By: Stefan Aarnio
Freedomway.ca

Photo Left: Stefan Aarnio and Award Winning Investor Nik Fast with his trophy earned at the West Coast Top Investor Awards.

One of my favourite things about being a real estate investor is the opportunities to meet extraordinary and interesting people. I had the pleasure of meeting Nik Fast of 2nd Story Investments this week. Nik is a local Winnipeg investor with an accomplished track record. He was recently the winner of the West Coast Top Investor award for "Best Deal of the Year" and he is a local celebrity in the investor community.

I have known of Nik for some time in the Winnipeg market, but had not had the chance to sit down with him to get to know him better. Upon meeting Nik, I found him to be a very humble guy, he speaks well and has a very pleasing personality. All traits of a shrewd real estate investor.

Nik has earned himself some local press for doing absolutely beautiful renovations, but the deal that he won the West Coast Top Investor award for was not a cutting edge, high design renovation that would earn a spot in the newspaper. The deal that won Nik a national award was actually a very simple deal based on seeing what others had missed.

Nik's award winning deal was a small house in the Weston neighbourhood of Winnipeg (a low to mid income blue collar neighbourhood.) Weston is notorious for having a very mixed base of inventory and it is very difficult to price out comparables in the area because the houses drastically range in builds and values.

Nik's "deal of the year" was a very simple concept. It was a "missed opportunity" and a house that had scared off too many buyers. It was sitting, getting old and racking up "days on market".

The small starter house that Nik is known nationally for was originally marketed at $109,000. No one bought it, and it sat... 

Next it was reduced to $99,000. No one bought it, and it sat... 

Next the house dropped to $89,000 and after 2 large price cuts, Nik sensed a motivated seller and an opportunity: it was time to take a look.

PRO TECHNIQUE: Nik was very smart in that he kept his eye on mis-marketed "problem houses". These are often houses with fatal flaws (like badly damaged foundations, or severe mechanical deficiencies), however, they can sometimes have problems that irrationally scare off retail buyers and are relatively easy to fix: These types of houses are money makers.

Upon seeing the house, Nik was very impressed with the cosmetics, the kitchen, the bathroom etc. It was a pristine house on the surface. However, after venturing into the basement, he found a basement absolutely FULL of mould.

PRO TECHNIQUE: Mould scares of many retail buyers and for smart investors, it can be one of the easiest ways to buy equity because it can be cleaned up for a couple hundred dollars and irrational buyers and irrational sellers are both terrified of it. Mould houses can be purchased for huge discounts and fixed quite easily. This is a profit generating technique to keep in your mind at all times.

THE PERCEIVED PROBLEM: When Nik inspected the basement, his agent told him that the foundation was "cracked" and that water had run into the basement creating mould. 

THE ACTUAL PROBLEM: Upon further inspection, Nik found that the dryer vent was not hooked up and had been blowing hot and moist air into the basement for years creating mould! Also, the house had no eavestroughs, which made all of the rainwater run into the basement to create moisture and mould. In addition, the plumbing for the garden hose was leaking down the foundation and into the basement creating moisture and even more mould!

Nik was able to inspect the foundation walls and sure enough, there were no cracks!

PRO TECHNIQUE: Find a problem house and find a way to solve the problem creatively and on a boot strap budget. The more creative you are, the more you will earn.

After the house had sat for 90+ days on market (which is unheard of in Winnipeg), Nik wrote an offer for $81.5 and it was accepted. Nik had the mould quickly cleaned up and had the house immediately appraised for $120,000. All of this was done WITHOUT RENOVATIONS - Instant margin, instant equity and instant profits! Some people would call this "money for nothing".

With nearly $40,000 of instant equity created, Nik was able to pull his funds immediately out of the house and purchase another house immediately.

PRO TECHNIQUE: Velocity - when evaluating an opportunity consider the velocity of your investment. If you can get your money out of the deal fast, it's high velocity. If a deal takes years to return your principal, it's low velocity. Stick to high velocity deals if you are an active investor and keep your money moving. In Nik's case, his money moved at lightning speed.

