As another year approaches it’s end, it is once again time to look forward and to set some goals. I can already tell next year is going to be insane, but I want to have plan already in place to ensure I’m not struggling. Let’s break down our goals and figure out how to reach them.
There are two categories I use. Real Estate Goals, and Other Goals. Sometimes I tend to get overly-immersed into my career so I need a reminder to keep some balance.
Here are some of my non-real-estate goals that keep my life interesting:
- Brainstorm with my kids (I have 2 young boys) and come up with some new adventures to take them on.
- Learn more about cooking (I tried out for Master Chef and made it to the second round a couple months ago. Great time!).
- Finish my documentary about learning to surf (I live in MI so I have to fly to Southern California to finish up the film).
- Get involved in more sports. Maybe soccer or flag football.
I’m sure you get the idea. I find I stay more motivated for all things in life when I am working towards some exciting goals that are not related to work.
Here are some real estate goals:
- Finish automating my business so it can run without me.
- Increase my sales to $8 million.
- List at least 2 houses per month.
- Stop working with buyers myself and have my buyers agent(s) work with them.
- Increase my average sales price.
- Have more time to write this blog and teach more classes.
These are my goals. The way I will reach them is to plan out exactly what I need to do. Since one of my main goals is not to work selling houses full time, I have to build very strong systems that makes sure things get done even when I’m not there. I have already decided I will not be working with buyers anymore (except for a select few clients and friends). My new buyer’s agent is in training to do things the way I do, and will be handling all of the buyers, until the point I need to bring on a second agent to help.
I stay more motivated for all things in life when I am working towards some exciting goals that are not related to work.
I have chosen to focus strictly on listings for myself. I am still handling all the listing appointments myself, but soon I will bring on a listing agent.
How I will list 2 homes a month:
My goal of listing two homes a month is simple math. I currently focus on sending out mailers to FSBO’s and expired listings. I know that for every 50 houses I send my mailers to I get about one listing appointment. I list about 75% of the houses I get an appointment on. So I need to send out mailers to 150 (50X3) houses every month to land 3 appointments and get 2 listings. It does get a little more complicated to figure out the exact cost of that. Each house I mail to gets a series of 6 mailers. So that is 900 mailings (150 house X 6 mailings) total. My cost is about $0.80 per mailer averaged out. That equals $720 a month to average 2 listings. With a median listing price of $150,000 the sales volume per year is $3.6 million. Commission income would be around $108,000 minus marketing costs of $8,640 for a profit of $99,360 for the listings.
And the buyers:
The marketing for the listings, and the sellers that buy another house, tend to give me about a 1 to 1 ratio. Meaning that for every listing I get I tend to get one buyer as well. I don’t really have to do any advertising other than what I already do for my listings. Let’s not go into the math on this one and just assume that the sales volume to the buyers is about equal to the listings. So we will call it another $3.6 million. That’s $108,000 in income. The buyer’s agent gets 50% of the commission, so this leaves a profit back to me of $54,000. My sales volume will be at $7.2 million with income of $153,360.
And how I will make it through the final stretch:
To reach my goal of $8 million I need to close another $800,000. My buyers agent will bring in some of their own clients which I can count, so let’s count on them bringing in $500,000 in sales for the year. I get on average 30% of those commissions, so that ads another $4,500 in income. I’m now up to $7.7 million in sales volume. The referrals I get are good for another $1 million in sales. That is now $8.7 million. These are about 1/2 seller and half buyers. So $500,000 in listings is about another $15,000 in income, and $500,000 in sales to buyers ads about $7,500 to my bottom line after the buyers agent is paid.
And now, time to count my money before I earn it!
So if I reach my goals my sales volume will be $8.7 million, with a total income to myself of $180,360. Out of this income I will need to cover overhead such as Realtor and MLS dues, gas, car maintenance, etc… But you get the idea. This of course is an overly-simplified version of what the entire plan looks like (and I realize not every listing will sell which will change the formula, but I don’t want to over-analyze it right now. This is a great starting point for goal setting and can be tweaked and modified along the way. But even in this simplified form it makes it look real and achievable. And if I focus on creating systems to make all of the marketing happen, all I have to do is oversee the business and go on listing appointments. Going on 3 listing appointments a week won’t take up too much time. And much of the other parts of running the business I can handle remotely, saving a lot of driving time and giving me a lot of freedom.
My goals may be quite different from yours, but it’s always interesting to hear about other people’s goals and how they plan to reach them. I hope there are some bits and pieces here that have motivated you and given you some new ideas. Just remember to make your own plan. Put down everything that you really want to achieve! Get motivated and make it happen. People do it all the time and you can too.