Setting your real estate investing goals is essential to your success in real estate investing. I hope you won’t require convincing of this fact. Setting goals works. Period.
But are you setting your real estate goals correctly? Is it possible that you may be missing a few details that could help you goal set even better?
You’re about to discover the “best practices” for setting real estate investment goals.
The Art of Setting Real Estate Goals
Achievers find a way to reach their goals.
Setting goals has been explained in much greater detail over the centuries in other publications. In this article, I’ll just focus on real estate investing goals since they have their own specific characteristics.
The best analogy of setting real estate goals is to compare it to doing a Google search. If you are very vague, and Google “real estate,” you will get vague results, and many will not be specific to what you’re after.
However, if you search for “How to wholesale real estate in California,” you will probably get much closer to helpful information.
But you can also go overboard with excessive detail, such as Googling: “how to wholesale real estate in Los Angeles during the spring part time in the evenings” and yield inaccurate results. (In fact, I did just that and the first result was a Baton Rouge, LA Craigslist ad!) So you have to strike a delicate balance of detail to hit the sweet spot.
The Real Estate Investing Goal “Sweet Spot”
To best illustrate the real estate investing goal sweet spot, let’s breakdown a common goal I hear often: “I want to do my first deal within three months.”
1. Definite Period of Time: Every goal must have a definite period of time or it’s just wishful thinking.
When you give a goal a date, it provides a framework in which to track your progress. In our example, giving a definite period of time of three months was well done.
NOTE: There’s no such thing as “too short” or “too long” of a definite period of time for a goal because, as you begin to proceed toward your goal, you’ll be able to make adjustments. If it’s too short, you’ll extend it. If it’s too long, you’ll shorten it up. The key is that there is a definite period of time.
2. Describe the Result: A huge error in setting real estate goals is not describing the result clearly. Be specific.
“Doing my first deal,” is NOT a descriptive result. In fact, doing a deal is not the goal at all. Instead, making money is probably the goal because you can do your first deal and lose $10,000! Losing money is typically not what a budding real estate investor means by a “deal.”
Instead of “doing my first deal,” perhaps the description of the result could read as, “Buy my first positive cash flowing rental property that earns at least $200 per month without having to use my own cash or credit to acquire the property” or “Close my first deal and earn $5,000 or more in net profits after all expenses.”
3. Remove the “How”: Goals are strangely powerful, but sometimes you achieve the results you specified in ways that you least expected.
To give a personal example, many years ago, I set a goal to participate in profitable investing deals all across the country, but I never expected that I would do it by mentoring people and sharing 50/50 in the profits.
When I first set that goal while looking at all the houses from the window seat of a Southwest flight, my plan was to hire a ton of people and have a big corporation with hundreds of employees and pay them salaries while I collected 100% of the profits.
In hindsight, boy–was that a bad idea. Thankfully I didn’t achieve that goal! Remove the how from your goal and just specify the result you are after within a definite period of time…the how will come as you embark on achieving the goal
4. Review Your Goals Periodically: This sounds so simple, yet it’s tragic just how few people actually review the goals they have set for themselves.
At a minimum, review your goals monthly, but far better is once per week. And don’t simply read them, but ask yourself if you’re on track to reach them. And if not, why not? What needs to change to get on track? To be quite blunt, if you don’t intend to review your goals periodically to assess how close or far away you are from them, don’t bother setting them.
Beware of Expectations
Beware of the danger of creating expectations. Goals are targets you have outlined that you are attempting to achieve. Expectations are predictions about the future that you may have very little control over.
New real estate investors, either purposely or inadvertently, sometimes create expectations, such as, “because of this course I just bought, within six months I’ll close three deals and finally be able to quit my job.”
Even the best training programs, applied in the perfect markets, at just the right time, are no guarantee of future results. There are so many variables. It may take longer than six months to get where you want to be. And it may happen faster!
The problem is that when you create expectations that don’t happen, your spirit can be crushed and it can completely derail your momentum and halt your progress.
In his excellent book, Man’s Search for Meaning, Victor Frankel shares a discovery he made while imprisoned in a Nazi concentration camp during the Holocaust.
He noticed that the prisoners who created positive expectations in their minds, such as, “We’ll be out by Christmas,” were the first to perish. What would happen is Christmas would come and go and they wouldn’t be out. Their spirit would be crushed, and they would lose the drive to survive.
Meanwhile, the people mostly likely to survive were those who associated meaning to their suffering, such as focusing on surviving, so that they would ensure that such an awful human atrocity would never happen again.
When you don’t make a million dollars in six months, perhaps there is a reason for it. Perhaps the struggle will equip you for things to come. Maybe there are other reasons which will reveal themselves many years from now as to the significance of not hitting your expectations.
So set goals, not expectations.
What to Do When You Miss the Mark
When you miss the mark, rather than hanging your head, sulking and asking destructive questions like, Why does this always happen to me? ask yourself what you need to do differently in order to get there.
Who do you need to ask? What are you missing? What should be done differently?
Then make some adjustments, change the definite period of time of the goal, and go back at it. Everyone gets knocked down. Winners get back up. Achievers find a way to reach their goals.