subset of 80 lessons learned - wais bermuda · thurston, robert allan, patrick francey, robert...

subset of80 Lessons Learned

$80,000 to $80,000,000 in a Decade

Nov. 12, 2014WAISC, Vancouver

Thomas Beyer604 – 564 - 7673

tbeyer @ prestprop . com

www . prestprop . com

Preamble / Legal DisclaimerReal Estate has been around 100’s of years� I didn’t invent apartment buildings nor its proper management nor its passive income nor its leverage potential

with income nor its tax deferral options nor its (usual) increase in value through time and improvements nor am I especially good at it .. Knowing what you want is important as is careful p(l)anning, but execution is key, as is a sense of urgency, listening, reading , kaizen… knowledge helps a lot, as does a sense of life’s opportunities and the ability to take advantage from them, but also useful is awareness of life’s risks and how to mitigate or manage them … being in the market at the right time helps, too .. And thanking God and others is important as is having fun while doing what some people call “work” .. And no GUARANTEES !

Knowledge is no one’s sole domain� I acknowledge shamelessly copying other people’s good ideas that I picked up during conversations,

telephone calls, meetings, presentations, education, courses, tapes and CDs over the years. Those people also learned and possibly also copied some of those ideas from other people’s books, tapes, CDs, courses, seminars or lectures. I have used material from the people used in the “Thank You” section and probably dozens more. Please forgive me if I have copied your original thought and not given you credit.

Thank You To:� Many people have influenced my life, my values, my thought processes and my real estate investment career

and I wish to give credits to their sometimes very small or sometimes hugely influential contributions, many of which are sprinkled throughout this presentation: Don & Connie Campbell, Greg Habstritt, Ozzie Jurrock, Raymond Aaron, Wright

Thurston, Robert Allan, Patrick Francey, Robert Kiyosaki, Douglas Gray, Tom Peters, Stephen Covey, Ron LeGrande, Tim Johnston, Douglas Thiessen, Dale Carnegie, Charles Givens, Harry Dent, John Murphy, Lou Gerstner, Jesus, Warren Buffett, Steve Jobs, Bill Gates, Terry Regenwetter, Janet Perna, Dave Rencz, Barry McGuire, Richard Bell, Neil Fenna, Lyndon Thiessen, Tom Docking, Gary Allard, George Fabi, John Stobbe, George Hilton, Matthew & Stephen Johnston, Zig Ziglar, Sasha & Greg & Mike Uhryn, Jim Vincent, Dominic Mandato, Paul & Monica Prochnau, Randy Jamieson, Brian & Donna Barnett, Rick Jenkins, Christian Lendi, Ross & Teresa Gilker, Neil & Sandy Kaarsemaker, Peer Rumland, Richard Dolan, Achim & Hilde Goldbach, Thomas Heiden, Howard Weale, Val Toffoli, Debbie Bradford, Rory Sutter, David Steele, Peter Hebb, Jan Fialkowski, Chris Biasuti, Nancy Ternowski, Christine Friesen, Larry Menarik, Brian Tracey, Dennis Aitken, Don Rumpel, David Jennings, Pat Gilker, Marianne Engel, Michelle Naffin, John Kish, Doug Bittle, Rick & Sheila Bayer, Bernie Garnhum, Len & Janica Williamson, Peter Tsukahira, Jeff Coors, Paul Szkiler, Pierre Doyon, John Beckett, David Davis, Scotty & Annie Grubb, Christine Kopr, Denise Odam, Keith & Linda Weaver, Charlie Bredo, Rick & Lyn Linklater, Adam Killam, Chad & Evie Willox, Mike & Sandy Hammerlindl, Keith McMullen, Prod & Elenor Laquian, Richard Alexander, Charles Menzies, Erica Frank, Jens & HsingChi von Bergman, my sister Barbara and her husband Steven Ongena, my brother Holger and his wife Martina Steinhauer, Abe & Elfrieda Friesen, my father Detlef, my mother Ursula, my amazing wife Lynda, and our two children, Sonja Marie & David Benjamin.

