Goal setting for real estate investors is critical for achieving what you hope to accomplish in real estate. Several studies have proven the effectiveness of goal setting. When you have your destination in mind, you're just, flat out, far more likely to actually get there. But are you setting goals correctly? And if you are setting goals, is there anything you're missing that could take you to the next level? What you're about to discover is how real estate investors should set goals.
Setting Real Estate Goals Correctly
Although there are far more exhaustive descriptions of how to properly set goals, here is how to set real estate goals correctly. Picture goal setting like performing a Google search. The more detailed and descriptive you are, the more accurate your results will be. However, if you are overly detailed, Google may return no results. There is a balance of the degree of description to hit the sweet spot.
A common real estate goal some new investors make can sound like this, "I want to do my first deal within 3 months." Let's dissect this:
1. Timeframe: Giving the goal a timeframe, in this example, 3 months, is excellent. Every goal requires a timeframe. A goal with no planned completion date is just wishful thinking.
2. Specific Result: A result of, "doing my first deal," is not specific enough to be helpful. In fact, it could be detrimental. For example, you could do your first deal and lose $20,000. That's probably not what most people would define as a "deal". Instead, this goal should be much more specific, such as, "Buy my first positive cash flowing rental property that earns at least $100/mo without using my own cash or credit" or "Close my first deal and earn $5,000 or more."
3. Avoid Detailing the "How": This example also correctly avoided detailing how the specific result would be achieved within the planned timeframe. Why can detailing the how be such a problem when goal setting? Overly detailing how you are going to achieve your goal can inadvertently pigeon hole you into very few options for making the goal happen. A good example of this occurs when a beginner makes the goal, "Do my first wholesale deal and earn $5,000 within 3 months." The problem is that this goal restricts this person to just wholesaling. What if a wholesale isn't your fastest and best route to money?
I recently spoke with a beginner who shared this goal with me and then later in the conversation, said that he got his real estate license but he had no interest in helping a buyer find a home, even if it was a doctor looking for a $500,000 home. Huh? Quick math would reveal that 3% of $500,000 is $15,000. Why would anyone who wants to do a wholesale deal and make $5,000, have an issue with making $15,000 as a buyer's agent? Money is money. It all spends the same. In fact, if you are licensed, representing a highly motivated retail buyer of a large home can be quick and easy money. Far too many investors, either through pride, or arrogance or just plain ignorance, can get too pigeon-holed in their thinking of how they are going to reach their goals.
4. Review Often: This is perhaps the biggest mistake goal setters make, they write down their goals and then never read them again! At a minimum, review your goals monthly, but far better is once per week. When you review them, ask yourself how far along are you in reaching each goal. Think through what adjustments, if any, should be made to make sure you hit the goal. If you don't know, ask yourself, who should you ask? What can you read? What can you do differently to get closer to your goal?
Note to Christians: For Bible believing Christians, the most important step in goal setting is to pray for the Lord to reveal to you what His goals are for you. There is an old saying, "If you want to make God laugh, tell Him your plans." Christians throughout history have discovered that setting their own goals that they think will also serve God were not nearly as productive as asking God want He wanted for their lives and then pursuing God's plans. Phil Vischer, creator of the wildly successful Christian cartoon VeggieTales, learned this lesson the hard way. His book, "Me, Myself & Bob" is fascinating and a great book for any Christians in business.
Danger of Expectations
Expectations are very different from goals. Expectations can be very dangerous. In his book, Man's Search for Meaning, Victor Frankel describes a discovery he made while imprisoned in a concentration camp during the holocaust. He watched who survived and who didn't make it. Who were the first to die? The people who set expectations by telling themselves, "We'll be out by Christmas." Well, Christmas would come and go and they would still be locked up. Their spirit would be crushed and they would lose the drive to survive. The future is unpredictable and their are many things that are outside of your control. An example of creating an expectation for real estate investors would be to plan on quitting your job in 6 months. Certainly that can be a goal, bu if 6 months comes and goes and you are still at your job, that should crush your spirit or reduce your enthusiasm.
When You Don't Reach Your Goals
When you don't reach your goals, rather than get discouraged, ask yourself what you need to do differently in order to get there? Who do you need to ask? What do tou need to learn?
If your lack of results is bringing you down, you can also take a page from the Holocaust concentration camp survivor book. Associate meaning to your challenges. Frankel found that the people who associated their experiences to something of deeper meaning, such as ensuring such human atrocities would never happen again, were the most likely to survive. Rather than ask yourself the destructive question, "why does this always happen to me?" instead, tell yourself that the roadblocks you have hit, have occurred for a reason. You may not know exactly why you have struggled, but attributing meaning and purpose will ensure you grow from your experiences and become that much more equipped to achieve and exceed your goals.