#PB4L

[profbruce]

White Angel of Merida Mexico

This silent angel in downtown Merida (aka Centro) offers you one slip of paper to guide your future. For 20 pesos, mine read (in Spanish), “Sometimes you win, sometimes you learn.” #Excellent message.

White Angel of Merida

This young woman dresses up every Thursday, Friday, Saturday and Sunday in her angel costume, which she designed and fabbed herself. She stations herself outside Merida’s cathedral in their central square.

In front of Merida’s central cathedral 

For a modest donation (such as my measly 20 pesos, about $1 USD) in her jar, which you can see at her feet, you draw one tiny piece of paper from her cup. She only “speaks” in gestures, ie, she’s a mime… She graces you with a smile as well.

I estimated she makes up to 1,200 pesos an hour (around $60 USD). It’s a good gig and she’s a fine artist/actress/mime in her own right. It’s another PB4L, personal business for life, or side hustle. Beats begging, right? Or waiting on tables if you are a young actress waiting for your next gig.

Makes people feel good too and, of course, it doesn’t hurt that she’s a beauty.

Prof Bruce

ps here’s Chris Rock’s latest (foul-mouthed) take on the power of female beauty (on Netflix), https://www.netflix.com/tudum/articles/chris-rock-live-standup-special. The title of his hour-long rant? “Selective Outrage.” A decent review is on Variety, https://variety.com/2023/tv/news/chris-rock-slap-will-smith-netflix-comedy-special-1235542611/. #NSFO #RatedR

pps I have a theory that pretty much everyone needs some sort of PB4L to get them through the tough patches that almost all of us will face during our time on this planet. You can read more at:

Should Every Person on the Planet Have a PB4L (Personal Business for Life)? https://www.dropbox.com/s/bpqc508879tsdwk/PB4L-personal-business-for-life-bruce-m-firestone.pdf?dl=0.

FOR REAL ESTATE INVESTMENT AND BUSINESS COACHING THAT’LL HELP YOU PROVIDE FOR YOURSELF AND YOUR FAMILY FOR 3-GENERATIONS, PLEASE CONTACT:

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD Real Estate Investment and Business coach Ottawa Senators founder ROYAL LePAGE Performance Realty broker 613-762-8884 bruce@brucemfirestone.com brucemfirestone.com https://burningrocksolutions.com/ https://www.linkedin.com/in/profbruce https://www.linkedin.com/company/firestoneinstitute https://brucemfirestone.com/blog/ https://www.youtube.com/user/ProfBruce/ https://www.amazon.com/author/brucefirestone https://twitter.com/ProfBruce https://www.facebook.com/groups/reiroi https://www.facebook.com/ProfBruce https://www.instagram.com/brucemfirestone/ https://profbruce.tumblr.com/archive

BOOK YOUR FREE CLARITY CALL WITH PROF BRUCE NOW, https://brucemfirestone.com/coaching/prof-bruce-real-estate-investment-and-business-coaching/talk/

• MAKING IMPOSSIBLE POSSIBLE • FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE • FEHAJ, FOR EVERY HOME A JOB, FEJAH, FOR EVERY JOB A HOME • MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT • HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, CITIES AND THE ENVIRONMENT TOO

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[hikari92184-blog]

Park Boyz AC out here getting ready to take care of our community. This is how we do. #parkboyz #parkboyzac #pb4l #communityservice #givingback #bookbags #schoolsupplies (at Newark, New Jersey) https://www.instagram.com/p/Bmb8VKxH4uA1A49wNXgLAN4LxU9pb3wn2ibuJs0/?utm_source=ig_tumblr_share&igshid=x7rjq919dvjc

[autopowergr]

Mπαταρία μοτοσυκλέτας PS , PB4L-B (YB4L-B) , 4Ah

[jocelyntobbey99]

Thank you all, including all of the U-South Outdoor Performance Ensemble members, for being amazing, you are all my heart and soul and I will 5ever love you, thank you💕💕 #yourebeautiful #LoveForever #PB4L #Panther #Forever #첫번째사랑 #감사합니다 #가족

[katvondisease]

"Excuse me, where can I find the nearest dick to shove up my ass"

[hyperz]

