What SHOULDN'T You Be Doing In Your Business?

The Earned Income Trap(TM) -- Part Two

The Earned Income Trap(TM) -- Part one

Women for Wealth Tele-Class

Hi Everyone,

The weekend in Phoenix was amazing. I'll do a separate post for that in just a moment.

I just found out from my friend Liz Uible that several of the graduates from Maui teamed up for a charity project that will also give you a chance to fine tune your wealth and investing skills.

I'm pasting the details of howyou can participate in this cause AND learn some key wealth and investing strategies below. Enjoy!

David

Women for Wealth Series™

Empowering Women Financially to Impact the World Globally™

The Women for Wealth Series is proud to announce an evening with Kelly Fabros, ex-LAPD officer turned Real Estate Mogul! Join international bestselling author, speaker and businesswoman, Christine Harvey, as she goes one-on-one with Kelly for an evening of education, inspiration and empowerment.

Learn how Kelly went from investing in single family houses to purchasing 2 large apartment buildings (316 units and 156 units) in less than 2 years.

Now you'll learn the exact techniques for wealth building to make it work for you.

7:00 PM Pacific Time Thursday, July 27th. Can't make it? Don't worry – on this first call of the series everyone gets a free MP3 download of the call! This $59.00 value is yours free. This means you can refer back to her words of wisdom over and over again – even go back months and years from now as you face new opportunities and challenges – it will all be at your finger tips forever.

You will learn:
· How to bring in exceptional cash flow and rarely set foot on your properties . . . Kelly lives in LA, her buildings are in the Midwest.
· How she made the leap into huge deals . . . and how you can too!
· How to network your way to the best deals . . . and get your offers accepted!
· How to find the money . . . Kelly has successfully raised huge sums of money!
· How to make sure your deal is a really good one . . . take the mystery out of the due diligence process!
· How to deal with the emotional roller coaster ride . . . it happens, learn what to do!
· How to navigate the world of commercial financing . . . what to look for and who to call!
· How to be prepared at closing . . . learn the surprises that can come up and how to avoid them!
· How to manage your properties from wherever you are in the world . . . choosing a property management company with confidence!
· How to learn from others' experience . . . Kelly will share her "24 Greatest Lessons along the Way" (One for every hour of the day!)
All of this and much, much more!

Plus, 100% of your donation will go towards 'Micro Lending for the Women of Bali.' This is your chance to help people who had little to start with and now find themselves with absolutely nothing, since the Tsunami struck! A few precious dollars help women build businesses to support their families, educate their children and end the cycle of poverty. And the best part is that the loan is paid back and re-circulates! Why not join us for this first in a series - learn, grow, build your wealth, and help others at the same time.

Be sure to forward this to your email list so others you know can benefit from Kelly's experience and knowledge!
To register for the live call and have access to your free MP3 download after the call visit:
http://www.womenforwealth.com

We'll talk to you Thursday night!

Women for Wealth Series^TM


P.S. YOUR FREE MP3 DOWNLOAD: You're going to be amazed at how easy some of this is! Click below to sign up now including access to your free MP3 download!
(Remember, you can go back to this recording months and years from now as you face new opportunities and challenges – it will all be at your finger tips forever!)
CLICK HERE... TO REGISTER and receive your FREE MP3 DOWNLOAD http://www.womenforwealth.com

P.P.S. 'ASK MASTERMINDERS' ... WANT TO ASK YOUR QUESTION? Here's your chance to participate in advance. Pose your question to our expert and we'll do our best to have it covered in the interview. Click here to enter your question: AskMasterminders@gmail.com

What is the Women for Wealth series?
Started by three Maui Mastermind participants, Christine Harvey, Juli Butler and Liz Uible, this organization is Empowering Women Financially to Impact the World Globally™ through education and inspiration.

Ten Deadly Deal Analysis Mistakes

Hope you all enjoy this one. I'm off tomorrow for Phoenix for our first ever, Maui Millioniare(TM) Wealth Weekends. We have about 230 people coming for this wealth workshop with 100% of the proceeds--gross, not net-- going to charity. I'll let you know how it goes.

See you next week!

The Ten Deadly Deal Analysis Disasters

Mistake 1. Taking TOO Long: Good deals don’t wait around for indecisive people. Many people “think a deal to death.” The best way I know to lower your anxiety level with a deal is to move forward provisionally (i.e. with a subject to clause or liquidated damages clause of some sort. You’ll learn more about this in the next chapter.)

Mistake 2. Trusting Seller’s Numbers: Even if the have only good intentions, most sellers just aren’t knowledgeable and all of them are inherently biased at least a bit. The most common problems with a seller’s numbers are pretty obvious—they think the value is too high (often times confusing “listing prices” of local homes with actual “selling prices”), and they think the cost to fix it up is too low.

