If You Fail To Plan... Plan To Fail - Why Investment Plans Are Critical To An Investors Success

If You Fail To Plan… Plan To Fail –
Why Investment Plans Are Critical To An Investors Success

If you are a pilot you file a flight plan. Ship Captains Chart their course. River runners file a float plan while even Scuba Divers live by the saying “plan the dive and dive the plan”. These and many other examples of proper planning are part of everyday life and yet investments are often left to chance…

If you’ve ever taken part in a 1031 Exchange you will know the most difficult and vital part of any exchange is acquiring the next property, your “replacement” property. The time-worn adage, “You make your profit when you buy real estate”, is true. Anyone who acquires a replacement property without knowing what they are going to get out of it is at the mercy of chance.


More sophisticated investors plan for the future. They know the profit they must earn to reach their investment goals. With this in mind, they calculate how much profit they will earn in the next investment, what they must do to earn that profit and when they will take their profit. They plan for the resale before they close escrow on the purchase of their replacement property.

A good investment plan will consider potential changes in the economy and the financial markets as well as trends and valuation methods. To a knowledgeable investor, being “stuck” in a property long after it has peaked may be a disaster.


Although it is difficult, if not impossible, to emulate the methods used by successful investors, there are a few steps every investor can take to meet their investment objectives:

Develop an investment plan. Know what your investments must accomplish for you over your investment life.

Ask yourself how the proposed investment fits your plan. What profit or return is it going to give you? If it does not fit your plan, it shouldn’t be purchased.

Develop a resale plan before you make a purchase offer. The various terms and conditions of the purchase offer may affect the resale. How can the purchase help to prepare this property so that the next buyer will find it attractive?

Develop a management plan. Write down all of the facts you reviewed and were told that led you to believe that the property would produce a certain profit or cash flow. If the property is supposed to increase in value to meet your investment objectives, how is it going to do that? If rents are to be raised, write down how much and when. Write down the profit you must make, when you intend to take that profit and how you will operate the property to meet your objectives. The more detailed you can be, the better able you will be to see if the replacement can actually meet your objectives.


With Oregon’s new statewide Rent Control, we have entered a changing market. For those investors who are able to plan ahead there will be opportunities. Rather than seeing the changes in the market as a disaster, take advantage of difficult times to find opportunities that will become available.

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