May

5

Now that my introduction is out of the way, it’s time to get down to business. And the first order of business is to define my goals so that I can track my progress and adjust as necessary.

By the time we settle down on the east coast, it will be mid-year, leaving only six months to accomplish any goals I lay out for 2008. Additionally, if you include all the tasks and time associated with acclimating to a new city, helping the fiancée with her business, planning a wedding, getting married, and taking a honeymoon, I won’t have the opportunity to devote full-time to my REI business in the second half of 2008.

That said, I will try to devote at least 25-30 hours per week on average to the business (which will likely translate to 50 hours some weeks and 10 hours other weeks), and I am defining some very realistic goals – based on that amount of available time – for the remainder of 2008:

  1. Buy My First Piece of Real Estate (Personal Residence)

    2. While more a personal goal than a business goal, the benefits of buying a personal residence as my first piece of real estate will provide me a deal of knowledge about the tactical aspects of real estate acquisition. Proceeding through a first RE deal will help me understand the entire acquisition process – locating properties, negotiation, due diligence, the lending process, and the closing process.

  2. Create a Formal Business and Management Structure

    3. This goal is all about setting up a formal structure that will provide both tax and legal benefits for my investing activities. As I expect that I will be building multiple businesses over the next couple years, ensuring that I get this part right the first time is very important; I plan to work with several accounting and legal professionals to ensure this goal is carried out correctly.

    Specifically, this goal will include:

    • Define my business structure
    • Register my business structure
    • Create a plan for accounting and management of the business
    • Set up bank account(s), credit card(s), and other services as necessary
    • Understand and plan for tax implications and expense accounting
  3. Complete my Business Plan

    4. I wouldn’t even consider buying my first investment property without completing a full Business Plan for my RE business. This should include my business goals, strategies, tactics, and risks. It should go into detail about investment criteria and how I will potentially work with outside investors and supporting team.

  4. Build a Reliable/Aggressive Team

    5. To be successful, I need to build a strong supporting team. At the very least I need to identify (and retain) the following team members:

    • Certified Public Accountant (CPA)
    • Attorney
    • Real Estate Agent
    • Property Management Company
    • Insurance Agent
    • Title Company
    • Property Inspector

    I will create a set of criteria and questions used to judge the ability of each team member to support the company and make us successful. I will use that criteria and question list to find the most complementary team members.

  5. Identify an Investing Location Using Formal Analysis

    6. While I’ve already identified the area where I will be living (Atlanta), it’s not yet clear exactly where I will be investing. It would certainly be convenient to invest in the Atlanta metro area (and if at all possible, I will), but the decision on where to invest should be based on much more than just where I live.

    I will do some formal analysis of various location criteria to determine my primary investing location(s). If Atlanta proves to be my preferred investing location, I will do more formal local analysis to provide direction on which specific local areas I should be targeting.

  6. Purchase At Least 10 Units of Investment Property

    7. Once I identify an investing location, it’s time to start buying property. Unfortunately, until I actually start trying to locate and acquire property, I have no baseline to determine how many units I can/should expect to acquire over a given period of time.

    Additionally, being new to REI, I don’t want to rush into large investments just for the sake of owning units. Instead, I will acquire properties at whatever pace feels natural, and only when I find properties that meet my criteria.

    All that said, I think it’s important that I state a goal for how many units I plan to own by the end of the year. Based on the fact that I don’t yet know if I will be buying single family homes, duplexes, triplexes, 4-plexes, apartment buildings, or apartment complexes, I don’t want to be too specific with this goal. But, I think it’s reasonable to set a goal of 10 units (where a unit could be a single family home, half of a duplex, or single apartment unit, etc) for the remainder of the year.

    I will likely revisit this goal as I continue to learn and gain experience.

Those are my RE investment goals for 2008; I will communicate all progress and obstacles here on the blog throughout the year, and have even created a separate section of the website to track these goals and my progress against them (this section is linked to from the main navigation bar at the top of each page).


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2 Comments On This Thread

  1. Ryan on May 5, 2008 9:02 pm

    Good luck. I’m looking forward to reading about your progress. Judging from what I know about you thus far, you’ll reach — and probably exceed — all of these expectations.

  2. Teja on May 6, 2008 9:05 am

    Might I suggest that you spend some time in a property manager’s office seeing how that end of the business works? I also have some suggestions, if you want them, on vetting a property management company, based on my experience as a HOA President and attorney; and some things to watch out for if you are considering buying foreclosed properties.