Well one of my best friends (@angelm2448 ) is off to basic today. It'll be close to 6 months before we can rage again. 🍻 Heres to your new adventure in life and to one day of you buzzing my house in an F22 and then stopping by in your Hakosuka. Stay out of trouble and don't piss off your superiors, well not anymore then you normally would Haha #airforce #basic #PB4L #hakosuka #skyline #datsun #nissan #kpgc10 #280z

[profbruce]

Get your FREE copy of Business Model Illustrations right now and my BEST updates delivered to your inbox

If you'd like to know how to take care of yourself and your family for 3-generations by building a high performing real estate portfolio and a successful PB4L (personal business for life), add yourself to my list, https://sendfox.com/brucemfirestone!

Want to instantly know more about successful real estate investing and thriving businesses? Then download this FREE handbook of mine, Business Model Illustrations, Real Estate Investment and Personal Business for Life Mini Case Studies. It’s only 67-pages long but has 10 mini case studies in it… 3 are business cases and 7 are real estate ones. Download it from, https://www.dropbox.com/s/febfsb07ev01ns8/Business-Model-Illustrations-Real-Estate-Investment-and-Personal-Business-for-Life-Mini-Case-Studies-handbook-bruce-m-firestone-2019-with-covers.pdf?dl=0.

Prof Bruce

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD

Real Estate Investment and Business coach

Ottawa Senators founder

ROYAL LePAGE Performance Realty broker

613-762-8884

bruce@brucemfirestone.com

BOOK YOUR FREE CLARITY CALL WITH PROF BRUCE NOW, https://brucemfirestone.com/coaching/prof-bruce-real-estate-investment-and-business-coaching/talk/

•   MAKING IMPOSSIBLE POSSIBLE

•   FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE

•   FEHAJ, FOR EVERY HOME A JOB, FEJAH, FOR EVERY JOB A HOME

•   MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT

•   HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, CITIES AND THE ENVIRONMENT TOO

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[rauraheartsmine]

Happy 21st birthday to one of my best friends and my girlfriend 😘😍 I love you so much bid! We have had the craziest times together and I can't wait to have thousands more! #pb4l (at Birthday Land)

[mikeshvgz]

This beard is getting unreal. #gothboys #boyswithbeards #babesofinstagram #boyswithtattoos #pb4l

[ohdeerjess-blog]

#PB4L

[profbruce]

AIR JORDAN BREAKS THROUGH TO THE OTHER SIDE

I learned recently (mind you from watching an Amazon Prime film, Air, courting a legend starring Matt Damon as Nike sports marketing executive, Sonny Vaccaro, and Viola Davis as Michael Jordan's mom, Deloris Jordan, a brainiac sports representative) that it was Michael and Deloris who understood what comedian Chris Rock has been saying for a long time, "LeBron James is rich but the MAN who signs his check is wealthy."

What Chris means is that if you own a franchise of any sort (a fast-food restaurant, a sports team, an apartment building, Microsoft 365, a patent, whatever), you own a factor of production and can (hopefully for you) make money while lying on a beach. This is the Holy Grail of business, all business—developing CMRR, committed monthly recurring revenues.

Deloris got it... big time. She negotiated hard with Sonny and Nike on behalf of her son that, in return for coming over to the Swoosh from rival shoe company Adidas, Mike would get a) a $250,000 per year salary for five years for Michael plus b) a piece of the action... a percentage (I believe around 10%) of gross sales of not only the launch shoe in the Air Jordan line but all shoes ever to be made under this brand.

Deloris was, I believe, the first ever to propose such a contract, which in essence, by providing Michael with a royalty on sales, gave him a return (via direct remuneration) on his intellectual property (his likeness, his incredible feats on the court, his championship rings and so forth). It gave him equity in the business even if he never owned a single share in Nike. Indeed, a royalty on sales (which is simple to calculate and monitor) would be a huge improvement in my view over share ownership. Returns from the latter are often opaque, hard to determine/pin down, and impacted by factors outside Micheal’s control such as exorbitant pay packages for executives of US publicly traded companies.

How do I know it's 10%? Well, in the above image shot from my TV screening of the film, the Air Jordan line sells around $4 billion for Nike today and in the next image (see below), the movie quotes reports that Michael (21-years after he retired from the NBA) is making $400 million a year from this deal.

