By Stefan Aarnio
Freedomway.ca

At some point, everyone starts at square one. No money, no experience, no deals, no contacts, no team, no business plan and somehow we can all make it happen. 

What do all successful Real Estate Investors have in common? There are 10 required essentials that Real Estate investors MUST have to be taken seriously. When you analyze the best investors like Donald Trump or Robert Kiyosaki and then look at a brand new investor who has never done a deal. There are 10 things that the pros like Trump and Kiyosaki have already established that a new investor will not. 

Phill Grove is an extremely successful Real Estate investor from Austin, Texas. Phill shared his Top 10 Essentials that EVERY Real Estate Investor NEEDS to be taken seriously with me last week in Chicago and I have really been cleaning up my act since then.

Every NEW Investor who is looking for their first deal must have the following before they start raising cash:

1) Websites - We are in the year 2012, a professional website is an ABSOLUTE MUST. It's completely unacceptable to not have a website nowadays, especially considering they cost less than $20 to produce. Professional design looking design is a requirement as are separate sites and URLs for your sellers, buyers and partners. Control your online presence and traffic.

2) Business Cards - Business Cards can literally make or break a first impression. We have all met the person at the networking event who either:

1. Doesn't have a card.
2. Has a FREE card from Vista Print
3. Has a hand written card on loose leaf
4. A neon card that can be seen from space
5. A card that looks like a fake $100 bill

Professional logos these days are cheaper than ever (Think less than $50 online), a proper phone line is a must (Think 1-800 number) not cell your personal cell, your personal email with professional .com address is a requirement, a thoughtful company name, and please... NO GIMMICKS. Remember, if Donald Trump wouldn't put it on his card, neither should you.

3) Voicemail Message - Easy, make it sound professional and get a good script so you sound like a real professional person. Not a party boy/girl or a cave man who cannot communicate. Nothing goofy here.

4) Real Estate Investment Associations - Simple, find local real estate groups, join and begin networking. Really, really simple.

5) Etiquette - So many investors FAIL at this. Make sure you have:

1. A Professional sounding ring tone, I leave my phone always on vibrate so no one ever hears my Apple default ringtone. Although the Apple ringtone is absolutely fine because everyone who is successful has an iPhone with that ringtone anyways.
2. Dress for success, you only one chance to make a first impression and cannot recover easily from a bad one.
3. Talk the Talk, know your vocabulary and be prepared to know what the words of Real Estate mean.
   

6) USP - Develop your unique selling proposition and memorize it. What makes you different? I like to tell stories about deals that went wrong and how I protected my investors. Warranties are also a great thing to offer if you have the guts to do it.

7) Elevator Speech - Very simple, have a 30 second, 60 second and 1:30 second version of what you do and how you do it differently. The key is DIFFERENTLY. Know your Executive summary from your business plan inside out, incorporate your USP, add a dash of emotion and stir for best results.

8) Borrowed credibility - When you start out you have zero relationships, zero credibility and likely zero experience. Find and associate yourself with more successful investors and form relationships to help build credibility.

9) Aura of authenticity - Don’t fake it till you make it, act like you belong. There is a huge difference between the two. Faking never works, everyone can smell your underlying fear. Tell yourself that you have already made it and feel the effects and confidence that comes from the feeling of early achievement. Consider what this means.

10) Mindset - If you think like a five figure person, you will act like a 5 figure person. If you want to be a 6 figure or 7 figure person, learn how to set your mind at that level and think/act like the person you want to become. People are magnets and they gravitate towards people who are tuned to the right frequencies. We set our frequency with our mindset.

These 10 essentials are often overlooked by intermediate and sometimes even advanced investors. If you are new to the game and haven't done a deal, make sure you have these 10 things rock solid before you go soliciting investors. You will blow them away with your aura of authenticity and will look professional right on day one.

Onward and upward,
Stefan Aarnio
Freedomway.ca

By Stefan Aarnio
freedomway.ca

I am often amazed when I meet new investors at networking events with how lazy people can get with their money. Often a new real estate investor is someone in their 30's to 40's, tired of their job, making a steady median income. Since they have a stable job, they are able to obtain easy credit and financing from banks. Often these investors will have access to a home equity line of credit, a wide arsenal of credit cards and will have an RRSP account with 30-40k (if they're responsible) and have saved 10-20k cash and are ready to do a deal - with their OWN money.

The sad thing is, this type of new investor has been working since they were 18 to reach this meagre cash position and they are now in their mid thirties and ready to start investing.

