Take a look at this picture. What do you see? I mean besides the nice Lexus.
Check out the signage. In this store you can get a haircut, sell your gold and electronics, have an alternation done on your suit and get the sole of a shoe repaired. Now that’s what I call one-stop shopping.
I pass by this establishment occasionally on my way out of the office for lunch. It sits next to a Kentucky Fried Chicken I like to drive thru when I’m in the mood for those yummy mashed potatoes and gravy. I often wonder how the person or persons who own this store are doing financially. Are they the very best barber, speculator, tailor and cobbler around? Is the owner of this business known throughout the community as the best at these trades?
Have you ever heard the phrase jack of all trades but master of none? It means you can do a lot of things in an ordinary way but none of them in an extraordinary way.
So do you want be an ordinary real estate investor or an extraordinary one?
Ordinary real estate investors bounce around from one opportunity to the next with little thought given to the end goal. They’re doing lease-options one day and pre-foreclosures the next (that’s what I used to do and if you saw my bank account you would agree I was very ordinary.)
The extraordinary real estate investors I know or have read about all have clear intentions.
Writing a Business Plan
There is no better way to clarify your intentions then by writing a business plan. In it you identify your acquisition strategy – exit strategy – strengths and weaknesses – target areas – buying criteria – price points – and marketing plan. This helps you maintain your focus. For example, just today I was asked if any of my investors would be interested in a land project near Prescott, Arizona. It was easy to say no because this type of investment does not fit into our business plan.
I’ve also discovered that having clear intentions and a solid business plan has made me more magnetic. I’m attracting investment opportunities that are in line with our goals because I’m very clear about what I want (too bad I didn’t know about this in college.)
Last fall we decided to start incorporating seller financing as an exit strategy. The steady cash flow without the headaches of property management was very appealing.
With our target buyer and investor partner criteria established we raised a little capital and have been growing ever since. At first our leads came from simple marketing techniques (CraigsList, signs). But now we’re getting calls from the most unlikely places. My landscaper just referred me to a very solid buyer. And get this – the buyer knows an investor from California that may want to partner with us on a few of these deals.
You probably have a junk drawer at home right? If so, what does it have in it? If it’s anything like mine it has pens, pencils, paperclips, coupons, restaurant menus, spare parts and garage door openers. I have a friend that says if you invest without a business plan and clear intent you are a junk drawer real estate investor. That crumpled up dish detergent coupon? That is a short sale you’re trying to close. The pencil with the teeth marks in it? Could it be the duplex you’re trying to flip?
It is said that the road to hell is paved with good intentions. If that’s the case then the road to success in real estate investing must be paved with clear intentions. So grab a pen and paper – get started on a business plan. And while you’re at it clean out that messy junk drawer.