It’s almost a wrap on my second year in real estate investing – my first year doing it full time – and holy hell has it flown by quick. The most amazing part is how much I’ve learned. Looking back at my 2018 goals reminds me how much my knowledge of methods, strategies, execution, and possibilities has grown.
So what were my 2018 goals and how did I do with them?
In early 2018, I set goals based on gaining a lot of knowledge over 2017 as an investor. Little did I know how much more I had to learn. Some of them I killed, some I didn’t; some I completely abandoned to focus on other items that I found to be smarter plays as I gained more experience.
- Purchase five single-family rental properties where we can get into them with at least 20% in immediate equity that cash flow at least $300 per month each. – We only acquired two new rentals this year. One was a flooded house we flipped and kept as a rental and currently own at 67% LTV. One was a house we acquired via sub to and now own at 60% LTV. This brings our rental property portfolio up to 5 properties worth $710,000, capturing us $106,000 in net equity, that are cash flowing $17,700 per year – an average of almost $300 per month per rental. Keep in mind, we maintain our properties well and are big fans of fixing one problem before it creates three more.
- Do three straight flips netting at least $25,000 each. – I ended up completing seven flips this year, with three more currently in progress. One thing I didn’t really think about when I set this goal was that I had a commission split setup with my Katy Home Team partner. On my first ten agent transactions (which I finished up with during November), she got 50% of my gross commissions. She made a little over $28,000 off my MLS activity this year; money that in the future I’ll keep much more of as profit on my flips. I had one flip lose money due to being lied to by the seller. Legal action is in progress surrounding that, so that’s all I can really say on it at this time. One didn’t do as well as we hoped but still turned a profit. All things said and done, I averaged about $14,000 per flip with commissions removed. However, our three still in progress flips are on track to average significantly more. You live and learn.
- Do three wholesale deals – I’m less concerned about the amount of profit from these at first and more so on gaining the experience in the process. – I ended up wholesaling two properties this year. I also learned I really don’t like doing so; I always end up wanting to keep the deals I find and flip them myself. I partnered up with someone on each deal, and my cut was about $11,000 total from those two deals. I feel more confident in doing these deals now, and I’ll continue to do them when applicable, as they’re part of the game.
- Increase available funds from our private money lenders to at least $600,000. – I killed this one and have access to more than 1.2 million in private funds as of December 2018. I’ve also been in the beginning processes of working with a small bank to begin handling the refinances of my rentals.
- Get my real estate license – I have already taken and passed the state and national exams and am waiting for TREC to approve my application. – Though I passed my test in November of 2017, my agent application wasn’t approved until March of 2018. I am now a licensed real estate agent.
- Launch my real estate agent websites. – I launched two agent websites, but quickly realized I didn’t want to maintain or promote two websites and consolidated them into one – Buying Katy.
- Be generating at least three closed agent referral leads per month by the end of the year. – I thought I’d be focusing much more on lead generation with my real estate license, but that hasn’t been the case. My license has been invaluable to me this year from an investing perspective, but I’ve found my passion is much more rooted in the investment side of things. As a result, this goal has grown dusty. However, I did discover a new strategy for utilizing my license on the investing side and plan to do more of it this year.
- On a personal note, we’ve sold our primary residence and will be moving into a new one in mid-March, so we need to get that done and deal with some minor chaos for a few weeks as a result. – It was complete chaos, but we moved!
- Do a full renovation of my husband’s office space in our new home. It’s currently a dated 1,100 SF space with a small but not very functional kitchen and a half bath. – This is complete and gorgeous. I estimate I’ll get a nearly 100% return on this when we sell the home.
- Grow our meetup to 1000+ members, with an average attendance of 100 per meeting. – We haven’t held a meetup since March, but we grew from 600+ to 800+ members despite that. I won’t give any excuses. It simply didn’t end up being the level of priority I originally envisioned it needing to be to my end goals.
Items that weren’t part of my initial goals for the year, but happened anyway:
- We did two owner finance deals – We are the bank for two people who bought homes from us this year. We refinanced the properties at 80% LTV for 20 years and wrapped them. Thanks to a bad appraisal, we had to bring money to the table on the refinance for one of the deals. All in all, we paid $8,000 cash out of pocket for the two properties after down-payments from the buyers and will be collecting interest on the notes for 30 years with a cash flow of $350 per month. This number should have been higher, but a rookie mistake by me was a lesson learned. The concept of owner finance is really intriguing to me. You still cash flow, but you have none of the responsibility for maintenance, etc. Of course, you also don’t own the asset at the end of the mortgage either. But it’s an interesting strategy I was happy to learn and gain experience with. It’s a strategy I know I’ll use again.
- I did two Subject To transactions this year. – Subject to is when you buy a home subject to you continuing to make the original mortgage holder’s mortgage payments. It’s not an assumption. You simply have the deed providing you perform. This allowed us to capture one really high equity rental and helped one person avoid financial distress when she didn’t have enough equity to make a straight sale. That second home we flipped for a 142.86% return in a three month period. Once again, a new strategy I wanted to gain experience with after learning about it, and one I’ll use many more times in the future.
- I did three retail transactions this year. – I didn’t have a goal to do any retail business as an agent this year but ended up doing it three times. Once as the listing agent, and twice as the Buyer’s agent. All of those were part of my first ten MLS transactions, so after paying my broker and my team lead, I netted about $10,000 on those transactions.
- I quit smoking. – Not really real estate, but, yep. I had my last cigarette on June 17th. I quit cold turkey. It. Was. HARD. I don’t regret quitting, but I still miss it.
$54,184.49 – That is the amount our private lenders earned in interest during 2018. Interested in learning how to make your money work smarter with us? You can contact us here.
What are my goals for 2019 in real estate?
Again, a hat tip to Invest Four More for inspiring this series. It’s been grounding for me to work on my goals knowing I’ll need to be accountable for them in this post at the end of the year. Looking back on last year’s goals, and seeing how much my skill set and knowledge has grown made me excited as hell to sit down and really think about my goals for 2019 – both personally and professionally.
So here we go.
- Add ten single-family rental properties to my portfolio where we can get into them with at least 20% in immediate equity that cash flow at least $300 per month each.
- Do twelve straight flips netting at least $240,000 total.
- Do twenty-five wholesale deals netting at least $125,000 total.
- Do three owner finance deals.
- Secure refinancing relationships and options for my rental properties and wraps with a small community bank.
- Continue to promote my Katy real estate agent and Houston house buyer websites and increase organic traffic YOY from 2018 by 300%.
- Continuing to build upon and expand the capabilities of my in-house lead analysis, lead management, and marketing software.
- Setup a line of credit available to use when my private financing is maxed out.
- Take the required continuing education credits for my real estate license.
- Do four retail transactions this year.
- Purchase my first multi-family deal.
- Lessen mortgage debt in order of expense.
- Have our Katy-based meetup hold two networking events.
- Launch a supplemental and complementary business.
- Read six business-related books.
- Remain smoke free.
- Workout at least six days per week. This probably seems like a personal goal, but the effect it has on my business in the form of motivation and energy is significant.
I look forward to updating y’all in 2020!