Real Estate Investors — The Little Things Count — Big Time
Posted @ 9:13 pm - Filed under Leverage, Real Estate Investing, Real Estate Markets, Retirement Income
A client of mine owns a successful cabinet shop in southeast Idaho. He’s decided, in his 50’s, to get significantly more aggressive in his pursuit of his retirement goals. Simultaneously, he’s also going for the gold with his business.
He’s putting a 7,000 square foot addition onto his company’s plant. Just this one small addition will accomplish the following.
• Allow delivery trucks to back into the building & out of the winter weather
• Lower supply costs — now has much more storage – he can buy farther ahead
• Lower storage costs — storage now will be on site without additional expense
• Added manufacturing space — more product produced in the same time
• Significantly reduce time from contract to delivery for out of state customers
• Increase gross revenues from 50% to over 100% in the next 12 months
• Increase profit margin without increasing product prices
The addition is much simpler and 
cheaper to build, as it’s a steel building, and will be complete by the end of this year, even though it won’t start for another couple weeks. As I observed in my conversation with him, “Sounds to me this project will amortize itself in about 2-3 minutes.” 
This is a guy who has been working hard all his life. I’ll bet by this time next year he’ll be kicking himself for not doing it a decade ago – which brings us to his retirement plan.
He’s recently acquired his first investment property – in Boise, about a five-hour drive westward. We converted some of his assets into investment capital and cash reserves.
10 years from now he’ll have built his company’s revenues to the point they’ll be a huge contributor to his retirement income.
In other words – it’s not the size of a change — it’s the magnitude of the results that count.
So what small changes can you make to your investment strategy to have this kind of impact on your portfolio? Assuming your current agenda is capital growth, in anticipation of retirement – here are some tweaks you might consider.
• Is your equity to value over 65-70%? Consider reinvigorating your leverage
• Time for a move? Seriously consider cheaper, out of state, growth regions
• Reassess your current position – don’t lose money via procrastination
• Have unused depreciation piling up? It’s a gold mine – take advantage
• Unused capital today, can cost you six figure$ in retirement income — really
For the record — that’s just the short list.
A final thought to maybe clear the way for some action on your part.
$25,000 invested today, with solid professional advice guiding you – will more likely than not produce a retirement income of $5-6,500 monthly. No kiddin’.
The little things matter.
This entry was posted on Wednesday, September 26th, 2007 at 9:13 pm and is filed under Leverage, Real Estate Investing, Real Estate Markets, Retirement Income. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.