The One Thing That Separates Winning Property Investors From The Losers

Written by Dave Johnson on September 2nd, 2016

The One Thing That Separates Winning Property Investors From The Losers

I’ve come across thousands of property investors in my time, but if there’s one thing that separates the good ones from the bad it’s this…

In fact, it’s the number one reason most property investors end up failing.

And why they don’t make any money.

I’m talking about setting goals.

And not just any old goals, the right goals.

Because yes, there is a difference.

Anything else and you’re setting yourself up for failure.

Smart goals are the difference between successful and unsuccessful property investors.

And if you ask me, they’re the secret to big property profits.

Let me show you how to set the right kinds of goals that’ll make you a profitable property investor.


Before You Even Start, You Need To Answer These Questions…


The first thing you have to realise is that property investment is a business and must be treated like one.

You have to set yourself goals & time-frames, and measure your success, just as you would with a business venture.

The first few questions you have to ask yourself, before setting goals is:

1. Why do I want to get into the property game?

2. What do I want to get out of the property game?

What is your reason for getting involved with property as a business, instead of a printing company or a coaching company or an IT company?

Why property?

Are you interested in generating lump sums of capital which could pay off debt, and help you leave your job, or do you want to invest in property because you believe the retirement system you are currently in is broken?

Maybe you’re looking to replace your job with a passive property income stream and live your dreams of becoming a writer or whatever that income could afford you.

But it is important that you know what you want as this will feed into your strategy and into your approach.

To make your property business a success you require three things, namely time, experience and capital.

Before setting goals it’s vital that you reflect on the following questions:

1. How much time do you have? Do you have a few hours a month available or have you just been retrenched and you can focus your full attention on your property business?

2. How much experience do you have in property? Are you new to the game or are you a seasoned professional?

3. How much capital do you have? Or would you need investors? Please note, if you don’t have capital it doesn’t mean you can’t be in the property game. You’ll just need more time, in order to seek out investors and pitch your property proposals.

It’s important to figure out the answers to these questions because they’ll lay out the parameters in which you can set your goals.

Let’s say, you want to build a passive stream of positive cash flowing properties.

You know that you have 5 hours a week to spend on this business, but you have zero experience and zero capital.

If you were to set a goal that you want to be financially free within 6 months and do 5 property flips within that time, you’re only fooling yourself.

Setting such an unrealistic goal will lead to failure, mostly because you’ll become so despondent when you don’t achieve the goal and give up when you are almost there.

Instead, with 5 hours a week and zero capital & experience, your time is better spent educating yourself, like attending property networking events, where you can meet potential investors or other property investors whose experience you can leverage.

Knowing these parameters gives you very clear guidelines on how to set realistic goals.

But when it comes to your goals, they actually need to be set in a specific way.

This is where the SMART framework comes in.

Let’s look at the SMART (Specific, Measurable, Attainable, Relevant and Time-Bound) framework, something that literally has the power to ensure you put yourself on the right property path.



Why SMART Goals Are The Secret To Big Property Profits


SMART Goal Setting Step #1: Specific

Why is specificity important?

Funny enough, I learnt this lesson from a Disney channel classic, Alice in Wonderland.

Alice was at a crossroads and asked the Cat “Would you tell me, please, which way I ought to go from here?"

The Cat replied, "That depends a good deal on where you want to get to."

"I don't much care where" ,Alice said naively.

"Then it doesn't matter which way you go”, The cat said.

What this teaches you is that without a clear end goal you’ll never know when you have reached it.

You have to know exactly where you want to go in order to get there, because, as Zig Ziglar once said, “If you aim at nothing, you will hit it every time!

To define a specific goal you must incorporate the five 'W' questions below:

  • What do I want to accomplish?
  • Why do I want to accomplish it?
  • Who is involved?
  • Where must I complete it?
  • Which requirements and constraints are most important?

For example, in property terms it’s important to clearly state your goals: Are you looking for a two-bedroom property in the Bryanston area that’s highly distressed and can be bought at 30% below market value…

Or are you interested in buying a property at an auction to then turn it into a R3,000 positive cash flow asset?

The more specific you can get with your property goals, the more likely they are in becoming true.

SMART Goal Setting Step #2: Measurable

You can only improve what you can measure.

With measurements you can see how far you have come and redirect your efforts to ensure your goal will be reached.

