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Goals for 2012

January 21, 2012

We all know the importance of writing down your goals and holding yourself accountable for them. My wife and I do this each year and it really helps to keep us on track.

We are looking forward to getting back in the game in 2012 after a wild 2011. We only made one purchase last year and it was a new primary residence for us. This did have us converting our old primary to a rental. Below are our goals for 2012:

  • Buy 2 properties – at least one with seller financing. I have yet to pull off an owner financing deal. This will allow me to keep my credit lines available for additional purchases.
  • Put our insurance out to bid. We are spending more and more on insurance and we are using two different companies. Now that we are married, I want to shop our business and see if we can save anything.
  • Get my Real Estate Agent License. My father is a broker, but he will not live forever. He can sponsor me and I could go on to get my broker’s license as well. I have analyzed the advantages and disadvantages of having a license and ultimately if you are serious about real estate – I think you should have it.
  • Renew the Property Management contract. We self manage all of our rentals, but we also manage one other property for someone else. Valerie and I were debating whether this was worth the time, but in the end it’s easy money and allows us to test trial a few different policies and approaches with tenants.
  • 30 days or less total vacancy for 2012. Last year we had 2 vacancies totaling 42 days. I want to beat that this year. (Both of these were my properties – My wife was perfect with hers)
  • Savings and paydown goals. Valerie and I have exact goals for paying down mortgages and reducing balances on our lines. We also set a goal each year to max out our 401ks and IRAs. Some investors might question putting all that capital into a retirement account if they can earn 10-20% on their money in real estate. We prefer to diversify our net worth and take the slow but steady approach.
  • Find another reliable handyman. I need that good, dependable person that is a jack of all trades that can respond the next day. We have one, but I would like to have another one in the rolodex.
  • $8k per month in rental income by December. If we make 2 purchases this year (of Class B properties), our monthly rental income should be around $8k.

My wife and I both hold full time day jobs so our goals only seem a bit conservative. Our long term goal is to stop at 10-12 properties, get everything paid off, enjoy the income and send in our resignation letters.  

Related Posts:

Mistakes for 2011 

From → Planning

  1. Good goals.

    How long do you think it will get the 10 – 12 properties paid off? Have you thought about buying some extra ones and selling them to pay off the others quicker?

  2. Steve,

    Well we are at 6 properties today, and 4 of them are F&C. We only buy one maybe 2 per year, but then pay those off aggressively. Aggressively means within 5 years. The only exception to this is Property 6. This was an old primary that we refinanced at 4.5% on a 15 year note a few years ago. We are not in a big hurry to pay this one off.

    How long will it take? 15 years at most. I hope most of the purchases occur over the next few years, but then paying everything off will run several more years out. The question will be can I stop at 10-12 or will I just keep going?

    Your other question about buying a couple of extra ones and selling the turds to pay off the good ones is an excellent idea. I had not really thought about that until you said that on your blog a while back or perhaps it was a response to a comment. Either way, it’s an excellent strategy and probably what I will do.

    Thanks for your comments – I always enjoy your blog.

    Good luck in 2012.

  3. If you’ve ever read John Shaub’s books, he advocates getting rid of your worst house and replacing it with your new best house every year. I think once your portfolio is stabilized that really makes sense.

    I am sure you will keep going, especially if you quit your job!

  4. Chuck,

    Nice post. I really enjoyed reading your goals. I look forward to seeing you knock these out over this coming year.


  5. Cesar permalink

    What will be your approach for finding another reliable handyman? Could you share how you found your first one? Your posts keep me motivated. Much thanks!

  6. Cesar,

    Thanks for the comments. I found my first one through my mentor (another investor). To find a new one, I always ask other people who they have had luck with. I also look for their truck or van in neighborhoods where my rentals are. This is a good way to get a contractor and meet the neighbors.

    Another good way to test out new handyman is to just try them out on some smaller jobs and see how they do. You can do quite a bit of screening on the telephone. I tell them I am not your typical retail customer. The work does not have to be perfect, but I want landlording pricing. Their reaction to this statement will tell me quite a bit about them and whether or not I might be able to work with them or not.

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