How to Structure my goals

Question

Hi BP'ers I have a goal that I have written down and looked at everyday (saved on my phone as my background screen). I was told to dream so large that it would scare me. As of today here is the goal I am trying to achieve in 20 years time.

The Goal: I would like to own 125 units/houses that cash flow $300/month each. This goal needs to be achieved is so I can give back to the community that has helped raise me to what I am today. I have to acquire an average of about 6.25 units/houses on a annual basis starting this year to do this.

I have looked at moving into a market where the numbers make a lot more sense (indianapolis, atlanta) in order to make this goal happen. However I know that starting off it isn't realistic for me to acquire 6 properties in my first year. Is there anyone who is able to help me model/schedule how a portfolio like the one I described can be built up over 20 years? I have a rough idea that it will look like a exponential equation (the rate of acquisition), but it would be helpful if someone may have more information on this.

Thanks all!

Solomon D. Oh

Michael Lam · Answer

Hi @Solomon Oh

I love that your honest and you are dreaming big and aggressive.  I'm a strong believer to get that 5x you must shoot for the 10x.

So you have clearly established a general goal of 125 units in 20 years time.  Now your asking help forming a strategy?  Obviously there isn't a silver bullet to this but you can start with good habits and prepare yourself for when opportunity arises your ready to capture it.

1.  You'll need a plan to increase your income.  So currently use your current income and current 9-5 job corp latter and see how your going to climb that to unlease more income.

2.  Even with you staying static with your income,  the first property you buy is crucial.  It must in my opinion meet the 4 pillars of real estate investing (leveraging OPM, Cash Flow, Appreciates, Tax benifits)  All 4 needs to work in your favor on your first home to monopoly over to next one

3.  I do agree that getting 6 units your first year investing is aggressive.  Only in that with each home you should expect to learn mistakes and improve.  If your not taking retro analysis, you may be overlooking systemic issues with your overall investing strategy.

4.  Patience needs to be in forefront.  Don't let this # of 125 unit cloud you judgment.  I would even adjust the goal to be,  in 20 years, I want to have a cash flow of X amount.  That way its not tied to a number of homes and will let you focus on ensuring your maxing out your ROI for each deal you look at.

5.  Good job writing down your goal,  that gets you one step closer to achieving it.

There are more to this, but I suggest you prepare yourself some more.  Curious to see what other BP folks suggest.

When your ready I would love to see a consolidated list that makes up this strategy, it'll be interesting to see what the wider community adds to this.

Greg Cooksey · Answer

A good first step is always a business plan! Put a good professional business plan together. You may not have enough info for entries in every single section, but putting your thoughts/goals/plans down on paper in an organized business plan will help you more than you know.

Account Closed · Answer

There are a number of ways to do this.

• You can create a business plan, for sure.  I would go through that exercise if I were you, in order to simply learn what you currently don't know.  Head to sba.gov to look at drafting a business plan.  Go to bplans.com to help as well.
• You can create SMART goals centered around the large goal.  You've already got one sub-goal (6.25 units/year).  Indeed, you can further break that goal down into one more discrete component.  That is, every 1 month and 28 days, you will have a house under contract, in escrow, that is moving towards closing.

Here's the thing;  I'm for both of these things, but certainly NOT just for the sake of doing them.  Do them, but do them as quickly as possible, for one reason only.  You are looking to generate as much clarity as possible to the action steps needed to move towards your successful outcome.If the objective I've outlined above is enough for you (1 house under contract every 1 month and 28 days), your action plan becomes a little clearer.  That is, your next questions should be centered around how to achieve that first objective.I would say getting out every night and looking at houses (yes; every day) should be your next step.  You should make a sub-goal of seeing 20 houses a week (approximately 3 per day or so) in order that you can put purchase offers on 7, in order that you can get one locked up.  Believe me when I tell you, IF you take these steps, you WILL get at least one house locked up every couple of months.  IF you get one house locked up every couple of months, you WILL obtain your goal in twenty years.  Indeed, because of what I know about the nature of goals, you will FAR exceed your original goal.  But, you don't have to worry about that at all for now.  All you have to worry about right now is going to see houses every night, for the purposes of putting houses under contract, for the purposes of getting your first deal.Good luck (though luck has zero to do with it).Keep rockin'.

Michael Lam · Answer

Hi @Solomon Oh

Make sure your active and check in.  I'm also a technical co-founder at GoHire in the HR Tech space.  One thing that keeps things moving along is to make your goals public and its even better to tell someone who you interact with often, that way they will naturally "follow" up with you and it creates this accountability and keeps moving the ship.

If your serious, you need to create quarterly goals and revisit them monthly or weekly.  In software development we break large task into small task and make ourselves accountable.  We call this an "agile methodology" which compose of weekly "sprints".  Essentially its planning out the goals for the week that will be completed and executed.

Solomon Oh · Answer

Hi Account Closed-

Thanks for the tips. I need a bit more clarity on the small task of seeing 3 houses a week. Did you mean in person, or did you just mean running the financials on 20 homes a week.

Also I am curious as to how I would purchase these properties with little money. Would I buy these homes at 70-80 of mar value and than work with a lender who looks at the numbers part of the deal to qualify it instead of my income/credit? Are there lenders like that out there? (without having 20% down)

Account Closed · Answer

You're asking me financing questions that are specific to your situation.  The answers to these question, I guarantee, are not best coming from me.In my opinion, you should be SEEING 20 houses per week in person. This means you're analyzing potentially three to four times that amount every week.  It should be a constant activity.And, generally speaking, there is always money for a good deal.  The less skin you have in the game, the more expensive the money is going to be.  But, it's there.

Solomon Oh · Answer

Hi Michael-

Thanks for the tips. I will work on trying to be a bit more flexible with my goals to amount for cash flow more than the specific cash per house.

I'll try to hit every single tip that you listed and make this dream happen.

Thanks!

Solomon D. Oh

How to Structure my goals

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