Introspection: Defining Your Real Estate Goals and Planning Your Future As A Real Estate Investor

Before you even begin to look for your first (or next) rental property, before you even get that pre-approval letter from a lender, before you begin to attend open houses and speak to real estate agents, you must clearly define why you’re even getting into real estate in the first place.

Once you’ve figured out exactly what you want to get by investing in real estate, your actions before, during, and after each deal will be totally dictated by this goal.

For example, some people want the freedom that comes from the passive income that comes with investing in real estate. Others want to be able to purchase fancy cars and nice big houses to live in. They’re in it for the money. Others simply love the process, taking a dilapidated property and like a blank canvas, turning it into a beautiful home that someone will love to live in, enhancing neighborhoods, and providing jobs to the local economy.

Whatever your reasons for investing in real estate, the most important thing is that you are aware of the goal. Write it down, keep it handy (in your wallet or glued to your monitor), and never forget it.

This goal, which will be your North Star, will guide you, and help you whenever your journey becomes difficult, whenever you stray from your path when you begin to feel lost, or begin to wonder why you even started investing in real estate in the first place. And surely, if you stick around long enough, it will get difficult. That is a guarantee.

Your goal will keep you focused. It will be something you will look to whenever you seemingly forget why you’re even doing what you’re doing.

I’ve had days like this. Other investors have had days like this. Literally, anybody undergoing a difficult journey will have days like this. It is just a part of life.

So, let’s begin defining our goals. Why we’re interested in real estate. What we want real estate to do for us. By beginning, of course, with envisioning our ideal future.

Personally, I envision the freedom and stability of having cash flow. Of not having to worry about money. Of being able to travel when I want. Of not needing to work a 9-5 job, dedicating my short amount of time on earth to working for someone else. 

Don’t get me wrong, it’s not that I won’t work. Obviously, I’ll be working as an investor. My goal is simply not to have to work, working only because I choose to, not because I am forced to in order to pay my bills.

This, for me, is the ultimate goal. I don’t care about fancy cars, living in a multi-million dollar mansion, or buying expensive, name-brand clothing. I don’t care about showing off or keeping up with the neighbors. I don’t mind being in debt, so long as that debt is providing me with cash flow and is being paid off by someone else. I want to be able to travel whenever I want. All the while my properties are producing income while I am away, managed by someone else.

I want to not have to worry about money. About not having my life dictated by a salary, a job, and bills. That, to me, is the ultimate form of success.

The goal you set for yourself will determine the decisions you make during your journey.

Are you more averse to debt? Will you be a commercial investor, or will you stick to single-family homes? How about multi-family properties? Will you purchase property after property and finance them all or will you buy properties all cash to avoid debt altogether? Will you build a business around it, and register an LLC (limited liability company), or will you just remain a small mom-and-pop landlord? Will you use private money, hard money, or will you buy, rehab, and hold, or will you flip your properties? Will you take on a partnership with someone? Will you build your brand, become an expert, and start a company?

All of these are legitimate questions that need to be considered before you begin investing.

For example, I do not mind having multiple mortgages under my name. I do not worry about paying all cash and being debt-free, so long as that debt buys me an income stream. The way I see it, not all debt is bad debt. Debt that provides income is the good kind of debt that I don’t mind having.

I’ll look for any loans possible to get the financial freedom I want. I will hold properties, and rent them, rather than flip them. Flipping is a full-time job, and that is something that I don’t want. I want to put my money somewhere and forget about it, all the while making money every month. I want to build a large portfolio of single-family and multi-family properties that will provide me with enough income to live the life of my dreams. If that takes hard money, private money, or mortgages, then so be it.

First, you need to envision what you want your future to look like.

Second, you will need to read up on all the options you have in real estate to build this future. And believe me, as you will see for yourself, there are many, many options when it comes to investing in real estate.

Third, you will need to decide which of these options is best for you depending on your personality and goal. Are you risk averse? Do you want to retire early? Do you want to continue working your day job? Do you want to save up for your children’s college? Do you want to own a shiny new Ferrari by the time you’re 35 years old? Do you want to live in a mega-mansion? Do you not care so much about having a large portfolio, so much as you care about making money on each sale?

You will only know the answer to these questions when you’ve thought long and hard about your future, your goals, and what you want real estate to do for you.

It’s the most important decision you will make, and time and consideration should be spent to make sure your goal is clear, concise, and something that you can look to when the journey becomes difficult. Because I can assure you, this is not an easy business to be in. It will get difficult, that I can say for certain. When you have a reason for doing what you’re doing, it will make the difficulties that much more bearable.