Yesterday, I was attending a local investment club in Winnipeg and I was pleasantly surprised to see how many investors in the club were ready to STOP using their own money and START raising capital to grow their real estate business.

The truth of the matter is, in business or real estate, you will ALWAYS run out of money... ALWAYS. No matter how much cash and credit you have, it always gets 'tied up' in a deal and you eventually run out.

I began investing at the ripe young age of 22 and the great thing about beginning so young is that I had virtually no cash, no credit and no credibility. I had to learn to raise cash, manage my small amount of credit, and leverage credibility. I had to learn the skills required to play the game with no cash from day 1 because unlike the average 35 year old new investor - I HAD NO CASH, NO CREDIT AND NO CREDIBILITY. I was a punk kid who had taken $2000 worth of real estate investing seminars and had to make the dream happen.

My investing career didn't begin to take off until I learned a very simple principle for raising money. This principal has allowed me to raise money for ALL of my deals (except my first one where I put down a small downpayment of $1200 cash). Since I learned the fundamentals of raising money, I have never put down money on an acquisition on any business or piece of real estate under my control.

Most investors think that cash is king, and they are terrified of raising money for a deal. The truth is CASH IS TRASH, everyone has it, and it's actually a very worthless and cheap commodity that can be easily attracted if you understand a few key principals.

There are 3 major parts to putting a deal together and raising all the cash you will ever need. The parts major parts are:

1. The Money = The cash required to start the business or acquire the real estate
2. The People = The TEAM that will operate the business or asset
3. The Deal = The business or asset itself.

Most new investors do not understand the 3 fundamental parts of a real estate deal and run around trying to raise money the WRONG way and they burn their credibility and look like total fools to their network of potential investors.

The Rules of The Money, People, Deal game.

1. The rules are simple: he or she who can obtain 2 of the 3 pieces required for a deal will get the third. For example, if you have a DEAL + PEOPLE... the MONEY will come every time. I have never had a deal fall apart because of lack of funding.
2. If you only have control of 1 of the 3 pieces, you have NOTHING. You are worth nothing and can't make a transaction happen.
3. The most valuable piece in the game is the DEAL. The better the deal, the easier it is to find the money. If you are incompetent or don't want to do the DEAL, you can always sell to another investor for a fee. This is very lucrative and I recommend it every day of the week.
4. The least valuable piece in the game is THE MONEY. This is because everyone has access to it. Money earns virtually 0% on it's own, it's constantly depreciating, and it can come from anywhere for a price. Cash investors will line up for a good deal and will compete and bid if they know it's a winner.
5. The people are interchangeable and so are you as the person running the deal. You are part of the people team. Make sure you have a good team and management style so you can add value to the deal and become an irreplaceable lynchpin. Develop a brand and you will become harder and harder to replace.
6. The deal drives the whole game and is the KING of the 3 pieces. The deal is the piece you should seek first (in my opinion). You can always sell it to another investor if you can't pull it off. I love buying deals from investors who want to pass or cannot close.

So many investors run around, trying to raise money without a team or a deal. This is absolutely the wrong approach.

The correct approach for playing Money, People, Deal is to:

1) Find a deal first, get it under contract with an escape clause and allow yourself a 'due diligence period' or another condition to delay your contract.
2) While the deal is tied up, begin assembling the Team as required to execute the deal.
3) Once you have the deal under control, and the people under control, begin shopping investors for money. Always have a PROFESSIONAL business plan/loan proposal prepared and be extremely thorough in your plan.

Show your investors the:

1. The Best case scenario
2. The realistic case scenario
3. The worst case scenario
4. The NIGHTMARE scenario

It's very important to run your investor through these scenarios and make sure that they are ok with loosing all of their money, or recovering from a NIGHTMARE scenario.

Once you have 2 different investors interested in funding you, you have pressure to negotiate and can close very easy. I like to split all of my deals 50/50 with my money partners because I don't like to haggle and "bite the hand that feeds". I prefer to overpay and reward my partners for investing in me. When I call them in the future, they are delighted to do more deals with me and have a cheque ready for me in minutes. I earn so much money for my repeat deal partners that they don't even think about going anywhere else.

After your first raise, begin building a track record, document every deal into a track record... then - rinse and repeat!

You can repeat this process UNLIMITED times and you will NEVER run out of capital.

What will eventually happen is, you will have more money waiting in your pipeline than deals, and then you will want to find people to bring you deals to keep your machine running. This is a great position to be in, and one that I am currently enjoying.