Now that's 1) CMRR, 2) making money while lying on a beach (or golfing, which Michael seems to enjoy more) and c) control over a factor of production for a long time.

I think more people should be looking for more ways to exploit this sort of royalty paradigm (not just sports greats and Hollywood actors) so they can benefit more from their work and their creativity.  

Prof Bruce

FOR REAL ESTATE INVESTMENT AND BUSINESS COACHING THAT'LL HELP YOU PROVIDE FOR YOURSELF AND YOUR FAMILY FOR 3-GENERATIONS, PLEASE CONTACT:

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD Real Estate Investment and Business coach Ottawa Senators founder ROYAL LePAGE Performance Realty broker 613-762-8884 bruce@brucemfirestone.com brucemfirestone.com https://www.linkedin.com/in/profbruce https://www.linkedin.com/company/firestoneinstitute https://brucemfirestone.com/blog/ https://www.youtube.com/user/ProfBruce/ https://www.amazon.com/author/brucefirestone https://twitter.com/ProfBruce https://www.facebook.com/groups/reiroi https://www.facebook.com/ProfBruce https://www.instagram.com/brucemfirestone/ https://profbruce.tumblr.com/archive https://www.tiktok.com/@prof.bruce7 https://burningrocksolutions.com/

BOOK YOUR FREE CLARITY CALL WITH PROF BRUCE NOW, https://brucemfirestone.com/coaching/prof-bruce-real-estate-investment-and-business-coaching/talk/

• MAKING IMPOSSIBLE POSSIBLE • FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE • FEHAJ, FOR EVERY HOME A JOB, FEJAH, FOR EVERY JOB A HOME • MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT • HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, CITIES AND THE ENVIRONMENT TOO

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COPYRIGHT, BRUCE M FIRESTONE, OTTAWA CANADA 2024.

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[profbruce]

Claudio in Merida Mexico has his own PB4L (personal business for life)

His name is Claudio. He comes to Merida (where there are wealthy tourists) from Oaxaca (gastronomic capital of Mexico) once a year to sell his beautiful handmade cotton/bamboo blankets door-to-door.

Besides himself, there are three other people who work with him (both men and women).

He comes by car and it takes a day or more (17-hours and 54-minutes drive time according to google) to get to Merida.

These blankets sell for around 1,500 to 1,800 pesos each depending on how good a negotiator you are as a buyer… We bought one.

They are machine washable and dryable.

This photo was taken at our front door. Claudio was nearing the end of his mission having already sold several hundred blankets.

Claudio doesn’t speak much English (actually none) so my spouse Dawn did the translating, while I did the negotiating.

They grow their own cotton and bamboo and make their own cloth.

This is another PB4L story… It’s my belief that most of us (wherever we live) need some kind of side hustle we can call our own; one we can rely on when everything else fails. It would help too if we owned some real estate as well, even if it’s a modest home, hopefully with little or no debt on either the business or real estate.

Prof Bruce

FOR REAL ESTATE INVESTMENT AND BUSINESS COACHING THAT’LL HELP YOU PROVIDE FOR YOURSELF AND YOUR FAMILY FOR 3-GENERATIONS, PLEASE CONTACT:

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD Real Estate Investment and Business coach Ottawa Senators founder ROYAL LePAGE Performance Realty broker 613-762-8884 bruce@brucemfirestone.com brucemfirestone.com https://burningrocksolutions.com/ https://www.linkedin.com/in/profbruce https://www.linkedin.com/company/firestoneinstitute https://brucemfirestone.com/blog/ https://www.youtube.com/user/ProfBruce/ https://www.amazon.com/author/brucefirestone https://twitter.com/ProfBruce https://www.facebook.com/groups/reiroi https://www.facebook.com/ProfBruce https://www.instagram.com/brucemfirestone/ https://profbruce.tumblr.com/archive https://www.tiktok.com/@prof.bruce7

BOOK YOUR FREE CLARITY CALL WITH PROF BRUCE NOW, https://brucemfirestone.com/coaching/prof-bruce-real-estate-investment-and-business-coaching/talk/

• MAKING IMPOSSIBLE POSSIBLE • FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE • FEHAJ, FOR EVERY HOME A JOB, FEJAH, FOR EVERY JOB A HOME • MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT • HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, CITIES AND THE ENVIRONMENT TOO

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COPYRIGHT, BRUCE M FIRESTONE, OTTAWA CANADA 2023.

