Inspirational Corner: Mondays

I attended an event and there was a group discussion on how a real estate investor fills his or her day. One comment in particular stood out to me.

This particular gentleman's neighbour was financially free. He noticed him mowing his law on a Monday afternoon. He said, "I'm trying to fit in all of my chores and my entertainment on the two days that are allowed to me (weekend), and here is my neighbour doing the same chores in the middle of a week day"

The term "Weekend" is not in the vocabulary of the financially free. - Kim Kiyosaki

One of the most freeing feeling of not having a nine to five J.O.B. is that when all of my friends and family on facebook post on Sunday all of those depressing pictures of the next day being Monday, it does not matter to me. Monday is just an other day just the same as Sunday for me.

Financial freedom is more then just having money issues taken care of. It's also the freedom of your time, to use as you choose. To mow the law in the middle of the week on a sunny afternoon if you so choose.

Good To Know: Q&A With A Real Estate Investor

Would you find it helpful to ask someone who is investing in real estate about their experiences and what they are learned along the way? I felt it would be useful to me so that is why I start the Q&A With Real Estate Investor sessions using GoToMeeting.

Every two weeks (on a Tuesday night at 7pm MST) I have a guest speaker join me. They talk about a specific topic that represents some of their experiences, and they we have a Q&A session.

Space is limited, be sure to contact me to reserve your spot and to obtain the link (it changes for every event). So far the sessions have been recorded and have been make available on this blog.

If you can attend join us for a change to learn and grow from other investors experience.

Tools Of The Trade: 3 Tiers

I was working at the Asset Protection class with Rich Dad Education covering the benefit of setting up a three tier corporation for your real estate investment. At the same time as I received an email from a real estate investor that offers real estate information emails and webinars. This particular email covered why a three tier corporation is not of much benefit for real estate investors.

Hmmm. What a coincidence.

In the email's defence, it is true that the set up of a three tier and following legal and accounting cost are significant. If your goal for your real estate business are small, they cost associated with a three tier may not be worth while. If however you are not limiting your potential with your real estate business and you are dedicated, the benefit of the benefit of the three tier could out weight the cost.

Many people are either advised by professional and decide on their own to start their business in their own name and later switch to a three tier. It may seem like sound advice but the problem with that is that you would have to deal with the capital gain at that time making it less worth while.

Before I explain a little bit about the three tier corporation let me make sure that it is clear I am neither a lawyer or an accountant and that before you set up this type of structure for your own real estate business you should seek the expertise of  professional that have dealt with such structures.

Above is an example of the three tier structure. You are the shareholder of Holding Inc who in turn is the shareholder of Managing Inc and Real Estate Inc. Real Estate Inc as a contract with Managing Inc for managing all of it's properties. The benefit of doing this is that instead of the income being taxed as an investment income (40-45%) with Real Estate Inc, it would be taxed as an active income (15%) with the Managing Inc.

See the benefit? Also I am not touching base with  the added benefit should you be sued, which as I've been told be a fellow investor is a matter of when not of if in the rental world.

I suggest you get more education on the matter of the three tier structure and to make a decision that will best suit your personal situation.

Step On It: The Benefit Of A Loosing Deal

I learn in every deal that I am involved with. Not the only the ones that I have closed on or the ones that have worked out the best. In fact the deal on which I have learned the most, we never manage to close on it.

On this particular deal, we tried to arrange a wholesale, which turned into a potential joint venture partnership. From that partnership we were exposed to different negotiating tactics and creative financing. When one strategy didn't work we tried a different one, following our potential joint venture partner.

It as thought me how to look at one deal in multiple different ways. As a Buy/Rent/Hold to a Wholesale and so on. It was the same with financing. By that time we had always purchased our property by personally qualifying for the mortgage and providing the down payment which had being 20%. In this particular deal the property was an eight plex so we would have needed 35%.

The first thing we where exposed to was that the vendor was willing to hold a VTB for a portion of the purchase price. In the eye of the bank, they still would only provide me with 65% but from the purchase price less the VTB lowering significantly my deposit. Unfortunately at the time we didn't have access to that amount of money. Which made us entertain other financial strategies.

In the end, we ended up holding the property under contract for nearly four months and we weren't able to come up with a suitable solutions in a timely fashion and we ended up cancelling our contract. A week later, I was discussing the deal with a fellow investor and on the spot he offered to purchase it from me as a wholesale deal.

Since we were concentrating on purchasing the property we had stopped considering wholesaling it. Had we kept that as an option all along; we could have wholesale it out.

"When in doubt, Wholesale it out" - wise words from my trainer

Well I can now say, that is one lesson we have now learned.

