REI: Your 2007 Results; Your 2008 Strategy

Am just wondering what other people’s REI strategies are for 2008.


Buy, Fix, Rent, Go Camping, Fix, Rent, Ride Motorcycle, Fix, Rent, Scuba Dive, Fix, Rent, Snowboard. That’s about it.


Where are you planning to scuba dive?



Seriously. My market has yet to decide what it is going to do. Everybody is holding their breath and waiting.

Price have not gone down. Inventories are building. Property is still selling at the same rate, just not as fast as new listings are coming onto the market.

If I see something I like at a price that I like, I will buy. But I look every day and I haven’t seen much of interest.

Right now, all I have plans for is to put a couple of good frame houses onto land I already own. It’s a very good time to build, because the building trades people are short on work. So I can get the better workers and they are willing to sharpen up their pencil when they bid.

If the market tips over the edge and prices start falling, I will more than likely be buying as much as I can afford.

Sort of what Mike said…Just trying to buy right, make money and enjoy life…

2007 was a make ready year for me.

Got here in early February and was hell bent on starting a low income, cash flowing rental business.

Put the brakes on that as the year progressed…just wasn’t sitting right.

Strategy wasn’t complete. Thanks to fdjake’s postings here, I was realizing I hadn’t really addressed the need for cash building.

Was relying solely on cash reserves…sorry, not my money.

So I took a listen to his “limited rehab” money making mechanism.

A good part of 2007 was spent seeking out team members: lawyer; accountant; real estate agent; mortgage broker; bankers; inspector; plumber; landlord mentor; plus a few more. Propertymanager has been a great resource for a long time.

Strategy for 2008 is hybrid: buy and sell & buy and hold. 40 cents on the dollar, (otherwise I’d rather stand on the sidelines).

One at a time, controlled growth.

Cap for the buy and holds is about 10 SFH. Have no clue as to how many I’ll get in 2008. If/when I approach 10 I’m going to seriously consider dumping them. I’m not really interested in residential for long term.

2008: Heavy on marketing. Some geared toward the buy & sell, (better areas)….rest geared toward a lower price point to cashflow as holds.



My Goals for 2008…

That house looks very familiar…Seriously…I have seen it before…Barbados,Acapulco somewhere…Can’t put a finger on it

One bedroom/ 1 1/2 bathroom waterfront villa with private jetty in front of Monkey Island in San San, Jamaica

For real estate:

Hire a phone assistant to filter / qualify the calls.
Train current acquisitions person further to buy properties.
Double or triple current marketing.

Buy and flip, buy and flip, buy and flip.

Looking to create a business where I am no longer involved in day to day aspects of it.

That’s pretty much my strategy for 2008.

Your strategy is pretty much my strategy. I have been keeping tabs in my plan not to fail thread. So that people will have a point to go back and read what I was doing BEFORE I hit it big.

Start my first major developement project in Ft Lauderdale, FL on Las Olas…building 14 luxury townhomes that will not be completed for 18months…Prey market turns so I can sell them for 2.25mil each with a total building cost of 1.2mil each (right now projected resell is 1.75mil each)

Also can rent some for longterm hold as complex next to mine is renting TH that are smaller and more traditional design for $30,000 a month so I target around $35,000 a month for seasonal rental…

Just waiting on my last permit so I can build on that 7mil land purchase from 2 months ago… And keep the last unit for myself…

I have 8 more houses to go. I plan to finish it in 2008. That will put me at 20 houses (If I don’t sell any). That is my core goal. If we sell any (one will almost surley go and another is likely) 1031 them back into 4 more. The money I get from at least one of my sells will go to refinace my worst cash flowing house to bring its returns in line with the rest. That will give me an annulaized cash flow of around $80k. I then plan on maintaining that core 20 houses. 1031 them after 3 to 5 years or refiance to optimize the performance of the portfolio of houses.

I have 8 more houses to go. I plan to finish it in 2008.

Looks like you’ve got a good buying year to hit your goal of 20 and the experience to move at that rate of acquisition.


That will give me an annulaized cash flow of around $80k

That’s great Bluemoon…I’m at about half of that and striving toward 100k a year positive cashflow…Just trying to pick and choose what I want in a very changing environment…best of luck in 2008… :beer

2007 goals fell short. Goal was to buy 10 houses, ended up buying 7. I walked away from few workable deals because I did not feel I should buy anymore.

2008 goal is to buy 10 houses again. This time, I would like to find deeper discount and hopefully concentrate on newer homes.

The challenge will be the new law that passed in Texas requiring written permission from the lender when buying sub2/owner financing. The workaround is not pretty either, would require a title insurance so thats an added 1.5% for buying and another 1.5% for selling and would take longer to close.

Doesn’t that pretty much screw up subject 2 altogether? wow.

It doesn’t eliminate it, but does provide a big challenge. It is the same thing they did to Lease Options and Contract for Deed in Texas.

My strategy:

  • Don’t panic. This to shall pass.
  • Avoid banks. They created many of today’s problems, and are exacerbating the problems by going from one extreme to the other in qualifying buyers to CYA.
  • Continually raise capital – especially business funding and private money.
  • Be the bank on all my deals (Rent-2-Own and temp to perm mortgage financing on my deals)
  • No bank = no low ball appraisal by scared appraisers trying to CYA.
  • Work diligently to reduce transactions costs, especially on the sales side.
  • Use aggressive tax planning to keep what I make.
  • Generate cash flow from R2O down payments, tax deferred.
  • Market aggressively to find all our own deals. No more wholesaler deals.
  • Build and sell an automated REI business automation software package to get the work done with only one assistant. (It’s hard to hire and keep good people).
  • Increase efficiencies to generate more net profit from smaller margins.
  • Watch the cash.
  • Manage the cash.
  • Keep the cash.


nice plan Jimbo!