An Offer You Can’t Refuse
In Stephen Covey’s well-known book, The Seven Habits of Highly Effective People, he talks about one habit that’s especially important for this time of year. Today, I want to explain why you need to be implementing that habit right now.
The habit I’m referring to is known in the book as “Habit 2,” and it simply says, “Begin with the end in mind.”
The way I interpret this habit is that in anything you plan to do, you should first determine the end goal and then reverse-engineer your way back to the starting point. That is the exact methodology we use when creating real estate offers.
We start by deciding whether we can keep a property as a rental or whether it needs to be sold. Once that question is answered, we can build the formula for making an offer to purchase.
For example, suppose I’m looking at a house and want to flip it. The first thing I need to determine is what it will sell for once it’s fixed up. We call this the after-repair value, or ARV. From the ARV, we subtract closing costs like real estate commissions and seller concessions, subtract the rehab cost, subtract an amount for unknown expenses, subtract our required profit, and whatever number is left becomes our maximum offer price.
So, if I believe a house will sell for $230,000 after repairs and it needs a $30,000 rehab, the math might look like this:
$230,000
– 6% commissions
– 4% seller concessions
– $30,000 rehab
– $30,000 profit
– $7,000 for “oops” expenses
= Top offer of $140,000
For rental properties, rent is the key factor. You need a house that can rent for enough to pay the mortgage, cover all operating expenses like taxes, vacancies, and repairs, and still leave you with positive cash flow.
For example, if a rental will rent for $1,800 per month, and you set aside 30% for operating expenses and $300 per month in cash flow, the math looks like this:
$1,800
– 30% expenses
– $300 cash flow
= $960 available for debt service
At that payment, if you could secure a 30-year fixed mortgage at 6%, you could afford to pay roughly $160,000 for the house.
In both scenarios, we began with the end — profit and cash flow — in mind to craft the offer.
As I’m writing this, it’s the last week of December 2025, and there’s another kind of offer you need to make. This one may be the most important of all because it will help define the trajectory of your 2026.
You need to make an offer to yourself, your family, and your business regarding how you plan to spend your time in the coming year. Some people call this a goal sheet; others call it a one-year picture — which is the term I like. Either way, the principle remains the same: begin with the end in mind.
The interesting thing is that there are two “ends” to consider here — how you finished 2025 and how you want to finish 2026. Exploring the first is critical. Here’s why.
To set meaningful goals for 2026, you must clearly understand where you are right now. Your current position has a huge bearing on what you can realistically accomplish.
For example, suppose your goal is to run a marathon this coming year. If you’ve been running 10Ks multiple times a week, training for a full marathon may be challenging but realistic. However, if you get short of breath walking up a flight of stairs, setting a marathon goal not only increases your likelihood of failure, it could also be dangerous.
That wouldn’t be a realistic goal, nor would it align with the SMART goal framework:
Specific, Measurable, Attainable, Realistic, and Timed.
Setting SMART goals greatly increases your chances of following through.
To determine your current position, consider these seven areas of goal setting:
- Spiritual
- Health
- Family
- Relationships
- Finance
- Education
- Fun
In each area, ask yourself three questions:
- What did I do this past year?
- What went well?
- What would I like to improve?
The answers will give you a realistic picture of where you are as 2025 comes to a close. From there, you’ll be able to set meaningful, achievable goals that can propel you toward a successful 2026.
Before you begin brainstorming those goals, let me leave you with this poem by Jessie B. Rittenhouse:
“I bargained with Life for a penny,
And Life would pay no more,
However I begged at evening
When I counted my scanty store;
For Life is just an employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.
I worked for a menial’s hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have paid.”
The year 2026 is almost here, and you have the opportunity to ask life for your future wage. Don’t take that lightly. Begin this coming year with both ends in mind, and write yourself an offer you can’t refuse.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, visit www.cashflowwithjoe.com or call Joe at 678-986-6813.