At the end of each year we have to plan for the upcoming year. For each type of business, this readiness will be different. This year, I am looking at it as a real estate investor and a probable residential home buyer as well.
My plan becomes my strategy. If I stick to a good plan, success will follow. If I already viewed 8 potential properties in October and November, I have an idea on what I plan to do for 2016. If I have a spend budget for investments of $500,000. I know that I have to screen these properties for most potential revenue for each property.
I also have to look at potential turn time for each property and about how long it will take to fix up each property. Therefore, I need to go back to each property and do a detailed analysis of each one. Initially, for each property, I need to know what the purchase price is. Then, I need to have a very good idea of what the repair costs will be. Based on the neighborhood, about how long will it take to resell the home.
With this in place, what profit can I anticipate. What do I have to sell the home for to make a reasonable profit. As I analyze each home, I need to figure this out. If the first home that is reviewed will cost $160k to purchase and repair, is it worth it. I find out that similar homes in that market sell for $210k and normally sell in about 3 months. If this holds true, this home may be worthwhile.
In analyzing home number two, the cost of purchase and repair is $225k. Similar homes in this market sell for $225k. I will leave this one behind.
For house number three, it is a little more upscale. However, with an initial investment of $300k which includes repair, I may be able to turn it for $550k. The homes sell fairly quickly in this neighborhood. The initial investment is fairly low because the home is a little older. However, original owners will still make some money off of purchase price. We will go after this one. We know that it will limit other purchases unless we can get some investors to add to our original $500k.
It is important to do the analysis required to make good decisions. The reason you invest is to make profit at some point. The profit needs to be worth your while. Except for the non-profits, businesses are in business to make money. So, Get your share.
Be ready for 2016, take a reasonable amount of time to evaluate your start for 2016. Make the best choices for the success of your business. A good first quarter may very well bleed into a successful second quarter. Plan for each quarter with the diligence that is expected to succeed. The extra focus on details will help bring in 2016.At the end of every year, we are asked if we are ready for the up