This may sound like a dumb question but the reality is, most investors are not clear as to why they are investing in real estate. Their reasoning is generally backed up by logic i.e. Real estate will make me money over time, real estate is cheap right now, interests rates are low, I get a better return than the stock markets etc. All of which are very true, but what’s the REAL reason why you are investing in real estate? Do YOU really know?
Download Your FREE guide to evicting a tenant!
We hope you never have to evict a tenant, but know it’s always wise to prepare for the worst. Navigating the legal and financial considerations of an eviction can be tricky, even for the most experienced landlords. Lucky for you, the experts at BiggerPockets have put together a FREE Guide to Evicting Tenants so you can protect your property and investments.
Find Your REAL Motivation
I dare you (okay, I double dog dare you) to take 10 whole minutes after reading this to really focus on what it is you want out of life. That’s right, lock yourself in your office away from distractions and sit in silence for 10 minutes and just dream. I guarantee you’ll be blown away, especially if you’ve never done this before.
Think about what you want your life to look like in the next 5,10,15 years. Are you financially free (not having to rely on a “9 to 5”) and living on a beach for 6 months of the year? Let yourself feel the sand on your feet and the sun on your skin and make an emotional connection with this feeling. I know this may sound a little woo-woo for some of you, but this is extremely important. The stronger the connection with this dream the more motivation you will have to achieve it. Having a sense of clarity will get you to your destination much sooner than “just buying property because interest rates are low etc.”.
Take It To The Next Step
Make a “vision board” of your goals. Cut out pictures from a magazine or print some off the Internet of things you want to achieve and glue them on a piece of bristle board along with a specific date in which you want to achieve them by (it’s okay to have fun with this too!). Put it somewhere in your house where you will see it daily as a reminder. I personally have one for my 10 year goals along with one I make every year to keep me on track in order to achieve my long-term goals. Clarity is key! This will help you to stay on a straight line towards your goals. And while “life happens” you are still in control of your destiny. Don’t let life just “happen” to you!
“The best way to predict the future is to invent it” – Alan Kay
How Much Cash Flow Will You Need?
Now that all the woo-woo stuff is over, here is the real reason why we do this (If you’re still reading, good for you!). Figure out how much cash flow you will need in order to live the lifestyle you want. For example, if you need $10,000 per month in order for you to achieve your dreams, how many properties do you need? Whether you specialize in single-family, multi-family or student rentals (because you are specializing right!?) you know exactly how much they cash flow per month which means you now know exactly how many doors you need in order to get that $10,000 of positive cash flow coming in monthly. When you have an exact plan set in place, it takes all other distractions away. When your friend or cousin calls you and says “There’s this great multi-family property across town. My realtor says it’s a great deal!”, you can say “Thanks but no thanks. I specialize in single-family homes in THIS part of town. That will just take me off course”. See how easy it becomes. Laser focused! I hope you take the time to dream a little and have fun with it. Good luck!