It’s Not About the Speech…

A former mentor of mine, Floyd Wickman, who commanded speaking fees in the tens of thousands of dollars, once shared with me how he was able to almost mystically captivate his audiences. Would you like to know his secret?

I’ll give you a hint: It’s not about the speech – it’s about the audience!

Floyd explained that, in any audience, there are only ever ten people. Wouldn’t it be great if you knew everything you needed to know about all ten of them before you ever stepped up to a podium or onto a stage? Well you can…

Classic speaking theory suggests that most speeches fall into one of three general purposes: to entertain, to educate, or to motivate. Floyd showed me, that in order to really connect with your audience, you need to do all three – every time.

Entertain

We all love to be entertained. For a speech to be entertaining, it doesn’t need to be uproariously funny; it only needs to be enjoyable and perhaps divert our attention for a few moments. As I write this, Shrek 3 is in theatres. Although I’ve not seen this one, it no doubt delivers a childlike storyline and moral for the kids, cleverly combined with more sophisticated diversions for mom and dad.

Educate

One of the most common purposes of a speech is to educate or inform. This involves helping people to learn about a new subject, develop a new skill, or learn more about a familiar subject. Many workplace speeches are intended to inform.

Motivate

To motivate or persuade requires changing an audience’s attitudes or behaviours. Change rarely comes easily, so this can be one of the hardest tasks of a speaker. However, if done effectively, it can also be one of the most rewarding. Sales presentations and high level vision talks are good examples of speeches intended to motivate.

Your Audience

But it’s not about the speech; it’s about the audience. So who are these ten people in your audience?

The first three only want to be entertained. These may be your toughest customers. They already know everything they need to know about your subject – in fact they may know more than you do. What’s worse, these are the people that are already out there doing it! They certainly don’t need to be motivated. They may be asking themselves why they’re even wasting their time listening to you. Ah, but if you can entertain them, they could become your biggest fans.

The second three people only want to be educated. These people are hungry. They come with notepads and poised pens. They want to learn. So if you merely entertain or motivate, they’ll go away feeling cheated. But if you leave them with memorable information that will help improve some part of their life, they will be very glad they came.

The third three people in your audience only want to be motivated. These people are having a bad day, week, month, or year. They’re thinking: “I already know everything I need to know – I’m just not doing it! So don’t try to teach me and don’t just entertain me!” However, if you can move them to finally take action, they’ll love you forever.

And what about that tenth guy? Well, for whatever reason, no matter what you do, you’re never going to get through to him. He’s probably in the wrong room. Maybe he meant to attend a session down the hall and is just waiting for an opportune time to get up and leave without drawing attention to himself. You will never be able to completely satisfy everyone in every audience.

Inspire

It’s not about the speech; it’s about the audience. Merely delivering a speech will get you only so far. Entertaining, educating, and motivating, combined with inspiration, will transform audiences. To inspire literally means ‘to breathe life into’.

Several months ago, Bruce Springsteen appeared with Elvis Costello on a wonderful show called Spectacle. Between powerful performances, Bruce described how he wants to write and perform in a way that connects with real people. There are loads of talented musicians, singers, and songwriters, but only a handful can do this. Bruce approaches his craft with a passion for transcendence by being “up in the heavens and connected to the earth” with “music that’s rooted, and at the same time, flying.” Arguably, Springsteen has succeeded.

Now breathe in. As you prepare your next speech, think about how to entertain, educate, and motivate every time, and begin to breathe life into your audiences.

Remember: It’s not about the speech; it’s about the audience!

Wholesale-Hybrid Real Estate Investment Model

Executive Summary:

The Basic Residential Real Estate Investment Model demonstrates our ability to generate superior investment gains through the prudent use of leverage secured against hard assets. This involves acquisition, at or slightly below market value, of homes that are in generally good repair. These are essentially retail investments.

Wholesale investing involves purchasing homes, in need of more major repairs, at discounted prices and adding value through renovation. These opportunities are found through court-ordered sales or from otherwise motivated sellers. Acceptance of wholesale offers requires the ability to pay cash and to close quickly.