The biggest lesson I learned from Nik is to be consistent and persistent in your local market. Keep tabs on houses that have "problems" and when they get to a high number of "days on market" go in and take a look. I don't like to buy off of MLS and prefer private deals, but I have used this technique in past and it works. Find the "deal killing problems" and find a way to fix them quickly, but take a steep discount for your problem solving abilities. Missed opportunities and mis-marketed houses have the potential to be the highest velocity deals and the highest profit earners.

Amateurs cannot spot the gold hidden in most opportunities, but professionals like Nik can! Congratulations on the deal of the year Nik!

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Thanks for reading! Please share this article if you found it helpful.

By Stefan Aarnio:
Freedomway.ca

This morning, bright and early, I attended a seminar in Winnipeg put on by Fortune Builders that a fellow investor had invited me to. The room was packed with likely 300 eager Winnipegers all excited to "learn to invest in Real Estate".

Fortune Builders was obviously an American company because the first thing I had to do upon arriving was sign a waiver and disclaimer so that I would not sue them for using my picture in future marketing. They also explicitly told me that the techniques shown did not indicate results (The USA's courts are jammed with meaningless litigation).

The man putting on the seminar was Jon Steingraber, originally from New Jersey. One thing I LOVE about American real estate investors is how competitive and cutting edge their marketing is. Canadian real estate investors (especially Winnipegers) are about 30 years behind in their marketing and when I see an American teach marketing, I listen and take as many notes as I can. Americans have a vast, savage, competitive market with 10 times the population of Canada; To survive, you have to be an exceptional marketer.

One concept that Jon shared with us was Frequency. Frequency is an advertising term that is used to describe the amount of "touches" or contacts you make to a prospective customer. For example, it usually takes 7 times the effort and marketing dollars to obtain a new customer. In contrast, working with an existing customer costs almost nothing in effort and dollars.

Many real estate investors use letter campaigns to target motivated sellers. Most investors, if they do a newsletter, mail campaign or even blog, will send out one "blast" of marketing and then quit. The first "blast" is very ineffective and converts almost no one. This is because no frequency has been built up.

However, if we took the same concept and reduced the amount of prospects, but sent them 4 timed "blasts" or letters in sequence, our conversion rates would climb with every "blast".

Why send 1000 letters out once when you can send 250 letters 4 times over a set period of time?

Frequency is extremely important in marketing, advertising and branding

Frequency is the difference between a top investor with profitable private opportunities and a mediocre investor struggling to make an average deal.

Frequency establishes yourself in your market and helps your visibility, which adds to your credibility, which increases your profitability.

High frequency investors and entrepreneurs have their fingers on the pulse of their market and get first chance at opportunities as they come through the private networks.

How can you increase your frequency in your market?

Here are 7 ideas to start increasing your frequency in your market.

1) Start a newsletter, monthly is a good place to start.
2) Attend as many networking meetings and clubs as possible.
3) Start a daily blog or weekly video blog. Syndicate as much as possible.
4) Frequently share content related to your message on social media channels.
5) Letter campaigns can be very effective if you have built good lists of qualified leads.
6) Look for opportunities to speak in front of groups of people. This only counts as one "touch" but will likely lead to more speaking opportunities. Speaking in front of groups is very high leverage and can build frequency and credibility instantly.
7) Promote other people through your channels, they will reciprocate. Give first, then receive.

Remember, if you are going to communicate with your audience, be consistent and develop a frequency. Don't start to communicate then drop off the face of the earth, that will hurt you because it will send your audience a mixed message. Make a frequency part of your marketing plan, figure out how many touches you will do over time and stick to it. Consistency and persistency always win, don't just be a flash in the pan.

Thanks for reading,
Stefan Aarnio
Freeedomway.ca

P.S. Please share if you found this article helpful!

By: Stefan Aarnio
Freedomway.ca

It always amazes me to see the thought patterns of novice and intermediate real estate investors. In Winnipeg (my home market) properties are relatively cheap compared to the rest of Canada. Properties are even considered "affordable" when compared to other markets in Canada. Winnipeg scores very well on the national affordability index.

But here's the downside of being so affordable...