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[profbruce]

Pivot! Start your own business in just 3-months with practically no money down webinar

I woke up on the Easter long weekend thinking I could help people become successful entrepreneurs by offering a new online course called: Pivot! Start a business in just 3-months w/ practically no money down.

Pivot! Act to change your life now

I taught entrepreneurship at Carleton University’s Sprott School of Business and then University of Ottawa’s Telfer School of Management, and one thing everyone had to do in the three months they studied with me was start an actual business in that time. No exceptions. Many of those students went on to create amazing new enterprises–from tech to services to entertainment and more, and some of them will be returning as guest lecturers to tell everyone how they did it.

“I watched one of Prof Bruce’s energetic and inspiring webinars about how to take care of yourself and your family in a time of Covid-19 and you know what I figured out? He can see and create value and new revenue streams seemingly out of the ether!” Rick Redel, measurement consultant, Alberta

So, I’ve updated and relaunched the program… online (via Zoom) with a new title, “Pivot!”

If you or anyone (from teens to seniors) you know is tired of just having a job (or maybe now, no job) and wants to start their own successful PB4L (personal business for life), they can sign up by downloading this form from dropbox, completing it and sending it to moi  (bruce.firestone@century21.ca), https://www.dropbox.com/s/2ks1xu6bf45vv5n/signup-firestone-institute-pivot-gigpreneur-course-2020.pdf?dl=0

Here’s the preparatory webinar that everyone should watch. Why? Firstly, because it’ll help you understand how to create a successful gig/side hustle/PB4L with a business model that provides a competitive advantage that allows you to build a sustainable new enterprise. Secondly, you’ll get a feel for what’s in the course and whether it’s right for you.

The course itself starts May 14th, 2020 and lasts until close to the end of July. Your investment? A ridiculously low $100 + HST a month.

“In the 21st century there isn’t a person who wouldn’t benefit and get inspired by Bruce Firestone’s teachings. I have been a huge Robert Kiyosaki fan but I must say, I loved Prof Bruce’s ideas even more. His expansive creativity and thinking goes beyond Kiyosaki. Bruce generously shares real case studies with real value. A true teacher. Build your business like your life depended on it, which maybe it does today,” Jill Koster BC

It’ll be life-changing for those who take it, I am quite sure…

“I consider myself well-rounded having been in management positions for most of my working career. I thought I was pretty good at what I do until I met Prof Bruce. He is so far above my level of business knowledge and understanding that I couldn’t help but be elevated upwards towards his level,” Rick Rose, Windsor

“I have taken numerous courses, including one’s from the US, that cost me tons of money… but I gained very little knowledge that I could easily apply. Since I started taking Professor Bruce’s course, I’ve learned more in this one course than all of the other courses combined. Professor Bruce’s course is down to earth and filled with everyday stuff that can be applied immediately to grow your business in the real world. I highly recommend anyone to take a course with Bruce even if you don’t invest in real estate or own your own business. It will teach you fabulous life skills!” Eva O’Grady, Ottawa

I’ve helped more than 1,500 other people create new enterprises not to mention that I started many on my own account such as the NHL’s Ottawa Senators, the Palladium (now called Canadian Tire Centre, where the Sens play), Ottawa Business News (now called Ottawa Business Journal), PETA (Presidential Executive Apartments, sort of Airbnb before there was Airbnb), TCCL (Terrace Corporate Centres, a mini office provider, the precursor to co-working spaces), Blue Heron Storage Corporation (a mini storage business). I also built more than 1,200 homes in a number of subdivisions, plus dozens of office buildings and shopping plazas…

I have invited nine other entrepreneurs (men and women who have started every kind of business from successful mobile pet grooming to renovation biz to tech startups to a publishing house focused on comics to a storage enterprise on the fast track to business superstardom) to join in. Might as well also learn from former students or coaching clients of mine who are living their lives as gigpreneurs, right? Some started out as side hustles but have evolved into enterprises of real substance and scale.

