Yes, this was the start of the 2012 Hyner View Trail Challenge (that’s why I’m smiling…). I figured a quick break down of the 2014 Goals for HBS.
1) Increase cash flow by $1,000/month (forward looking cash flow) – With the five units I currently own (Two duplexes and one SFH), I ‘profit’ approximately $950 per month (I am not paying for property management). All of the ‘profit’ is currently being reinvested in HBS. By the end of 2014, I want to increase the profit to $2,000 per month. Ideally, I would work on this goal in bits and pieces, purchasing one property per quarter that cash flows $3,000 annually. However, I would still meet the goal if I were to purchase one property on December 31, 2014 that cash flows $12,000/year. In addition, I could purchase properties that are rented at under-market rent, if I think I could raise the rents to the $3,000/quarter threshold.
2) Purchase a minimum of 3 additional rental properties – I plan to add a minimum of three properties to my current portfolio. I think I will actually have to add more than three properties if I want to meet Goal #1 above. I anticipate that I will more than double the number of units HBS owns this year.
3) Use unique financing on at least one deal this year – This comes from the REI class I’m taking right now: Cash Flow Freedom University by Ben Leybovich. Ben advocates finding properties that offer unique financing opportunities. One property I am considering purchasing is a duplex, owned by the same owner since the mid-90’s. The owner paid off the mortgage in 2013. Because there is no mortgage, the owner could hypothetically offer 100% financing for the deal.
4) Leverage an additional $200,000 – This is simply how much additional ‘debt’ I want to carry by the end of this year. I am earning approximately 11% on my leveraged cash. If I continue this earning streak, I would earn approximately $1,830/month if I were to leverage a total of $200,000. This would crush Goal #1.
5) Locate a headquarters for HBS – Honestly, my garage is full of tools and materials I need for HBS. I would like to locate the materials and tools in a larger space so I could have some space to fabricate custom pieces if needed (also, I have a few friends who could use some large shop space). In addition, my wife has requested that I convert my HBS storage area to a craft room. I would like to have a dedicated craft/painting/sewing/candle making area. If I can locate a headquarters (don’t need to purchase in 2014), that would be an excellent step towards our craft room.