Throughout life we end up setting plenty of goals for ourselves. Some of them we achieve, others we don’t. Some are small and some are big. Some of them we keep to ourselves and others we shout to the world. Simply said life constantly changes and so do your goals.
There’s theories out there on whether or not it’s best to tell others what your goals are. This post isn’t about what’s right or wrong, I’d say just do what works best for you. For me though, I have personal goals that I don’t share and I definitely have plenty of goals that I do share. I’ve shared a number of goals on here that y’all have had a chance to read about.
Back in March of 2018 I posted about my real estate goals. It was called My Plan to Acquire 10 Rental Properties by 30. When it comes to my real estate goals I try to be vocal because 1) I believe in the power/opportunity investing in real estate has and 2) I hope to inspire others to to go out and achieve whatever it is they want to achieve, whether it may also be real estate investing or something totally different.
I bring up the old post because as I said, life changes and so do our goals. The goals I have now in regards to building my real estate portfolio are different then what I’ve talked about before and I’m sure they’ll change again in the future, but I want to keep y’all updated.
Dreaming Big
Back in the summer of 2018 I went on a vacation to Naples, Florida with a friend of mine. Overall I’d say we both had a great time. It’s a nice city with plenty to do and it was really just nice to get away and relax. It’s always nice to get away haha.
A part I really enjoyed though was my time in the morning. While my friend was still sleeping, I’d wake up early in our AirBnb, pour myself a cup of fresh coffee that our amazing host brewed, then head to the back patio where I’d sit and enjoy the outside as I’d reflect on how my life was going and where I’d like to head in the future.
Part of that reflection was mostly dealing with my investing and how big I’d like to build my business. My state of mind mostly had to do with the fact that I was in Naples. It’s a town where a lot of wealthy are and right down the road from our AirBnb was a small airport that catered towards private jets and the wealthy, so during the entire stay I’d always be seeing planes in the sky and asking myself, “what if?”
I’ve always been a dreamer and I’ve always wanted to be wealthy. Combine that with the belief that anyone can make it happen and that’s where I am. With all of these thoughts and experiences mixing together I started asking myself, “what would it take/how much money would I need to achieve a lifestyle of flying on my own private jet?”
I’m sure everyone can guess that it takes a lot of money. First you have to purchase the plane, then pay for all of the fuel, pay the pilot, pay to have it stored, pay for maintenance, and plenty of other things that I’m just not thinking about right now.
This type of thinking excites me and I love dreaming about the amount of money I’d need to make in order to not even be affected by spending millions in a year. It excites me and makes me want to go out to do more and more!
That being said, I sat down and started looking at numbers, just doing some basic math. For example, if I needed to earn $5,000,000 and made $200/door investing in real estate, then after all expenses how many doors would I need? (ahh, takes me back to math class). In order to make that I’d need roughly 2,083 doors producing a solid $200 a month in cash flow. That’d be crazy! At the same time though it’s also possible and others are making it happen for themselves. There’s people out there that have double that amount and more!
Even though it’s super exciting to think about making $5,000,000 a year, you also have to think about how you’d make that happen. I have 3 houses right now. How the heck am I going to get from 3 doors to 2,083? I’ll tell ya right now it won’t be by purchasing more houses!
Weighing Needs vs Wants
At the same time I started weighing my needs vs my wants. I always start considering this especially when I start reading material by Chad Carson over on coachcarson.com. He combines real estate investing with the FIRE community (Financially Independent, Retire Early). In this mindset, you start considering what it’d take to cover your basic expenses in order to retire early and live a life doing what you’d like. So, say you’re monthly expenses are $5,000. How many properties (or doors) would it take to reach that?
Using the same $200/door example it’d take 25 doors. What if though we could make more money per door? I mean 25 doors is still a lot to manage for people even if you do hire a property manager. So how could you have less properties, but still make that $5,000 that you need a month? You pay off the mortgages!