Meet Erika Godwin, one of the guest lecturers in Pivot! founder of barketing.co, web services for pet businesses

There is more about the course here, https://brucemfirestone.com/pivot/ and, again, if you want to sign up, just download this form, fill it in and send it to me, (bruce.firestone@century21.ca), https://www.dropbox.com/s/2ks1xu6bf45vv5n/signup-firestone-institute-pivot-gigpreneur-course-2020.pdf?dl=0

Be well everyone,

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD, Real Estate Investment and Business coach, Century 21 Explorer Realty Inc broker, Ottawa Senators founder 1-613-762-8884 bruce.firestone@century21.ca

[profbruce]

How to create your very own high-performing PB4L, personal business for life

Where do (good) ideas come from to start your own business?

Well, if you are Ben Jacobsen, you marvel at the fact that your girlfriend is willing to spend $10 on a tiny package of bespoke table salt.

So, he left Europe and moved back to the Oregon coast where he sampled seawater from 27-bays until he found one he thought might produce a great cooking and table salt.

This is a transition I see all the time. Mr Jacobsen went from a few failed tech startups to something he loves doing and which has a much greater chance of success than (say) building apps that have to compete with millions of other software applications.

Ben is also 43. In tech, you are considered old at 40 (30, if you are in China).

Anyway, here’s my summary on how to start your own biz based on the Bloomberg Businessweek article about “The Salt King of America,” https://www.bloomberg.com/news/features/2019-08-28/jacobsen-salt-is-bringing-attention-to-sodium-chloride.

1. Ben Jacobsen is a failed technology startup guy transitioning away from risky pure tech plays that have a residual value (if they fail) of approximately zero to something that is based on skill, has a real estate component plus enough “walls” around it to be highly differentiated and sustainable in the face of potential competition

2. serendipity (his girlfriend) gives him the idea of haute couture table salt and cooking salt

3. he develops his IP by testing seawater from 27 Oregon coast bays til he finds one that produces the right taste (Netarts Bay flakes, flavored by a high concentration of oysters in those waters)

4. he evaporates seawater at the right temperatures for the right duration; it’s part of his DV, differentiated value, (ie, secret sauce)

5. his PB4L (personal business for life) is now set—he’s finally found his why!

6. he focuses on sales, sales, sales—he first hooks up with a local grocery chain (13-stores) at a new vendor food fair… now he has a real business

7. he erects barriers to entry: applies for a state salt-making license from the department of agriculture, gets a water-taking permit too and then wins US Food and Drug Administration approval for his salt as well as raising capital from friends and family

8. now he buys real estate—an old oyster farm on the Netarts coast, which he renovates–it’s much cheaper (and faster) to buy and reno than to build new

9. next, he hires 11 staff

10. he’s the first to set up a salt works in Oregon since Lewis and Clark did so 50-miles north in the early part of the 19th century during their legendary exploration of the area

11. everything old is new again—you want to find your purpose in life (?) then check out the encyclopedia Britannica circa 1930 in your local library and reinvent old crafts from earlier centuries… and wrap them with modern era business models and know-how

12. he also has a 27,000 sq ft warehouse and HQ in Portland where Jacobsen Salt gets packaged and merchandised

13. he raised prices from $5.50 USD for a 4-ounce bag in 2011 to $12.50 today (2019)

14. he finally starts paying back family and friends

15. this isn’t a one-hit wonder—he expands the product line (in this case to new seasonings).

Here’s where I am going with this–find a skill, develop a PB4L, buy some real estate (own your own premises), hold your PB4L in one company or sole proprietorship and your real estate separately, develop CMRR (committed monthly recurring revenues, the holy grail of any business or organization) then (as Mr Spock says), “Live long and prosper…”

Leonard Nimoy demonstrating the Vulcan sign for “live long and prosper.”

