Knowing

In the past few days I've had the distinct privilege of walking with a friend as he struggled to complete an MBA assignment. Duane (not his real name) is a highly skilled professional in his field (healthcare) and has courageously taken on the challenge of furthering his education, mid-career.

When Duane found himself stuck on one particular question of an assignment, he did what all intelligent business people do: he called for help. As I listened to Duane's struggle to line up his learning with the case study in front of him, I recalled my own experience as an MBA student. I, too, leaned on the wisdom and experience of others who helped me get through. Cliff (his real name), an accountant, and Michelle (her real name too), an economist, walked with me for two full years. Their support was invaluable.

Nearly fifteen years later, I realize that what seemed so daunting back then, is now really quite obvious. A little education and a lot of experience will do that.

Duane will be just fine. When the classes are finally over and the exams are all written, the case studies will fade back into real life, and eventually, what once seemed so strange will suddenly seem obvious. That's the difference between learning and knowing.

And I will proudly watch as Duane magically mixes old learning with new to create something quite spectacular. And Duane will one day walk with someone else as they struggle through something strange - and he will know!

Remembering

We are reminded today of the brave men and women who have fought to protect our freedom. With poppies, moments of silence, and media coverage of public events honouring our heroes, today is a day for remembering. I find myself reminded today, also, of the man who taught me to remember.

Mr. Wayne Belanger was my high school principal. I recall the annual Remembrance Day Assemblies he led. As a young adult, I was mostly concerned about present day events and all things that revolved around me. I confess that I sometimes found these assemblies long and tedious and, while I understood from my history classes what he was talking about, I never full grasped the relevance.

It wasn't until years later, as I sat in a movie theatre witnessing the opening sequences of "Saving Private Ryan" that I realized what Mr. Belanger was talking about. These kids, who were only slightly older than us, were going to war, and suffering so that we could live in freedom.

So today, Mr. Belanger, I honour you, and others like you, for taking seriously your role as mentors to younger generations. And I take a moment of silence to remember those who have fought, and those who continue to fight - and sometimes fall - for freedom.

How to Find a Genius

Business has been great this year. So great, indeed, that I discovered I was in desperate need of a little help.

About a month ago I ran an advertisement seeking an Administrative Genius. I was immediately impressed by both the quantity and quality of the applicants. In less than 48 hours I heard from 40 people. One person wrote such a compelling cover letter that I had to call her right away. Six others also delivered exceptional cover letters and targeted resumes. I identified an additional four as "maybe's" for a possible second round of interviews. Five others I offered to refer to people in my network who were also seeking assistance. And twenty-four did not present well enough to merit further action.

There may have been some gems in those 24, but they never made it past the first cut. In case anyone is interested, here's how I narrowed the field:

• Anyone who responded in less than 7 seconds (I'm exaggerating only slightly) did not hear from me. How could they possibly have diligently researched me, my company, and the position offered in such a short period of time?
• Grammar, spelling, and formatting errors don't cut it - especially when the specific purpose of the position is to make an employer look good! One person told me they were "consciencious". (If you think about it a bit, it may have been a good idea to spell-check that word!)
• I included a simple test in the offering: "Apply to jobs@SecretHomes.ca with subject line: "Administrative Genius"". Missing this seemingly minor point is a good way to have your resume end up in the wrong file and demonstrates a lack of attention to detail or inability to follow simple instructions. (And, in my mind at least, a "Genuis" is significantly different than a "Genius".)
• Templated Cover letters and non-specific resumes don't get far either. They sort of imply a lack of self-esteem.
• Applicants get no extra points for cover letters or resumes that open with "What I want is... blah, blah, blah". No employer on earth cares about what you want until they have at least a faint idea that you might be suitable for what they want. If the employer is paying for the ad and your salary, try starting with helping them solve their problem. If you're successful, they will be more than delighted to give you what you want.
• Finally, and somewhat curiously, not one applicant used any tool beyond a cover letter and resume to attract attention. For example, part of the posted job description listed management of Social Media. Doesn't anyone have a Facebook or Twitter account they'd want me to see?

I did have the pleasure of interviewing half a dozen very impressive individuals. For the most part, these people made flawless presentations, and were secure enough to take some chances by revealing a personality, rather than false professionalism.

Generally, I learned that one of the main attractors about my ad was that I described the position as one that would allow work from home and in the field, as well as flexible hours. In some cases, the candidate discovered through the interview process that there are trade-offs to this kind of freedom, and that perhaps they really were more suited to a little more structure.

Admittedly, I wasn't entirely certain of what I hoped to find. It is very difficult to describe an ideal position, and then seek to find the perfect person to fit that ideal. It is far more reasonable to find a good person and craft a position around them.

To all forty people who honoured me by responding to my advertisement: Thank-you! It takes great courage to put yourself out there. I know that there are many amongst you I would love to have met. I hope the comments above may in some small way help in your search. To those I met: a special thank-you. My inability to offer you a position at this time reflects more on my needs than your qualifications.