Since properties are "affordable" in Winnipeg, many novice and intermediate real estate investors get lazy and actually use their own cash and lines of credit to buy properties. Eventually they will always run out of cash or credit and then they either stop growing or change their mindset. What I have seen happen in Winnipeg is that we have a good number of investors who have decent day jobs, between 1 and 10 doors (depending on the age of the investor) and their resources are usually tied up or close to maxed out.

To grow the real estate business further, it's time to think outside the box.

I started out in real estate investing at the age of 23 and had NO CASH from day one. So if I wanted to play the game, I had to operate with NO CASH. Every dollar that comes into my business is re-invested... but not into properties, because I play the game of NO CASH.

So where does my money go when I earn it? What do I buy instead of saving up for down payments? How do I operate a real estate business with NO CASH?

There are two things that I think every entrepreneur/real estate investor should be purchasing with their hard earned dollars - and it is not more property!

If you want to grow your business at an exponential and geometric rate you must buy two things: Time and Talent.

There is a term in investing and business called Velocity. Velocity is the speed at which money moves. When I started out in Real Estate investing, I was focused on doing 1-2 deals a year. I was a very low velocity investor and I actually tried to use my own cash and credit (which didn't take me far because I had virtually none).

At the time of writing, I am considered an intermediate investor (classified by one transaction a month) and I'm heading towards advanced investor (classified by 100's of transactions a year). The velocity of novice investors, intermediate investors, and advanced investors varies greatly and is the key to moving forward in your career. 

What separates the "men from the boys" when considering intermediate vs. advanced investors? In a general sense, there are only two things differentiating the two: time and talent.

In the past, my mentality would be to use my resources to save up or raise funds for a slow buy and hold. Today my mentality is to use my resources to create lead generation, websites, brands, videos, blogs, articles, photos, seminars, billboards, employees, teams of bird dogs, databases, referral programs, books, social media campaigns to build a web of influence. This web grabs large amounts of leads and maximizes the dollars generated per lead.

All of these bells and whistles attract properties, money partners and strategic partners to me. I have access to the best opportunities and have exponentially increased my chances of success.

To create and maintain this web of influence, I need time and talent. There is no way that I can build all of these things with my limited technical knowledge and finite time.

I buy time by outsourcing a lot of my tasks. Digital tasks are outsourced on eLance.com or crowdSpring.com. Purchase time in depressed economies where you can get time and talent for pennies on the dollar. Physical tasks are outsourced to local contractors or delegated to strategic partners who take a share of the profits.

I buy talent in the same way. I make sure to attract the best talent to my teams, pay people what they ask or more, invest in bonus and reward structures and keep my machine well oiled. Coaches and mentors are new addition to my payroll this year. Free advice is too expensive for me now. You only get ahead in this business by paying and you get to choose between blood, sweat, tears, time and money. You can pay in any way you like and I've already paid in blood, sweat and tears... 

Paid coaches are extremely expensive, but the knowledge and foresight I get from spending time with people who have reached the "advanced" level of investing is ABSOLUTELY PRICELESS. I often see investors scoff at the prices that some coaches and mentors charge, but I think that it is worth every penny. Why re-invent the wheel? Just hire someone onto your team who knows how to build the wheel - it's really simple. I know that I cannot do everything myself and must purchase Time and Talent to reach my goal of "advanced investor".

My goal is to do 100 transactions in 12 months, realistically starting in January 2013 and ending January 2014. It won't be easy, but with the right thinking, systems and coaches, I don't think it will be too hard either. The biggest challenge will be to think differently than I have in the past, because I have already achieved a degree of success, but not the level that I want. I can guarantee that I will not be painting suites or driving around looking at properties every day if I am going to achieve my goal, that is far too inefficient with my time and resources. Instead, I will be purchasing massive amounts of time and talent to execute my strategic plans.

Before we finish reading, ask yourself: Are you purchasing time and talent in your business? If you are, are you purchasing enough? What are you missing? Who are you missing? Who do you have to hire to get you to the next level? How do you need to change your thinking? Please share your thoughts in the comments below.

Thanks for reading,
Stefan Aarnio
freedomway.ca

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

By Stefan Aarnio
Freedomway.ca

Every single person who ever goes into business "for themselves" has felt the feeling of not earning what he or she is worth. Often this feeling is what employees feel at their jobs every day. This feeling is often strongest when good employees open their paycheque to see relatively meagre earnings every 15 days.