Homework: Think about the last time you attempted to raise money and ask yourself: Which of the 3 pieces did you have before raising capital? Were you prepared with an adequate business plan? Were you successful or unsuccessful? What could have gone wrong and what could have gone smoother?

Money raising is the ultimate skill of the entrepreneur and one that everyone should learn to perfect. I learned this skill early in life, and I will never be without capital again.

Stay hungry,
Stefan Aarnio
Freedomway.ca

P.S. Share this article if you found it helpful!

by Stefan Aarnio
Photo Left: JT Foxx and Stefan Aarnio

I have spent the week in Chicago at an event hosted by JT Foxx and George Ross and my perception has changed yet again on business and investing.

I have met investors from all levels in last few days. Some investors have literally done 1000's of deals in a short time span, others have done 500's of deals, 100's of deals 10's of deals and many have done no deals at all. What amazes me, is the different mentalities between the levels of investors.

I find that the lower the level of the investor, the more greedy they are, the lower the skill set, and they have a tendency to try to 'hoard' equity and kill deals. In contrast, I have noticed that the investors who have done 500-1000 transactions in 5 years or less are extremely generous, have wonderful abundance mentalities and can literally PRINT MONEY whenever they want. They make money by creating opportunities where others see nothing. They can freely add profit centres to distribution channels and multiply cash flows where others saw nothing. These investors are successful because they are able to ADD VALUE which is a key component of business. The unsuccessful, new investors try to TAKE VALUE away and are only focused on one number... That number is ROI or Return on Investment.

Mini-Mega Partnering is the seminar I have spent 3 days this week in, and close to 50 hours of time. It is full of some of the world's top real estate investors and coaches and the ironic thing is THERE IS VERY LITTLE TALK OF RETURN ON INVESTMENT. Very few are discussing ROI or numbers or percentages at all... Instead, 75% of our time has been spent focusing on the OTHER returns that people make in investing and more importantly in BUSINESS. After all, business and investing are extremely similar, and business is really just a high velocity version of investing.

But please don't misunderstand me. Return on Investment is a very important return to anyone investing money and please use it when evaluating a deal. However, there are 4 additional returns that I think everyone should consider when considering a business opportunity.

1. Return on Effort
2. Return on Time
3. Return on Learning
4. Return on Relationships

In my real estate career, I have done 12 transactions this year, all with none of my own money. I leverage these four returns and create value for my partners and investors by letting them consider Return on Effort, Return on Time, Return on Learning and Return on Relationships... In addition to these 4 Returns, I also give them a very healthy Return on Investment.

JT Foxx has gained access to hundreds of millions of dollars to do his real estate deals and he has done over 700 deals in 7 years. His perspective is:

"The back office (The team running the deal) is more important than the acquisition (The deal itself)." -JT Foxx

The brains behind the deal (often called the management) creates ALL OF THE VALUE in any real estate or business deal because any moron can serve coffee, but it takes a genius to create a Starbucks.

I like to remind people when I'm raising money for my deals that money has very little value when parked in a bank account. Money is a transportation medium and can be compared to a car. If you have a beautiful Porsche and leave it parked in the garage all winter, by the time summer rolls around you will have a rusting hunk of metal. The car will be devalued, in bad shape and will need repairs. Money works the same way - it needs to move. If money is parked in a bank account for the winter, by summer it has devalued. Money itself has no value and if parked long enough, it's value will go to Zero.

I have dozens of deals come across my desk every week and I always have to decide on the 5 major returns behind every opportunity.

1) What is the Return on Effort? I want to operate the deal with minimum effort. I like to cherry pick and if the deal requires too much effort, I will sell the opportunity to another investor. I am becoming a high velocity investor, big risky rehabs are less attractive to me than they used to be and need to be turned in less than 30 days. I like a high return on my effort and so do my investors.

2) What is my return on Time? Again, I am becoming high velocity. My goal is to achieve 100 deals in a year and I cannot take on a project that takes all of my time. Remember, keep the best opportunities for yourself and if something is too time intensive for your appetite, pass it on to another investor.

3) What is my Return on Learning? I need to make sure that the deals I'm doing are going to take me out of my comfort zone enough to keep my skills sharp. The world is always changing and you need new skills every day. Make sure you are learning something all the time in your deals, don't get too boring. Take some calculated risks and learn.