For my part, there is a happy ending. For the past eight months, I've had breakfast almost every Thursday morning with a group of people I've come to know and respect. A chance conversation with one of these people revealed an astonishingly good fit. On Monday, I met with my friend Blaine to begin planning how we could work together. I may introduce him more fully in a future post.

And that is how you find a Genius - look long and hard, but don't forget to look right in front of your nose!

Hey Buddy, Can You Spare Some Change?

How do you respond when someone approaches you in the street and says: “Hey buddy, can you spare some change?”

Even after all these years, I’m still not sure. Let me share a story with you, along with 3 propositions and 3 possible responses.

A few days following my 19^th birthday, I boarded an airplane with a one-way ticket from Ottawa to Calgary. I had $100 in my pocket. Mine was a self-imposed experiment: Could I survive on my own?

Landing in Calgary, I immediately set about finding work. On the first day, I read 2 books at the library on oil drilling rigs. On the second day I presented myself at the office of every drilling company in Calgary. On the third day, I was on an airplane headed for a remote drilling rig about a hundred miles north of Fort St. John.

Working on the rigs paid well, so when I returned, I did so with several thousand dollars, which I immediately deposited into a bank account. I’d made it with $100. My next experiment was to try starting with nothing. My goal was to accumulate just $150 – the price of a flight back to Ottawa.

Well, I didn’t quite have nothing; before making my deposit I’d paid for 7 nights at the YMCA – a tiny room and a warm bed was welcome in February – twelve dollars a night.

The next morning I arose early and full of energy. I was about to prove that everyone who lives in poverty does so by choice and is simply lazy. I headed off to a temporary industrial employer. Sure enough, I waited around for about an hour, and then headed out on a bus to my first assignment. This was going to be even easier than I thought.

At the end of the day, I discovered something somewhat disturbing. I would receive my wages at the end of the pay period – 2 weeks from now! Two weeks! I only have a bed for one week. How am I going to eat?

A minor setback.

Back at the Y that evening I did some research. There was a street corner just a few blocks away where guys would line up first thing in the morning. Trucks drive by and pick up day labourers – and the best part was: they paid cash!

At $4 an hour I needed to work three hours to sleep inside. I dug ditches, I swept warehouses, I unloaded trucks, I cleaned construction sites, one time I even hosed out sulphuric acid sludge from a big white tank somewhere. I got a steak lunch for that one – and a rash!

If I had a choice between sleeping inside or eating, I always chose sleeping inside. Then one day I was carrying ceiling tiles from a stack to a work site. I noticed a workmate making about 1 and a half trips for every one of mine. He asked me when I last ate. “Three days ago”, I answered. My new friend told me where I could get a free meal.

The next morning I showed up at the Single Men’s Hostel. Before receiving a meal ticket, I had to meet with a counsellor. I remember he asked me how much money I had. I reached into my pocket, pulled out a handful of change, and answered: 67 cents.

That morning I discovered the gift of free food. I also learned that scary looking people aren’t so scary, up close. I learned that no one ever complained when the food was only lukewarm, and if the scruffy guy across the table was too hung-over to eat, he was never too hung-over to share.

After two and half months on the streets I learned something else too: It’s almost impossible to get ahead when you’re down. For the first time in my life, I truly felt despair.

My hypothesis failed. I eventually went back to the bank, collected my cash, bought a plane ticket, and flew home.

Here are my three observations:

1. We are all poor. Rev. 3:17 reads: “You say: ‘I am rich; I have acquired wealth and do not need a thing.’ But you do not realize that you are wretched, pitiful, poor, blind, and naked.” People are fragile. Mental illness or an unfortunate string of events can put almost anyone out on the streets.
2. We are all rich. Placed in global and historic perspective, almost anyone living in Canada is fabulously wealthy. We have access to social services providing food and shelter. Many parts of the planet don’t share this luxury.
3. We are all the same. Proverbs 22:2 reads: “Rich and poor have this in common: The Lord is Maker of them all.

So what do you say when someone approaches and asks: “Hey Buddy, can you spare some change?” Here are three possible responses…

1. “Spare some change?! Get lost!”

2. My friend Jim, who lived on the streets for 3 years, says: “Don’t give it to them. Half will spend it on alcohol; the other half will spend it on drugs.” In Canada, homeless people have access to social services. But Jim would also ask you to treat all people with dignity. The only reason he no longer lives on the streets is because someone cared enough to love him when he was unlovable.

3. The third response is yours: What do you do when someone asks: “Hey buddy, can you spare some change?”

Did You Miss Me?

I recently read somewhere that nearly 80% of all new blogs are abandoned within the first 90 days. I can certainly see how! Life gets busy, and frequently communication falls by the wayside.

As a pilot I learned that, when faced with a possible emergency situation, I should Aviate, Navigate, and Communicate - in that order! In other words, keep flying, figure out where you are, and tell someone. I wonder how well that translates to this journey we call life.

My last post here, Take a Break, was nearly eight weeks ago. Did you miss me? I guess I've proven my point.

