Management is the least favorite subject of most of the entrepreneurs that I meet at seminars and real estate conventions -- and many of my readers -- but I can’t resist revisiting the subject from time to time. In the process of writing the book for my new seminar called “Creating Cash Flow With Creative Deals” which was presented in February in Tampa, it struck me how much income and gain was being lost by people who refused to learn how to manage single family houses.
That was a favorite saying my old Mentor, Warren Harding used to point out that "people skills" pay larger dividends than real estate skills. Ask yourself if people skills don't serve you well when you're getting a speeding ticket, or asking for a loan, or a job; or trying to get a permit or zoning approval, or buying, selling or renting a house? Warren said that in all phases of real estate and finance, ultimately success, depends less on specific property attributes or the financial "numbers" than on one's ability to communicate objectives to others and be able to listen carefully to be able to comprehend theirs. While there's little room for sympathy in a business transaction, empathy plays a large role in being able to craft a transaction that meets the crucial needs of the parties. This month's letter will delve into this subject a little more to see the part that empathy plays in tactical and strategic situations:
Somewhere in the fall every year, I stop focusing on new projects and start mentally winding up activities for the year. With an eye to taxes, I begin the process of gathering together all the income and expenses, to see how much my net income is going to be from all my various activities. From this, I make a rough calculation of how much I’ll be paying in taxes, and, after I get over the shock, I look for ways to defer more income while I accelerate expenses.
December 2001 Whew, this has been quite a year. Over the past 12 months we've had the election SNAFU, political budget wrangles, a bear market plus the bombing that erased trillions of dollars from the market, falling mortgage rates, a new Tax Act, military conflict, job layoffs, and now the Anthrax scare. You'd think that we'd get some kind of respite in this final season of the year. Alas, that isn't going to happen. With billions spent on the war on terrorism, government at all levels is fast running out of money. The only way they can get it back is from the taxpayer!
August 2001 One of the popular myths surrounding the single family house business is that those who buy and hold property somehow never sell, and that those who buy and sell property don't hold it for investment. As a practical matter, success in real estate requires that the entrepreneur take the course of action most likely to produce the greatest progress toward his or her financial objectives, long or short term, as the case may be. While buy and hold strategies provide most wealth over the long term, buy/sell techniques can best fund current expenses. What you ultimately decide to do with a house that you buy has a lot to do with how you finance it, and vice versa.
July 2001 One of my early mentors, Cliff Weaver, used to say that "It's terribly embarrassing to be physically alive and financially dead." But that happens to a lot of Floridians for one primary reason: Because of its climate, relatively low cost, and lack of State income taxes, Florida is a leading destination for retirees. Over the years I've had an opportunity to get a real close up look at how they live, and how they liquidate their assets to maintain their lifestyle. By and large, they've underestimated the income they would require to support themselves over their lengthening life-spans, and they failed to start early enough to aggressively begin to prepare for it.
June 2001 ENTREPRENEUR CARRIES ITS OWN REWARD . . . Sometimes it's hard to cast my mind back to the time that I was just starting out in real estate. I probably can't really conjure up the thrill that building my first house or buying my first investment lot gave me, but I do remember that I got a big kick out of it. In like fashion, when I listed my first house for sale as a salesman, sold it, and walked away with $175 in commission I remember that I was on top of the world. I felt the same emotional high later when I first opened my real estate brokerage in my own name. I recollect that I was awash in self-contentment. I can recall sitting long into the night at my new desk in my own office building reveling in the fact that I was finally in business for myself.
March 2001 To many, "Asset Protection" connotes foreign trusts in tiny tax haven islands, Banana Republic Banks, or arcane political enclaves such as Lichtenstein, Andorra, Gibralter, Campione, etc. To others, "Asset Protection" involves tax and estate planning; and the use of corporations, limited liability companies, and trusts. To yet others, the foundation of "Asset Protection" is concealment of the ownership of their assets and identities behind cleverly constructed facades which act as lightening rods to divert potential threats toward false targets.
February 2001 At about this time each year, once all the final figures for the preceding year have come in, I find myself reviewing my activities over the past 12 months, and setting both my personal and financial goals for the next year. I conclude by summarizing what I've done and what I have set out to do, then writing this down so that I can refer to it over the year. Since my early 20s, I've done this for more years than I care to count. As a result, the record of this pilgrim's progress is cause for both pride at objectives that I've attained mixed with liberal doses of dismay for the goals I've failed to meet. The slim margin that separates success from failure can often hinge upon how one uses the hours of the day to be as productive as possible. This month's letter will focus on ways to manage your time to enable you to work more efficiently.
January 2001 Welcome to the first month of the next year of your life. If you're tempted to write down some new year's resolutions one might be to make 2001 a better year than 2000. If the Wall Street Journal is to be believed, this won't be much of a challenge for a lot of people who speculated in high tech stocks last year. By now, to their dismay, many have discovered there is a fine distinction between true investment in contrast to pure speculation in the stock market.