The Science of Flipping - Episode 82: How To Set Your Goals For 2017 | Real Estate Investing Podcast

Episode Date: January 20, 2017

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Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. What is up? What is up, everybody? Welcome back to the Science of Flipping. I am your host, Justin Colby, and it is January 2017, and we are going to be rocking this year just like we have in years past. I'm very much looking forward to getting back at it with our podcast. We rocked the house last week to set the tone for 2017, so this is going to be another great episode to get this year started off right. This is, again, the first month of the year, the first week of the year. You guys have the opportunity to create what you want from this year. As I talked about last episode, it's all up to you. You get to be

the person who can set your life, create your life by design, create anything you want in this, but you have to do it, right? As real estate investors, as entrepreneurs, we all wish we could just make the big checks and do what we see on TV, and that's just not the case. So I made this podcast, and I've been on iTunes for several years now, and this is the number one ranked

real estate investing podcast to give you the systems, the tools, the implementation, the organization for you to create your real estate investing business. That means wholesaling. That means rehabbing and flipping. That means buying and holding, developing. I've done it all. I'm here to give back to you guys all of the secrets and systems

that I use in our business to create a very, very successful real estate investing business here in Phoenix and in Dallas, Texas. So I am here giving back, and so at the start of this episode, for those of you who are new to the podcast and you decided, hey, I want to get into 2017. I want to get into real estate investing and hit the year strong. Welcome to real estate investing. Welcome to the Science of Flipping. If you haven't been to the website, check out the website, thescienceofflipping.com. I actually am giving away for free my number one bestseller on Amazon called The Science of Flipping Books. Go to The Science of Flipping.

I'm giving this to you for free for being such a loyal listener. As a matter of fact, one of the things that you'll see new for those who are coming back, and maybe you've downloaded the book and have been listening for years, I've been getting a lot of requests for people that want mentoring, coaching, help. They want to be around me, my team, Kent Clothier, Sean Terry, and others that we work with. And so we are giving an opportunity for you to fill out an application. This is an application to one of our boardroom masterminds with myself and Sean and Kent and several other, about 20 other top real estate investors from across the country.

And for those of you who are interested in getting that help, there is a button that says mastermind and apply now. Go ahead and click the button, apply, and one person from my staff and or even myself might reach back out to you if so chosen to be a part. This is very exclusive. This is not come one, come all. You have to be accepted. So be honest and sincere in your application. If you're just getting started, we need to know that. If you are making quarter million dollars a year investing in real estate, we need to know that. Make sure to fill out the application. We will review it. And if we believe you are a good fit,

we will call you to talk further about what the next steps are. So for those of you who are loyal listeners, thank you. We are now giving you the opportunity to fill out an application for our boardroom mastermind that meets three times a year. I mean, it is killer. With myself, Sean Terry, Kent Clothier, you don't want to miss out on this. So fill out the application. Just be honest. Be sincere. Let us know where you're at so we can help you.

So now that that's all said and done, guys, let's jump into this episode. It's the new year. As I mentioned, as we all know, it's January, let's jump into this episode. It's the new year. As I mentioned, as we all know, it's January. It's all about goals. It's all about starting your year off right. I think too often people talk about goals. I wrote down some notes about what I really want to talk to you about goals. They set goals in this broad manner. I want to become a real estate investor or I want to make a million dollars in real estate investing this year or I want to do a hundred real estate transactions or whatever. But they don't actually have any measurability to it.

And so the first thing I want to talk to you about goals is a lot of times goals are set in the wrong area, right? That means you're going to have to put energy in areas that aren't the important areas. And so when you're setting goals, you really want to make sure they're considered smart goals. There's an incredible book out there called Traction. I have read it now two and a half times. I'm halfway through the third time I'm reading it. So it's an incredible book, but it really gives you some tools to start giving guidelines to how you set your goals. Some people say, I want to lose a hundred pounds this year or gain a hundred pounds of muscle or whatever, which is great. But now you need to really realize, you need to prioritize how you set your goals.