4) What is my Return on Relationships? I try to employ two strategies when choosing deal partners. A horizontal approach and a vertical approach. The horizontal approach is to do as many deals with as many people as possible to gain a social track record and develop a reputation. This is a great way to get your name out there and network. On the flip side, I like to remain loyal to my best investors and create deep relationships where the success and trust can climb to higher and higher levels. I like to consider who I am doing business with and the relational capital that is exchanged when doing business. Relational capital is EXTREMELY important in the business world, and many new investors completely forget about this very important currency.

The biggest mistake I see people make in business or investing is that they get rigid in their thinking and only focus on one type of deal or one number - usually ROI. Next time someone brings you a deal, consider the 4 other returns and look for the 'hidden gold' that is buried deep in some opportunities. 

Remember the other types of capital that circulate in the world and learn to harness not just money but time, effort, relationships and learning.

Thanks for reading,
-Stefan Aarnio
freedomway.ca

By: Stefan Aarnio

From time to time I visit my friend Shaun Furman's website millionairementorstoday.com and I watch him answer one or two questions from newbie investors/entrepreneurs that ask him questions about getting started in business.

On Shaun's site, one of his viewers asked "How do I start a business with no start up capital?" - A brilliant question. Many entrepreneurs start out with little or no money (that's how I started, with only $1200 dollars) and Freedomway Joint Ventures was started this year in February with literally under $100.

Fundamentally in business there are two types of businesses 1) Production based businesses and 2) Distribution based businesses.

Many entrepreneurs (including myself) make the mistake of jumping into a production based business without even knowing it and soon find themselves needing huge capital requirements to build/create/develop whatever their dream product is. After they spend the money or get a loan to "build the dream product that sells itself", they find there is no market for their creation and they die a horrible horrible death with their creditors (often their family members and friends).

I know this cycle because I have been through it many times myself, especially in the music industry.

If you are starting a business, THE BEST model you can pursue is a Distribution based business. A distribution based business is great for a beginner right to advanced entrepreneur because: 

1. They can leverage and use other people's proven products and systems, 
2. They need FAR less capital or even no capital to start 
3. The velocity of the business is higher (they can sell units on day one and earn revenue) 
4. They can leverage teams and systems faster because they are not bogged down in production, 
5. They are easier to finance, if financing is required,
6. The owner only has to focus on marketing/branding of the product and SELLING which is where ALL businesses make ALL of their money.
   

If you look at some of the biggest and best businesses in the world, Walmart for example, they are a distributor only. They white label a few products, but they are one of the world's biggest distributors of consumer goods. They do billions and billions of transactions a year (high velocity).

Richard Branson and Virgin is another prime example. Branson has over 400 companies all called "Virgin" that distribute different liscenced products and services. His company produces literally nothing, but markets everything. Branson started as a distributor of records and built a very healthy distribution channel in his early days. Today, EVERYTHING from his cell phone contracts for his mobile brand to his planes in his airline are all leased and only marketed and distributed through his mother brand. Why own? That's a ridiculous idea... Own nothing, control and sell everything.

Notice that Coca-Cola bottling companies are split up into separate regional distributors who distribute the product and DO NOT (I REPEAT DO NOT) produce the Coca-Cola formula. That is held by a separate "producer" company.

In my own business, I am making rapid changes from being an all-in-one "producer and distributor" with low velocity to creating two high velocity distributor divisions that will become my primary focus and my production line will slowly introduce products to my channels as we grow.

Below is the formula for "easy and low risk" success in business, write it down.

1) Build a distribution channel (this usually means a database, if you don't have one, you're not a business - you are a joke).
2) Sell other people's products first.
3) With your capital start funnelling in your own "production" line on a test.
4) If you find that you have success with your own product in your distribution line, then continue funnelling in your products for the highest rewards possible in your business. You will be making 3-7 profit centres guaranteed if you can pull this off and will have insane profits.
5) If your own product doesn't do well, cancel it fast, or change it fast and continue being a distributor with a steady cash-flow.

If you do this right, you literally cannot lose. You don't actually start investing capital or money until you decide to get to step 3, which many people never do and quite frankly, never have to do if they are good at step 1 and 2.

NEXT PARAGRAPH IS FOR NOVICE REAL ESTATE INVESTORS ONLY;

For all of the real estate people out there, if I could start again in real estate, I would start as a bird-dog and then a wholesaler. Those are excellent distribution businesses and I am approached weekly by novice investors with no cash who want to get started. I set them up with my bird dog package and tell them to some "bring me deals". Some of these novice investors bring me deals and get paid $500 to $5000 a lead... Some don't bring me anything and waste my time and resources. You can make a very good income as a bird dog, then you graduate to a wholesaler, after you have your distribution channel ready you can start rehabbing and distributing your "own" products.