You may enter into a bad deal, or struggle with a deal just to have it dissolve in your hands unable to close on it. If you take the time to learn the lessons that deal as to offer, it was well worth your time.

What A Life: Back To School

Well this year both of my boys are in school full time with Patrick in grade one and Jerome in grade three. They do grow up so fast. On the down side I am back to making lunches everyday and only a few weeks into it, Jerome is already sick of sandwiches. They are both adjusting to school life well, although Jerome is not impress with the homework.

Rich Dad Radio: The State Of Real Estate

This weeks guest speaker on Rich Dad Radio, is Rich Dad Advisor Ken McElroy author of "The ABC Of Real Estate Investing" and "The ABC To Property Managing".

Kim, Robert and Ken are discussing "Real Estate; is it a good time or a bad time to jump in?" Obama as been encouraging the country to reach for the american dream of owning your home. Should we be concern of history repeating itself? This scenario sounds awfully familiar.

Also, If Robert Kiyosaki keep saying your home is not an asset, why is he recommending real estate. Find out on this week's radio show.

Inspirational Corner: Always Look On The Bright Side Of Life

In my line of work I come across a lot of financial independent people. They are nothing special, simple the same as the rest of us. They do seem to be more relaxed and overall a little happier. How can this be, money doesn't buy you happiness. This weekend I was working with such a person and she had a great way of explaining. Out of the 100% of stress in life, 80% of it can be resolved with money. So if you've educated yourself about money and it is no longer an issue, you can use a 100% of you energy to resolve the 20% of stress left in your life which is the stuff that really matter. That would be your relationships with your friends and family and such matters.

Wouldn't it be great to be able to see the bight side of life in all situation because such a large portion of life's stress at been taken care of.

Good To Know: Self Property Managing

This was the topic of discussion on the last Q&A Session with Chris Calon. Be sure to watch that video to get more details on dealing with tenants and being a property manager. I have a prepared a presentation that will provide a little bit more details that was passed on to me from my mentor.

What Are You Reading? Why "A" Students Work For "C" Students - Part 1, Chapter 4

The "Action Step For Parents" in this chapter is to introduce new ideas, words, concepts, and experience to your child on a regular basis and, ideally, in the course of everyday life.

Any situation and any occasion is a great time to introduce new ideas and discussion about money with your child. Keep it appropriate based on their age. Last week my husband was playing Monopoly with the boys. They got discussing the mortgaging option on Monopoly. The benefit: money in your pocket now; and the disadvantages: the reduced cashflow if someone lands on their property.

Robert talks about the different windows of learning:

• Windows of Learning #1: Birth to age 12 - Quantum Learning:                                                                This window of learning is when the brain is whole and neural pathways are being connected. After age 12, in order to learn something new, a new neural pathway needs to be built from scratch. It really is harder to teach an old dog new tricks; this is why it is important to learn new words and concept in this first window so that the pathway is in place to expand on those concept in the next window of learning.
• Window of Learning #2: Age 12 to 24 - Rebellious Learning:                                                                   This is a stage at which to encourage exploration. So encourage your child to find the answers to the question that arise. Provide the tools to investigate the consequence of actions and be open to discussing the process with them. In this rebellious stage, telling a child not to do something is likely to trigger the opposite response. Rather than say "Don't..." do something, ask: "What do you think the consequences might be if you did that?" Encourage your child to make their own decisions, if they fail or falter do not rush in to rescue them. We learn from experiencing the real-life consequences of our actions and decisions and working through them.
• Window of Learning #3: Age 24 to 36 - Professional Learning:                                                                 Your relationship with your adult child at this point as evolved. If you have spent time on their financial education in the earlier stages of their life, this is when you will see them put that foundation knowledge into practice. This is the stage where you watch your child select their own path of life.

Tools Of The Trade: Prezi

My friend, Chris, was my guest speaker this week for the "Q&A With Real Estate Investor" series. For his presentation he used a program called Prezi. I was very impressed. Our thought pattern is not linear, it grows on top of one and other more like branches of a tree. Prezi was a great way to liven up a presentation.

Step On It: Growing

It's easy to stop and stick to a strategy we have mastered when learning real estate investing. It takes a constant commitment to continue to grow.

What A Life: Out With A Bang

For the last week of summer vacation before the boys go back to school we camped at the track. The boys got to ride their dirt bikes. They loved it! It was great to enjoy some quality family time before the hectic schedule of school starts again.

Rich Dad Radio: Misty Hyman

This week on Rich Dad Radio, Robert and Kim are discussing what it takes to be successful with Olympic gold medallist Misty Hyman.