80 Lessons Learned

� Life Lessons

� 5 ways to make money

� Business Lessons

� Asset Allocation

� Real Estate Lessons

� Real Estate is a Three Course Meal

� Leverage

� Volatility – Stocks vs. Real Estate

Part 1: Life Lessons

Lesson 1: Man Plans and God Laughs

Lesson 2: Clean up Your Messes (Part 1)

Lesson 3: Clean up Your Messes (Part 2) – Relationships

Lesson 4: Clean up Your Messes (Part 3) – the Bigger the Mess, The More Time it

Takes to Clean

Lesson 5: Clean up Your Messes (Part 4) – Phases of a Mess

Lesson 6: Build a Stable Base (Part 1) – Faith

Lesson 7: Build a Stable Base (Part 2) – Family

Lesson 8: Your Spouse is you Permanent 50/50 Joint Venture Partner

Lesson 9: Kaizen – Consistent, Incremental Progress

Lesson 10: Kaizen – Large Leaps can Lead to Low Confidence and Messes

Lesson 11: Growth in Discomfort – Taking the Next Step

Lesson 12: Growth in Discomfort – The Anatomy of an Uncomfortable Change (The

Stepped S-Curve)

Lesson 13: Growth in Discomfort – Change Gets Easier Each Time

Lesson 14: Ready, Fire, Aim – Take Reasonable Steps to Mitigate Risk

Lesson 15: Ready, Fire, Aim – Leap Before You Look (sort of)

Lesson 16: ASK – Learn By Asking Questions

Lesson 17: ASK – Asking Questions Separates You From the Crowd

Lesson 18: Know Yourself – Figure Out What You’re Excellent, Good, Average,

Poor, and Terrible At

Lesson 19: Know Yourself – Everyone is Good at Something

Lesson 20: Know Yourself – Patience

Lesson 21: Delegation – Don’t Confuse Getting Things Done with Doing Them

Yourself

Lesson 22: Delegation – You Can’t (and Shouldn’t) Delegate Everything

Lesson 23: Delegation – Knowing What You Don’t Know, and “There’s No Dash in

‘Micromanage’!”

Lesson 24: Delegation – Don’t Delegate Your Strengths, Work on Them

Lesson 25: Delegation – You Can’t Delegate Relationship Building

Lesson 26: Delegation – Employer/Employee Relationships Must be Win/Win

Lesson 27: Positive Feedback – Reach Out to Empower Yourself

Lesson 28: Mentoring – The Value of Informal Mentors

Lesson 29: Live Below Your Means – Your Car is a Money Pit

Lesson 30: Live Below Your Means – A Penny Saved is Two Pennies Earned

Lesson 31: Live Below Your Means – Except When it Comes to Your House)

Lesson 32: Challenge Your Belief System – Adhere to the Evidence

Lesson 33: Challenge Your Belief System – You’re not the Beliefs that you Inherit

Lesson 34: The Noble Art of Leaving Things Undone

Lesson 35: Principle Based Decisions Lead to Big Results

Lesson 36: Principle Based Decision Making – Know Where you Stand, or Be Pushed

Around

Lesson 37: Communication – Continual Growth

Part 2: Business Lessons

Lesson 38: Communication - Selling and Marketing

Lesson 39: Communication – Know Your Advantage and Communicate it

Lesson 40: Communication – Speak in their Language

Lesson 41: Communication – Sales Process

Lesson 42: Communication – Relationships Come First

Lesson 43: Communication – Presentation Skills

Lesson 44: Partnering – Don’t Partner if You Don’t Have to

Lesson 45: How to Choose a Partner

Lesson 46: Immediate and Delayed Income

Lesson 47 – Move Understanding Forward

Lesson 48: Have a Casual Disregard for Money

Lesson 49: Green Money vs. Blue Money

Lesson 50: Spend Money Wisely

Lesson 51: Creating Momentum – “The First Million is the Hardest”

Lesson 52: Generalist, Specialist, or Generalist Specialist

Lesson 53: Even Steve Jobs was Replaced

Lesson 54: Risk – How Conservative Do You Want To Be?

Lesson 55: Risk – Fail Your Way to Success

Lesson 56: Risk – Tolerance to Risk Fluctuates

Lesson 57: Know Your Worth

Part 3: Real Estate Lessons

Lesson 58: Investing – Wealth Planning is About the Wealth of the Planner

Lesson 59: Investing – Choosing an Advisor for your Investment Portfolio – Or Should You do it Yourself?

Lesson 60: Investing – Real Estate in your RRSP or TFSA?

Lesson 61: Investing – Maximize Your RRSP: Make 50% to 66% "On the House"

Lesson 62: How to Start Out in Real Estate Investing

Lesson 63: The Five Ways to Make Money

Lesson 64: Working – Earning an Income

Lesson 65: Investing Your Own Money

Lesson 66: Investing Other People’s Money

Lesson 67: Employing Other People

Lesson 68: Intellectual Property

Lesson 69: The First Steps to Becoming a Real Estate Investor

Lesson 70: Is a 50/50 Joint Venture Fair?