When renovations are complete and a qualified tenant is in place, new conventional first mortgage financing can be put in place. This means that an investor may then be able to extract up to 80% of the improved market value. Ultimately we are controlling the same asset, but with significantly less capital.

Adding value through renovation, and this more sophisticated use of leverage, translates into higher returns. Capital raised through refinance can then be redirected to the next project – thus recycling the down payment.

Why Use an Equity Partner?

This is by far the best question I have received. Real estate investors routinely target returns of 20-40%. They just don’t usually share them with you!

It is certainly possible to arrange short-term debt (bridge financing) through private or commercial lenders. Interest rates are naturally higher than conventional financing, but not unreasonable. The problem is that each deal requires at least some new capital, and additional credit when it comes time to refinance. Eventually I will run out of both.

An equity partner is in for the long haul and shares in gains through renovations, as well as cash flow, mortgage principal reduction, and appreciation. Ready access to capital and credit enables us to find and close better deals.

There is risk associated with all investment activity

Seasoned investors identify, mitigate, and manage risk. The lowest risk real estate investments are single-family homes. Townhouses have fewer variables when it comes to renovation – interior only – so there is reduced likelihood of error in estimates. We are minimizing down payment, but not equity, and we are fully secured on title.

These wholesale purchases do however require cash up front, and the luxury of conditions, inspections, and written estimates may be significantly lessened.

Case Study:

This is the same property profiled in the Basic Model. After Repaired Value and rental assumptions are the same. The reason returns are so much better is because of the wholesale purchase price, value added through renovations, refinancing, and most importantly, because the same asset is controlled with less capital.

Wholesale-Hybrid Model (recycling down payment)
After Repaired Value (retail)	$204,000
Unconditional Cash Purchase Price (90% of ARV less Renovations)	$163,600
Seller Financing	$0
Closing, Carrying Costs & Contingency (3 months)	$4,400
Full Interior Renovations	$20,000
Initial Financial Contribution (Purchase + Renovations + Carrying)	$188,000
Refinance with new first mortgage (80% loan-to-value)	$163,200
Acquisition & Project Management Fee (2% of ARV)	$4,080
Capital Investment Remaining after Refinance (initial + fee - mortgage)	$28,880
Year 1 cash-flow (rent - PITCM)	$4,219
Year 1 cash-on-cash return	14.61%
Year 1 principal reduction (35 year amortization; 2.5% variable interest)	$2,868
Year 1 gain (cash flow + principal reduction)	$7,087
Year 1 return on investment assuming 0% appreciation (gain / investment)	24.54%
Estimated 5-year value (assuming 3.5% annual appreciation)	$242,288
Estimated 5-year mortgage balance	$143,315
Estimated 5-year gain (Value + cash-flow – mortgage balance – investment)	$91,188
Estimated 5-year return on investment (5 year gain / investment)	316%

Capital Partner:

The Capital Partner’s projected net gain is calculated as follows:

Calculation of Capital Partner 5-Year ROI
Estimated 5-year gain	$91,188
50% of 5-year gain	$45,594
Divide by Capital Investment	$28,880
Capital Partner return on investment (5-years simple interest)	158%

A Final Note:

This post is provided for information purposes only. It is not intended to solicit investors.

Twenty Twitter Tips

The following post is in response to a friend’s question: How Do You Get People to Follow You on Twitter?

The short answer is: It’s called social media; engage others and provide something of value!

Here are Twenty Twitter Tips to help you get started:

1. Go to the Twitter Help page and read it;
2. Read a few of the blogs on ‘How to Find Followers’, but don’t buy a program to automate!
3. Fix your Bio (if it’s weak – or cliché); choose a great photo; state your location; and include a link to your website;
4. Send invitations to people already in your database;
5. If you haven’t already done so, download (free) TweetDeck or a similar application to manage your Tweets;
6. Use ‘Hash Tag’ (#) searches to find relevant Users (i.e. #environment, etc.);
7. Follow everyone you find interesting (there’s an initial limit of about 2,000);
8. Search the ‘followers’ or ‘following’ lists of others you find interesting, and follow them;
9. ‘Retweet’ (RT) interesting and relevant Tweets;
10. ‘Mention’ (@) your Followers liberally; respond to, or comment on, their Tweets;
11. Keep your own Tweets laser-focused (but stay human);
12. Use Hash Tags to identify your tweets (if applicable);
13. Participate (Tweet) often (but don’t overdo it);
14. Use compelling titles for your blog posts and link to them in your Tweets;
15. You should be blogging in your area of expertise at least once a week (keep it to approximately 300 words);
16. Remember: Social Media introduces; Blogs educate; Websites/People sell;
17. Provide your Followers with value: Contribute, contribute, contribute!
18. Watch and emulate the Users you appreciate most;
19. Keep it fun. Don’t become obsessed. It’s not a contest – just let it happen;
20. Contact me if you’d like clarification on any of the points above.