Okay, so I call them SMART goals, the book calls them SMART goals, and what that stands for, SMART goals, is strategic for S, so SMART is an acronym, strategic for S, measurable for M, attainable with A, realistic for R, and timely. Okay? So in real estate investing as business owners or whatever you're setting these goals in, right, you need to make sure that they are strategic, measurable, attainable, realistic, and timely. So is it realistic for someone who might be just listening to this podcast and thinking, I want to get into real estate investing and I know you can make seven

figures. I know Justin talks about it all the time and I want to go make seven figures. Well, that's not realistic, right? And you actually don't even know the time it takes to build a business like that, right? So you're setting a goal, which is great, but you have no, it's not realistic at all. It's not attainable for you because you don't even know what you're doing yet. You haven't even got your first deal done yet, right? So you need to make sure these goals are set in a way that they are smart goals, right? So strategic, measurable, attainable, realistic, and timely. So you can build a spreadsheet for yourself.

You can write them out on a Word document. But getting into real estate investing, if this is your first time, or even if you're experienced, right? So we did our end of the year meeting last three weeks ago, four weeks ago in December, maybe about three weeks ago, right? And the end of the year meeting had to do all about running the numbers and analytics of what we found in 2016 and setting the goals for what we are going to do moving forward

in 2017. And so some of the stuff that we really wanted to do is we are getting deals done specifically wholesaling that are making us roughly $12,000 per deal. Well, in 2015, we were at $18,000 per deal, right? And so we saw a decline in average profits in 2016. So one thing we've now decided to do is we are not going to let the seller negotiate with us and give us anything less than what we believe is a $15,000 profit. Now, if we're off or something happens or our buyers aren't hot in that area and we are unable to sell it for $15,000, then so be it. But we have a strategic goal of every single deal this year has to be above $15,000. That is our strategic goal, right? That's goal number one. It's very measurable

because as we sit down every week, every month, every 90 days, and I'll talk about that here probably in the next episode and all about our 90-day goals. You want to make sure that you can follow what you're doing. Is it attainable? Is it measurable? I can measure every week, every month, every 90 days. So now we know where we need to fix. If we're getting deals in all the time that are $12, 10 grand, 8 grand, we're not negotiating well enough. We just simply aren't.

Now we need to know where we need to fix. So we need to fix our negotiating skills, right? Is it attainable? Absolutely it's attainable. I'm not saying I'm trying to get $35,000 every single wholesale deal. I'm saying I'm trying to get 15. I know it's attainable because in 2015, we made $18,000 a deal, right? So I know that that is attainable, right? And so for those of you out there, that's a good baseline. The national average for wholesale

deals is $10,000. Now for me, when we fix and flip, we don't want to do a fix and flip for anything less than a hundred thousand dollars. I don't want to, it doesn't make any sense because of the time it takes to make anything less than a hundred thousand dollars and, um, deal with the contractors and them being late and them being over budget and possibly the city getting involved for adding square footage, whatever that means, it doesn't make any sense. If I can go do two or three or four or five deals averaging $15,000, I mean, I'm right there. I don't have to deal with any of the outside people, right?

So I don't have all the X variables. So again, strategically, we want to make sure that we're at $15,000 every wholesale deal. Is it measurable? Absolutely. Cause we meet once a week. Um, and we can look at it monthly and then every 90 days is attainable. Yes. Because we've proven we could do that back in 2015. Um, is it realistic? Absolutely. Again, cause we've proven we could do that back in 2015. And is it timely? Yeah, that's a goal that is timely because we're actively out there doing deals. So we can start measuring it this week, right? For those of you who are as a wholesaler,