I have two other blogs. On my SecretHomes blog I reveal real estate secrets and share stories intended to help people buy, sell, rent, or invest in real estate. On my Kingdom Business Group site I explore the integration of faith and work, and seek out virtuous business opportunities.

In an effort to free up some time to communicate more regularly on all three, I'm looking for a really good Administrative Assistant. I have some thoughts I'll share on that tomorrow morning...

I'm becoming a big believer in the value of sharing ideas and hearing from others, and I'd love to hear from you.

Take a Break

Many years ago when I was a Maitre d', Gerry Gourmlay was one of my favourite waiters. However, I'd like to tell you about the one time he made me more than a little anxious.

The dining room was packed. All the other servers were busy in their sections, but Gerry was nowhere to be found. I searched everywhere and finally discovered him, relaxed and sitting on an overturned container outside the kitchen door, savouring a cigarette.

"What's the deal Gerry!?" I asked with, I'm sure, a trace of panic in my voice.

"Jeff, everyone in my section is happy. Nobody will miss me for 5 minutes." Gerry was right. Gerry was almost always right. When we do our very best in the service of others, we both need and earn the freedom to take occasional breaks.

Slow down a bit today. Take a break. No one will miss you for a few moments.

Tenant-First Rent-to-Own Investment Model

Executive Summary:
The Basic Residential Real Estate Investment Model demonstrates our ability to generate superior investment gains through prudent use of leverage secured against hard assets.

Rent-to-Own builds on this model by enabling a tenant to ultimately own a home they are renting. Advantages to an investor are many: reduced initial capital investment; increased monthly cash-flow; reduced maintenance and management; a predefined exit strategy; and quicker turnaround of capital.

Here’s how it works. A future purchase price is established in advance. The tenant/buyer pays a non-refundable deposit (option) securing their right to purchase at that price. This deposit becomes part of their future down-payment, along with any additional instalments. We then work with the tenant/buyer to help them qualify to purchase from us outright within one to three years.

This strategy is ideal for good tenants who would rather own than rent, but have not yet saved a full down-payment, or for those who may not yet qualify through traditional means. Tenant-First simply means that we find people, rather than properties. We allow them to shop and select a home of their choosing, and then negotiate and close on their behalf.

Why Work With Partners?

Ready access to capital and credit enables us to immediately begin selecting and working with prospective tenant/buyers. The Capital Partner benefits by participating in returns that would be otherwise unattainable.

I’m often asked if there are many of these deals out there. Of course not! If there were, everyone would be doing this. We use a variety of sophisticated lead generation systems including our www.SecretHomes.ca website to attract and screen tenant/buyers. While the concept of rent-to-own may be more common than you would expect, closing deals requires knowledge, skill and ability.

There is risk associated with all investment activity

Case Study

This is the same property profiled in the Basic Model. Potential returns are better because the Initial Financial Contribution is offset by the option/deposit, and cash-flow is increased through regular down-payment instalments and by eliminating property management from the budget.

You will note that there is a fee for acquisition and project management. This covers lead generation and general costs associated with full-time attention to the investment.

These projections are based on actual rent ($1335/month); mortgage payments ($588/month); property tax ($1,380/year); and condo fees ($195.50/month). I have assumed that an additional $150 per month will be contributed toward down-payment.

CASE STUDY (Stonewood Village)
Appraised Value	$204,000
Purchase Price	$198,000
Tenant Deposit (minimum 3% of Appraised Value)	$6,120
Acquisition & Project Management Fee (1% of Purchase Price)	$1,980
Initial Investment (DP + cash to close + light renovations + fee - Tenant Deposit)	$40,760
First mortgage (80% loan-to-value)	$158,400
Second mortgage (VTB)	$0
Year 1 cash-flow ((Rent + Additional Deposits) - PITC) x 12)	$7,032
Year 1 cash-on-cash return	17.25%
Year 1 mortgage reduction (35 year amortization; 2.75% variable interest)	$2,730
Year 1 gain (cash flow + principal reduction)	$9,762
Year 1 return on investment assuming 0% appreciation (gain / investment)	23.95%
Estimated 3-year value (locked-in 3.5% annual appreciation)	$226,178
Estimated 3-year mortgage balance	$149,977
Estimated 3-year gain (value + cash-flow - deposits - mtg. balance - investment)	$45,017
Estimated 3-year return on investment (3 year gain / investment)	110%

Capital Partner:

The Managing Partner finds, negotiates, and administers the investment from beginning to end. A Capital Partner supplies initial capital and credit, is fully secured on title and, upon disposition receives return of all funds invested, plus participation in 50% of net profits, as fully described in the Joint Venture Agreement.

Using the Case Study above, the Capital Partner’s projected net gain and return on investment is calculated as follows:

Calculation of Capital Partner 3-Year ROI
Estimated 3-year gain	$45,017
50% of 3-year gain	$22,509
Divide by Initial Investment	$40,760
Capital Partner return on investment (3-years simple interest)	55%

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