I Met Jesus in Kitgum

I met Jesus in Kitgum. Her name is Sandy. I don’t know what she looks like, but I’ll never forget the sound of her voice.

Four years ago, my friend David Collins, founder of Canadian Food for the Hungry, invited me to join him and small group of adventurers on a Vision Trip to Uganda.

Uganda is in east Africa. The northern part of the country has been ravaged by an ongoing, brutal, and senseless civil war. After arriving by airplane and spending a few days in the capital city of Kampala, we boarded a much smaller aircraft and headed north to Kitgum.

Kitgum is a tiny dusty town just south of the Sudan border. Home to numerous relief agencies, it’s a bit of a safe haven for victims of a war that has recruited thousands of children and forced them to serve as soldiers, porters, or looters.

Just before dark, we settled into our accommodations – a sagging mattress, a torn mosquito net, well-worn furniture, and a cold shower. I was a little apprehensive about sleeping in that room, but it was far better than what we would witness the next day.

In the morning, as we piled into our van, we heard rumours of recent ambushes on the route we’d be travelling. For the price of a case of cookies, we were in good hands – eight armed guards rode in the truck ahead of us.

That day, we visited two IDP camps and interviewed three brave survivors. IDP stands for Internally Displaced Peoples. These are like refugees – in their own country – who have been moved from homes scattered throughout the countryside in an effort to avoid attack from rebel forces. The theory is that there’s safety in numbers. The problem is that it’s almost impossible for these people to support themselves in camps.
 

One of the camps we visited was Padibe. A fire had recently torn through this camp, devouring the grass roofs of tiny huts that provide shelter. These people had lost everything – and then lost that too!

At Padibe, we heard from a young woman – now in her mid-twenties. Guilt and fear prevented her from speaking in much more than a faint whisper. Through a translator she told us how, as an adolescent, she was walking with three other girls from her village, on their way to work in a field, when they were ambushed by rebel soldiers. The soldiers warned them not to show fear, and in a twisted attempt to prove their point, shot and killed two other children in front of them. All four girls were terrified. Their punishment was that this young woman and one of her friends were ordered to beat the other two girls to death. From the lips of the translator we hear three dreadful words: “…and we did.”

The survivors were taken to a nearby rebel camp. But in the middle of the night, the beaten girls regained consciousness and crawled toward the sound of voices, looking for help. Our survivor and her friend were told to finish the job – “…and we did.”

For over twenty years, children have been abducted and forced to do unthinkable things. Girls are recruited as porters, looters, and concubines. Ten year old boys are lined up across from one another, given guns, and told to shoot the boy across from them. Those who survive become soldiers; those who don’t are called cowards. The threat is always the same: “After what you did, you can never go back.”

The broken young woman addressing us in the IDP camp eventually escaped during a raid and hid two nights in the bush before arriving in Kitgum.

But that’s not my story.

My story involves another young girl: Sandy. Sandy’s a Night Walker – one of hundreds of children who live on small farms with their parents, yet journey every evening to huddle together for the night on a concrete slab in the centre of Kitgum, in an effort to avoid abduction.

After an emotionally exhausting day in the camps, our group returned to Kitgum and, that evening, visited the Night Walkers. We were somewhat surprised by their enthusiastic welcome. These kids were clean, well-dressed, orderly, educated, healthy-looking, beautiful, gentle, and joyful.

I was tired and found a place to sit on a concrete wall. I remember the warmth of the wall and the warmth of the bodies around me. The black children seemed to fade into the blackness of the night. I heard a voice beside me: “My name is Sandy.”