Prof Bruce

FOR REAL ESTATE INVESTMENT AND BUSINESS COACHING THAT’LL HELP YOU PROVIDE FOR YOURSELF AND YOUR FAMILY FOR 3-GENERATIONS, PLEASE CONTACT:

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD Real Estate Investment and Business coach Century 21 Explorer Realty Inc broker Ottawa Senators founder 1-613-762-8884 bruce.firestone@century21.ca twitter.com/ProfBruce profbruce.tumblr.com/archive brucemfirestone.com

• MAKING IMPOSSIBLE POSSIBLE • FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE • FEHAJ, FOR EVERY HOME A JOB • MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT • HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, CITIES AND THE ENVIRONMENT TOO

[profbruce]

The case of the rich dentist and his perpetual motion machine

[This is an excerpt from an upcoming book I am working on called, Business Model Illustrations, Real Estate Investment and Personal Business for Life Mini Case Studies]

David Leigh (not his real name) is a rich dentist, age 44 when he first comes to Firestone for coaching. He is a lean, polite married person with five children who loves to travel overseas and wants to retire from active dentistry at age 59, 15 years from now.

Even though David came late to dentistry, in fact, maybe because of that, he is constantly integrating new technologies into his practices and is as much an entrepreneur as he is a dentist. He is an immigrant to his current country and, upon arrival, spoke only a few words of English.

He is now fluent with a light accent.

[It’s here! Now available! Business Model Illustrations]

How did he get into dentistry? Was it his love of perfect teeth? Desire to promote better dental healthcare and hygiene? No. He simply asked around and found out that dentists make more money than any other professionals including doctors, so he announced one afternoon to his amazed spouse he was applying to 11 dental schools despite his lack of facility with the local language, which he figured correctly he could learn in 100-days before any interviews took place. He also correctly and abundantly proved that dentists (at least ambitious ones) make a lot of dough.

 panoramic radiograph of historic dental implants, circa 1976/77, source: free media repository

He currently owns three dental practices in a million plus population city and makes about $1 million per store. Put simply, he has three million dollars per year of what my spouse likes to call, “Whole Foods money,” that is, money you can touch, feel and SPEND.

 He is risk averse but likes real estate.

What would you do?

***

David at first decided to buy townhomes, lots of them. His retirement goal was to have $900,000 a month in net operating income. That is not a misprint—that's equivalent to $10,800,000 per annum.

He hired two realtors referred to him by his coach who over the next five years worked pretty much exclusively on building his portfolio.

They also put together a portfolio management company that charged him 8% of rental revenues or 15% for any properties they managed on his behalf that were placed on platforms like Airbnb, which obviously represents more work for his property managers.

At the time he started, each town was costing him about $300k in Ottawa, $850,000 in Toronto and around $925,000 in Vancouver.

Cap rates were around 5% in Ottawa, 4% in Toronto and 3% in Vancouver, which means that after his mortgages are retired, his Ottawa places would produce about $15,000 in net operating income, Toronto would net him $38,000 and Vancity $27,750 per year per investment property. 

All of these cap rates are below the Firestone Institute target of 6% pa. Nevertheless, with rental vacancies hovering around 1% in all three cities, this is a very low risk investment strategy.

 Over time, Dr Leigh became more comfortable with animation strategies such as adding tech (multimedia) packages to his rental properties and buying doubles and single-family residences as well as towns where he could add legal in-home suites and later backyard coach houses.

As a result, he was able to boost his cap rates by about 1 to 2 points in each city, which does not sound like a lot, but look at it this way—it's like turning an aircraft carrier or very large passenger ship. Even a degree or two improvement in turning radius makes a big difference in terms of how much lead time you need to avoid an iceberg. Ask captain Edward John Smith[1] about that.

To make things easier, lets conjure up a hybrid property... a Vanto[2], which is an imaginary combination townhouse, double, single family home with legal in-home basement apartment, tech package and an occasional coach house that costs $675,000 and is situated in Vancouver, Toronto and Ottawa and produces a 6.75% cap rate.

How many “Vantos” do you need to buy to produce $900k a month in net operating income?

The answer is simple: It is $900,000/($675,000 x .0675/12) or 237.

So, the doctor needs to buy 237 Vantos to reach his goal of $10,800,000 in retirement income.

To be on the safe side, David and his coach set a goal of 300 properties purchase over a five-year period.

***

Now you would be forgiven of thinking, “That's all fine and good. He's a rich dentist, he can afford to put together a portfolio like that by just keeping on writing checks.”

Well, you would be wrong in this assumption.

Once, a real estate portfolio gets to a certain size (which it turns out isn't all that huge), it becomes self-supporting.

Huh?

Yes, real estate, when managed properly, is the only perpetual motion machine in the known universe.

How does that work?

