Nobody likes to brag about small goals. We all have this propensity to set enormous goals that most of the time we end up achieving none of those. This is true in the real estate business, as it is in practically everywhere else. Today’s guest host, Robert Orfino of Mr. Texas Real Estate joins Jason Bible to talk about goal setting and why it pays to start with small, realistic goals at first and gradually working yourself upwards. While big goals certainly ramp our motivation up, small goals are more helpful in the long run because they give us a means to track our progress and prod us forward. Listen in as Robert and Jason also give us the latest and hottest in the real estate market in Texas and the West Coast.
Listen to the podcast here:
How We Set Goals With Co-Host Robert Orfino
We are about to embark on a little odyssey. We’re heading out to the left coast, if you will. It’ll be perfect. It’ll be great. We’re at the base of the San Gabriel Mountains there. We’re saying it out to Dena, North of Pasadena, unincorporated California, big flippers market several years ago. Everything was all perfect, little 1,200 square foot houses which are broke. They’re totally messed up and we’re able to go in there and flip. It was perfect. Talking about flipping, I was speaking about that and I grade Houston, Southeast Texas, as 5 out of 10 for flipping. It’s because of what we’ve been talking about as those $100,000 houses are now inching up into the $150,000 range. The $150,000 houses are inching up into that $200,000 range. The $200,000 ones are hitting up the meeting with $250,000.
If you want to buy a house from $180,000, you want it to put $50,000 in, be at $230,000 and sell for $300,000. Those houses have now popped up to $24,000 to $250,000. That market understands that there are $240,000 to $250,000 is making those ones harder to find where ours, there’s more inventory in that $150,000 area, but that’s the no man’s land. If you buy and want something for $150,000, you put in $30,000, it’s hard to get $230,000 out of it $240,000. It’s still a sub $200,000 house but that changes in about a couple of years. When all of these houses that we’re talking about are now pushed into the $250,000 to $300,000 range, then you’ll be going and running the independent ties in buying a house for $150,000 putting your $40,000 in, putting on a market for $289,000 and make your money.
I’m seeing and it’s interesting. Curtis came over to the house and we were looking at Westbury and Meyerland. I still think there’s a good play there. I looked at a house, 20,000 square foot lot, 5,200 square foot one storey, corner lot, beautiful trees. They want $450,000 for it. The rehab is going to be $200,000 easy. Inside the loop, it’s a beautiful place. They can’t require all of them to be lifted. I want to go down that rabbit hole at some point. In any case, we were looking at some houses over on the west side of town where I’ve got some inventory over there that I bought and we’re Airbnb-ing and renting. One of the things I noticed is there’s a lull in the marketplace between $140,000 and $180,000. That’s exactly what it is. Some of these houses need a lot of work and you can’t get them cheap enough to flip them because they need so much work because they’ve either been impacted by the storm or they’ve been degraded over the last 10 to 15 years. You’re right. They need to push that $200,000 level. Once you bust through that then it starts making sense on the flip side.
Those houses are going to be obtainable. You’re still going to have working-class neighborhoods where they’re going to start to change over into a better working-class neighborhood. It’s like Texas City. We started looking in Texas City years ago. Everything was on sale between $60,000 and $80,000. There’s nothing. There are literally three houses below $100,000.
I need to talk to AG. I would love for AG over at Real Acquisitions if they could build a heat map. The heat map to show over the last five years, the change in concentration of houses below $100,000. It’ll be some areas of town that will be dark red. Lots of houses blow $100,000. It turns from red to blue to purple to green to gray to white and there’s nothing there anymore. To see that transition below $100,000 over the last five years would be incredible.Less than 5% of New Year’s resolutions make it through January, and a lot of it has to do with our propensity to set grandiose goals. Click To Tweet
We’ll miss it because it’ll come back in about 2.5 years. I think 30 months is fair. We’ll miss it. I don’t think that we’ll be flipping Texas City in 2023 but people should be aware of that. That’s where it’s going, which means that we were still finding a lot of good deals $100,000 to $200,000 for buying and holding. We put an offer on a triplex for $180,000. I think gross revenue would be $2,500.