Lesson 71: Buying vs. Owning – You Make Money When You Buy

Lesson 72: Buying vs. Owning – The Three Rs of Property Management

Lesson 73: Real Estate is Not Get Rich Quick, It’s Get Rich For Sure

Lesson 74: Making the Jump From Single Family to Multi-Family

Lesson 75: Knowledge is Its Own Acquisition

Lesson 76: The Cash Flow Myth

Lesson 77: Good Debt vs. Bad Debt

Lesson 78: Income Thinking vs. Net Worth Thinking

Lesson 79: Choose Real Estate Investments That Make Sense to You

Lesson 80: Real Estate Transaction Costs and the Virtual Life of a Building

Topics of Discussion� How we got here

� Life Lessons

� .


� .


� .

� .

� .

� Final Thoughts

Prestigious Properties ™ Overview� Founded in 2000 .. After 10 year of “gee, I should do s.th”

� Buying in bulk since 2000: like flower, less $s per pound !

0

200

400

600

800

1000

1200

1400

1600

89 909192 939495 969798 99'00'01 2 3 4 5 6 7 8 9 10 1112

Acres of Land

Units Owned



� Currently own 15 properties (incl. condos, houses and two land parcels) with values exceeding $100,000,000

� over 37 buildings transacted so far worth $175,000,000, 20+ buildings sold (dumb .. dumb .. dumb) .. About 800 apartments as of Nov. 2014 , exceeding $10M revenue annually

� 700+ investors who invested well over $45 M so far

0

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600

800

1000

1200

1400

1600

89 909192 939495 969798 99'00'01 2 3 4 5 6 7 8 9 10 1112

Acres of Land

Units Owned



� Currently own 15 properties (incl. condos, houses and two land parcels) with values exceeding $100,000,000

� over 37 buildings transacted so far worth $175,000,000, 20+ buildings sold (dumb .. dumb .. dumb) .. About 800 apartments as of Nov. 2014 , exceeding $10M revenue annually

� 700+ investors who invested well over $45 M so far

� � OPEN FOR INVESTMENT: Kings Castle LP

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1000

1200

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89 909192 939495 969798 99'00'01 2 3 4 5 6 7 8 9 10 1112

Acres of Land

Units Owned


� Life Lessons



� .


� .

� .

� .

� Final Thoughts

Some Life Lessons Learned� 5 Ways to Make Money


� Work


� Work

� Invest (your own) money


� Work


� Invest other people’s money (OPM)


� Work



� Invest other people’s time (i.e. delegate / build a team / JV / partner / small business)


� Work



� Invest other people’s time (i.e. delegate / build a team / JV / partner / small business)

� License / IP / Trademark


� Life Lessons





� .

� .

� .

� Final Thoughts

Prestigious Priorities

� Warren Buffett’s Rules for Investing

� Rule No. 1 - never lose money.

� Rule No. 2 - never forget rule number one.

Prestigious PrioritiesOur Priorities• Return OF your money• Return ON your money• Quarterly Cashflow

� Warren Buffett’s Rules for Investing

� Rule No. 1 - never lose money.

� Rule No. 2 - never forget rule number one.

30%

Medium

Risk

10%

High

Risk

Asset Allocation

(Stocks, Bonds and Private Equity)

60%

Low

Risk

30%

Medium

Risk

10%

High

Risk

Asset Allocation


60%

Low

Risk

DISCLAIMER: IT IS NOT ADVICE. IT IS AN OPINION OF THE AUTHOR AND/OR PRESENTERS

30%

Medium

Risk

10%

High

Risk

Asset Allocation


60%

Low

Risk


Land Development

(with mortgages)

Second Mortgages

(construction)

Most penny Stocks

Construction Projects

(with mortgages)

Greek Bonds

Private Software Firms

Restaurants

30%

Medium

Risk

10%

High

Risk

Asset Allocation


60%

Low

Risk


Land Development

(with no mortgages)

Second Mortgages

(non-construction)

Most large CAP stocks

Euro Bonds

Gold, Diamonds

Commercial Real

Estate

Construction Projects

(with low mortgages or

In very high demand

locations)

30%

Medium

Risk

10%

High

Risk

Asset Allocation


60%

Low

Risk


Apartment Buildings

(with modest mortgages)

First mortgages

(non-construction)

Quality Corp. Bonds

Many Municipal Bonds

Government Bonds

30%

Medium

Risk

10%

High

Risk

Asset Allocation


60%

Low

Risk


Apartment Buildings


First mortgages

(non-construction)

Quality Corp. Bonds


Government Bonds

Note: RISKY (according to

the security commission

rules) is an exempt

market offering with any

of these even if some

asset classes are less risky

than others!

30%

Medium

Risk

10%

High

Risk

Asset Allocation


60%

Low

Risk


Apartment Buildings


First mortgages

(non-construction)

Quality Corp. Bonds


Government Bonds


� Life Lessons






� .

� .