You can't accidentally reach the level of an Olympian without an large amount of dedication and work. Her trainer, JD Rosania who was also on the show explained that she succeeded because she believe what she was doing was working to get her to the goal she wanted to reach. If she had doubt in the process she would never have reached her goal.

Being adaptable was also a big part of her success. Misty had her advantage in the underwater kick off. She could remain a very long time underwater giving her a lead. However part way through her training the rules where changed limiting the time allowed under water forcing her to adjust her technique.

They also discussed the importance of setting new goals when you are about to reach the one you have set for you. Many who reach a goal that they had set for themselves, lose all momentum since they do not have an other goal to drive them.

Hope you enjoyed this week's radio show.

Inspirational Corner: Single Parents

I am very fortunate! I have great kids and an amazing husband. But even though my kids are great, they are time when motherhood gets difficult. My oldest love to have things his way, and loves to argue when he doesn't get it. It's been great to have my husband to back me up or to be tagged in if I need a break.

Single parents, like my sister, do not get that option to tag out. Unless the kids are sleeping, there is no downtime. I tip my hat to all of those men and women.

Some single parents out there are also dealing with the added stress that is thrown at them from the other parent. Some parents, although could not make things work out with each other still make a great team when it comes to parenting their children. But sometimes we have a parent lash out to the other through the child. I've seen single parents that although are been put through hell by the other parent, only speak well of them in front of their children. To those single parents, I bow down to you.

To my sister Jinny, my friend Leslie and to all single parents out there, I bow to your strength.

Good To Know: Property Management

For father's day, my oldest son brought home a school project as a gift for his dad. It was a "newspaper" with the headline of my husband being recognized at the #1 dad.

"What I like about my dad:

• He rides dirt bikes
• When he's not working, he plays with me

Things to know about my dad:

•  He's a mechanic
• He works a lot
• He's a farmer"

People get involve with investing in real estate for different reason but always to improve their current situation. We are doing to have more time, so that we can dedicate it to our children. Because freeing up our time is our goal, we are choosing to use to services of a property management. Of course for our property that are not located in the same province where we live, a property management is also a necessity.

In real estate investment, many people get dazzled by the extra money self-managing can bring. There is also a lot of tired landlord that give up on the financial benefit real estate investing can provide because the cost of their time was too high.

It is important however to select the right property managers. Here are questions I ask my potential property managers. 

• What is their process for rent collection and delinquencies?
• What can they say about the local rental market?
• Are they up to date with current rental laws and building codes?
• What's their plan to market your properties?
• What is their schedule for inspection of your properties? How often do they inspect it? (I require that the property is viewed at least once every three months. Potential tenants should be made aware at the time of the application, we will be checking the batteries of all fire alarms at that time)
• Do they have established relationship with suppliers and tradesmen?
• What are their fees? (normally I plan for about 10% but I've seen them vary from 5 to 15)
• How do they screen their tenants?

Using the services of a property manager will mean that it will be that little bit harder finding properties that will be able to support the extra expense. It is my feeling that the piece of mind and freedom of your time is well worth that hassle.

If you are currently self-managing and utilizing the services of a property manager is not an option for you, be sure to catch next week's good to know for some tips on making that task easier.

What Are You Reading? Why "A" Students Works For "C" Students - Part 1, Chapter 3

Chapter's three action steps for parents is: Use Money Problem As Opportunity To Learn.

Most parents try to shelter their children from the money problem they are facing. Growing up I never knew why we where having money issues, I just knew we didn't have any. The only thing I learned about money was not to ask for it. I remember turning down school trips when there was a fee involved. My parents never knew there was an event coming up. So really, I wasn't truly sheltered, I just didn't understand the concern. I handled it by avoiding the topic best I could.

Your child may be too young to handle serious money issues, in such a case, Robert suggest that you instead discuss budgeting for grocery shopping and take them along. 

We all have money problems, no matter how wealthy we are or how wealthy we are not. See your money issue as an opportunity to grow your child's financial IQ.

Tools Of The Trade: Empower Network

I am just back from working a Rich Dad Event in Ontario and after that a week of camping. We wanted to finish summer with a bang and we are now ready for back to school.

This week for Tools Of The Trade, I wanted to talk about Empower Network. I first came across some of their videos just before I started this blog. In fact it was those videos that inspired me to start and provided me with some training on how to get started and to maintain. I've just recently signed up with them following a fellow Rich Dad students lead and advice.

I am looking forward to getting further education with Empower Network and can't wait to put it into practice. Monetizing my efforts don't hurt either.

So please take the time to check out my first Empower Network post. If you are a business owner no matter how small or big, you should be putting these great marketing tools to work for you today.