By Ozzie Jurock
This is an expanded version of the article which appeared in The Vancouver Sun on August 11, 2001
Ok, you are motivated. You will buy real estate. You want to be an investor. Owning real estate is good, right? Particularly now, as markets heat up a bit in British Columbia, buyers are coming out from behind their 'yeah, buts' and clutching their cash ready to commit. But saying that all real estate is good, is like saying all mutual funds are good, let's buy some. It doesn't work there and it doesn't work for real estate. God speaks to real estate investors with a written action plan first and she speaks to everybody else second.
A personal written real estate action plan.
Personal to you! If you want optimum results you've got to do things right. Analyze yourself. What is it you are trying to accomplish? Cashflow from a tenant to pay off your mortgage? A nest egg for your old age? Capital gain fast? People go out and make their major investment strictly on emotion. Real estate is good, isn't it? No, not all real estate is good. Remember: You make the most money on the day you buy. And that does not happen by accident. There is thinking, planning, evaluation and personal risk tolerance at play. And you find out yours by sitting down with pen and paper. It all starts with your personal plan.
There are no short cuts. There are all kinds of variations.
What ever your true goals are get them down in writing.
How will you handle calls of, "My toilet is flooded, or my washer is leaking, or --- the furnace is out." How many of these calls can you tolerate?
Get your answers down on paper. Take as much time as it needs. The answers will tell you what kinds of property you can buy. You need to be able to match up your investment objectives and your temperament to the properties you buy. This is really a case of 'different strokes for different folks'.
Take a good, hard, serious look at yourself. And you've got to do that from a variety of perspectives --- financial, intellectual, and temperamental.
The objective should be to construct a set of goals so that you have a plan of action in writing. Goals and plans that are not written down are nothing but musings. I know --- I know --- you're different. Sure you are.
It's not enough to say I want to make a lot of money. That isn't a goal. How much money, by owning x number of properties? You have to be precise. It isn't enough to say you are going to work hard. That isn't an action plan. What will you learn, read, understand every day to get you to your goal? Take an honest look at yourself. Then you decide what results you want to achieve.
If you want to have an income stream of $10,000 a month then you know that you have to have a two million dollar portfolio if you're going to achieve this without taking undue risk. You also have to decide what risks you're willing to take on the way up to that two million dollars. A lottery ticket or buying one property a year for the next ten years.
There's all kinds of help out there just waiting for you. Stationary stores have forms that are designed for evaluating rental property. Library shelves are filled with books on the subject and in those books you'll find just the right form that you can adapt to your own needs. But guess what? YOU have to do it. It IS work that YOU must do.
There are very few things in this business that I am as sure of as this. If you have a written plan of action, you will be motivated to get in the game with confidence and not follow some guru. You will have a useful measuring stick and a compass that will take you where you want to go.
Real estate has been a wealth builder for thousands. Some had luck, caught the wave. Most continuously successful real estate investors understand that the best deals are created not advertised and that the biggest problem lies in understanding themselves.
Of course in the end it is all about guts. The guts to take action. The person who acts, even if he's only 90% or 95% right is always further ahead then the person who waits to be 100% sure. Remember, if you wait for all the traffic lights to be green between your house and where you're going, you'll never leave your driveway.
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