We Are GaREIA Issue 3, September/October 2015 | Page 4

President’s Note
Building a Foundation For Your Business
- Mike Jacobson
Would you start building or renovating a house
without a plan? Would you build the house
without a foundation? Would your plan be
detailed appropriately?
Here is a general process to attain financial
freedom through real estate. This is only one
way, but it is well-documented, repeatable and
has been used for generations.
1. Foundation – Business Plan
2. Find the property
3. Fund the deal
4. Fix the property
5. Flip for Cash or 6. (Port)Folio, hold for
Cash Flow
7. Financial Freedom is achieved after
repeating steps 2 through 6 until enough
properties have been obtained to produce the
desired Cash Flow.
Just as in building a house, the foundation of
your business is important if it is to last a long
time. So what goes into the foundation?
The most important element is Integrity. Build
your business around people that you can
trust. See last month’s article, “Who Can You
Trust?” and remember that when the prize is
bigger, so are the sharks. Find competent and
honest team members through networking. Two
of the most important team members are an
accountant and a real estate attorney. Both of
these should be well-versed in real estate
investing and able to provide guidance as your
business grows.
Ask yourself several questions. What are your
goals? What do you have to start with? This
includes time, finances, and skills. What is your
mission? Why did you choose that
mission? Why are you choosing a particular
method to achieve your goals? If you don’t
understand your Why, then you may lose your
motivation when obstacles continue to
appear. Goals and strategy may change or
evolve over time. Just as many people move
into larger houses over time, your business
strategy may call for a different plan as your

goals change. Design the business to fit the
goals you are trying to achieve.

For example, if your goal is to provide a passive
income of $12,000 per month, that can be
achieved with 20 free and clear houses. This
assumes each house has rental income of $1,000
per month and expenses of $400 to cover taxes,
insurance, repairs, and property management. If
you have other sources of passive income then
you may want to reduce the total number of
properties in your portfolio. Or you may want to
scale up your acquisitions depending on your
desired lifestyle and philanthropic goals.
Your real estate investments should be treated as
a business. The foundation should also be sized
based on the business you are developing. Yes,
an LLC is recommended. But you do not need
one to get started. As Bill Cook frequently says,
“The Alpha and Omega of real estate investing
is meeting with sellers and making offers.” It is
important to get started and have some
success. This could be as simple as birddogging
for another investor. Then take some of the
profits to form an LLC, invest in additional
education, and spend some on marketing. Don’t
become a seminar junkie thinking, “I just need
one more course.” Get out and make
offers. Then expand your foundation as funds
and resources permit.
Georgia REIA will be offering several courses in
the next couple of months that focus on building
your foundation and meeting with
sellers. Tamara Bunte will be teaching a
Saturday on “Unlimited Success.”
Next is the Yellow Letter Coaching
program. This program teaches students how to