Step 3 – Prep – Bruce Firestone

Clarity Call

Sometimes, before people sign up for full-on coaching, they want to do what we call a Clarity Call (or a clarity session).

What’s that?

It’s a one-hour zoom call (or skype session) where we try to determine if there is a match between coach and coaching client, and what kinds of things will be dealt with during coaching. There is usually a charge for this, but it is not a significant investment, at least in terms of money.

What do you get from your CLARITY SESSION with Prof Bruce?

develop your real estate and PB4L business models
set out your financial goals
review together where you are at today
know exactly where you want to go
know exactly how to get there

“Risk comes from not knowing what you’re doing,” Warren Buffett

EACH SESSION IS INDIVIDUALLY-TAILORED TO YOUR NEEDS AND CONCERNS…

Preparing for your clarity session

To get ready, here’re a few things for you to do:

Watch this 12 minute video, How to really provide for yourself and your family,

https://www.youtube.com/watch?v=0yXycpt6axo&list=PLd3QdcBlEm99ne8FcvIotTgjBmtSxEmuB&index=1

Read this, Why You Should Treat Even Your Principal Residence as If it Was a Rental,

https://profbruce.tumblr.com/post/153639912969/why-you-should-treat-even-your-principal-residence [After you’ve read the blog post, please watch the Robert Kiyosaki video at the bottom but only after you’ve read the article—about a 1-hour long Kiyosaki video but worth it ?]

Read this too, Warren Buffett Methodology Applied to Real Estate Investing,

https://profbruce.tumblr.com/post/155903593104/warren-buffett-methodology-applied-to-real-estate

Can you also prepare your PBS (personal balance sheet)? We attach a couple of samples for you to use.
Next, complete the form what interests you most in real estate (also attached).
We also want you to think about what type of PB4L, personal business for life, you might want to build or, if you are already doing one, how you might want to develop it further.

There is one more form attached—your goals form. Have a look at it but DO NOT COMPLETE THIS ONE. We will do it together on the call ?

Last thing, can you send us your DETAILED agenda at least 3 days before our call so I can prepare? What are your burning questions/problems/opportunities?

Regards,

Bruce

[Editor’s note: the forms mentioned above are all included in Practical Magic. Please refer to the table of Contents above or search this document (if you have an e-copy of it) using ctl “F” on your keypad.]

What interests you most in real estate?

Alright, time for you to do some more work.

Use five stars for areas you are most interested in, one star for least:

Own my own home
Residential rentals
Industrial property
Industrial condos
Small shopping plazas
Commercial real estate
Cottage property
Farmland
Mini storage
Land development and land ownership
Green building
Tech package/smart building technology
Financial analysis
Financing
Animating real estate/adding differentiated value
Entertainment uses/adding leisure and recreational components to real estate, residential, rural, agricultural or commercial
Mixed use
Institutional uses
Charity and NFP (not-for-profit) uses
Property management
Mortgage brokerage
Real estate brokerage
Forming an investment group/running it
Becoming a home stager/designer
Becoming a building inspector
Understanding urban planning, zoning, severances, subdivisions and bylaws
Becoming a renovator/contractor/constructor or sub-trade
Marketing real estate
Becoming a real estate investment or PB4L co-coach
Other, please specify:
_________________________________________________________________________________

What resources are available to you? [circle that which applies and write down the amount available]

Cash
RRSPs, LIRAs, TFSAs. 401(s)s
Home equity
Unsecured LOC
Credit cards
Partners
Friends, family and fan funding
Investors
Other, please specify: _________________________________________________________________________________

Do you want a partner(s)?

Do you want to—

1. Buy, add differentiated value, animate, manage, hold and refinance like famous investor Warren Buffett

2. Trade/flip

I am—

Very risk averse
Tolerate risk well

I am—

Prepared to work hard/put in a lot of sweat equity
Want to do the minimum

I want—

An operating business
Passive income

I am prepared to—

Do my own property management
Contract it out

I am—

Tech savvy
Social media and marketing savvy
A novice at both

I am—

Very handy with tools and construction and maintenance
Not sure which part of the hammer to hold

I—

like selling
hate sales with a passion

There is a history of entrepreneurship in my family—

I—

Want to have a PB4L
Running a PB4L just isn’t for me

My credit score is _______________

Visit CreditKarma.ca for your free beacon score (using this site, does not affect your credit rating), it will look something like this:

In five years’ time, I would like to/I see myself doing—

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

My Personal Balance Sheet

Did you know that you can run even the largest businesses knowing just three things?