� Final Thoughts

26

• Appetizer: Positive Cash-Flow

Real Estate: A Three Course Meal

27


• Main Course: Mortgage Paydown


28



• Dessert: Value Increase through

– improvements (if any)

– re-positioning

– reduced expenses / higher rents

– time

– roughly: real estate doubles in 15 -20 years !


29



• Dessert: Value Increase through

– improvements (if any)

– re-positioning

– reduced expenses / higher rents

– time

– roughly: real estate doubles in 15 -20 years !

• Never sell ??

– Why sell ?

– Re-finance

– Full course Meal



� Life Lessons






� Leverage

� .

� Final Thoughts

Why Real Estate? (with cheap levered money )

133%+

Year 5 @ 8%/year

Assumptions: 25% down, 25 year amortization mortgage,

low to break even cash flow (value in year 1 = 3000,

mortgage = 2250 going to 2000 in 5 years .. 25 year

amortization .. thus 10% mortgage paydown)

Why Real Estate? (with cheap levered money )

193%

133%+

Year 5 @ 8%/year





Why Real Estate? (with cheap levered money ) � Even with conservative

market value growth of 4-5% annually, typical cash-on-cash returns can be in the 10% to 20% per year range (before costs, overhead and our profit)

193%

133%+

Year 5 @ 8%/year






market value growth of 4-5% annually, typical cash-on-cash returns can be in the 10% to 25% per year range

� Very doable and consistently doableif one has the experience and knowledge – or partner with the right people and buys in growth areas !





193%

133%+

Year 5 @ 8%/year


market value growth of 4-5% annually, typical cash-on-cash returns can be in the 10% to 25% per year range

� Very doable and consistently doableif one has the experience and knowledge – or partner with the right people and buys in growth areas !

� yes, even a 40% -50% value growth in 5 years is very doable in certain markets

193%

133%+

Year 5 @ 8%/year






� Life Lessons






� Leverage

� Stocks vs. Real Estate

� Final Thoughts

Stock market

After MER of a typical mutual Fund

10 year average3% per year

Average TSX10 year average5% per year

• TSX Index Performance over 10 Years Raw Index and

after 2% MER / year

Stock market – 7 Years

After MER of a typical mutual Fund

7 year average-1% per year

Average TSX7 year average1% per year

• TSX Index Performance over 7 Years Raw Index and

after 2% MER / year

Apartment Building Growth

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

$225,0001997

Asian

Financial

Crisis

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

““““Consistent positive growth over

the past 27 years””””

ICREIM / IPD Canada Residential

"Apartment" Property Index (TR)

$197,968(Dec-31 2012)

2008/09

Global

Financial

Crisis

1987

Black Monday Crash

1998

Russian

& LTCM

bailout

2000/02

Internet

Bubble

Bursts

& 9/11

$10,000 invested (Dec 31-1984)

7 Source: REALPac/IPD Canada Annual Property Index as at Dec. 31, 2012. This index is referenced as it is the longest direct property data series commonly used by institutional real estate investors.

It is an unlevered index. PAST PERFORMANCE MAY NOT BE REPEATED.

““““Positive calendar year Total Returns every year over past 27 years””””

Source: JJ Barnicke, Edmonton – 1995-2007 & REMAX Real Estate, Alberta Data Search – 2008-2013, 2014 CommercialEdge

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

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Av

era

ge P

rice

pe

r D

oo

r

Year

Average Price per Door - Edmonton, AB

Invest where the people move!

41

� Alberta Population

� Today: ~4M

� In 2020: bigger than BC

� In 2040: 6.2M

� Calgary = 2.4 million

� Edmonton = 2.1 million

� Income & growth-focused investment

� Backed by income-producing apartment buildings

� Earn 6% DRIP or 5% Cash Distribution annually

� RRSP / TFSA / LIRA eligible

� Target Annual 8 - 10% ROI

� From only $10,000

Consider a Private Apartment LP

Annual ROI Target 8-10%+

Advantages of a

Private Apartment LP

Apartments One of the safest real estate sectors

Private Lower volatility

Limited Partnership

Growth orientated, tax-advantaged returns

Proven business model,

hassle-freeProfessionally

Managed

Become a Landlord. Without the Hassles.TM

Final ThoughtsBecome a landlord - Without the Hassles ™

The real estate roads are paved with gold … but you have to bend

over to pick it up !

Lever sensibly with low interest rates !

Don’t wait to invest in real estate –Invest in real estate and wait ! ™

When you check into the old folks home ….

ActionCome to our booth !

Sell: Decent Risk Adjusted ROI !

Join 700+ investors !

Get a copy ofmy book !

subset of 80 lessons learned - wais bermuda · thurston, robert allan, patrick francey, robert...

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