I think $2,500, $2,700 and then if I remember looking at it, it should get as close to $1,000 a month in net cash. You’re out of pocket $30,000 to $35,000, it brings in $12,000 a year. It’s hard to screw that up.
I’m thinking about the marketplace. We’re still a 4 out of 5, 8 out of 10 for buying and holding. We’re going to California where it’s a 0 out of 5 for flipping and wholesaling all in. No deals there at all. It’ll be interesting because I’m going to bring out a case study sheet that shows Texas City Houses. We’re not going to change a little bit and on the back of it, we’ll have our contact information for people want to get ahold of us. If you’re a real estate investor, you go where the deals are. If you’re a lender, then you can lend anywhere in the country. The people in California complained about can’t find any deals. There’s nothing there. That’s what Texas is for. That’s what Raleigh Durham is for. That’s what Florida is for. They’ve got to go.
Miami-Dade, Boston, certain parts of New York, Seattle, Portland, and SoCal are a great example. I even put Austin and Chicago into this bucket where the only time you’re going to make money in those markets is coming out of the downturn. There’s got to be a crash or as a real estate agent, you’re listing houses and all that other stuff. At the end of the day, you’ve got to follow the crash and we’re ten years into a recovery in SoCal. I want a house at Coronado Island and I’m not paying $1.3 million for it.
We’re going to see Bruce Norris. I have one question for him, when do I move back to California?
That’s a great question.
That’s all I want to know. We started talking a little bit about goals. I did my goal webinar and that was fun. I get a little excited about that.
You do phenomenal webinars. I was telling everybody that on Facebook Live. I’m like, “If you’ve not seen Rob do a webinar, it is spectacular.”
A lot of people stayed all the way through the end. That’s a real measure. They didn’t fell asleep.
I’m putting a deal here on my calendar where I’m having lunch with James here at Tookie’s, which I’ve never heard of before but it looks legit. He said, “Where do you want to go?” I was like. “Some kind of seafood place down by you.” Two minutes later, he sends it back. This is the place to go. It’s on Bayport Boulevard, Seabrook. You drive right by it for our St. Leon property. This is going to go back to ‘17 for me. I’m going to fatten up a little bit. It’s breakfast, lunch, dinner, happy hour meetings.
We have a full kitchen in the office that bought more utensils, real knives so we can cut some things. That’s where you’re using your utility blade. We’ll be able to do that. If I can get two meals a year, then we can get a lot of things under control. We talked about goals. That was fun. Sending some short-term, near-term, mid-term, long-term goals getting those things moving. I told everyone to take out their calendar. You could do this too, if you guys are tracking your progress. Set a reminder at the end of every month, make it a repeatable event, the last day of the month, last Friday, Monday, or Saturday of the month, whatever it is. Make it an event where you’re going to review your progress. That’s critical.
There’s going to be times where no matter how good things are going, you’re going to get distracted by life or you’re going to lose three weeks. The problem is when you lose three weeks, it’s hard to get back. If you set a reminder at the end of every month, review your progress and don’t erase that event. Let it repeat, that kick your butt a little bit to get back on track. I thought that was a good little nugget for people to do. Most people are trying to figure out a way to get out of the mundane. We broke down the hours. We show them there are 20 hours a week. That 20 hours a week you got to get your workouts in, you got to get your self-improvement in, you’ve got to watch your learning videos, you’ve got to make offers. There’s not all of the time.
You’ve got 20 hours a week to do real estate and they’ll spend 10 hours of that cruising around MLS. I’m like, “That’s not real estate investing.”
We went over that. We’re halfway through our 2020 goal already. That was fun breaking down all that portfolio and we’re getting a lot of responses. People want to buy some, people want to sell some for us and help us.
We contracted an 88-house package that we’ve been working on with a friend of ours, Chris Hopper. It’s going to be fun.
Looks like it jumped to 94.
Did they throw in a couple more?
