I've been thinking about how well I did Vs my goals for 2007 in my real estate venture. I've been told that if you write down your goals and review them daily you have a high chance of making them. But that doesn't seem to be the case in our situation.
I did buy 3 houses this year, but since I didn't sell any properties this year, I look at my entire plan as flawed. Flipping houses in this area takes much more expertise than I have at the moment. Watching all the flip shows on TV where clueless people do everything wrong and still make $100K just discouraged me most of the second half of the year.
But I did meet some of my sub-goals:
I did find over $720K of funding although I did not seal the deal on the major source ($500K), so I ended up having about $220K of funding available but did not use any of it. The major source was going to cost me $6500 to finalize the deal (I did get approved) and I borrowed that money from Prosper but by the time it came around to paying out the money and signing the papers, I started to realize I was not going to sell my rehab and was stuck with a $2300k per month payment to make, so I bailed.
We did do direct mail all year to pre-foreclosures but again, do to the failure to sell any properties we scaled back our advertising to just those properties in growing towns. This amounted to less then 20 letters per week which isn't enough to really do any good.
The third goal we just didn't do after our first 2 purchases in February. When we couldn't sell the wholesale property quickly and realized I would need much more cash for the rehab I only worked with pre-foreclosures and only made a limited number of offers to banks for short sales.
I did get an operations manual in place which has been a really good way for my wife and I to communicate about what to do.
I see that most of the sub-goals were geared towards buying property and not towards selling. There were several strategies we tried for selling properties: FSBO, flat-fee listing, full service Realtors, E-bay auctions, The "Sell Your House in 5 Days" strategy and Rent-to-own. The last was the the only success that I had, which doesn't get me any of the equity out of my houses.
So now I am in the position of many real estate investors - lots of equity but little cash.
I had hoped to double the number of houses bought and sold next year when I first devised my 2007 goals, but now think that I will scale back. My experiences buying in areas where population is declining echoes my 1980's real estate experiences in WV.
In the next month I hope to come up with a plan for 2008, but for the next couple of weeks will focus on moving and fixing my current residence so I can market it as a Rent to own house.