A measurable goal will answer questions such as:

  • How much?
  • How many?
  • How will I know when it is accomplished?
  • Can the indicators be quantified?

Let’s relate this back to property.

Imagine your goal is to be financially free in two year’s time using a positive cash flow rental strategy in the Johannesburg CBD area.

How can you make that measurable?

Well, firstly you will need to know what your financial freedom number is (IE what is the amount of passive income you’ll need per month to survive).

Now imagine you need R20,000 per month to survive.

If the average positive cash flow rental properties in that area are around R2,000, that’ll mean you’ll need 10 properties over the two-year period.

This will then require you to buy a new property every 2-3 months.

After the first 6 months you’ll be able to see if you’re on track to achieving your goal or not.

You can measure your progress and thus change your strategy or tactics to achieve your goal.

SMART Goal Setting Step #3: Attainable

If we look at the previous example, the question then becomes are you in a position to purchase one property every 2-3 months?

In other words, do you have the time, experience and, most importantly, capital to purchase one property every 2-3 months?

This step is here to guide us in setting realistic and achievable goals.

You have to look at where you currently are and choose a goal that is possible to achieve.

Otherwise you’re setting yourself up for failure.

An achievable goal will usually answer the questions:

  • How can the goal be accomplished?
  • By when?

Here’s where a coach can be really helpful, as they’ll be able to guide your thinking.

I always like to think: Aim for the moon and even if you miss you’ll land amongst the stars. Despite this being a well-known saying, it’s not always realistic.

That’s why you need to set yourself demanding goals.

Goals that are challenging and hard to reach, as these will push you.

But the trick is to not set goals that you know are impossible to achieve.

SMART Goal Setting Step #4: Relevant

Your goals need to be relevant to your vision.

Remember your vision is your compass and if your work doesn’t align to that direction, don’t do it!

A relevant goal will positively answer these questions:

  • Does this seem worthwhile?
  • Is this the right time?
  • Does this match my other efforts or needs?
  • Am I the right person?
  • Is it aligned to my vision?

It’s important to define your strategy.

Where do you want to be in 5 years’ time and how do you plan to get there?

Do you want to be financially free in 5 years’ time with 15 positive cash flow properties fuelling your lavish lifestyle?

If that’s the case, you should be setting yourself lots of mini goals that’re aligned to that vision.

You should be:

  • Meeting with 2-3 estate agents on a weekly basis.
  • Attending at least one auction a month.
  • Contacting investors and putting together proposals.
  • Learning from a mentor who has done what you are wanting to do.

And you should NOT be buying negative cash flow liabilities (as this does not fit in with your vision).

Every time you’re about to embark on an activity, ask yourself: Is this getting me closer to my goal?

It’s so important that you know where you’re going and that the next immediate step that you’re taking will get you closer to that goal.

SMART Goal Setting Step #5: Time-bound

Your goals need to have a definite end date, otherwise it could just go on forever without being achieved.

A time-bound goal will usually answer the questions:

  • When?
  • What can I do six months from now?
  • What can I do six weeks from now?
  • What can I do today?

So many people get stuck living their same uncomfortable lives because they create no urgency for change.

I hear it all the time:

“I’ll change later”

“Next time I’ll invest”

“In the future I will be a professional property investor”

These people don’t realise that without creating a deadline they will not have any urgency to achieving their goals.

Create a sense of urgency and importance to changing your life.

It’s about setting yourself a challenging deadline and then holding yourself to the achievement of that deadline.


How To Focus On The Right Goals


Firstly, you need to stick goals on your fridge or a wall that you see often.

Remember, out of sight out of mind.

I like to think of them as “vision boards” as they remind you of what you want.

Having that visual reminder is what’ll get you out of bed on a cold Sunday morning to go view properties.

You have to know why you want to do this.

Your ‘why’ is what’s going to get you through the ‘how’.

And then secondly, the most important thing to do is surround yourself with the right people.

People who’re also focused on financial freedom and growing themselves and their businesses.

You need this kind of positive energy to fuel your goals and ambitions.

Your goals must be defined in accordance to your vision.

Whenever your vision changes your goals should reflect that change. You can then use those goals to ensure your vision is achieved.

Remember if your vision isn’t materialising, your goals are not properly defined. 

Until next time, be bold and go build that property portfolio.

Dave Johnson Signoff

Dave Johnson
Analyst, The SA Property Investor
The Money Lab