It was exhilarating when I first got the thought in my brain that I wanted to try real estate investing. I didn’t know about wholesaling or the many other types such as lease options or even probate. What got me excited was the thought of Money and Freedom.
The other day I got an email from Todd Heitner. He has been reading my blog for a while and wanted to offer his words of wisdom on how he has achieved his real estate goals. It’s a great post that lays out a framework on setting the right goals and having the right mindset. You’ll enjoy this post for sure!
In just a moment I’ll show you the 5 specific action items you need to take to get what you want.
But first we need to establish, what exactly do you want to get out of real estate investing?
Most people would say “to make money”. But you can make money working at a job. So why do you really want to be a real estate investor? Maybe now you’re thinking, “to make A LOT of money.” OK, fair enough. Real estate investing is a great way to make lots of money. But what does making a lot of money mean for you? What do you want to do with the money?
Or maybe for you it’s more about freedom. You don’t want someone else making all the decisions, telling you when you have to work and when you can go home. You don’t want someone else to be able to say ‘No, you can’t have time off right now.’ You want to have more time for your family or hobbies or just the freedom to choose how your time is spent.
Maybe it’s about security. You don’t want the fear of walking in one day and finding out you’ve been laid off or fired.
More than likely, it’s a combination of all those things. Who doesn’t want more money, freedom and security?
The problem is, most people don’t get those things. In fact…
At Least 95% of People Don’t Get What They Want
According to the Social Security Administration, at the age of retirement only 5% of the population will be wealthy or financially secure. The other 95% will be either: forced to keep working, dead, or broke and dependent on others to take care of them financially.
Why do 95% of people not get what they want?
Well, it’s been said that 97% of Americans don’t set goals for themselves. While it would be hard to know a number like that accurately, you and I both know that most people don’t have any goals or a plan to achieve them.
It’s easy to fool ourselves into thinking that setting goals isn’t important. I know I resisted it for years. I thought, “I don’t need to write it down, I know what I want.”
If I asked you right now what your #1 goal with real estate investing is, what would be your answer?
If your answer is, “To make more money,” I’ve got news for you: that’s not a goal!
Or if your answer is “To spend more time with my family,” again… not a goal. Why not?
According to BusinessDictionary.com, a goal is defined as: An observable and measurable end result having one or more objectives to be achieved within a more or less fixed timeframe.
2 important words from that definition
Measurable & Fixed Timeframe
2 important words from that definition
More Money & More Time
Not measurable, not specific, so it’s not a goal
To reach a goal, it must be measurable and have a fixed timeframe
So, for example, let’s say what you want is to make more money. Let’s work together to turn that into a goal.
First off, we have to know clearly what “more” means. In other words, it needs to be a number.
If you want to make “more” money, you first need to know exactly how much you make right now.
Be clear on your starting point and write it down.
If you get a steady paycheck, that’s pretty easy to figure out. If you’re already self-employed, that’s a little tougher. You’ll want to look at bank statements and add up how much money is coming in each month. Add it up for 3-6 months and divide by however many months it is to get an average. There’s your starting point.
Now, how much do you want to make?
Decide specifically what you want the goal to be. Make it realistic.
In the past, when I wanted to set an income goal I just pulled some big number out of thin air because it sounded good. That’s OK, but it’s also pretty meaningless.
To really know how much you want to make, first you need to clearly define what you want your lifestyle to look like. After all, money is just paper and numbers. The paper doesn’t enrich your life in any way. So what do you want to do with the money?
In his book, “The 4-Hour Workweek,” Tim Ferris talks about creating a “dreamline” where you write down what things you want for yourself, divided into 3 categories: things you want to have (for example, a certain car, a certain number of investment properties, a virtual assistant, etc.), things you want to be (such as being more physically fit, to be able to speak a foreign language, to be a good husband/father, etc.), and things you want to do (such as traveling to certain countries, do $1,000,000 in deals, build your dream house, etc.).
After you have your lists of items you want to have, be and do, next you need to assign dollar amounts to what it would take to achieve each of those things. Calculate what the monthly expense would be for each of those things. For example, for having a certain car, maybe it’s what the monthly payment would be. If it’s taking a trip to Scotland, figure out how much the trip will cost and divide by 12.