We just sat there. Sandy’s fourteen. She sleeps on the veranda and has a twelve year old brother named Jacko. She showed me her school books and math homework. A ten year old entertained us. I played and teased with others as they crowded around. But I sat with Sandy.

Not far off, I heard voices that sounded like fun. I asked Sandy if she’d like to see what was going on, but she was clear:

“No, I just want to sit here with you.”

After a trying day, and in the midst of commotion, here was a friend who just wanted to sit with me. I couldn’t move. I wanted to stay there forever.

I don’t know how long we sat there, but eventually someone came to tell me it was time to go. I stood, and reluctantly said good-bye. I moved away from the wall and waited for the others.

But as I stood there I felt something. The breeze? My imagination? A gentle touch on my shoulder?

It was Sandy: “Mr. Jeff, are you coming back tomorrow night?”

I wouldn’t recognize Sandy to see her. It was dark, and she was dark. But she had a rich and gentle voice. I would remember that voice.

“I just want to sit with you.”

“Are you coming back?”

Toastmasters & the Church

In January of this year I made two commitments to myself: I would join a Thursday morning Toastmasters group, and I would join a Sunday morning church service.

My first morning at Toastmasters a gentleman with a broad smile walked directly toward me, recognized me as a guest, shook my hand, and warmly welcomed me. He then took me into the room and elegantly introduced me to others who would soon become my friends. I was addressed by name and treated as an honoured guest. That first day, I was treated to a hot breakfast, offered an opportunity to speak, and at the end of the meeting the group genuinely wanted to hear how I felt about being in their presence.

Within only a few short weeks I’ve been invited to lunch with one of my new friends, and coffee with others. Another called Easter Sunday to invite me to join him for dinner. The Toastmasters organization actively explores and builds on the individual gifting of each new member. I even have a mentor to help me grow. At each meeting I’m encouraged (and delighted) to serve the group, and I’m learning how to love others.

This morning at Toastmasters I had the distinct privilege of delivering a short message entitled: I Met Jesus in Kitgum.

I’ve been following Jesus for over twenty years. I have served on staff at a large local church and have a Masters degree in Christian Studies. I know that the Church truly is the body of Christ. I love the stated vision of the little congregation that meets on Sunday mornings in my new neighbourhood, and to their credit, they do have great coffee, but like all who are created in the image of God, I long to be valued, to belong, and to contribute.

As I wait in hope for the church, I praise God that his Spirit is welcome at Toastmasters!

Never Be Afraid To Ask

Several years ago, I was sitting on the front row in an Executive MBA classroom. Maryann, a few rows back, was explaining a concept related to the application of technology in her work as a Business Systems Consultant.

As Maryann spoke I recognized repetition of a certain TLA.[1] In fact she used this TLA so frequently that I began to suspect that it might be integral to what she was explaining. The problem was: I had no idea what those three letters stood for!

Being no match for Maryann’s technological expertise, I naturally did what you might do. I quietly leaned to the woman on my left and asked: “What does ‘TLA’ stand for?” She shrugged and whispered: “I don’t know.” I then shifted to my right and asked the same question of the man sitting there. Same response.

Next I did something that took great courage, and defies all human logic: I raised my hand and asked the question. Maryann graciously obliged, and much to my surprise, nearly seventy percent of the classroom simultaneously expressed appreciation for their newfound knowledge. And I thought I was the only one who didn’t understand!

Here I was, sitting in a room full of brilliant people, and no one dared to ask! Why is it that we sometimes risk ignorance in order to maintain appearances?

I have, of course, since learned that the best and brightest people we encounter in life are never afraid to ask for clarification when they don’t understand something. Hmm, I guess maybe that’s how they came to be the best and brightest among us!

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[1] A ‘TLA’ is a three letter acronym for ‘Three Letter Acronym’. I credit my friend Steve Outhouse for sharing this clever tidbit with me. I use it here generically, for demonstration purposes.

A Basic Residential Real Estate Investment Model

Executive Summary:

Our objective is to purchase and retain break-even or positive cash-flow residential revenue property in fundamentally strong markets – property acquired at or below market value, with expectation of a minimum 5-8 year hold. Strategic improvement and superior property management help to attract and retain desirable tenants.