those are things you wanna be able to measure, right? How many doors are you hitting? You need to measure all of your business and I'll get to that in future episodes here. But right now I just want to talk to you about how to set proper goals, right? Make them smart, strategic, measurable, attainable, realistic, and timely. Now here's the thing. If you do it in that way, you can hold yourself and or your team accountable, right? So you might have two people, like we have an office of five people, right? That's not including myself. That's not including

my business partner. That's not including any of our contractors, right? That's including two follow-up people, two acquisitions people, and a dispositions person, right? So, uh, we have a office full of five people that work this business full time. Um, and so for me, it's very easy for me now to, uh, hold them accountable, right? So if we're just talking about making sure we have an average $15 or $15,000 profit on our wholesale deals, very easy for me to do because we meet once a week on it and I can measure it and I can look at it and I can tweak it and I can say, this is what you need to do. And why did this deal get less than $15,000? Why didn't you say this? And I can make them better. I can hold them accountable. And quite honestly, if my acquisition manager can't average $15,000 per deal,

I need to go find a new acquisition manager, right? So I get to hold them accountable and make my team better. Now for you, if you're a solopreneur, right, you're doing everything by yourself, which we've all been there, you get to be able to measure yourself, right? And where are you missing? Where are you dropping the ball? It makes it so that you can hold yourself accountable. Even if you're a solopreneur, you need to be meeting with yourself once a week, reviewing your numbers, reviewing your goals at least once a week. You might even

be able to do this daily if you have daily goals, right? Let's say you have a goal that is, I need to call 20 other investors every single day. Well, in the morning you wake up, you look at your spreadsheet and you say, okay, I called 22. I'm good for yesterday. Now I got to hit another 20 today. Right? So you can hold yourself accountable and you can do this every single week. Um, there are absolutely way weekly check-ins, right? And then what we would then do is we want to do, um, 90 day deadlines on those goals. Okay. Um, so for example, uh, you know, an immediate goal is to have $15,000 per deal. Um, so at the end of 90 days, we review all of the deals that we do. So let's just call it 15 to 20, give or take, um, wholesale deals that has nothing to do with any of our, uh, hotel deals that has nothing to do with our rehab deals. It has nothing to do with our buy and hold deals, right? This only has to do

with wholesaling. Um, we get to look at it and we say, okay, 90 days later, what was our average profit per deal? And if it's less than $15,000, I get to hold them accountable. I get to make tweaks and changes where I believe need to be made, and they get to go after it. Now, if we're way off our target, well, now, again, I got to start making decisions. Maybe I have the wrong person for the role. Maybe I need a hire. Maybe we need to change how they're meeting with the seller and negotiating. I might go shadow them, right?

So I have these 90-day, the book Traction calls them rocks. I just call them deadlines, right? I have a 90-day, the book Traction calls them rocks. I just call them deadlines. I have a 90-day deadline. We're going to review the progress we're making. But I have these weekly check-ins every single week. Our company comes in, the entire company comes into our office. So we have seven people in my office. And we sit and talk about exactly every single deal, the profits per deal, what deals are closing, what deals are on the works, what are we buying and rehabbing, what are we buying and holding.

Whereas the progress on the rehabs, whatever that may be, we review them, right? Now, when you do set a goal, that one goal needs to have someone responsible for it, okay? So that's another part of what I believe people mess up as far as business goals they mess up this aspect of it right now again if you're a solopreneur you're responsible for all of it that's that's what it is now if you have a team if you're here and you're making money and and you have acquisition people and you have disposition people and you have marketing people and you have VA's and you have marketing people and you have VAs, someone has to be accountable for your goals, right? Because you are, um, you're leveraging

their time and you're leveraging them to do those activities. So you need to hold them accountable for whatever that is. Now they might even have a team, right? Uh, but it doesn't matter. There's only one person held accountable for the goal that you're trying to achieve, right? But it doesn't matter. There's only one person held accountable for the goal that you're trying to achieve, right? It just simply doesn't matter if they have a team, if it's not just them working on whatever goal it is. You have one person that is reporting the goal. They're holding the flag saying, this is my responsibility to make sure we reach this goal. And you have to make sure you hold them accountable, right? And then you have your quarterly 90-day meetings.