But please, promise me you won't make the mistakes I've made in the past by jumping into production right away OR you will have 700 copies of a Alternative Rock CD sitting in your basement looking for a home.

Thanks for reading,
Stefan Aarnio
Serial Entrepreneur, Real Estate Investor, Artist
Freedomway.ca

Making Money the Smart Way
By: Robin J. Elliott

We've heard all the cliches that are trotted out by so-called “experts” - You have to risk a lot to make a lot. You have to sacrifice your time with your family / your family. You have to be focused on one specific product or service and one specific demographic / psychographic customer model. You have to own your category on the Internet. You have to create a successful image (so lease an expensive car, pay a small fortune to graphic artists, printers, et al, lease an expensive, “impressive” office, buy a franchise, buy a business... I could go on all day.

My response to all this claptrap is, “Not necessarily.” I'm an unusual kind of entrepreneur in that I hate risk. So I run my business with no cost, no risk, no employees, no inventory, no leases, no limitations, and no cost of sales. So everything I earn is 100% profit. That's 90 – 95% of my income. The other bit is coaching and speaking engagements, both of which cost a little time, but both are designed in order to create more passive income. And I live pretty well. I don't buy stuff I don't need with money I don't have to impress people who don't care. Nobody cares how old I am, how smart I am, what my academic “qualifications” are, what experience I have, where I live, what car I drive...

Sounds too good to be true, right? I'm not talking about some Ponzi scheme, Forex, Network Marketing, real estate investing – none of that stuff. This is simple, logical, risk free, minimum time. I use Leverage, and I do that through the medium of Joint Ventures. I've been doing it for 25 years. You can do it anywhere, from anywhere, regardless of who you are, where you are, or how old you are. It takes some learning and some work in the beginning, and of course the more you learn, the more you can earn, and the faster you learn it, the faster you can create enough residual or passive income to live very comfortably indeed, with enough time to enjoy your life and the people in it.

Joint Ventures are based on the simple idea that if you bring a business more sales, they will pay you a commission – that is a part of their profits. So you can literally introduce new customers to any business that agrees to pay you a commission, and you can develop multiple income sources in different industries and in different places and countries. There is literally no limit to this concept, because it takes little time and you don't need to understand the business – just the benefit of using its products or services.

Business owners, how does this sound? I took a profit centre in my business that had taken nine months to get to $4,000 per month and boosted it to $20,000 per month in FOUR DAYS – with one, risk-free JV. If a JV Broker did that for you, would you pay him or her a percentage of that $16,000 increase every month? You would if you're smart. It's money you wouldn't have had.

How you find those customers, how you link the customers to the businesses and get paid, how you develop as a Joint Venture Broker is what I teach. And I also teach business owners to use this same principle to increase their sales and profits and only pay for results – that is commissions for sales – thereby removing risk and limitations. Less that one percent of small business owners understand and use Joint Ventures, whereas the practice is very common in large businesses. It's nothing new; it's just new to the owners of small businesses. Once you understand and use Joint Ventures, you control your income and your financial destiny. Imagine having twenty different income streams from twenty different business! That, in my opinion, is called “security.” Having a job is about as insecure as you can be.

I recently made a phone call to introduce a friend of mine who helps people get taxes back from the CRA to someone. That five minute phone call earned me a commission of $4,000. And it saved his client a LOT more. Pure profit. Win / win / win. Some people work hard to earn $4,000. Or they have to sell a lot of stuff to net $4,000. There are MANY ways to make these JV's happen. You don't have to leave your home if you don't want to. Our primary focus is real, brick and mortar businesses with real people and real money, not online JV's.

If this sounds too good to be true, check out a few testimonials on my website www.leverageadvantage.com – I have hundreds more – and objectively consider how logical this is. What I'm saying is that whether your a business owner who wants to increase your sales and profits, or you've lost your job or can't get a job, retired, a school child, just got out of prison, someone who simply wants to supplement their income, a senior, a new immigrant – it doesn't matter. Joint Ventures are a very safe and viable option. No more excuses. And it depends on how much you learn and how fast, and how much you put into making it work. And the best part? Even if one of your Joint Ventures underperforms or doesn't work at all, nobody loses any money!

Next step? Grab a free membership at www.DollarMakers.com, take a one dollar trial at www.jointventuresforlife.com or contact me direct to see if personal coaching is the way to go.