Revenue producing real estate investment benefits from the prudent use of leverage secured against hard assets to achieve: income from cash-flow; reduction of mortgage balance; equity growth through appreciation; a hedge against inflation; and favourable (capital gains) tax treatment.

There is risk associated with all investment activity. One deterrent to would-be real estate investors is fear of having insufficient information, knowledge, and experience to find, acquire, and control consistently performing assets in fundamentally strong areas. There is significant difference between emotional speculation and a reasoned approach to investing. Seasoned investors learn to identify, mitigate, and manage risk.

Why Edmonton?

Looking to the future, resource-rich Alberta, and specifically working-class Edmonton, presents one of the most promising investment opportunities in the world. Here are a few reasons why:

• Average income (percentage and net dollar value) is increasing faster than provincial/national averages
• Population is growing faster than provincial/national averages
• Job creation exceeds provincial/national averages
• The city has a diversity of major employers
• At 25.9% debt service to income, standard townhouses are well within the RBC Affordability Index’s ‘hot zone’
• Edmonton is expected to benefit from an economic real estate ripple effect due to major investment in Alberta oil sands
• Political leadership has created an atmosphere of economic growth
• The Economic Development Office is progressive and helpful
• Infrastructure is being built to handle expected growth
• The area is attractive to baby boomers’ lifestyle
• There is a short-term problem likely to disappear in the future: many large-scale energy infrastructure projects are temporarily on hold
• Labour and materials costs are rising, driving up cost of new homes and consequently dragging along value of re-sales

Why Me?

I have been involved in the real estate industry for nearly 30 years, as an investor, agent, educator, or consultant. I have assembled an exceptional team of real estate experts to handle all aspects of each transaction. As a Real Estate Investment Network member, I have timely access to research and updates on real estate markets.

Why this property?

This property is a well-situated 2 story townhouse with front and rear yards, adjacent parking, 3 bedrooms, 1½ bathroom, 5 appliances, and in excellent condition. The complex has good management and this unit has a tenant already in place.

The calculations below assume purchase at market price and variable rate mortgage. This property is one of three to be purchased as a package.

Projections:

Purchase price	$205,000
Appraised value	?
Down-payment & cash to close (includes 1 month staying fund)	$44,500
First mortgage (new financing at 2.25% variable)	$164,000
Second mortgage (VTB)	$0
Year 1 annual cash-flow	$3,575
Year 1 mortgage reduction	$3,116
Year 1 profit	$6,691
Year 1 Cash-on-Cash return	8.03%
Year 1 Return on Investment (assuming 0% appreciation)	15.04%
Estimated 5-year value (5% growth/year)	$261,600
Estimated 5-year mortgage balance	$147,692
Estimated 5-year profit (Estimated 5-year Value + cash-flow – Mortgage Balance – Down-payment)	$87,283
Estimated 5-year Return on Investment	196%

Joint Venture Partner:

Joint Venture Capital Partners are invited to participate in these projects as outlined on the accompanying Classic JV Worksheet. As Managing Partner, I find, negotiate, and administer the investment from beginning to end. The Capital Partner supplies the initial capital and credit, is fully secured on title and, upon disposition, receives return of all funds invested prior to participation in 50% of all net profits.

Using the projections above, expected net gain is calculated as follows:

Estimated 5-year profit	$87,283
50% of estimated 5-year profit	$43,641
Divide by down payment & cash to close	$45,425
Estimated 5-year return on investment	98.0%

Some other things you may not know:

· There are no Land Transfer Taxes in Alberta

· There are no Rent Controls in Alberta

· All mortgages in Alberta are non-recourse

· In Alberta, all Condominium Corporations must commission an engineering firm to provide a Reserve Fund Study every 5 years

· Over the past 50 years, average residential real estate in Canada has appreciated by a compounded 6.4% annually (Alberta is expected to lead future growth)

· Vacancy rates in Edmonton Q4 2009 were 4%; CMHC projects 3.5% by Q4 2010

· Alberta is currently one of the few balanced markets in Canada

· Alberta has the second largest oil reserves in the world (after Saudi Arabia) – and arguably the most secure!