that property they will ask things like,”in what area?” and “what type of property?” so as you learn more you need to add those details.
This is another very important point about setting goals for your real estate investing. Once you have these clear goals, people such as realtors will suddenly handle you much more seriously. Even if you don’t have all the answers; imagine walking into a realtor’s office and hitting them with those two goal statements. Which one will get you further? Even if you don’t know which area or what type of property they won’t treat you like a tire kicker. They will ask those important questions of you and you can learn from them and go away and make your goal even clearer before getting back in touch with them. And the next realtor you visit won’t even know that you hadn’t thought about that. They’ll just see someone who knows exactly what they want and will be able and ready to help out.
The last point I want to make about goals is more to do with the measurement part than with specifying them. I know that sounds tedious but it can be really exciting. The most successful companies in the world track their progress against their goals because it is effective to do so. Imagine putting a easy graph on your surround that has the months along the bottom axis and the cash flow you’ve developed on the vertical axis. You can draw a red line across the graph representing your target of $4,000 per year and then you can draw an angled line that adds another $333 to the cash flow each month. This gives you some very good feedback as to how you are progressing and motivating while there is still time to do something about it. That’s obviously much better than just seeing how you went 12 months later and finding that you only acquired property that produces $1,000 per year. It’s a very simple and powerful tool.
If you are really controlled you can take this one step further and use the same approach for the activities that grow the consequences that we are valuing on the other graph. This really helps ensure the result. For example, if you know you need to evaluate 100 properties and make offers on 10 to acquire that amount of property then you could graph those drivers as well.
Author: Ada DenisThis author has published 101 articles so far.