They’ve added six more.
We’ll contract the other six. I had a conversation with one of our lenders when I was headed back. I’m going to have a conference call with them. Chris had a conversation with a lender of ours. They’re good friends of ours too that we want to work with. I’ve always wanted to become the go-to company for selling packages. The reason I’ve always wanted to do that is that I know there are a lot of real estate investors out there that amass these packages of real estate and then they’re like, “What do I do with them? I don’t want to list all of them because I don’t want to deal with all the craziness from a real estate agent.”
You’re stuck and you’ve got ten houses in one neighborhood and they only sell five every quarter. “What am I going to do? I’m trying to 1031 into a hotel.” It’s all that stuff. I was having a conversation with Alex over at Jet and he said, “Do you know what’s going to happen after you close this?” I said, “I’m going to start getting a lot of phone calls for packages.” He said, “That is exactly what’s going to happen.” We’ll take a look at it. I guess between that and the RV park and possibly the storage facility, we’ll be easily over $15 million for the year to hit our $25 million goal. I’m already looking at what does the rest of the year looks like? What’s 2021 look like?When you set big goals, the mountain looks so big; it’s intimidating to try and go up the first couple of steps. Click To Tweet
Can we get a couple of apartment complexes in that last $10 million? Figure out a way to double that money in 6 to 7 years, that would be exciting. After all this time and all this experience, it comes on the table and you get the raw turkey. You know how to cut it up and cook it. I know exactly what to do. I took those lessons learned and move forward on that. That should be a nice deal I went over again. There are people want to pull some pieces out, which we’d be happy to talk to you about putting it into the fund, portion of going into the fund and make the funding incredibly strong.
We’re throwing 30 houses into the fund, so the fund is open. I’ll put an email together and I’ll send an email out to everybody saying, “Funds back open because we got 30 houses. We’re about to slam into this.”
I had a nice investor meeting. He got his accreditation, so he’s looking to move right in. That’s exciting for us to get all this stuff moving and syndication with the apartments. There’s a lot going on for us. People are always like, “I’m amazed how much you do.” Get good people around you. Identify where your holes are and fill the holes with good people. For those who will hit some of our serious goals. We’ll come to California and hopefully, we’re going to raise some money out there.
I will tell you this. I don’t know if we have anything planned but we’re on the waitlist for the stall house. I have been a sweet guy with those people. “We’re big fans, if you all could sneak us in.” I’ve got that on the list. We’ll see. She said, “I’m going to email you.” I’m like, “We’re not going to bring a car or anything. We’re going to get Ubered. We’re going to drop off. We’re going to sneak in.” I said, “If you got room for us, we’d love to see the sunset at the stall house.”
I’d love to see that too. Remember, we’re there until 4:00 at the event. What time is the sunset?
I don’t know. I got to look.
I’m sure it’s like 6:00 to 6:15.
That’ll be a trip to get over that side of the town.
I went there, too bad because it will already be in Glendale. It’s right down to five.
We’ll see. If I can get that to happen this trip, great. If not, it’ll happen soon. We’ll be back out there with plenty of times.
We got to figure out the radio station thing down there too.
We can do shows from sister stations. We got to prep them up for it. We can go to the Salem Network. We might be on iHeart. I can’t remember.
That’s interesting. We’ll work with that next time.
They’ll let us use their studio.
We’re going to California every other month and we’ll be up in New Jersey every other month offsetting. We’ll be back and bouncing around from coast-to-coast on this stuff. We’re here in Southeast Texas. We have a big announcement coming out.
We do. I’m waiting for somebody’s bio. I know you’re reading. You’ve got a homework assignment, send me the bio.
Once that bio comes out, we have another influencer who’s going to be joining us.
I keep saying like, “This would be a shocker.” These are all shockers.
This will be a good shocker. I believe we’re going to do them on Wednesday nights. I have to take a look at my notes, and then AC, I believe is on Tuesday nights. If we get the other guy, it’ll be Thursday nights. We’re going to run the best of on Friday. You and I will do a full show on Monday.
