Are my goals realistic? What is my best avenue for achieving?

13 Replies

Good day BiggerPockets folks!  First off, thanks for a great site and all the great contributions.  I have been lurking for a while, but have dreamt about real estate for years.  I am currently 33 years old, with a wife and three beautiful children, 9, 6, 4.  I have a question regarding goals, what have been goals for others, etc.  I have 5 main goals but for the sake of discussion I will start with my first two that I hope to accomplish by 40.

My first goal is to use real estate to be debt free. To release my family from the burden of debt.

My second goal regarding real estate is to cash flow enough to support the basic needs of my family.... say $5000/month

My initial thoughts and strategies are to begin with seeking out a few flips that can generate some capital to move toward a diversified approach that involves flips and holds/rentals.  I've been fortunate to have some mentors, experienced real estate folks to bounce stuff off or and learn from, so I feel I have a decent idea of what it takes, but by no means do I have it all figured out.

Anyone willing to share some insight into what their goals were/are and some feedback on if my approach makes sense would be great.  If you have to tell me I don't have a clue, not a problem, I have some thick skin! 

Thanks  

Hi Rich, there are many ways to be involved in real estate. Sounds like your ideas are is as good as any place to start. 

When you say you want to be out of debt, I assume you mean consumer debt, or student loan debt, as opposed to RE debt? 

Rich Spiczka, I think you do need to clarify #1 as to what "debt-free" actually means. 

The type of debt that will lead to you making money can be considered "good debt", while the kind that sucks money away can be considered "bad debt".

If you mean unburdened by personal debt like car loans, student loans, loans on your primary residence (bad debt), then that is certainly an achievable goal.  But if you also intend not to take on any debt while investing in real estate (good debt), it is going to be much more difficult.  Although its possible to not put any of your own money in some deals, it certainly limits your options if you're not willing to assume any financial risk. 

So are you looking to have no "bad debt" or to be 100% debt free?  

Matt Lefebvre, Real Estate Agent in NH (#070207)

SET GOALS specific ones for you and your family. Ones that can be quantified daily and weekly.

Then set your time management to achieve those goals. So for example- you want to make 5000/mo. Great- How? When?

If you want to flip- how many homes do you need to see to make a bid on some? How many bids do you need to secure a property? How many properties will you need to achieve 5k/mo?

Most important- write it down. review it daily- make corrections, update it.

You will achieve your goals and then some- good luck

Rich,

I like what @johnSantero said about setting specific goals because like the old saying "if you are not aiming at anything, you will hit it every time.  Also,  why not partner up with some of the mentors around you.  Ask what you can bring to the table and work your butt of for them.  Its a great way to see the "inside" of a deal without much exposure.  good luck

Originally posted by @Eva Salas :

Hi Rich, there are many ways to be involved in real estate. Sounds like your ideas are is as good as any place to start. 

When you say you want to be out of debt, I assume you mean consumer debt, or student loan debt, as opposed to RE debt? 

 I mean consumer debt like you mentioned above.  

Originally posted by @Matt Lefebvre :

Rich Spiczka, I think you do need to clarify #1 as to what "debt-free" actually means. 

The type of debt that will lead to you making money can be considered "good debt", while the kind that sucks money away can be considered "bad debt".  

So are you looking to have no "bad debt" or to be 100% debt free?  

 I intent to use debt to achieve the goals of flipping, holding, etc.  I was speaking of consumer/personal debt.  Thanks for your reply.

@Rich S.   Excellent, hope all goes well.

Another bit of advice though.  If you have goals, write them down and share them with people who will hold you accountable.  I don't know the exact numbers, but I've heard that writing goals down + sharing them with others is the best way to stick to those goals.  The two things that will keep you on track are accountability and a "why" (there's another thread here running about "why" you're investing in real estate).  

Best of luck to you!  

Matt Lefebvre, Real Estate Agent in NH (#070207)

I like your ambition sir! I too like to be debt free; I only buy distressed houses for cash 50-60k. I also do some 5-10k flips to build up the cash to buy more. I'm not interested in having mortgages on investment props. 

I stared with a 10 year goal.  It was to have 10 paid for rental houses.  I did start out with some cash (less than $100,000) and was able to add $25,000 to $50,000 per year.  I did flips to build up enough to add rentals.  I was able to do 2-3 flips per year and built up to 8 per year.  I budgeted 20% profit per flip.  Of course, there were taxes to pay.  I started with only my cash but added debt later.  I never used more than 50% debt.  The most debt I had was $1 million.

After 9 years I have about 20 rentals and only do one to 2 flips per year.  I also loan money at a 12% rate.  I buy rentals to give a 8% cap rate and borrow at 4-5%.  My debt to property value ratio is less than 30%.  I also invest in the stock market.

Break your goal into shorter and smaller increments.  Don't be discouraged.  It will go slow at first and then will snowball.  I wish you the best.

Bill

I agree that goals are important to get you started and motivated, but I'd add that you need to be prepared to change them as you go. Real estate is very much a moving target, and flexibility is key. While you don't want to go chasing after every shiny object, you do want to keep an eye out for where the opportunities are as the market changes. If I had stuck with my original goals from 15 years ago I don't think I'd be in as good a situation as I am today.

Jean Bolger

oh, and as far as your question about if those current goals are realistic: that's hard to say as you don't give any detail about the amount of debt you're talking about, what resources you have to get started with and what the current market is like where you live. If you have really great answers to all those questions then I don't think what you're asking is unworkable, but sit down with a calculator and use your real numbers. 'Stretch" goals are fine, but there's no sense in setting yourself up for disappointment by using dreamer numbers. Facts are friendly!

Jean Bolger

That's funny. I feel like I am in a similar situation as you... well except children part. I am a newbie also. One of my realistic REI goal is "I have 3-4plex as my primary resident by end of this year" so I can implement househacking.

But after reading 10x by Grant Cardone, I now have a list of more unrealistic goals now such as:

"I started my own companies by 2016"

"I have muti-billion dollars company which operates its own"

"I weigh (blank) and I have a black belt"

etc etc.

I think you can def achieve your goals. But like @Jean Bolger  said, you gotta learn to adapt. When I look back at some of the goals I made in the past few years, I am shocked that how much I diverged and grow from my old goals ... in better ways!

O.K. Now for the real thing, think big or go home. Your present goals are all what I call things I will settle for goals because they are much better then what is at the moment.  You only need one goal like "I love being in the process of accumulating over $5,000,000 and it makes me feel good.

Now all your other goals should be production goals. I will contact 3 potential sellers every day, I will contact 3 potential buyers every day. I will ask everyone I meet, tell me do you invest in real estate? Do you know any one that does? Have you ever thought about it for yourself? You will be amazed at how often one of these casual contacts goes somewhere. and you will figure out what to say. The last time I did that I said as we were about to part well thanks for you time and help, what I really need at the moment is someone that wants to earn more then the 1% the bank is paying them on their savings. He said how much and I said 8% which is much better than that 1% that the banks like to pay. Have you ever heard of the rule of 72. He said no, I said the rule of 72 tells you how long it will take you to double your money at a specific interest rate. So by dividing 72 by the 1% the bank pays you will double your money every 72 years. Now at 8% you will double your money every 9 years.  Mucho better don't you think?  Who do you think had some money to lend?

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.