Mistake 3. Trusting “appraisals”: An appraisal really isn’t meaningful, unless YOU hired the appraiser, and YOU gave them the instructions, and YOU are handing the appraiser the check. I can influence an appraiser to appraise a “$100,000” house for as little as $80,000 and as high as $120,000 (or more). That’s close to a 40% varience on the two appraisals of the same property! So take any “appraisal” the seller hands you in the spirit that it was intended, as a MARKETING piece! The best appraisals are ones that you hire the appraiser and give them their instructions. If I really want an appraisal to be accurate then I choose a reliable appraiser I’ve used before and ask her, “What would this house need to be priced at to sell in 90 days or less?” This should give you a conservative estimation of value.

Mistake 4. Doing your math in pencil: The next time you catch yourself thinking it’s okay to “fudge” your numbers a little to make the deal cash flow or the rehab payoff on paper, BEWARE! Some investors have a tendency to “play” with the number a little to make them show a marginal deal is better than it really is. Remember, just because the deal makes a profit on paper doesn’t mean you’ll make money in the real world.

Mistake 5. Overestimating the market rents: This one happens all the time. The way you know what a house will rent for is to do a market rent survey. The rents listed in the paper or that a real estate agent told you may or may not be accurate.

Mistake 6. Overestimating the “as is” value: So many investors forget that to turn a house in 90 days or less requires the price to be REAL, not pie in the sky. What would it really take to get the house into top showing condition? Be careful to be conservative in your estimate of value going into the deal. The worst case then is that you make MORE money!

Mistake 7. Getting bogged down in process… Use the 3-step process you just learned about so that you incrementally invest more time in the deal only as it proves it is warranted. Learn to trust your due diligence and evaluation process and make sure it is checklist driven. This is your best insurance that you’ll do it the right way every time.

Mistake 8. Worrying about the house on the Quick View step: On your first pass, you are only concerned about three things: 1. What is the real market value of the house? 2. Is your price right? 3. If you are planning on holding onto the property long term, will it cash flow?

Mistake 9. Underestimating the time it will take to Flip / Fix / Fill / Sell: I’ve bought a lot of houses from investors who got stuck with holding costs being too much for them to handle. Be careful here. If your exit strategy is to sell the house to a retail cash buyer it will need to be in showing condition or you’ll struggle to find a quality retail cash buyer. Always be conservative with how long it will take you to execute your exit strategy and if possible, build in a healthy cushion of extra time.

Mistake 10. (The Biggest Deadly Deal Disaster of All) Hiding behind analysis because you are afraid to pull the trigger on the deal! At a certain point as an investor you will need to step forward in the deal and commit.

Wealth Tips Eletter July 10, 2006

This eletter was sent out earlier today. If you want to subscribe to this eletter, just email your contact info to my assistant judy@getrichgetreal.com.

THanks, David

Subject: Wealth Tips and Announcements

Hi Everyone,

I know it’s been over two months since my last posts to the wealth blog and my last eletter on wealth. Please forgive the lag. As most of you know, now that I’ve sold my half of MFG I’ve been semi-retired for the last 6 months and I’ve been loving the extra freedom.

It’s been an incredible experience getting the chance to start fresh and focus my business life about what I’m most passionate about.

I hope you enjoy the wealth tips, some on real estate investing and some on wealth in general.

Also you’ll notice some important announcements and links in this eletter too.

Enjoy!

*********** Wealth Tips 1 of 2 ******************

Changing Your Buying Strategies as the Market Changes

Many of you live in areas of the country where the real estate markets have slowed down quite a bit. This will have a big impact on you as an investor and it’s critical that you adjust your buying strategies accordingly.

If your market has slowed then the biggest shift is for you to tighten up on your deal criteria. What used to be a hugely profitable deal two years ago may be only a marginal deal in today’s market conditions. Make sure you build your profit in right from the very start.

For those of you who buy for cash (your money, your bank’s money, or outside hard money lender’s money): make sure you get a much lower price than you might have settled for several years ago. You can’t be buying for 70-75% or higher of the as is value in a flat or declining market and be confident that you’ll make enough money to make the deal worth your while.

I suggest you tighten up your minimum margin to at MOST 65% of the as is value, and ideally lower than that.

For those of you who are buying on terms (lease options, subject to the existing financing, owner carry deals): make sure the property will cash flow with a cushion if you have some longer vacancies or a small decline in market rents of 5-10%. In a really soft rental market I want my MINIMUM cashflow cushion to be a spread of at least 10%, ideally 15% or more, between my total payment and the market rent. A down market is a GREAT time to pick up bargains that you can hold for 2-5 years until the market turns, then you get to ride up the appreciation curve on the other side.

The smaller the cashflow cushion you have, the more equity you need in the deal to build in security for yourself so that if worst comes to worse you can sell the property and exit from it fast.

I hope these reminders help spark you to take a fresh look at the deals you are willing to take in a buyer’s market.

Below I will be sharing the Five Core Financial Wealth Skills.

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Wealth Blog Update:

I will be posting WEEKLY updates to my wealth blog from here on out so make sure you go check it out. I’ll share strategies on wealth, investing tips and techniques, and other wealth insights. It’s located at www.GetRichGetReal.com

I’ll be sending out this eletter once or twice a month so make sure you add this address to your “safe senders” list or you might miss out on these important ideas.

