In this episode I discuss the difference between long-term and short-term goals in real estate. I am going to ask you to consider your long-term goals. A lot of real estate investors focus too much on the short-term goals and not enough on the long-term goals!
It’s important in real estate, just like in any business endeavor, to establish early on what it is you hope to achieve in the short-term, but also to look ahead and figure out what your goals are in the long-term. It is very easy to get caught up in short-term goals. Short-term goals bring more immediate gratification than long-term goals. This is because short-term goals are within your grasp. Often, short-term goals are realized within days or weeks, whereas long-term goals take months or years to realize.
I firmly believe that, when you’re setting goals for yourself and your business, you should start with long term goals. The reason why I say this is because, if you have a clear understanding what it is you want to accomplish in the long term, you can create short-term goals that support your long-term goals. Your short term goals should always support the bigger picture; the goals that you ultimately want to achieve. If your short-term goals and long-term goals are completely unrelated, it’s going to be difficult to succeed with your long-term goals.
Think of it this way: if your long-term goal is to have 50 rental properties, it’s going to be pretty difficult to get there if all you do is flip houses. You can flip 100 houses, and at the end of that endeavor you still won’t have any rentals. However, if your long-term goal is to own 50 rental properties, and your short-term goal is to buy ten per year for five years, your short-term goals will be supporting your long-term goals. That’s not to say that someone who wants to own 50 rental properties in five years can’t flip houses, but flipping houses will not help you reach your long-term goal of owning 50 rentals. Flipping houses and acquiring cash flow properties are mutually exclusive activities. Both are excellent real estate investing models, but one will not help you reach the other. It is also true that if your goal is to flip 50 houses, acquiring 10 rentals per year for five years will not get you there.
When you’re first getting started, your long-term (1st year) goal might be to flip five houses. This might be the first year goal of a brand-new investor who has never purchased an investment property before. It’s important to note that long-term is a relative statement. If you’re brand-new and you only want to look at the year down the road, long-term could be one year. For others, long-term could be 20 years.
If your first-year goal is to flip five houses, you need to set up short-term goals, perhaps monthly goals, that support your one year goal. Short-term goals that support a one-year plan to flip five houses could include things like:
- Joining a real estate investing association.
- Identifying a realtor that works with investors that you can work with.
- Identifying successful real estate investors in your area and asking them to mentor you.
- Hiring a successful real estate investor as a coach to help guide you.
- Looking at/evaluating five to ten houses per week.
- Putting offers in on two to three houses per week.
I don’t want to give you the impression that everything you do has to be carefully planned and plotted before you do anything. I would much rather you get out there and just get started than sit around writing the business plan for months. But once you get out there, get started, and maybe do your first deal or two, take a minute to figure out where you want your business to be in three to five years. Then create a plan to get there. Don’t let this planning keep you from taking massive action. However, at some point you might want to plan your business in order to achieve your long-term goals.
Now get out there and just start!