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Monday, November 26, 2012

Finding the Next Investment and 2012 Goals

Since the last house flipping project is now closed and in the books it's time to move on to next item on the goals list. I have been evaluating my goals for 2012 to see what is still left to be done and what's in store for 2013.

You might have noticed I have not been very active on the blog or on the site but that is because I am focusing on other goals and some work on the site instead of in the site. Not to mention dealing with several issues with my rental properties.

First off, with the sale of House #10 I have now achieved my two main goals for 2012. These goals were to flip two properties with an average $30k profit and to achieve a certain amount of income for the year. I am happy to say that we have done so two months before the year is over. Which only makes me wonder if I set my goal too low…

Such is the challenge when setting effective goals.

Anyway, now that those are done I have turned my attention to other areas that had taken a back seat. I am still searching for more real estate but now I am looking for a rental property which much to my surprise has become very difficult.

The foreclosure inventory in Atlanta has decreased significantly over the last 6 months as you can see from the following chart:

Notice the gigantic decrease in foreclosed inventory in September and
October vs. same time last year! This is only for Fulton County (data courtesy GAMLS).

I really don't know what is going on because the number of foreclosure notices and actual foreclosures has not gone down that significantly. So where are these houses that have been foreclosed on?

Talking to other investors there is an impression that big time investors are buying houses by the thousands, even before they make it to the open market. Therefore leaving very little for the small time investor like me... 

So even though I have been making a lot of offers I haven't even gotten close to getting an offer accepted. My challenge is also that I am making offers that are financed, since I will be buying the property with a loan, instead of my usual cash offers. So now I am getting beat by other (desperate) investors paying cash.

The reason I want to buy with a loan is so that I can leave my cash alone and use it to buy properties for flipping. Also, the loan that I can get right now has very low interest rates and this would give me great cash flow in a rental property that meets the criteria I want.

I am looking to purchase something that will rent for at least $1,000/month and would give me $500/month cash-flow. Meaning that after all the monthly bills are paid (mortgage, taxes, insurance, reserve fund, etc.) I still get $500 per month left over. I also want to get at least an 18% cash on cash return. Finding a property that gives me these returns in the area I am looking is challenging but doable.

I have also been looking forward to 2013 and planning what is next. I figure that if I achieved my income goals for this year I need to raise them for the next... At the same time I am in the early stages of researching a new business opportunity that could develop into something pretty big for us but it's too early to tell.

Finally, I have been spending some time behind the scenes working on this site. You see, papa Google has such a dominance of the Internet that when they make changes to how they rank and evaluate websites everyone has to follow suit. So I am catching up with some rule changes they have made over the last year.

Anyway I find that ever since I started writing down my goals several years ago and started tracking my progress I actually started achieving them…imagine that! Hence why you see ten successful real estate investments. Those were all a result of planning and goal setting.

I find it very useful to evaluate my successes AND failures and gather lessons learned. I encourage you to give it a try if you haven't done so. 

What you have been working on in 2012 and what you are looking forward to in 2013?

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