S.E.C. Real Estate Observer

• Tweet

• Tweet

When you think of something that needs to be completed, what is the first thing you think about? Do you think about the steps you will take get started, or do you think of a clear result?  My question is and always will be, how can you think about what needs to happen if you do not have a clear ending or result?

I think we as business people, regrettably, look for the structure or the “what must happen” before we are certain of the desired result. If I know I must drive to Las Vegas and I have a specific date and time to be there, I can then plan on when I should leave and set a path to achieve these results. The same thing happens in the real estate world. In the buying and selling of property, the development of real estate, the purchase of notes, or any other investment or action you wish to take, you must have a clear result. “Why do we own real estate?” If you say, “to make a profit,” then you and I must agree on what a profit is, or I cannot help you. Will your profit be before tax? After tax? Before closing costs? What is a profit? If you say, “I am going to hold this property for five years and sell it for three times net the amount I paid for it,” you have defined your result. You now know that you are going to make a 24% return on your money, it is going to be a net amount, and you that you want to sell it within a specific time frame.

How often do you review your desired results? Once a month? Once a year? How often should you review your desired results? Can your results change? Like the computer, how often do you hit the refresh button? If the market changes for the worse, what just happened to your desired results? If the market improved, what just happened to your desired results? How often will a class of real estate change, but not the market? How well do you keep informed? How well should we keep informed? Do you get the point?

Never assume real estate is a good investment. Never assume that desired results will always remain the same. Never assume that the investment will always be a winner! Always remember that your initial investment is the most important thing in the world, and you should always strive to recover your initial investment!

Set specific dates for certain results. How do you get to them? Perseverance!