When these same people get fed up with their wimpy paycheque, they quit their jobs, become self employed and charge higher rates per hour (the rates that their employer was billing out to clients) to earn more money. However, the next part of the cycle is one of two things:

1) They either run out of time and hit their new earnings ceiling with escalated risk of being self-employed. 

-OR-

2) They begin to lose clients because they raised their prices and earn the same amount as they did in their job but work less hours.

I know this, because I have been in both scenarios and know the crushing feeling of not living up to my potential. So many  Real Estate investors, Self employed small business owners and all business people get the feeling of not earning our potential.

JT Foxx is one of my teachers and mentors and he has identified the "8 reasons you are not worth what you should be worth at this point":

1)   Time management – so many people who become self employed think that they have earned a holiday - every day. They are still in the "time is money" mentality and trade time for money on a 1:1 ratio. Time management is something that really separates the top earners from the bottom earners. Most people waste huge amounts of time because they are programmed to work on the clock. Time needs to be budgeted and leveraged the same way that money is to grow your business and earning potential exponentially.

2)   Fear - Fear of failure or success is a crippling disease. I have often been stopped in my tracks many times from fear of failure and even more frozen by fear of success in other cases. Fear of prices and fear of spending can often hold entrepreneurs and investors back from moving forward in their businesses. Warren Buffet says "Price is what you pay, value is what you get." Remember: It’s not how much things cost, it’s how much value that your purchase produces that matters.

3)   Procrastination- Top earners are action takers who implement everything at amazing speed. Procrastination ties in with time management, it comes from not having a specific blueprint or plans for success. Often a coach can remedy this and build a specific blueprint for you to remedy this common problem.

4)   Lack of Focus- This is something I personally struggle with. Often, effective entrepreneurs have a mild to severe case of A.D.D. and try to implement everything across the board. Richard Branson has been nicknamed "Dr. Yes" by his investment teams because he says "yes" to every opportunity and needs help with focus. Branson has actually hired specific investment analysts to shoot down his ideas and screen the bad ones. He is very happy to pay people to reject his ideas and maintain his focus. In the words of the wise: "do 1 thing 5000 times instead of trying to do 5000 things 1 time."

5)   Accountability- We are often very bad at identifying our own mistakes and punishing ourselves when we don't hold ourselves accountable. People who do not have coaches often have little to no accountability and this makes it easy for us to allow failure and abandonment of goals to occur. Accountability coaches are brilliant for "checking up" on us when we are about to give up. Hire a coach to check on your goals and ensure that you follow through with your intent.

6)   Lack of Funds- Every entrepreneur, business person and investor needs funds to "run the machine". Many times when we start out, we are WAY undercapitalized and as we grow, we need to raise cash. A common myth in business is that funds are hard to come by. However, in reality, it's talent and business acumen that are much more scarce than funds. If you can prove your skills, you will NEVER be without funding.

7)   “I can do it myself”- This is one of the worst sins a person can utter as a business owner or a self employed entrepreneur. "Doing it yourself" is extremely destructive because it keeps you from building the systems and teams required for a saleable business. People who do everything themselves do not have businesses, they have glorified J.O.B.'s and they ALWAYS BURN OUT. It's a fact. I've had the "DIY" disease for the past few years and am extremely liberated to ditch the dirty habit. "I can do it myself" is the battle cry of an ignoramus and a phrase for self enslavement.  It keeps you pinned as a self employed slave and prevents you from becoming the CEO of your own organization. Another common phrase by a chronic DIY'er is "I’ll do it after I’m successful." This is like saying "i'll purchase fire insurance after my house burns down". You have to build your business right from the beginning, otherwise, it becomes exponentially harder and more expensive to demolish it and rebuild it later. You will get trapped if you try to "DIY" it after getting the business running.

