If you scroll down to the first blog, I had high hopes for the year of 2023. In 2022 I acquired over $1,000,000 of real estate deals. I wanted to double that in 2023. I bought nothing. I blame this on a few things, and I'll start with the biggest cause.
1) Complacency.
I got very comfortable with what I had achieved. My main goal was to retire my wife so she could focus on having a healthy pregnancy. Check. Also to cover our monthly expenses so I could focus on being a full time real estate agent. Check.
I was comfortable. Why would I risk what I built?
This mindset slipped into my daily life. I stopped making my cold calls, driving for dollars, meetings with other investors. All the things you need to do to find off market deals.
2) Interest Rate Shock
I started the year on my normal deal analysis schedule. Pick 3-5 properties a day to run through the spreadsheet, call my lender to get current rates. Every time I called, the rates would be higher than what I had expected. Several different lenders. Even though rents started to increase, making things cashflow. The rates would just go up as well. I'm very strict with my investing. I never buy unless it cashflows day 1. This is probably something I'll be changing the next couple of years. Invest more for equity and appreciation.
3) Lack of Investor Relations
I had squeezed my investors dry over the past couple of years. With uncertainty in the market it was harder to find someone willing to take a risk. See everything is about return. Back when interest rates were 3%, you could pay an investor 4-5% plus equity. They were thrilled. But shoot just last month I saw a CD at a bank for 7.1%... 7.1% FDIC insured. Hard to compete with that. Creative financing is something that has to be huge the next couple of years for my business.
The final reason is the most important. I have a son being born in February. Every listed reason above can be solved by me working harder. Cold call to find cheaper deals, more meetings to find new investors, seller financing to cut the bank out completely. But the peace of mind that doubling my emergency fund brought me is worth it. The only reason for building multiple income streams is peace of mind. If you are up all night worried about money because you spent all your cash on down payments. You're better off with a 9-5.
Goals change, priorities change, circumstances change. You need to have a plan that can adapt to your circumstances. In 2024 my focus is on being a good father, husband, and maybe buying something if a good deal comes across my desk. Also hopefully get a new job at a Wealth Management Firm and pass my CFP exam so I can help people reach their financial goals.
If you're looking for a real estate agent in NWA, I'd love to help!
Commenti