1. your AR, accounts receivable, beginning and end of month

2. your AP, accounts payable, beginning and end of month

3. your bank balance, beginning and end of month.

Of course, you’ve already guessed what I am talking about… these three variables are all you need to see to know what is happening to your cashposition. Cash doesn’t lie[1], but accounting statements can certainly mislead, even those prepared under GAAP (generally accept accounting principles) rules. There is lots of flexibility in those rules so financial statements can get quite creative even without being fraudulent—for example, they can push some expenses to next quarter and bring some revenues forward to this quarter so profits look better and stock price reacts too, upwards, at least in the short term.

Savvy investors track cash. So do smart owners, CEOs and presidents. Let me repeat, “Cash doesn’t lie.”

Here’s how it works—if your bank balance during the month has gone up, and your AR and AP are unchanged, this is a sign that your business is doing well, growing. If your cash balance during the month has gone up, and your AR is unchanged and your AP has gone down, this is a sign that your business is doing really well—your revenues and profits are growing and you are using that to not only increase cash on hand but to pay off debt…

However, you can have a situation where your cash balance is going up but your AP has gone up even more, which means that the only reason you have more cash on hand is that you are not paying your bills, which is bad.

…

The above discussion about cash and balance sheets is one of the reasons why we put so much emphasis on only buying property that cashflows. It gets old in a hurry having to reach into your jeans every month to subsidize a real estate investment. This is just as for from businesses, including hockey teams so make a real, cash profit… every month if you want to be HAPPY.

You know what they say about the NHL?

The 2^nd happiest business day of your life is the day you acquire an NHL team
The happiest? The day you sell it…

Even though balance sheets can lie, it’s still very useful for you to create a PBS, personal balance sheet (see example below). This is a surefire way to keep track of everything and, if you study yours from time to time, you will find things you own, you probably should divest, and others where you should double down—renew your focus and increase your efforts.

Produce this and look at it with us to see how it can be improved.

Now have a go at your own:

Summary of Assets Owned or Controlled

My name ………………………………………………………………………………………….

Quarter: Q1 Q2 Q3 Q4 [STIKEOUT THAT WHICH DOES NOT APPLY]

Year: 20__

ASSETS

Cash & Marketable Securities

$…………………………………………………..

Registered Pension Assets, LIRAs & Pension Entitlements

$…………………………………………………..

Furniture

$…………………………………………………. .

Real estate 1:

address …………………………………………………………………………………………………………………………

FMV, fair market value

$…………………………………………………..

Mortgage amount

$…………………………………………………..

NOI, net operating income

$…………………………………………………..

Purchase price including closing costs, renovations and repairs

$…………………………………………………..

Real estate 2

address …………………………………………………………………………………………………………………………

FMV, fair market value

$…………………………………………………..

Mortgage amount

$…………………………………………………..

NOI, net operating income

$…………………………………………………..

Purchase price including closing costs, renovations and repairs

$…………………………………………………..

Real estate 3

address …………………………………………………………………………………………………………………………

FMV, fair market value

$…………………………………………………..

Mortgage amount

$…………………………………………………..

NOI, net operating income

$…………………………………………………..

Purchase price including closing costs, renovations and repairs

$…………………………………………………..

Real estate 4

address …………………………………………………………………………………………………………………………

FMV, fair market value

$…………………………………………………..

Mortgage amount

$…………………………………………………..

NOI, net operating income

$…………………………………………………..

Purchase price including closing costs, renovations and repairs

$…………………………………………………..

Real estate 5

address …………………………………………………………………………………………………………………………

FMV, fair market value

$…………………………………………………..

Mortgage amount

$…………………………………………………..

NOI, net operating income

$…………………………………………………..

Purchase price including closing costs, renovations and repairs

$…………………………………………………..

Real estate 6

address …………………………………………………………………………………………………………………………

FMV, fair market value

$…………………………………………………..

Mortgage amount

$…………………………………………………..

NOI, net operating income

$…………………………………………………..

Purchase price including closing costs, renovations and repairs

$…………………………………………………..

PB4L FMV

$…………………………………………………..

Tools and Equipment

$…………………………………………………..

Vehicles

$…………………………………………………..

OTHER ASSETS

$…………………………………………………..

Total Assets

$…………………………………………………..

LIABILITIES

Real estate 1: