The life and times of an Arizona Investor

This will be my personal journal to document my failures and successes during my real estate experiences in Arizona. All stories, thoughts, and successes will be documented..

Tuesday, January 03, 2006

My 2006 Financial Goals

Here it goes.... These are my financial Goals for 2006. I won't mentioned my family and health goals. I have high expectations this year because I know that I've learned the tools to invest, I can and will find more awesome real estate deals, and I have more of a drive than ever to close!

Before I start, I heard a segment from "Dr. Phil" on goals which I agreed on. He mentions that people make goals based on emotions and that is why most fail. Don't make this mistake! Create procedures to make the goals a reality. As Gerald Romine states, "There's two things in life, excuses and results!"

1) Determine how much borrowing power and/or other people's money you have access to investing.

I have enough liquid capital/credit to keep purchasing some properties. Not many and this does not make me happy. If my land deal hits this year (we are working hard to get it sold), than I will be in a even better position to buy several investment properties in CASH.

Private money is setup and ready for the right investments.

Goals for 2006, find other people's money. Right now, I do not have partners w/ CASH or anyone willing to loan me money out of a IRA, etc.. I am working alone, which I would rather not do. I have a friend my age that partnered w/ his agent and they have built up 2 million dollars of investor money to do deals. This is the way go.

However, my best friend who lives in Palo Alto is interested in investing w/ me. This is a possibility if a big project comes up and I need more capital support. This is a deal by deal basis so there's no formal partnership right now.

Hindsight is a wonderful exercise, if I had more access to cash, I would have bought more property (before the huge appreciation in the last 3 years) and would have been much better off. This should be one of my top priorities. My best bet is going to my local REI meetings. I am searching , buy have not found the right investors yet.

I will also consider signing deals and finding the money! If its good deal, the money will come. (Thanks Trisha)

2) What is the current state of YOUR Real Estate market and what techiques are best suited to maximize profits in your local market?

The other day, I realized that I didn't REALLY understood my local REI market until July of this year! Thats amazing... If I knew the numbers and the story , I would have done many deals that I gave away! (Yes, I gave more than a few deals away) At the time, I didn't want a negative cashflow of $75, or maybe a slim margin of 10k flip, if I knew the market correctly, I would have made $75k of equity on the rental property and 30k on that flip! It was my choice and I lost the profits.

So, how do you know your market? I learned the market by taking a REI class w/ a realtor (investor) that is the real thing! He needs to know the market because he's growing his business. He publishes a real estate letter that contains tons of graphs w/ solid numbers in Tucson. Graphs on appreciation in the last 5 years, monthly inventory levels, affordability indexes, etc.. You need to see the numbers and the story becomes clear. Research your county recorders, talk to investor agents, and/or go to real estate club meetings and understand what other investors know!

Goal for 2006, track the local RE market on a monthly basis. Especially now.

3) How risk adverse are you?

From a scale of 1 to 10 w/ 10 being high, I would say that I'm a 9-10 in taking risks this year. I haven't done development yet, however, I am ready to do it in 2006. Why? Because I've talked to too many people that are successfully doing it right now! Of course the numbers need to work.

Goals for 2006, make an offer on every property that I analyze from my marketing campaign (Caller screened of course).

Overall 2006 Strategy: Pretty simple, first, generate cash via wholesale or fix/flip. Secondly, buy a rental property! Repeat again! The goal is for the business to generate enough capital to buy the rental properties for me. I expect to do at least 4 projects this year. I am looking for two properties w/ huge lots that can be developed. And two rental properties that will cashflow (need to be bought at around 70 LTV). These types of deals are getting harder to find in Tucson, but I'm up for the challenge.

Getting the developments complete in the summer is perfect for maximum profits and buying properties in November/December is best because inventory is at its highest.

To summarize, I want to raise around 40k-80k and spend it on long term investments.

I'm a firm believer that 80% of the effort is in the marketing, so if I'm successful, I should easily make the goals.

In addition, now that I understand my goals, I can tailor my marketing efforts.


Additional goals:

|| Bginvestor, 5:57 PM

2 Comments:

When you get into a position where you raise enough cash, do you expect to continue your labor intensive marketing? Or would you be willing to give up some of your profit per deal (by working with others who can bring you deals - for a price higher than a bird dogger, for example), in exchange for time to find and work through more deals?
Blogger Seattle Eric, at 5:34 AM  
The answer is yes and yes!

I'm doing this marketing because it works! Its better than postcards.

In this type of market, its tough to make the numbers work..

However, we do have wholesale deals here, and it does happen.

For large projects, I would definitely consider partnering for development or income property.

Take care
Blogger Bginvestor, at 7:29 AM  

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