Friday, July 31, 2009

Never Eat Alone

Keith Ferrazzi - Never Eat Alone

This is a very interesting book that illustrates the importance of networking for succeeding in life: Professionally and personally.
I enjoyed reading it.

Keith gives several practical tips on how to build and maintain your network. The book gives enthusiasm and energizes to do things differently.

You won't go anywhere by yourself. Hence Keith suggests that for every goal, one should write a NPA or Network Plan of Action.
Define the people that could help you reach your goal, either by their knowledge, their own network, their position...
Then strive to meet these people. (research for the most successful people in the field you are interested in, find out where you could meet them)

Before meeting the people you want to meet, do your homework and research who they are, what they like etc...when you finally meet them, flatter them by letting them know you researched them.

Whenever you decide to reach a certain position, start immediately to network in that domain.
Before changing career, build the network in that new domain, work for free to get references in that domain.

Establish a Personal Board of Advisors, similarly a company has a board of administrator, once should seek advise from several wise people or mentors.

Judge someone by how they treat people below them, not the people above them
Never forget who helped you get where you are in the present. Keep in touch. Don't hesitate to keep in touch with several people at the same time, for example you can very well meet 3-4 people for dinner and introduce them to each other.
Be an organizer, events, dinners, conferences, be a speaker at conferences...

Focus on giving and helping your network rather than receiving. Strive to be a connector and introduce people that can help out each other.
When you help others, they often help you.

After a talk, be among the first to ask a smart question and introduce yourself, that will probably be the only question most people will remember.

Don't be afraid of failure or rejection and rest in inaction:
"The choice isn't between success and failure; it's between choosing risk and striving for greatness, or risking nothing and being certain of mediocrity"

"Is it what you know or who you know that leads to success?
Both. Who you know determines how effectively you can apply what you know."

You need to broadcast who you are and your achievements
"Everyone sees what you appear to be, few really know what you are"

After meeting someone, always follow-up.
- Express your gratitude
- remember an item of interest from the discussion
- reaffirm whatever commitments you both made (meet again?)
If you met someone at an event where they probably met a lot of people, be the first to follow up, or get noticed, with a picture, a sentence remembering the discussion...

Check out Keith's blog at

Tuesday, July 21, 2009

Home Buying Seminar

About 2 months ago I attened a Home Buying Seminar presented by Keller Williams

This was a friendly 2h long basic introduction of the buying process.
This was more oriented towards "home" buyers than investors and really insisted on the emotions involved with finding and buying the "dream home".

Their talk was followed by a presentation from Chase introducing the basics about mortgages.

Below are some notes I took.

- all the California Realtors offer Job Loss Insurance till 31 dec 09 (a $1500 value over 6 months)

- When buying a house never use the seller's agent as the buyer's agent (conflict of interest)

To pick the rigt buyer's agent, interview at least 3 of them before picking the one you want to work with.
Ask them question, How long have been in the area? how many customers at a time? average time to find a house...

For 1% increase in loan interest rate => your purchasing power decreases by 10-12%!

Different types of sales:
- Short sales a.k.a. pre-foreclosures
=> the sellers owes more than the value of the house
=> if the sale goes through, the lender will lose the missing money
=> the lender has to approve it
=>the house is sold AS IS

==> these sales are often stuck for up to 6 months, they are hard to close, you can cancel your offer at anytime, more offers can come in.

- in foreclosure
=> the owner stopped paying mortgage for 5 months or more
=> the bank tries to foreclose

- bank owned a.k.a. R.E.O. a.k.a. foreclosed
=> the bank owns the house
=> the bank will give quick responses on offers (2/3 days for a yes/no)
=> the house is sold AS IS, but a contract can force repairs or credit towards closing costs (= pay for the repairs)

- Property inspection of a house $450
- Termite inspection $150
- Closing Costs => 3%

Before buying a house,
- inquire whether there has been any new projects on the house? any add-on? or rezoning (flood zone, earthquake...)
- meet your future neighboors (even for investment property! good tenants will want good neighboors)
- home warranty => generally covers equipment and appliances such as dishwashers, plumbing systems, electrical systems etc. that fail due to normal wear and tear.

The Buyer's remorse
- I paid too much, I bought too fast, I didn't see enough homes...