We’re going to wrap up our segment here on goals for 2020. It’s okay to have a big, hairy audacious goal. We get that. I’m sure you like to have three realistic goals that show progress. I’m a big believer that people get addicted to progress.
I agree with that. I have this general interest in psychology, particularly on the behavior side. What’s abnormal or what’s normal? What’s fascinating to me is most people enjoy the process. In other words, the gains. It’s more about the chasing than it is catching. Once you caught, it’s all right and then you got to go onto the next thing. One of Jim Rohn’s famous quotes is, “The secret to life is growth.” Once you catch that thing, what’s the next step? What’s the next growth phase? You grow through the process. You grow through the chasing, not necessarily the catching.
I agree. Somewhat realistic like, “I’m going to drop 20 pounds in 60 days.” It’s completely realistic. I can move quickly there. That’s a goal for me. There are 3 or 4 little missing things from our Airbnb. That’s a company goal. Let’s make sure we have all the bath soaps in and make sure we have the stupid little shells with the candles in the bathroom.
Let’s talk about the health thing. That’s where things get interesting. Biomechanically, whether you lose weight or gain, whatever it is, some of that stuff is not necessarily up to you. Don’t get me wrong, you have a lot of control in that arena. However, the goal is, “I’m going to eat this stuff five days a week. I’m going to do these sorts of exercises three days a week.” If you do those things, let’s say you only lost 15 pounds instead of 20 pounds. You could look back and go, “I’m much stronger and faster. I feel 1,000 times better.” When you start talking to a lot of people like, “I wanted to buy six houses this year and I only bought two.” I’m like, “You increased your net worth by $75,000 and you bringing in $600 a month in net cash.” That’s not bad. At least you got off the starting block and you’re moving in the right direction. That’s where I see a lot of people, they get these big crazy goals and they never get off the starting block.
A lot of people, especially in this town have that problem. They’re engineers and science-based here and people get lost.
Let me put it this way. You don’t look cool at the networking event if you walk in and go, “I’m trying to buy two houses this year.” Here’s the thing I find fascinating. People’s egos can’t handle small goals even though that small goal would be a huge win in their life. What’s a small goal? Maybe I can’t lose 50, 20 or 10 pounds. I’m not going to retire in real estate. What if I buy three houses?
For us, people within our mastermind, a realistic goal is going to be three multi-families like 2 to 4 units. We want to have a minimal 6 to 12 doors by the end of the year with the people that we’re attracting is reasonable. It should be no reason why we can’t get that stuff done for people working with them and masterminding in our group.
Whenever we talk about goal setting and mindset, I don’t like to look at goals in this time period. This is the way I like to explain it. A year from now, when you look back over the past twelve months, what would you be proud of? Instead of saying, “I’ve got to have these many houses, I’ve got to do these many flips.” I’m like, “Stop.” Let’s pretend we’re a year from now and let’s look back and say, “I am glad I did this, this and this.” It removes part of that ego from the equation because we’re going back to you, it’s your goals. What would make you feel good when you look back over the previous twelve months where you say, “We did good.” One of my goals, even though I didn’t have a number on it, it was something I wanted to do, free real estate. I’m like, “I’m tired of paying for this crap. How do I do this in such a way where maximize the equity, minimize the cash participation?”
For all intents and purposes, we crushed that goal. Even though we didn’t have a number out there, I was like, “If we do this 1 or 2 times, it’s going to be cool.” We can figure out how to scale that. When I was talking about that goal, it was like, “If I could do this 1 or 2 times.” We didn’t sit down and write a big plan and say we need to do ten of these and all that. If we can do 1 or 2, then I can figure out how we can do more. A lot of people, if they set their ego aside on these small goals, your ego can’t handle small goals. If you say, “I go to these real estate networking events and these guys say they’re going to flip ten houses or buy twenty rental properties.” I’m going to throw that nonsense out the window and say, “I want to buy three.” You’ll look back a year from now and go, “I’m glad I bought those three houses.”
