REI Goals For 2008

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)

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

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

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

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

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

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).