8)   "'I'm not sure what to do" - Most people, especially people who have been conditioned to be employees, have trouble figuring out what to do. We are programmed to take orders, not question authority and execute other people's orders like robots. Once you pull the plug on the J.O.B. and come into the real world, you suddenly have to think for yourself. The two things you can never pay an employee or contractor to do are:

1) Think and
2) Do things in the right order

In the land of the free, you are now the #1 thinker, you drive the ship and have to make the calls. Do not let your ship smash up on the rocks. Of course if you're not sure what to do, you will need to find a coach or a mentor to navigate you on your journey to freedom.

When you look at the 8 reasons why you are not earning what you are worth, the same list can be used to identify why people will not do business with you. Go over the list one more time, take an inventory of the reasons why you are not earning your maximum potential and focus on improving your weak categories. Remember: Where focus goes, energy flows and if you can eliminate your weaknesses and change your mindset then you'll eventually be earning what you are worth and you will be pleasantly surprised.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Please share if you enjoyed this article!

By Stefan Aarnio
Freedomway.ca

Photo left: Build your tribe with the 3 most important types of capital.

In the world of business, capital is needed to fund ventures, purchase equipment, land, product, time, talent, people, relationships and leads. Most entrepreneurs and Real Estate investors chase and compete for cold hard capital all day long and never learn about the "other" types of capital that are often more important and powerful than cold hard cash.

When I began in business, all I could think about was cash, profits and revenues. I couldn't see the bigger social, educational or relational picture that was taking place around me. Consequently, when I began in the world of business, I was isolated, ignorant, alone and broke. In the animal kingdom I would have been eaten by a large carnivorous predator.

Unfortunately for me, my fascination with traditional capital had blinded me from the true wealth and value that circulates every day and pays zero in taxes to the government. I didn't realize that business is a TEAM sport and that you cannot run it alone with just cold hard money - or lack thereof.

JT Foxx, one of my teachers and mentors, showed me the 4 types of Capital, and the 3 that most people don't think about.

The 4 types of capital:

1)   Capital (real money) for business: This is the type of capital that everyone thinks about. It's cold hard cash and most people chase it and compete for it. In my opinion, this type of capital is the most worthless of the 4 types and very easy to obtain if you understand the other 3 types of capital.

2)   Educational capital, money for your education: This is an extremely important type of capital. Many people finish high school or university and then never invest in their education again. This year alone, I have invested 3x my college education in educational capital and will have it all earned back by the end of the year. This type of capital is absolutely required for you to grow your business. The people who avoid this type of capital move slowly through life, cannot expand their business geometrically and cannot collapse timeframes. THIS TYPE IS ESSENTIAL.

3)   Social Capital – investing in causes etc. We've all heard of social capital, but so many people don't build their business around it. People do not buy products and services, they buy what you believe in. Social capital is created when you do GOOD things for your community. Make sure you give back once in a while. Select a charity to either raise for or volunteer for that aligns with your business and beliefs. This type of capital is extremely important because prosperity attracts prosperity. If you are going to succeed, you need to be an attractor of prosperity and not hoard to create poverty. People who fail to invest in social capital become isolated, alone and vulnerable. DO NOT FORGET ABOUT SOCIAL CAPITAL.

4)   Relational capital – between people. Relational capital, like social capital connects us on a greater level. People are tribal creatures and in the tribal days, isolated tribe members were cannibalized by other tribes or predators in the jungle. Today the world is no different. Relational capital is formed when you take care of the people around you and build solid, long lasting, reciprocal relationships. This type of capital is the glue that teams and tribes are built out of. Without this type of capital, you cannot bind yourself to other people or create strategic partnerships or alliances to take on bigger missions. Build your team, invest in RELATIONAL capital or die alone at the hands of a bigger, stronger tribe.

The very interesting thing about the 4 types of capital is; the more you focus on the unconventional types of capital, the more opportunities, people, deals and cash you attract. Recently in my own business, I have focused on the 3 neglected types of capital and my business has exponentially exploded. I work on the projects I want to while bigger and better opportunities fall into my lap every day. I focus on my network, bringing value to other people and creating synergies with colleagues. This is where successful people find true wealth and satisfaction in life. Stop chasing the money... The harder you chase - the faster it runs.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Please share this article if you find it helpful.

