3 Massive Mistakes Videos

3 Massive Mistakes Videos

by

Dave Dubeau(2013-04-02)

“Lease to Own vs. Long Term Buy & Hold”

Before I get started on this month’s article, I would like to take this time to wish all Fast Track To Cash Flow (Inner Circle) members and their families a Happy, Healthy and Prosperous 2007!

When I originally agreed to write my monthly real estate article for David Dubeau and

Darren Weeks, I agreed to do so as a way for me to “give something back”. I’ll repeat the following quote that Robin Elliott uses often: “You can have anything in this world that you want, as long as you first help enough other people get what they want.” Zig Ziglar.

There is more truth to this saying then you could ever imagine. How do you think I know this?

I recently read a book that was co-authored by Donald Trump and Robert Kiyosaki. The book is titled “Why We Want You To Be Rich – Two Men – One Message”. If you have not read this book, I encourage you to do so! It provides many insights as to why both these gentlemen have become VERY, VERY RICH! Chapter twenty nine is titled “Leaders Are Teachers”. In this chapter Donald makes reference to a quote from one of the world’s greatest leaders of all time, Sir Winston Churchill: “We make a living by what we get, but we make a life by what we give.” What a truly great quote!

Please ask yourself this question: Am I giving something back?

Giving comes in many forms. It could be your time. It could be your money. Maybe you could share your knowledge and wisdom. Whatever it is…be sure that you do YOUR part in 2007!

I would like to take this time to thank David Dubeau, Darren Weeks and the entire Fast Track organization for providing me with the opportunity to give something back.

Thank You!

That’s enough of the philosophical stuff; let’s get on with this month’s article: “Lease to Own Vs. Long Term Buy & Hold”.

This particular topic is very dear to my heart, as I have and I continue to invest in both types of real estate strategies. Each strategy offers a slightly different spin. The Long Term Buy & Hold strategy provides the investor with many benefits. But in my view, these are the four key benefits;

1. Income (cash flow)

2. Depreciation (tax breaks)

3. Amortization (mortgage pay down)

4. Appreciation (increased value)

Depending on the individual market you are choosing to invest in, your returns may be reflected in any one or all four of the referenced areas. What do I mean by this? For instance, in a fast appreciating (hot) market, you may find it difficult to cash flow. While appreciation may be significant, you have to be in a position to weather the storm until you finally liquidate the property and reap the rewards.

I recently (May 2006) attended the Robert Kiyosaki event in Toronto. During the event Robert made reference to the following; “investing strictly for long term appreciation is suicide”. I would like to qualify (in my own words) what I believe Robert was really saying. While you may do very well in the appreciation category, you will only do well if you

actually get there. If you are unable to support the asset, you may very well “crash and burn” before you reach your objective. The only way you will get there is if your properties provide you with enough (positive) cash flow, or you are in a position to fund your shortfalls from other sources. I do not personally like to fund my properties out of my own pocket because that takes all of the fun out of investing! I like to refer to these types of properties as “Alligators”. Please remember this…Alligators will eat you alive!

As an investor: CASH IS KING!

The other issues that most long term buy & hold investors are

typically faced with is what I refer to as “The Terrible Ts” (Tenants & Toilets). A live interview was conducted (2006) with David Dubeau and myself and was recorded on CD. During this interview I covered this particular topic in great detail. If you haven’t already had the opportunity of listening to this CD, please contact the FTIC offices and order a copy.

Please do not get me wrong. Long Term Buy & Hold has and continues to serve me very well, but only because I follow a system and watch the fundamentals. Many an aspiring investor has had his or her dreams destroyed as a result of bad Tenants and or a lack of positive cash flow.

When I attend events around the country, the common issue that most real estate investors are typically faced with is the lack of, or NO CASH FLOW! Like I said earlier, these type of prop- erties are Alligators! And they WILL eat you alive!

Early on in my own personal real estate investing career I became very well aware of the “cash flow” problem. Not that I had negative cash flow properties. I only purchased positive cash flow properties that fit my system. I had a different problem…I wanted to give up my day job! The reality of giving up my day job by following the investor (buy & hold) masses of the past was NOT

an option! In order to give up my day job and stay in real estate, I knew that I would have to become creative. So, creative I became! I had attended a number of US based real estate seminars that exposed me to the “Rent To Own” concept. I tried to implement the system as

taught, but they just did not work. However, I did not give up! I tweaked, modified and Canadian- ized the program until it did work. And work it has!

So what are the benefits of Lease To Own?

There are many! I like to summarize all of the bene- fits using one simple word…PREDICTABLE!

1. The (positive) cash flow is superior to Long Term Buy & Hold properties, and it is PREDICTABLE.

2. The exit (liquidation of property) strategy is shorter and…PREDICTABLE.

3. There are no more Terrible Ts (Tenants & Toilets).

4. I do not make any repairs or perform any maintenance. My Tenants do that for me.

Sounds too good to be true, doesn’t it? Well it’s not!

While reading Donald Trump and Robert Kiyosaki’s book, I realized that my Lease To Own real estate investing strategy is a perfect example of what they referred to as “The Formula”. In part three (page 163) it is titled “DEFINING MOMENTS – Going Beyond Winning and Losing”. They describe the formula as;

Leverage +

Control +

Creativity +

Expansion = Predictability

In my Lease To Own business model, I view the formula in this way;

Leverage: As a result of the track record of both myself and that of my company, I am able to use other people’s (investors & banks) money to purchase more properties.

Control: I have complete control over my investments. In my case, the asset is my property.

Unlike stocks, bonds and mutual funds where you effectively have no control! You have even less control if you are handing your money over to someone else to manage them for you.

Creativity: Doing something different. Not doing what the (real estate investor) masses have done before me.

Expansion: As a result of the success that I have achieved with the Lease To Own business model, Iam now able to franchise my model across the country and around the world.

Predictability: I am able to predict my monthly cash flow, my exit strategy and profits for my investors and myself.

The BEST thing of all…I am able to help other people achieve their goals in life!I provide people

with the opportunity to own their own home! Remember The Giving Something Back issue I spoke about earlier in this article?

As previously mentioned, I am currently implementing

both investment strategies,but I am leaning more and more towards the Lease To Ow strategy,as it provides my investors and myself with a PREDICTABLE return on our investment dollars.

It’s Not What You THINK…It’s What You DO That Really Matters. Take Control of Your Financial

Future by Taking ACTION Today!

Dave Dubeau, author, entrepreneur, and successful Canadian creative real estate investor, shares with you his rules of Canadian Real Estate Investing, Real Estate Investing Education and Training, and how Canadians can invest in Real Estate profitably.

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