Two duplexes and a triplex, you’re going to be sitting at around $700,000 in purchases with $150,000 in equity in it and they’ll be throwing off about $3,000 a month in cashflow.
They can’t beat that.
By the end of the year, you’ll have enough money that you can go out and buy another duplex. All of a sudden, that’s when it starts getting exponential when that timeframe compresses down. It all starts with those 6 to 12 doors.
Part and parcel of that, I’ve got a great goal for everybody. How about this? Over the next 24 months, can you create enough cashflow to meet the poverty line? The poverty line in the United States is $25,000 to $30,000. Could you over the next twelve months at least get your real estate portfolio to where you’re at the poverty line cashflow?
That’s a realistic goal. What is the poverty line? Let me lookup. You hit a big nail on the head there with our ego won’t allow us to work with smaller goals. Everything is got to be huge and big. It’s 6 to 12 doors.
What people don’t understand is it’s the small goals in the twelve-month period that gets you huge results five years from now.It’s good to have a few realistic goals that show progress. People get addicted to progress. Click To Tweet
You’re creating a practice, routine, and good habits, you’re gaining a ton of wisdom.
Here’s the other way I like to put it. If you’re an athlete, not everybody gets to be Tom Brady. However, if you’re on the field at some point when they’re playing the Dolphins, Belichick is going to say, “Tom, you’re going to have to take a break here. We got a Super Bowl to win. Let’s put this third-stringer Jay Bible and throw a couple of passes.” I’ll get a Super Bowl ring because I sat on the bench. However, there may be a starting job somewhere in the future. What I tell a lot of people is, “I do not see a lot of deals.” I’m like, “You got to close 1 or 2. You’ve got to be in the arena, doing the reps, running the ball, and doing the work.” Even though it doesn’t get you your goal right now, you’re in the arena. A family of four, gross income is $25,000.
$25,000 is the goal.
If you could get $25,000 a year in cashflow, you are at the poverty line in the United States. It’s an achievable goal. It’s a great number.
I want to talk a little about goal setting, at least how I do it. I sent out an email about how I look at goals. One of the things I find fascinating is in the world of goal setting, a lot of people will tell you, this is a Tony Robbins thing. “You need to make a goal so big and huge that people will laugh at it.” That may be great from a motivational standpoint but it’s not practical. There are some stats out there that say that less than 5% of New Year’s resolutions or goals that are made at the beginning of the year make it through January. The likelihood of success is diminished by 95%. Part of that has to do with the fact that we have these enormous goals, huge grandiose goals we’re going to take on the world. What a lot of people don’t recognize is that they overestimate what they can accomplish in twelve months and underestimate what they can accomplish in five years. That’s a huge delta there. In twelve months, there’s only so much time.
Robert mentioned in the earlier segment that you only have about 20 hours a week outside of your job, family, fitness, all that stuff to make a big change in your life, whether that’s real estate or to have better relationships, whatever that means to you. The reality is that there’s only a certain amount of hours in a day. However, can you take 2020 to work on 2 or 3 of those things as opposed to taking and trying to work on five? In this email, the other thing I said is one of the best goals that you could make if you’re a real estate investor, is buy four houses. Let’s say you can’t buy four, maybe buy one. The way I like to look at goals like this is, let’s say we were in December of 2020, I look back on the last twelve months and my goal was to buy four houses but I only bought two, would my future self be happy with my performance? That’s the way I like to look at goals.
We’d all love to take on the world. We all want to be billionaires, and all that, that’s great but for most people, that’s going to be 99% of you reading this blog. What are some easily achievable goals? What happens if you set a goal too low to buy four houses and you buy four in the first quarter, guess what? We can amend those goals up. When I started our house buying company back in 2013, our goal was to buy six houses from July to December. We bought seven. That’s not bad. We bought one more house than we anticipated. The following year, 2014, I wanted to buy 50 houses. That was our goal. We bought 67. We met our goal and then we exceeded it. However, I could tell you if my goal was to buy 100 and I only bought 67, my mental space would be a little bit different.