By Stefan Aarnio

Photo left: Damien Elston and Stefan Aarnio

I just arrived home from a 4 day trip to Chicago, Illinois to study with some of the best Real Estate Investors and Marketers in the world. The trip was fantastic, the speakers were amazing and as Oliver Wendell Holmes would say: 

"A mind, once expanded by a new idea, never returns to its original dimensions".

One of the biggest problems facing our population these days is that we spend extensive resources and time "expanding our minds" but we do not spend the time to train ourselves to take action immediately. Education is only potential until acted upon. We seem to have a vast majority people (especially in the Real Estate Investment World) that are Over Educated and Under Trained. We have countless men and women who are smart, educated and broke. Our universities and schools work day and night mass producing these drones and we spend anywhere from $20,000 to $250,000 per person to produce an Over Educated Under Trained drone. You can be as smart as you want in business, but if you cannot pull the trigger on a decision and take action, then you might as well just quit and go work in the government or a union.

One very inspiring Real Estate Investor that I met in Chicago was Damien Elston. 12 years ago, Damien was struggling with 4 kids, 3 jobs and was working 100 plus hours a week. Damien was barely scraping by in life until he attended a Rich Dad Seminar 12 years ago. Damien attended a live seminar and at one point the speaker stopped the presentation, looked Damien in the eye and said a a quote that changed Damien's life forever: 

"Some men have 1000's of reasons why they cannot do something, but they only need 1 reason to do something."

Damien had 1 reason why he needed to succeed in real estate. He had 2 kids already and had 2 more on the way. He wanted to be a good father and provide for his family. Over and above a strong motivating reason to be in pursuit of success, Damien had a trait that (I would consider) to be an advantage over the rest of the Over Educated Under Trained population. Where they thought they knew something about Real Estate, Damien knew nothing. This cleared his mind and he was completely free and open to absorb is training with full force.  When Damien began his Real Estate Training with the Rich Dad company, he had almost no education past high school. 

Of course you may be wondering why no education is an advantage? 

One of the biggest problems that novice and intermediate Real Estate Investors have when they learn "outside of the box" Real Estate strategies and techniques is that their ego flairs up and they begin to search their over educated under trained brain for information on something they know nothing about.

When we think we know it all, we cannot learn. Damien thought he knew nothing so when he went for Real Estate TRAINING he didn't have his past formal (and irrelevant) EDUCATION to get in the way. All he had to do was follow what his trainer told him to do.

Success is just that simple... Follow the trainer's orders.

Damien quickly became a rock star wholesaler in his market and within 6 months had wiped out all of his credit card debt and began making significant money in Real Estate. Within one year, he became a trainer for the Rich Dad company. He had an extremely healthy attitude towards self improvement: "You are going to be as good as you believe you are (going to be)". Today Damien is the CEO of the JT Foxx Organization and is responsible for running the business and implementing new strategies across the organization's brands.

The advice that Damien has for investors across all skill levels is: Start Implementing right away. ALWAYS start applying your new knowledge at the very moment you acquire it. If you are in a seminar, don't just take notes - begin implementing while you are in the meeting. TAKE ADVANTAGE OF YOUR TRAINING. Too many people say "i'll start on Monday..." and Monday never comes.

One of the key ingredients for a successful business is a high amount of actions taken. After all, actions determine results. The more actions you perform, the higher chances you have for excellence.

Remember to ask yourself when you are presented with new training information: 

1. ASK YOURSELF: Am I resisting this? If I am, why?
   
2. ASK YOURSELF: Do I think I know about this new information without really knowing about it? If you really know about it, then why haven't you done it yet?
3. ASK YOURSELF: Is my ego getting in the way? For most people, egos run amok and out of control while trampling all potential learning.
4. Does my past education really apply to this new training? Chances are, if the information is not already implemented in your systems, then it does not.

Make sure you are NOT OVER EDUCATED and UNDER TRAINED. This can be your undoing as a Real Estate Investor or business person.  Spend less time on education and more on training. Don't read another book and then get started - go now! learn how to accomplish and master a new concept - right in the field. Make those inevitable rookie mistakes, act fast and learn to play the game in the best way possible. Of course, success can be simpler than you think: Be a Damien and let your actions outweigh your education until you reach your appetite for success.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

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