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Our Real Estate Goals for 2012
We are big on setting and achieving goals so we’d like to share our 4 main goals for 2012:
1) We will exceed the return expectations and needs of our investor partners.
Thus far, 3 of our funds have been completed. We are pleased to report that our investors received the following average IRR on their capital:
Fund 1 – 24%
Fund 2 – 26%
Fund 3 – has only one property (rincon) remaining in escrow to sell in early March and we are projecting a 22% average investor IRR for that fund.
Fund 4 – 33%
Fund 5 – has two properties left, linwood which went into escrow the first day on market and they both look solid. This may be our best fund to date.
Fund 6 – We have purchased a $510,000 property on a golf course with minimum work & a condo so far with a few more in the pipe.
2) We will purchaseÂ 30 properties and 20 sales in our single family funds
while continuing to maintain a conservative selection process and high profit margins.Â We have increased our manpower here in the office by hiring Max Frank for accounting support andÂ Tamara Peterson for administrative and project support. We have the team and resources to expand on our current modelÂ and start exploring new opportunities within our residential niche.
- 4 Properties in the first quarter
- 6 properties in the second quarter
- 8 properties in the third quarter
- 12 properties in the third quarter
3) We will diversify our funds with some higher-end homes.
With the successÂ ($140k profit in one month)Â of the Via Divertirse project, a 4,000sf home in San Clemente, we have started exploring opportunities in the higher-end $600k+ markets within the jumbo loan limits. We are seeing some price compression and much fewer competitors chasing deals in that market. More of our time could be spent on fewer projects with higher profit margins.
4) We will open a separate fund to buy and hold property.
Returns have been good but our investors have expressed interest in the returns and capital gain tax advantages of buying and holding property. Values are firming up in San Diego and the availability of longer term private financing for stabilized rentals has prompted us to open a fund to capture returns from rental cashflow and longer term appreciation.
Here is a couple links to our most recent posts on goal setting taken from our workshop “goal setting & business planning”
Here is a great video from Brian Tracy on goal setting. If you’ve never heard of him you should strongly consider hearing what he has to say. He is a great teacher and motivator and has inspired me for years.
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