Ok, first you have to learn something about amortization. Your banker, financial planner, (most) realtors, lawyer, mortgage broker, mom, dad, sister, brother, uncle and aunt will tell you to string out your amortization period as long as you can or, better yet, get your monthly payments down as low as possible by going with interest-only mortgages. 

How long does it take to pay off an interest-only mortgage?

Forever.

How long does it take to pay off a 30-year amortized mortgage?

Obviously, 30 years.

This is the worst advice ever.

Shorten your amortization period as much as you possibly can until you are squeaking with the pain of meeting your monthly payments.

If you have animated your property, written proper leases (an art in itself) and are managing it well (qualifying great tenants, providing them with top level service, and making sure there is no deferred maintenance), you should be able to get your amortization periods down to 20 or maybe even 15 years.

Now here's the tricky part. You want maximum leverage in your early years as you build up your portfolio; ie, borrow as much OPM (other people's money at the highest LTV, loan to value, ratios you can possibly get) but with the shortest amortization periods you can manage without going into a negative cash flow situation.

Let's illustrate this.

You buy a Vanto for $675,000 with an LTV ratio of 80% so your mortgage is $540,000. With a short enough amortization period (say 15-years), you could be (or actually it's your tenants) paying off, say, $29,200 a year in principal. Over five years, that's a whopping $146,000 of your mortgage principal retired—gonzo. 

Here’re some sample calculations:

And if you've bought in a great location in a city with at least five or six major economic engines (nice stable ones like government, healthcare, tourism, learning, finance, entertainment, tech (well maybe not all that stable but certainly a growth engine), real estate...), your place has gone up in value at 3, 5 or even 7% per annum. So now (assuming a 5% annual appreciation rate), your imaginary Vanto has gone up in value to a fantabulous $861,500 over 5-years.

Here's the magic formula—by nearly killing yourself with really high monthly mortgage payments, you have opened up a ton of room for refinancing your Vantos. Your mortgage has dropped from $540,000 to $394,000 whilst your borrowing capacity has increased to $689,000 so now you can refi each Vanto you own and put (after 5-years of tough sledding) $295,000 in tax-free cash in your designer jeans[3]. That's for each Vanto you own, every five years. Wowza.

Now, of course, you could always decide to buy a nice top of the line Mercedes like Ray Donovan drives (in the first four seasons of a Showtime series of the same name) or, if you are like Dr Leigh, you can buy more property WITHOUT HAVING TO WRITE ANOTHER CHECK.

That's perpetual motion, folks.

perpetual motion anyone[4]?

It's something that Warren Buffett discovered in the 1950s. Only he applied this thinking a bit differently—he purchased stakes in great companies with decent dividends. Dividends acted as “rents,” stock prices as property values and buying on margin was equivalent to using OPM[5], aka property mortgages. Mr Buffett likes to say, “Our favorite hold period is forever.” He also understood that as stock prices rose, and his debt dropped, he'd be able to refinance and pull out tax-free money then rinse and repeat the process. Sound familiar?

By the end of 2017, the doctor owned 307 properties and his coach had to suggest to him, "This might be a good time to stop buying property, David!"

“But I like it,” he replied plaintively. 

“Yeah, but you had a goal when we started and now you've gone past it. I think you should stop buying, and because you have the cash flow to support it, I suggest you shorten all your amortization periods even more… to 11 years as they mature so you can pay off all your financing by the time you turn 59 or 60.”

He (reluctantly) agreed.

Then his coach added: “Oh, one more thing. Once you are debt free, never, ever pledge this portfolio again. Keep it debt free or close to debt free. It's your iron reserve as my dad liked to call it, and certainly never pledge it so you can buy an NHL team[6].”

Last thing—the doctor plans to pass his portfolio onto his five kids. As they each turn 18, he'll add them for “love and affection” (an actual legal term and practically costless to do) as joint tenants so on his passing, he is simply deleted from land titles leaving his kids as sole owners. All that to say, no probate, no probate taxes, no bankers, lawyers, accountants, executors, IRS or CRA agents or other hangers-on can steal those properties from his heirs. No one can sell them, pledge them, refinance them, without everyone on title agreeing.

What's the fastest growing form of abuse today? It's probably not what you think it is—it’s elder abuse.