I wouldn’t be as happy about it as I bought those 67 even though 67 is greater than 50 and 67 is a great number, almost to 100 but not quite. If my goal was 50 and I bought 67, it’s time for celebration. If my goal was 100 and I only bought 67, it’s time to reevaluate. I’m a big proponent of finding easily achievable goals. I know everyone is on the weight loss kick, which is fantastic. Let’s do one meal a day. That’s a good, healthy meal. Let’s not try and completely change our diet and routines. We were at a small house here inside the loop in Houston, the Houston Heights, if you all familiar with where that is. We’ve got good chicken breasts in there. I made chicken breasts for everybody, including some people that went over. I remember there’s three of us over here. I made lunch for everybody. Rob was over here eating breakfast, going to grab something on the way out so he can make his flight.
He said, “If I can do two good meals a day, I know that’s going to have a positive impact on me long-term.” I’m the exact same way. I like to look at, “If I’m doing these certain things every day and I’m doing it every day, it’s more than likely than not to get me to this goal, to get me to this next level.” I’ll give you a great example, working out. Some people will say, “Jason, I’m going to get ripped this year. I’m going to lose 70 pounds of fat in eight months.” I’m like, “How about this? Why don’t you start off with a promise to yourself to walk your neighborhood for 45 minutes, three days a week?” He goes, “That seems reasonable.” Let’s start there. Let’s start it reasonable. The problem is that when you get these big, huge goals, the mountain looks so big, it’s intimidating when you’re trying to go up the first couple of steps. The hike, that’s the first couple of miles and it’s absolutely morally defeating because you haven’t even mastered the first couple of miles.
In my family, we’re big cyclists and we do a bike ride every year. It’s about 150 miles. They call it the MS150. It’s 200 miles, it’s about 100 miles each day. However, we don’t go out and say, “We’ve got to be able to conquer this goal. Day one, we need to ride and crank out 100 miles on the first day of the training season.” You start out simple. You do little rides around the neighborhoods to get back in shape. You start doing 5-mile rides, 10, 15, 20. This happens with financial goals and health goals. What happens is your body and your mind begin to acclimate to this process. You start knocking out 5 miles and your body acclimates quickly that. You start doing 10, 15, 20, and then 25 and here’s the other amazing thing that happens. Not only do you become acclimated to the distance, you get faster over the same distance.
Let’s say you’re doing 15 miles at a time. You’re doing that faster than when you were doing your 5 miles at a time. That’s what happens. I put a post out via Facebook Live where I said, “Doing is winning. The more you do, the more you win. The more you do, the more you like it, the better you get at it.” It’s this cycle that occurs over and over again. However, when people say things like, “Jason, I’m going to buy 40 houses this year.” “How many do you buy last year? Three. How about we buy six? Let’s double it. You’re going from 3 to 6. Let’s do that.” One of these other goals I hear, especially around the goal setting and all the seminars, you’ll get somebody that says, “Jason, I want to make $1 million this year.” I go, “How much did you make last year?” “I made $110,000” I’m like, “Why don’t we start with let’s make $110,000 in real estate?”People’s egos can’t handle small goals. Click To Tweet
This is one of the other goals I propose. “If you’re brand new to wholesaling, brand new to real estate, the poverty line for a family of four in the United States starts at $25,000 a year. Let’s build you a little real estate business that makes you $25,000 this year. Once you figured out how to make $25,000, and then let’s double that next year to make $50,000 and then let’s double that the following year to make $100,000. If you’re talented and you get a little lucky and you make $100,000 this year, let’s double that goal for next year.” Let’s start with the baby steps first. You don’t have to run right out of the gate. In fact, if your expectation is to run right out of the gate, you may be disappointed because you’re going to fall hard. I’m with the Mr. Texas Real Estate team. Rob and I, my business partner, run a mastermind. If you are interested in that, you can send us a text at (281) 401-9008. We’d love to have you in our group. Thank you so much for reading and I will see you in the next segment.