WHATS YOUR INVESTMENT STRATEGY?
What exactly are you trying to achieve?
So, you are currently investing in Real Estate or are you thinking of investing in Real Estate? Have you ever sat down and thought for a moment what your investment strategy is or what you plan to achieve? You know the saying, “Failing to plan is planning to fail!” which I think was first said by Benjamin Franklin. Is it Commercial real estate, Residential real estate, flipping, holding long term or short term, or are you doing a 1031 somewhere, sometime to grow? What exactly are you trying to achieve? Do plan at staying at your current job and just having a few rentals for added income or enhanced retirement? Or do you want to stop punching the time clock and work for yourself some day? Are you self-driven enough to take on a fixer upper whether it is to keep and rent or sell for profit? How about 20 to 30 some flippers or fixer uppers per year? These are the questions and more that you should have some sort of answers before you dive in!
My father’s plan was to buy rental houses each year till retirement and then sell a house each year thereafter. I believe the plan to sell was to do a Land Contract on each sale and live off the monthly payments. That plan did not go so well when I came on board and we bought out another property owner and grew beyond selling a house a year! A few years later, my sister joined in and we bought even more till we had a significant number of units. We had single family rentals all the way up to large apartment complexes. After owning some buildings nearly 27 years, and using up the depreciable life, perhaps this plan was not the best since it did not fit what property we owned. We never really made a new plan till the time came that we had to and there were less options available to us! Whether the plan was good or not, is not the most important, but at least there was a plan and a goal. Obviously, a good plan is the best, but no plan is the worst! In our case the issue was that the exit plan needed to change to match the growth plan!
But imagine the folks with no plans and the missed opportunities or the taxes they paid unnecessarily! It is important to develop a plan and follow it. It is also important to recognize when a plan needs to change to adapt to changes in your life or new goals. It is important to seek out professionals to help you achieve your plans. Yes, professionals cost money, but the save you more money in the long run! This could be the right person who helps you properly do a 1031 Exchange that avoids paying taxes. It could be a Professional Commercial Real Estate Agent that help you understand the market and negotiate a sale or purchase of a property. It could be the Professional Commercial Real Estate Agent that helps you connect with people to find ways to exit from your current investments that then allow you to find new adventures with still receiving investment income and investment growth!
You certainly do not start with a plan and stay with that plan through your investing career, in most cases. A plan can change as your life, needs and goals change! The important thing is to start with a plan and follow it. When you find a reason to make a change, then make the appropriate decisions with the appropriate professional help. There is also that saying that you can die with the property to avoid taxes….but is that really your goal? At some point your investment strategy needs to turn into an exit strategy. That exit strategy does not mean an end to your investments, just a change in how you manage them, and the time your involved.
So, the lessons of the day are to make a plan and follow it. Recognize when the plan needs to change. Engage professionals to achieve the plan. Determine what you exit strategy is or better yet, determine your life simplification strategy is to change your investments when it is time to change your life!
Please contact me today and let’s talk about your investment strategies or your exit strategies! We can work to form a plan for what your real estate investment future looks like!
Chris Mokler at 920-279-6104 or chris@cjmassociates.org.