As a realtor, a mentor, a teacher and a coach, you could get some seniors to sign practically anything. They'd sell their homes for half price just on their realtor’s say-so (something of course you must never do). But if their sons and daughters, granddaughters and grandsons are on title, not so fast, buddy.

***

REAL ESTATE IS GET RICH, SLOW, BUT IT'S PROBABLY THE SUREST WAY TO WEALTH EVER INVENTED.

[1] Captain of the RMS Titanic on its maiden and only voyage.

[2] This horrible acronym stands for VANCOUVER—TORONTO—OTTAWA, a Vanto.

[3] Here’s an insane real estate model for you: Somehow you are able to purchase 15 Vantos, one a year for 15 years and pay off all your mortgages during that same 15-year period. In year 16, you put a mortgage on one of your Vantos, but this mortgage has a 1-year amortization period with payments exactly equal to or slightly less than your NOI from your entire portfolio. If your Vantos are worth say $861,500 each, and have a cap rate of 6.75% pa, you’ll see a total NOI from your 15-property portfolio of $872,268.75 per year. You could put a 95% LTV ratio mortgage on one of your Vantos (or 47.5% on two of them), which yields $775,350 in tax-free cash that you can touch, feel and spend. At 4.99% interest with a 1-year amortization period, your P+I (principal and interest) will be -$814,039.97 for the year. You’ll also be able to add $58,228.79 in cash to your iron reserve. Plus, adios your mortgage debt at year’s end. Then you can do it again, once a year, forever. You’ll live like a prince or princess and NEVER PAY INCOME TAXES AGAIN in this lifetime or any hereafter 😊 which means (if you are in the 50% income tax bracket), you are better off by nearly half of your NOI of $872,268.75 with this model. #Bonkers For many clients, their exit strategy is to die—that is, they’ll pass on their PB4Ls and real estate investment portfolios to their kids and grandchildren. In places where British common law applies, they can do this via joint titles—adding kids and grandchildren to any title for what is legally known as “love and affection and a dollar.” After the principal owner passes away, he or she is simply deleted from land titles (land registry) without any legal, executor, bank, accounting, IRS/CRA, probate fuss or muss… And for some principals, they always have the option to do a variant on this “insane” model by putting some debt in place if they need cash for their personal care or just to take a great holiday or finish off their bucket list of lifetime wishes. Any debt left to their heirs will, like earlier tranches, be paid off by their tenants. A nice gig if you can get it, n’est-ce pas?

[4] Source: Public Domain, https://commons.wikimedia.org/w/index.php?curid=95851.

[5] OPM = other people’s money.

[6] Which turned out to be the NHL’s Ottawa Senators, purchased by the author in 1990/91 for $50 million USD. The Sens went bankrupt by the mid-2000s ☹ because the Canadian looney went from about 90 cents to the USD in 1990 to 62 cents a dozen or so years later and payroll went from $6.5 million CAD in their expansion year 1992/93 to approximately $85 million in the mid-2000s.

Bruce M Firestone, PhD

Real Estate Investment and Business coach

Century 21 Explorer Realty Inc broker

Ottawa Senators founder

1-613-762-8884

bruce.firestone@century21.ca

twitter.com/ProfBruce

profbruce.tumblr.com/archive

brucemfirestone.com

MAKING IMPOSSIBLE POSSIBLE

FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE

FEHAJ, FOR EVERY HOME A JOB

Copyright, Bruce M Firestone, Ottawa, Canada 2019.

[profbruce]

Coaching: Introduction to Prof Bruce Real Estate Investment and Business Coaching Parts 1-5

Waterbridge Media and Bruce Firestone created ten short videos about Prof Bruce real estate investment and business coaching... here’re the first five in the series:

part 1

part 2

part 3

part 4

part 5

Full playlist on YouTube, https://www.youtube.com/playlist?list=PLd3QdcBlEm9_3tN2YJVgDc3uIE-FIFM0g

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD, Century 21 Explorer Realty Inc broker, Ottawa Senators founder, Real Estate Investment and Business coach 1-613-762-8884 bruce.firestone@century21.ca twitter.com/ProfBruce profbruce.tumblr.com/archive brucemfirestone.com

MAKING IMPOSSIBLE POSSIBLE