Loan qualification will check
- Capacity to pay back: income, work history, debt
- Credit Score (need over 720)
- Capital
---Down Payment
---Cash Reserve (at least 2-6 months of expenses required)
---Cash for Closing costs (if seller doesn't pay them)
- Collateral : Appraisal of the property

Debt to income ratio should be below 38%
You can withdraw 10K penalty free from the 401K to use as down payment.

FHA loans have the same rate for everyone.
- down of 3.5$
- 1st time buyer or not

ACORN program
- down of 3%
- doesn't require mortgage insurance

- down 5%

Loan Pre-qualification is free => just give your data (do it online !)
Loan Pre-approval will usually have a fee ($300), is valid for 90 days only, all paperwork is verified Hard credit pull, W-2s, bank statements, employments....

You can improve your FICO score by 10-30 points within 30 days by opting out from Credit Card's mail list at

Wednesday, July 15, 2009

Rich Dad: Learn To Be Rich

2 months ago, I attended one of Rich Dad's free "Learn To Be Rich" session in a Hotel conference room close to me.

You can see the next ones at

The hotel parking was $11 and there were no other parking in 1/2 mile radius.
The room was not indicated, no drinks served, no warm welcome.

I sat in the room along with some 70 other people. We watched a video from Rich Dad's website while waiting for the session to start.

Our speaker greets us, I must say I was very impressed, he was one of the best public speaker I have seen. His talk was well built, well organized, perfectly mastered, funny and he was always anticipating the audience's reactions.

About 60% of the talk was actually a very convincing sales speech to have us sign up for a 3-day real estate seminar coming up at the same location in 3 weeks.

In short the seminar "normally" cost $995, but if one signs up tonight, it's only $495, for 2 people, you get pretty much every book, video and manual Rich Dad ever published, you get access to the web site, the advisers, and all sorts of pre-written contracts worth thousands in attorney fees. A quick search on the web reveals that they've been doing these free seminars, every week, with the same deals, for at least 3 years and I didn't find anyone happy with the 3-day seminar which seems to be more of a 3 days sales speech for a 7 or 15 days training camp. The planning they showed us for the 3-day seminar had something like 100 sections, way too many to do anything more than define each topic quickly and give simple tips.

I took a few notes on the non-sales part of the talk.

The only thing you need to do to become is rich is " FIND THE DEAL "
or in other words, find a house that you will buy for very cheap and that you will rent for very expensive after minor or no repairs.

Everyone can look for the DEAL, it does not cost a dollar, just time and passion.

once you found the DEAL, you have the First Mover Advantage
=> have the seller sign a 30-day contract to sell to you only (to lock him)
=> then you have 30 days to find the money to make the deal happen
=> and since it's a great deal, you won't have problems with that
if banks don't lend you money you can search the web for Hard Money Loan: investors that will lend you the money and take parts of the benefits.

Look for FSBO (For Sale By Owner) => there is no agents.

a 401K is savings, it's bad, it's wasted money.
Real Estate or owning a business is investing.

Economic Cycles: describe the regular ups and downs of the economy.
In average every 6 years the market will go up and crash.
In average a recession last 18 to 24 months.
The recession starts at the highest point of GDB preceding 2 quarters of negative growth.

We've been in the current recession for 18 months, hence in average we should have about 6 more months before it ends.

=> you need to act before, BUY NOW

There are 3 ways to get rich
- stocks
- creating a business, wholesale something = quick cash
- real estate => easiest, cheapest to start with

To identify & make the DEAL, it's all about having the right spreadsheets, forms, contracts.
=> Learn before you do, take a Real Estate Class.

When a recession ends, usually the economy goes in a phase of expansion that lasts 5 to 6 years.
=> you should only leverage at the beginning of the expansion
=> you should sell (stocks, real estate) before the market reach the peak, don't wait for signs of weakness.
=> sell some real estate, and pay off your 'best houses to keep' before the dump !

Use the 1031 transfer to build your wealth avoiding taxes
=> you need to keep buying for a higher value and in the same type of housing (single family home)

create a Real Estate Investment company
=> deduce from your taxes, gas mileage, trainings...

All in all, this was a great & fun experience, and if you decide to try it, I would suggest to go without cash, nor checks, nor credit cards, nor phone... just to be on the safe side. These guys are just too good at doing their business: selling you seminars.

Suggested reading: Randy Pausch - The Last Lecture