Next, you need to know your monthly expenses. Look at what you’ve been spending for the past months and, if you’re just getting started with real estate investing, add in a marketing budget that will allow you to do enough deals to support your business. If you’ll need to hire help, include that. Be sure to also account for taxes. After adding up your monthly expenses, Tim Ferris suggests multiplying it by 1.3 to allow for savings and a buffer.
So add up these numbers: Your monthly expenses x 1.3 + the monthly cost of your ideal lifestyle. What did you end up with?
Now you know how much you need to make each month. Let’s say the number you come up with is $10,000. Maybe that will include having a part-time assistant, a modest marketing budget, and putting something back for taxes and savings, along with a certain amount of travel and other things you want to do, have or be.
What do you need to do in order to consistently make $10,000 per month? How long would it take you, realistically, to get to that point?
Let’s say you determine that it would take you 6 months to get to the point that you can make $10,000/month consistently. OK, now we’re getting somewhere. Now you have a goal:
Write down your goal and put a deadline on it.
“Goals that are not written down are just wishes.” UnknownIt can help to set some kind of consequences for either reaching the goal or failing to. It needs to be significant. For example, let’s say if you reach your goal, you’ll reward yourself by taking a vacation to some place you always wanted to go. But what will happen if you fail? It can also be a strong motivation to have a strong consequence for failing to reach your goal. At the end of this post I’ll give you the link to another post where I shared a powerful example of this from my own business.
“Goals are dreams with deadlines.”Diana Scharf HuntSome people are more motivated by positive things that they want, whereas others are more motivated by moving away from things they don’t want. To really make it powerful, use both.
Now it’s time for a plan. What do you need to do between now and then to reach that goal?
Create a plan for what has to happen between now and the deadline to reach your goal.
Get a whiteboard or poster board and make a timeline. Write each month and what things need to happen each month.
“Without goals, and plans to reach them, you are like a ship that has set sail with no destination.”Fitzhugh DodsonEstimate what your expenses will be for each stage of the process. For example, what will you spend on marketing? Will you need to hire a coach who has already done what you’re trying to do? Write it all down.
Put this timeline in a prominent place where you’ll see it every day and can see where you’re at and if you’re on track, getting behind, or ahead of schedule.
Now you know where you’re going and how you’re going to get there.
But there’s one other vital ingredient. You need some way to stay on track. Most people will fail to carry out the plan and still not reach their goal.
Put things in place that make it harder to give up than to keep going.
It’s easy at first when you’re excited about it, but along the way you start running into obstacles, you get discouraged, your friends or family tell you it’s not going to work… That’s when it really gets hard. That’s when you need something in place to remind you of why you’re doing this and get you back on track.
“If you can find a path with no obstacles, it probably doesn’t lead anywhere.”Frank A. Clark
The more things you can have in place for this, the better. I wrote a free resource called “5 Actions to Guarantee Your Success” that covers 5 specific things you can do that will make it harder to give up than to stay on track. I’d really suggest reading that for details about putting Step #5 in place. I’ll share the link at the bottom of this post.
By default, things are kind of stacked against our success as entrepreneurs. Putting these things in action will tip the scales in your favor and make it easier to succeed than to fail. For myself, that was what was missing for a big part of my entrepreneurial journey and it has made all the difference.
Now you know where you’re going and how you’re going to get there.
But there’s one other vital ingredient. You need some way to stay on track. Most people will fail to carry out the plan and still not reach their goal.
Let’s Recap…
How do you get what you want from real estate investing?
Clearly know your starting point
Determine specifically what it is you want
Write down your goal and put a deadline on it
Create a plan for what has to be done to reach the goal
Put things in place that make it harder to give up than to stay on track
About the Author
Todd Heitner has been helping real estate investors for over a decade, especially with their mindset and marketing. Todd specializes in helping investors establish their online presence with professionally-designed websites. Now he’s even giving away free websites to his readers. Claim your free website at DoneDealWebsite.com.
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Comments 56
I am very pleased to read such a wonderful post. Now I am eager to learn more about this stuffs you mention. Please keep on doing a good job and I’ll be glad to read all your posts.
Wonderful article. It was a very good read and very recommendable. I really like how you tackle the importance of having a goal and a deadline. I would highly suggest this article for those investors who fails to get what they want when investing. Thank you for a very intellectual insight.
