Are you flying your apartment investing “business” by the seat of your pants, with no real plan other than not to fail miserably? If so, you’re not alone. A healthy majority of commercial property owners are going it on a wing and a prayer. One of life’s truisms is that most people know less than you think they do. So if it’s true that most people know less than you think, it logically follows that the average commercial property investor’s business plan is to hop from emergency to emergency, trying simply to hold his head above water. To move into the upper echelon of this type of investing, all you have to do is be more organized than the average investor, which is not too difficult a task.
One way to start getting your commercial property business organized is with a business plan. Do you think Donald Trump wakes up in the morning to “wing it” through another day of property development? We don’t know the man personally but we’re going to tiptoe out on a ledge here and say, “No.”
Your business plan doesn’t have to be a gaudy, four-color document that runs into hundreds of pages but it should be written down. Relying on your memory to retrieve the details is not a good substitute. To become a wealthy apartment owner, you need a focused, targeted business plan. If you have never taken the time to write down what you want to achieve as a commercial property investor, and how you plan to go about achieving it, how will you ever know where you’re going or when you get there?
Tom Landry, Hall of Fame coach of the Dallas Cowboys had good insight into this. He said, “Setting a goal is not the main thing. It is deciding how you will go about achieving it and staying with the plan.” This from a man who won two Super Bowls and got close several more times. We tend to think leaders like this know a little something about what it takes to succeed in your chosen field of endeavor.
Here are some things to consider when you begin to write your business plan.
- What do you want to achieve by owning commercial properties?
- What is most important – cash flow, building wealth, retirement, or minimizing management issues?
- Where do you want to be in one, three, five years, or more?
- How much time, effort, and energy are you willing to expend to reach those goals?
In our way of thinking, it would be almost impossible to ever be a successful commercial investor if you haven’t pondered these questions deeply and come up with solid answers.
The MHP Listings Team
Flickr / bk1bennett