Hey! There are many opinions on goals. What I’m here to say is that regardless of your opinion; most agree that you have to decide on what your goals are…. You have to write them down… And you have to constantly think about and review them. I would add that you should reverse engineer them and create weekly mini goals.
For example; if your goal is to make $100,000 your first year flipping houses…. Here’s what I would do. -Tip- First add 20%. This will help you mentally. We humans, myself included, tend to lack the final push to do things 100% when they are stretched out over a long period of time. Similar to a construction project being so difficult at the very end…. The last 10% feels like it’s way more than it really is. This is common and I personally think it’s a mental tiredness or possibly entitlement that we feel when we’re soooo close to the end that we start to coast. Goals are similar in that we work so hard for so long that we often start coasting near the end. Enough on the 20% markup… just do it, you’ll thank me.
The goal is to make $120k in the next 12 months. In order to reverse engineer the goal we need to break the goal down into measurable chunks and eventually measurable tasks. That’s an average of $10k/month. If we know (or hear from others) that we should average $25k per flip, we now know that we need to do 5 flips in the next 12 months. We also know (or have heard) that deals typically take ~4 months from purchase to sale… then we know that we need to get our butts in gear. This means that we’d need to buy the 5th deal no later than 8 months from now. This means that in the first 8 months of the year that you’ll have to complete 4 flips and have them sold by month 12. We should also consider that a deal takes 4 months from purchase to sale, this doesn’t include the time to find and buy the property. So since some deals can take many months to find and buy we’ll use 2 months (30 days to find, 30 days to close).
$120k in 12 months
$25k/deal = 5 deals total
6 months total deal duration (including finding and buying the deal)
Now you need to break the goal down into measurable tasks. How many deals do you look at before you buy one? Let’s use 10 for this example. This means that you’ll look at 50 properties this year and buy 5. And since you need to find and buy the property well before the 12 month time period you should really understand that you need to look at 50 deals in the next 6 months. This will allow 2 months to seek it out and purchase it before you start the project, which takes 4 months. That is 8.3 deals per month or 2 per week (50deals/6months = 8.3deals/month).
Now it’s pretty easy to wrap your head around. You need to make sure that you look at a minimum of 2 deals per week if you want to buy and sell 5 in the next 12 months.
How can you assure that you’ll have 2 deals per week to look at? Are you well networked with several agents who get deals off of mls? Are you well connected to all of the wholesalers in town? If not, it’s time to put your dancing shoes on and get out there and mingle.
If you want to make $120k in the next 12 months you know that you have to look at 2 deals per week, so making sure that this happens is your most important and measurable daily task. Now go out there and set some goals and start purchasing some properties!
“Without a known destination how will you know where you’re going or if you’ve gotten there?”