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Nice Tips. You have a very good point. I think I am one of the 95% people who can’t get what we want. Americans are terrible savers. We lack the self-discipline to put a monthly deposit into our IRA, SEP or 401k as small-business owners. However, buying a rental property is a significant commitment that you are required to commit to and maintain. You will always be grateful in the long-run when you don’t give up on it and build future cash flow and wealth.
Such an intelligent post! Very helpful indeed!
I must agree with step 5, putting things in place to make it harder to give up than on stay on track? Would definitely apply this to my own point of view. Thanks!
More power to your blog!
It’s a very helpful article for me. I am going to follow the tips that you’d mention. I think positive attitude add a big advantage with it.
Thanks.
Great Read
Me and my wife had this discussion several months ago. Number 3 on your list of writing goals down and put a deadline on them is something I have done for years now. I don’t always reach my goals, but it gives me a target to reach for. For me, my inability to be consistent has held me back. 2016 will be a different year. Thank you for the article!
This article has a lot of useful information. It is always best to have a well defined goal. Thank you for sharing!
I like how you emphasized the importance of having a goal when investing in real estate. Like you said, “making more money” or “spending more time with family” aren’t real goals; they’re wishes. Making realistic goals with set start and end times will help make real estate investing more possible for you. Thanks for the article.
Hello Scott,
This post has made me very pleased.
Very true instincts you have inserted in your post.
These are some most concern problems, that are faced by many of them
who are willing to invest in the real estate area.
This post would be helping many of the investors who fails, what to do
before investing in the real estate business.
I think I am among the 95% of the people who fails to get what they want.
these real estate business and investments have become a tough market now days.
Thank you for sharing these insights among us.
Shantanu sinha
I am looking to get into real estate investing. I don’t know much about the business, but I want to learn. Thanks for your tips about reaching goals and setting goals. I am going to write down all of my goals and make sure I can accomplish them. They’re going to be high, but not unachievable.
Great share!!Its true many people don’t know what they exactly want and this post include all the important points.Please keep on posting post like this and I’ll be glad to read all your posts.Thanks for the article!!
Very helpful article indeed. You have mentioned important points. I have to agree in having goals. What good are actions if you don’t have a goal, right? Thank you for this information. Good Read!
Thank you for making your article so clear and comprehensive. I’ve never quite understood real estate investing until now. It’s hard to believe that 95% of people don’t get what they want from investing. I agree that you need a measurable goal and fixed time frame to reach a goal.
Hi,
It is really wonderful to see such a great post!! I love the way you just described all the aspects that people confuse regarding what they want from real estate investment. I really admire your post!
People who have already tried their hands in real estate investing know well that if the investments are made well, one can easily get profitable returns. The most important thing that you can do is educate yourself about real estate investing. Be sure to focus on more than just real estate investing in general.
Thanks for such a nice sharing!! Keep sharing like this!
Regards
Ronald K. Roy
Great read. It gives me a lot to consider before just jumping in to the real estate market again. Writing out my goals definitely seems like a way to get what I am looking for.
Hey, Scott, I found your this post today and its great, the way you express in details is awesome, and as all readers commented here you help them all in a real way :). These all tips are really helpful for those who want to try their hands in real estate market investing; so keep going publish more great articles good luck!
You’re right about the importance of setting goals and your inspirational material is a great guide. “The 4-Hour Workweek” is a resource for many innovative achievers.
Hii
Great post!
Your tips are really beneficial because it is necessary to understand that what we need to establish and what exactly we want to get out of real estate investing?
So,by keeping these steps in mind we can enhance our business.
Thanks,for sharing this valuable information with us.
Great
Hii!!!
Investment in real estate may be expensive but an effective deal can make a big difference. And no doubt that deal totally depends on the real estate agent that you are hiring. So one should careful before hiring any real estate agent.The ideas you mentioned here are awesome.
Thank you so much for great sharing.
Great step by step guide on how to start thinking about investing in real estate!
Very helpful! Thank you so much for sharing. I am a 19-year-old kid who is wanting to start investing in real estate. So thank you for all the information.
Hey
That’s quite an informative article.Real estate is typically bought and sold either through a licensed real estate agent or directly by the owner. The vast majority is bought and sold through real estate brokers.