So you meet quarterly every 90 days. You meet, you look at what you've built as far as a strategic goal. Is it measurable? Is it attainable? Is it realistic? And then is it timely? Right? So you got to make sure all those things can happen. Because what I looked at is I started building a financial model that we are potentially going to go with for payment of our team now.

And it's very unique. It's a little different. Not 100% sure it's going to work. But while I'm building it, I'm also looking at all of these characteristics. It strategically benefit, it will strategically benefit our company, right? So it's strategic in that. It's very, very measurable, right?

It is absolutely attainable. Is it realistic to believe we can build it that way? I'm not so sure. That's the one I'm not sure about right now, but it is absolutely timely, right? So I'm looking at when I'm building this model out, I'm also looking at that, right? Is it realistic to implement right now, and will it be done in a timely manner? Not sure, right? So you have to look at it because when I started this episode out by someone saying,

oh, I want to make a million dollars in real estate or I want to do 100 or 200 deals. I want to do what Justin does, right? Well, that sounds great, but you're not making sure that it's realistic, right? And then you're also basically creating an annual goal, right? You're saying, I want to do a million dollars a year. Well, what are you going to do a month? What are you going to do a week? How many deals do you have to do? What's your average profit margin, right? You have to

break out and break down your annual goals, right? Into quarterly goals, your 90 day rocks per the book traction, right? And then from the 90 days, you can break down monthly and from monthly, weekly, and weekly, daily, right? That's how you got to treat your business. You can break these big goals into smaller chunks. So you can measure yourself along the way. Am I making progress? Am I making progress? And that is how you set goals.

So remember, you have smart goals. Get goals that are strategic, measurable, attainable, realistic, and timely, and start doing it now. Do not put it off for next week. Do not put it off for next month. It is today. Write them down in a notebook. Write them down in an Excel spreadsheet. It doesn't matter. Start setting your goals today. It doesn't matter if we're talking about business. It doesn't matter if we're talking about health, weight, finances. I set out at the beginning of 2016 to say, I want to save $100,000 in my pocket. I want to save $100,000 and I did it, right? That was one of my goals. So I knew how much I had to save every single week, every single month to get there, right? It's not very difficult per month. So then I'd broke it

down by four weeks a month and I was able to get there, right? I made some very good investments. They panned out. I was able to put that money into savings and I got to my goal. It was very strategic. It was very measurable. It was very measurable. It was very attainable. It was realistic and it was timely. I had a whole year to do it. So it doesn't matter if you're trying to save money, trying to make more money, trying to start a business. Get yourself some goals and make them smart goals.

All right, guys. So that is the episode. That is what I got for you. I'm going to be hitting you hard and heavy all year long with some great stuff. Again, all of the systems, the tools, how to implement, how to grow, how to scale, how to hire. That's what this episode and this podcast, The Science of Flipping, is about. If you're a rehabber and a fix and flipper, you're going to love this. If you're a wholesaler, you're going to love it.

If you're a real estate investor in general, this is where you want to be. It's absolutely free knowledge. Again, go get my free book, The Science of Flipping. You can download it for free on my website. Otherwise, Amazon is $10 and it's selling like hotcakes. So get it for free if you're a loyal listener. Also, if you want to be a part of something special, a part of a collective group of real estate investors

doing things, making money, building businesses, myself, Sean Terry, Kent Clothier, and many other very successful real estate investors, and or if you're a beginner and want to be part of a beginner group, fill out the application. See if we can get you accepted into our mastermind. They're very small, very intimate,

but it will change your life. It will change your business. It will get you going. The button that says mastermind, click the button that says mastermind, fill out the application, and we will get you going. All right, guys?

So that is it. I'm Justin Colby, and I'll see you on the next episode. Peace.