I met my investment goals last year. I never do that. I usually shoot for the moon. I thought that doubling my portfolio and doing a few flips was the right milestone for 2016. Looking back, It wasn’t. I did what was in the realm of my possible, not in the realm of “the possible.”
I’m changing this year. You might ask, what was your goal last year? Its not so simple. Right after I bought my 10th property, I decided I needed to improve my cash position. I stopped my acquisition activities and proceeded to flip three of my newly acquired homes. It took longer than I planned. It wasn’t the rehab or the turns that blew my schedule. It was the closings. I was so used to cash purchases that I forgot how painful a mortgage process can be. That timing affected my outlook for 2016. Thus starting with 7 properties, I decided to double to 14 by the end of the year, and I did. Fail.
If you’re thinking 14 properties is great! It is, but it was not an appropriate goal. I could’ve/should’ve done more. Instead I let market conditions, a new job and other things detract from my priority of acquiring passive income. I didn’t get serious about my goal until after September. That’s right, I bought my 7 properties that completed my year all from October to the first week in December.
In October I closed 5 deals.
Why? I had convinced myself that because I wasn’t finding deals, no one was. When in fact, home values were on the rise (bad for me), I now know others were still finding great deals. They were local, had a more aggressive strategy, and could pivot much faster than I could. So during the summer months when primary home buyers were out in mass buying up homes on my farm, pricing me out, I stopped trying. Once the summer ended, I resumed my strategy and continued to buy. I missed out on half the year though.
Over the last couple of days I’ve been thinking a lot about 2017 and what I expect. I want to move the mark. THE MARK. The one that changes your lifestyle. Trust me owning 7 properties is the same as 14. So, will 28 be different than 14? I doubt it. Hence, doubling is out of the question this year. I need to change. Change my mindset. Change my time frame.
When I started this passive income quest, I wanted to replace my Active Duty pay by the time I retired in just over five years. That was a great goal because I’d never enjoyed a “check in the mail.” In 2014 it started. I proved the concept to myself. Then I went linear, which led me to my 2016 goals.
Now, I’m back to where I was in 2013. I see the potential. I see the possible. I’ve ID’d the obstacles. So, what’s my goal?
In 2017 I will:
- Finish the year with 100 doors. I use the term “doors” to describe a SFR or a door in a multifamily unit.
- Do 12 Flips to fund my rapid expansion.
- Buy a mobile home or RV park, or both.
- Finish the year with $100,000/liquid cash in my RE accounts.
- Develop a growing team of buyers, contractors/rehab’ers, lenders, attorneys and other professionals who are incentivized to help me achieve my goals.
Why? (I keep asking myself, and so should you!)
This is the most important question. Its not for status or ego. It boils down to ONE THING. It will profoundly change my life. That’s more than double my current W-2 income and I’ll have 2 years left to retire. Choices and opportunities will be much different than the ones I have now.
If you are thinking this is motivated by greed, you’d be wrong. Dead wrong. More is not always a function of greed. Sometimes, this time, its something more powerful. Its the desire to change. Change a career vector, change from a life in pursuit of income, to a life in pursuit of service. My dream job of being a track and cross country couch at our local high school…now within reach. My dream of concentrating more time serving at church, within reach. Finally, my dream to teach all of my kids to fly, most certainly, well within reach.
The numbers are simple enough. When I plan my deals out, they have to conform to certain criteria (we should all be very choosy right now!!!). As it turns out, after I pay all of my expenses, budget for maintenance, cleaning and save for big capitol expenses, each on of my properties makes approximately $250/month. So, 7 houses made me and extra $1750/month. 14 Houses does double- $3500/mo. Its good. Its great actually. But it didn’t move the mark. It cushioned the bank accounts, allowed me to be a little more liberal in my spending, but it was by no means life changing. 100 doors under my current construct looks like this: $25K/month $300,000/year. That’s cashflow. My cleaning and maintenance accounts will grow as well all adding to my net worth. That is life changing.
When I wrote the goal down, It scared me. It was too big, too much. It exceeds all my lending, management and contracting/rehabing capacities. Everything will have to grow. Most of all, I realize my “farm” can’t produce those numbers. I’ll have to start cultivating other zip codes in other states if I want to achieve those numbers. I need people that are as hungry as I am who are incentivized to bring me deals. I need competent management companies to manage my assets. I need no less than 10 rehabbing crews to get me to my mark. I need 7 more lenders each with around $500K or more in available funds. I need help. I think I know where to find it…u interested? Stay tuned.
We started Active Duty Millionaire to provide a source of education, motivation and support for those wanting an alternate source of income while in the Military. Why? Because sometimes we feel trapped. Trapped into thinking “this is the only way”, the only income, the best income, the only way to feel validated as an expert or person. But its not. Its service at its finest form, and we get compensated for it. In order to serve, it needs to be a choice and I’m not downplaying the fact that its not, but, IF you are independently wealthy and you continue to sacrifice and serve, you have something special.
A couple of months ago an associate asked for something he really needed. Something that would impact our mission in a positive way. It wasn’t fraud, waste or abuse, but it was different, however, not too different. Other units had the same capability. The response was “I cannot risk my position” for your request. There was a regulation, many regulations which made the request difficult. Eventually, he was denied his request. Our current system frowns upon risk takers, understandably so with lives at stake. However, what if we were motivated by mission, not fear for losing a position? What if losing a position was something worth risking for the mission’s sake? When people are motivated by service and not position retention or advancement, good things can happen. The truth is spoken, decision makers get the unbiased opinions of subordinates, the mission happens.
Let’s be frank. Its in everyone’s best interest for you to be financially secure and successful. I hope you will consider my words and start on a path that will lead you to a more secure future and a higher service. 2017 is already here. We’re late in getting started. I need 7 homes on contract by the end of the month. I’m gonna make it happen, will you? Now go build something bigger!