This is due to their real estate knowledge and experience and, at least historically, their exclusive access to a database of active properties for sale.I have consulted them before buying a property and they were helpful.
Photography is also a good way of advertising your property for sale. Makes a lot of difference.
Hey Buddy !!!
Nice Post!!
The articles is very helpful and informative.To work according to the plan is very important when your are going for the thing that has no place of mistakes.Real estate investment is not an easy job specially for the people who are investing for the first time. Thanks for sharing these valuable thoughts.
Keep Sharing!!!!! 🙂
I agree, all goals should have a fixed time frame. My husband has been thinking about getting into real estate, but I don’t know how I feel about it yet. Hopefully, we can sit down and talk about it more.
Hi,
Thank you for sharing valuable information. Now a days many people investing lot of money in real estate. but they don’t know how to get the results. So every one read this article then you can get valuable information.
Hey Scott,
I am strongly satisfied with your above-mentioned points.
Here I would like to suggest that before investing in real estate you should choose the perfect location because the quality of the location will attract buyers.
Thanks for sharing this informative article. 🙂
Awesome Post, Thankful to you to give us such a useful information which is needed to be considered by all of us.
Long Term planning should be there so that we don’t need to be dependent on other in future.
Great article. A couple of points to add to your article. Start setting your goals early in life. I always wanted to invest in real estate and did not start investing in real estate until I was 41. I invested most of my money in my 401k. I wish I would have started investing in real estate. Making sure you have the right mind set is one of the most important step in the process. If you have the right mind set, you can find the way to meet your goals. Write you goals down every day. I am a real estate agent now and am involved in real estate all the time. There are so many ways to make money in real estate.
great article do you have any advice on the pros and cons of useing a self directed roth ira to invest in real estate
Author
Unfortunately I have never used a Self Directed Roth IRA for investing so I would not be able to help. Sorry Brian
Hi Scott, I just started investing in real estate and I read daily one article on RE investment. I read your article recently and I found very interesting and helpful for beginners who actually want to start their careers in RE. Thanks for sharing such an informative post and I really appreciate this one. Keep Posting similar articles.
This post is a source for real estate investment insights, strategies, tips, guidelines & other great content for real estate investing. Thanks for posting this. It really helps. Great post!
I prefer to investing in a pooled fund with professional managers that are investing their effort and expertise. The concept of a pooled fund is that mutual investors put together their resources into a single pool, which is then invested by the managers into numerous deals in Italy.
A great guide, i would say Scott. Many people are unaware of these techniques due to which they make bad investment.
Great post. Real estate business is amongst the most rewarding businesses. You have provided really good information and ideas which are useful and people can understand better. Keep sharing…!!!!
Investing in a real estate business is risky but the rewards that you’ll receive in the end is so much better than investing in the stock market. Anyway, just an opinion.:)
A great work man.
Step by step recommendations. Good work
Great post. Real estate business is among the most rewarding businesses. You have provided really good information and ideas which are useful and people can understand better.
I love that you have discussed this topic thoroughly. It makes real estate investment more understandable, most especially to people who are beginners in this topic. Cheers for a great content!
I really love this post and very informative, wish you have more specific article same like this its help a lot
keep sharing
Thanks for sharing this article. It is very helpful for a beginner who are new in real estates.
Hey Scott, Highly informative article! Gain valuable information from your article. I really appreciate you spending some time and energy to put this informative article together. Thank you so much for sharing a helpful post.
Thank you very much for post the article. Really, it’s very good.
ITS VERY HELP FUL AND VERY INFORMATIVE.THANK YOU..
Hello Scott, I am thankful for your willingness to share your knowledge. My friend suggested reading your blog. I am in the property management business. I prefer to manage my own properties so I have learned lots of tips from you
Author
Thank you for coming to my blog 🙂
so cool
Very informative article. It’s worth visiting and recommending to the Real Estate Agents. Thank you for sharing this helpful information with us. Keep going and update the latest information at this knowledge hub.
I have gone through the article it is very informative. Keep sharing more.
I really love this post and very informative, wish you have more specific article same like this its help a lot
sàn gỗ
Nice content and tips thanks for sharing.
Thanks for the great article.