If you've ever been to an auction, any kind of auction, you will have heard the auctioneer's closing words - "Going, Going, (strikes his hammer) GONE!
We can adapt this call to our real estate investment plan, merely by changing one letter - change the "G" to a "D", so your slogan for your plan is "Doing, doing, DONE!"
You can now use this technique for your three step real estate investment plan.
Step 1 - Doing (but nothing concrete yet)
What is your investment goal? Be specific about what you want to achieve, and the time frame in which to do it. Don't just get the goal off the top of your head - you should have a valid reason for why you wrote that goal down.
For instance, you may think your goal is to give up work, but that's your dream, not your goal, it needs to be specific.
If you gave up working, what would you live on? How little/much could you live on? Let's say you could live quite comfortably on $100,000 a year - you'll have to come up with your own figure, which might be much less. This is part of the valid reasoning mentioned before - you have come up with a specific figure.
So, if you need $100,000 a year, how are you going to achieve that? Would this mean10 cash flow positive properties each returning $10,000? Perhaps, or it could mean 5 properties returning $20,000. Again, you decide.
What's the realistic time frame for this? It has to be reasonably quick, or you will always think you have plenty of time, which leads to procrastination. Let's say five months. This conveniently breaks down into getting 2 properties per month to reach the 10 properties we need. (this will become the DONE part), or you may wish to break it down further into 1 property every two weeks.
So this is now your step 1 investment goal - to get 10 properties returning on average $10,000 per year.
Step 2 - Still doing (here's some concrete!)
Work out how you are going to get those 2 properties each month.
This is where you do your research, looking up deals on the internet, or trawling real estate agents. Don't just look in the window, that's not DOING anything, go in and see them. Tell them you are in the market, but be truthful, say you want a hundred thousand dollar house that you may be able to get for $80,000. These deals exist, and so do even better ones, because you never know the particular circumstances of the seller - they could be under the threat of foreclosure, or in the middle of a divorce settlement, or there may be siblings squabbling over their share of an estate.
Keep working at this, you will probably have to take some time off work, as doing it properly will be close to a full time job. Always check that what you are about to do will bring you a step closer to buying the two properties you need to stay on track, don't be busy, be productive. I work for the government, which is full of people just busy being busy, hardly ever achieving anything really worth doing. Don't fall into the trap of just being busy.
Step 3 - DONE!
This is in some ways the easiest step, as you only need to do one thing - get a signed contract!
Make up a big chart with three columns.
In column one, put the heading; Doing - Step 1.
In this column put the figure 10, or the number of properties you require.
In column two, put the heading; Doing - Step 2.
In this column put the names of the properties you are working on, as discussed in step 2 above.
In column 3, put the heading DONE, in bright colours and large letters.
Obviously in this column you would put the names of the properties for which you have a signed contract.
Under all three columns, put "Properties to get" and "Days left". Then get the chart laminated and put it up on the wall of your kitchen, or some other prominent position in your home.
After the heading "Properties to get, put the figure 10 After the heading "Days left", put the figure 150 (about five months)
Every morning, change the 150 days to 149, 148 and so on. As you put done deals in column 3 of your chart, change the 10 to 9, and so on.
Believe me, if you don't put this goal in writing like this, you probably won't get there. Also remember it will be hard work, but say you put in two weeks or more of solid work - that's around 100 working hours. Say you achieve your goal of $100,000. You've just been paid $1000 an hour!
Of course, the next year is even better - you get paid $100,000 a year for doing nothing!
©Peter Phillips 2007
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