Wealth Workshop for Charity!

On July 22-23^rd, 2006, Diane and I will be personally leading a 2 day wealth workshop to raise money for charity. Diane and I will be paying for all of the costs for the event so that 100% of your $500 ticket price goes straight to charity (The Justa Center, a homeless shelter that works with families to get them off the streets and back on their feet).

Below is a quick description. To register go to http://www.taxloopholes.com/index.php?s=stldetail&id=52

The workshop is laid out in six parts:

Part One: Upgrading Your Wealth Operating System™! Learn a powerful five-step process to literally reprogram your belief system about wealth, money, and financial abundance so that making money is easy and automatic. Never again will you unwittingly engage is self sabotaging wealth destroying behaviors because in this section of the workshop you’ll learn the key distinctions that will put you in charge of your own wealth program.

Part Two: Dreaming Big! In this section of the workshop we’ll guide you to be bold and create those big dreams in the seven important areas of your life to serve as the guiding star for all that you accomplish. Plus, you’ll learn how to tap into other people’s dreams to build a lasting joint venture to accomplish even more.

Part Three: Masterminding Your Way to Millions! You don’t need to do it all alone. You’ll discover how to create a highly functional mastermind group that will push you to even greater accomplishments. You’ll learn the five critical elements of a powerful mastermind to keep it operating at the highest possible level for breakthrough results.

Part Four: Building Level Three Wealth and Enjoy a Maui Lifestyle! It’s not enough to just make a lot of money. You need to build your wealth in such a way that it truly creates secure and thriving financial freedom. In this section you’ll learn the secret Maui Financial Freedom Formula™ and a breakthrough new system for measuring your real financial progress. You’ll learn why “income” is the worst predictor of financial success and how to powerfully build with the five pillars of wealth to create enduring financial freedom.

Part Five: Tapping Into Maui Giving to Create a Legacy that Lives On Beyond You! One of the hallmarks of a Maui Millionaire is the sustained giving that he creates throughout his lifetime.

Once you’ve learned these essential strategies and technologies to leverage from where you are to where you want to be, we have one more important area to focus on before you go home...

Part Six: Your Personal Financial Freedom Plan. Before you leave on Sunday night you’ll take with you a highly detailed, personally created, action plan to take you to financial freedom. This way when you get home you’ll hit the ground on Monday morning with a clearly laid out plan of exactly what you’ll need to do to turn the ideas from the workshop into dollars in your bank account.

************ Wealth Tip 2 of 2 *****************

The Five Core Financial Wealth Skills

One of the biggest roadblocks I see for wealth builders is not knowing where to start. Below is a list of the five most important financial skills you will need to cultivate to become wealthy.

Go down through this list and pick out on area you see that you need to develop and buy a book on this subject and begin reading it in the next 14 days. Don’t delay. Your financial freedom depends on you taking action!

Skill One: Learning how to invest for forced appreciation. Forced appreciation is when you buy an asset and increase it’s value by changing it or leveraging it in some way. For example, you can buy a foreclosure house at 50 cents on the dollar and massively increase it’s value by both fixing it up and also changing the circumstances of the owner. Or you can buy an apartment building that is in a prime location and convert it to condos. This change to a higher economic value is another example of forced appreciation.

Skill Two: Once you’ve accumulated a solid asset base, learning to invest for passive, residual cash flow. This was a hard lesson for me to learn. There is a big difference between investing for capital gains and investing for residual cash flow. To be financially free you need to create streams of income, not a nest egg. Your nest egg is only a resource from which to create income.

Skill Three: Fluency with the language of business—Balance sheets, Cash flow statements, and Profit and Loss Reports. I don’t love math myself, but for me to build and grow my wealth it was critical for me to learn a basic level of fluency in financial statements.

Skill Four: Fluency with the language of contracts. Every deal you ever do will be expressed in the legal language of a contract, so you better take the time to learn how to understand that language.

Skill Five: Upgrading your Wealth Operating System™. This is the sum total of your emotional associations and beliefs about money, wealth, and your ability to earn and enjoy it. This is such a key part of wealth that I just finished co-writing a book on this topic with Diane Kennedy called, The Maui Millionaires™. The book will be released in late October or early November of this year.

Okay, so there you have the skills laid out. I’ll make sure to post some more detailed ideas on how to best master them on my wealth blog and in future Wealth Tips eletters. The key for now is to highlight what they are for you.

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That’s it for this letter. Make sure to keep checking weekly on my wealth blog (www.GetRichGetReal.com) for more updates and ideas on creating wealth.

I hope your week is a GREAT one!

David Finkel

P.S. If you want to find out more about that two day wealth workshop where ALL the ticket price will go to charity just go to http://www.taxloopholes.com/index.php?s=stldetail&id=52 to register!

P.P.S. It’s nice to be back in the game since my extended vacation!