Failing to Review Your Finances, Progress, and Overall Activity at Least Once a WeekPosted by at October 25, 2012 in Activity | Control | Financial
- No cash flow. Deals are about to close, but you can’t pay the rent this month.
- Bad accounting. In a lucrative year, you owe the IRS $30,000 but only have $18 left in your business bank account.
- Poor management. Your management plan, if you have one, is chaotic.
SUCCESSFUL REAL ESTATE INVESTING 32 The first year I learned to wholesale properties, I made 52 deals. I made a lot of money wholesaling houses; I had a lot of rentals that brought in $5,000 to $8,000 a week. Multiply that by 52 weeks (that’s $260,000 to $416,000), and at the end of that year I said, “That worked great.
Now I’m going to do something else.” I went into managing property, because I’m good at it. I managed other people’s properties. I had an office and a staff, and I gained status in the community. I felt important because everyone wanted to talk to me all the time.
My employees and I were extremely busy and stressed out, but we made no money. We were collecting our rents and others’ rents and doing rehabs and making wholesale deals. A lot of money came in, and a lot of money went out, but overall, it was a financial mess, because we’d take money from “here” to pay “there.”
One of the happiest days of my life was the day I sold my property management company. And here’s the interesting part: When I got rid of a lot of my overhead, my profits skyrocketed. Ever since that stressful time, I’ve vowed that every Friday, whatever business I’m in, I’ll study a report of what’s come in and what’s gone out and what activities have taken place during the week.