What kind of goals have those who have reached them in the rental income area set? Did you try to purchase a certain amount of properties per month or set a cretain income goal i a certain time period? If so how did you achieve the goal?
Thanks
Buy “The Millionaire Real Estate Investor” by Gary Keller. Great book all about numbers and goals.
My goal is to buy 20 houses worth nominally $100k each that cash flow $200/month. That would give me control of $2million (in California that would be 1 house) worth of real estate and a monthly cash flow of around $4000 per month. In order to do that I have a goal of buying a house every month and a half. That gives me time to rehab and get a tenant in and then move to the next one. I have been buying a house every month and an half throughout 2006 although I have changed my strategy. I now am doing a land trust instead of renting the last couple of houses. What this does is allows me to get money up front (usually $5,000 to $7,000) and the monthly is usually around $200/month for 2 years and then I let them refinance out after the 2 years and take the difference of what I bought the house for and the price I sell it to them for (at least $20,000 per house) on the end. The profile of these deals looks like this.
2006 tenant moves in I get $5,000
2007 -2008 cash flow $4,800
Tenant finances the house I get $20,000
Total over the 2 years to my pocket $29,800
Hi, thanks for the great replies I will buy that book and also I too try to get properties that cash flow at least 200 per mnth after fix and a small cash pull.
dw,
My original goal was a 5 year plan to start and grow a rental property business that would acquire $1,000,000 in equity and $10,000 per month in positive cash flow. To do this, my plan called for purchasing 50 rentals (10 per year) with an average equity of $20,000 each and cash flow of $200 per month. I’m almost done with the number of rentals and the equity, but was not able to get $200 per month per rental using real world numbers (have I mentioned that before?) Therefore, my new goal is to reach 100 rentals within the next 5 years with $2,000,000 in equity and a cash flow in excess of $10,000 per month.
Mike
Speaking to the importance of goals, I was recently reading through some notes from a seminar in my industry and was reminded of these statistics about goal setting.
70% of people - No goals ( just go day to day and work )
= nominal income level.
26% - unwritten goals ( I think I want to double my income )
= earned 3X as much as no goals
4% - Clear, written, and measurable goals ( see Propertymanager’s above post)
= earned 9X as much.
Yet even faced with these numbers many people just don’t want to struggle through the process of forcing it down on a peice of paper and going for it.
DB
Hi everyone thanks for the great responses. My goal too Mike was to get to 50 houses or buildings whether it be a single double or whatever that creates 200 per month income. I am just starting out with a few but on average I see that 50 buildings will cost me about 2 million dollars and will come close to that 10k per month in real world numbers. Every once in awhile you get lucky and get a double that does 300 per month positive.
Thanks again
do you guys with the rentals hold title with an LLC or in a land trust with LLC as a beny?? If you use land trusts is it harder or more confusing for a bank to REFI(like to blanket mort. later??)
Don’t buy the book! Use someone elses money and borrow it from the library ;D Sorry, couldn’t help myself.
jb,
I hold SFHs in LLC’s as I consider them to be only medium risk. I hold apartment buildings in land trusts with the beneficial interest being the LLC. Yes, it is more confusing for banks but they work for you, not the other way around. This is another good reason to deal with a small local bank - they are more flexible. I always provide the trust documents.
Mike
I don’t think the issue is having goals or writing them down. I honestly think people just don’t know how to set goals and track them. I was talking to someone new to investing (and at 22, new to work life I guess) about my goals and his goals. He told me his goal is to be multi millionaire in 18 months. Now, can he get reach these goals? if he does not break it down and have clear vision of how to get there and track it, he won’t reach these goals.
Some fail to see Real Estate investing as a real business that needs forcasing and planning. The gurus pitch the get rich quick part time and people buy into it, but only those who understand business or end up learning the business aspect of it succeed.
Many set unrealistic goals, or set goals and don’t know how to track them. And if they miss their goal, they dont know how to correct their action plan to reach their goals. Mike gave an excellent very high level example where he adjusted his planned target figures to meet his goals 
I agree. There are people that do find those golden deals and do make a lot of money real fast but you have to be in the right area and know how to spot them. Others it takes a lot of hard work but they do get there. The important thing is to never give up, just keep learning.
I don’t think the issue is having goals or writing them down. I honestly think people just don’t know how to set goals and track them. I was talking to someone new to investing (and at 22, new to work life I guess) about my goals and his goals. He told me his goal is to be multi millionaire in 18 months. Now, can he get reach these goals? if he does not break it down and have clear vision of how to get there and track it, he won’t reach these goals.
In all the books I’ve read about becoming successful, it all comes down to your last sentence. Most people don’t make goals, and the majority who do, don’t know how to break them down into meaningful, everyday, tasks. THAT is the key, IMHO.