Let’s say your principal and interest on a house is $500 (to keep the numbers easy). Now combine that $500 with your $200 in cash flow and your at $700. So now how many doors do you need? 7.1 doors. Lets go with 8 to be safe. 8 doors folks! That’s it. That seems much more realistic and manageable. Then if you hire a property manager then all you have to do is manage the person and they take care of the properties. You can then go spend your days doing whatever you’d like!
My Goal
So with all of this in mind, I looked to combine the two schools of thought, building a “large” real estate empire and also just covering my needs while being realistic.
It didn’t all come to me in Naples. That was just where all this thinking started, but it was actually months later when I came up with a goal that was both challenging (making me push further in life and get outside of my comfort zone) while at the same time is still possible for me to achieve within a realistic timeline of 20 years.
So what’s the goal and the plan to get me there?
I want to own 150 doors free and clear by the time I’m 40 years old and generate $85,000+ a month, which equates to $1,020,000 a year.
Now reading that, I’m sure a few of you will laugh, a few of you will doubt, and I’m sure a few of you believe it’ll never happen. That’s totally okay! There’s always going to be haters, but you bet if you tell me your goals I’ll have nothing but respect and I’ll cheer you on all the way.
The HOW
Alright, so how in the heck to I plan on making $1,000,000 a year?
Well, when I was in Naples I came across a video by Brandon Turner over on Biggerpockets where he discussed what he calls the “Stacking Strategy”. To simplify it all and shorten the post, the stacking strategy is the act of doubling your doors every year or at a pace that makes sense for you. You start with a house, the next year a duplex, then a quad-plex, then an 8-unit and so on and so forth until you achieve the number of doors you want.
I took this strategy and asked, “how many doors do I need to make $85,000 a month? Well the same math as earlier – $85,000/200 = 425 doors. Then I said, “well I don’t really want that many so how many would it take if I owned all my properties free and clear?”
Assuming principal and interest are $550 along with $200 we come to $85,000/750 = 113 doors. I don’t like the number 113 so I went up to 150 from there and called it a day. At that point I’d be making more money, but pretty much this is how I set my goal.
What makes me believe even more that I can achieve all of this is my timeline. If I came on here and wrote a plan on making $1,000,000 in 3-5 years I’d laugh at myself too! I know for a fact that I wouldn’t be able to make that happen. That’s not to say someone else can’t though because it’s been done by others. Really it’d just depend on how much work you want to put into everything. How hard do you want to hustle to make your dreams come true? I’m honestly a pretty lazy person and know that I don’t want to work every second I’m awake. That doesn’t work for me and enjoy taking time for vacations, drinking beer, and getting tattoos. Spending that money sets me back financially, but at the same time I want to enjoy life too and do things that I love. Even though I’m in the pursuit of be wealthy and having more money, money isn’t everything.
For me, I’m planning on taking at least 20 years to get to where I’d like to be and it may even take longer! In the first 10 years I want to focus on growth using the stacking strategy, then in the latter 10 years, switch gears and focus on paying down all of the mortgages to become debt free. Starting this process now at 25 puts me at 45. I’d say making $85,000 at 45 and being retired isn’t too shabby folks. The current plan anyways right now is to retire at 38 when I’m done with the Air Force.
Now, obviously the world isn’t perfect and the numbers in real life are not going to match with what I’m writing down. Some properties are going to make more money and some less money. As long as I’m not losing money, I honestly don’t care.
So What’s the Point?
The point of all of this is to just have a benchmark to reach for. Something that challenges me to get to new levels, makes me grow and ultimately improve my skills.
I may reach the goal, I may exceed the goal, or I may never reach the goal. Heck, at some point I may only want to make $5,000 a month. Life always changes so in the future I may want more or I may want less. For now though, this is what I have my eyes set on. Not to mention, it’s fun to just dream about it all! With dreaming though you need to take action and that’s exactly what I’m going to do!
What goals do you have?