All Forum Posts by: Jon Klaus

Real estate connection? He became a surveyor at age 24:

“Then for six weeks, daytime and often all of nighttime, he had his head deep in Gibson’s Theory and Practice of Surveying and Flint’s Treatise on Geometry, Trigonometry and Rectangular Surveying. From decimal fractions one book ran on onto logarithms, the use of mathematical instruments, operating the chain, circumferentor, surveying by intersections, changing the scale of maps, leveling, methods for mensuration of areas. Many nights, said Mentor Graham’s daughter, she woke at midnight to see Lincoln and her father by the fire, figuring and explaining, her mother sometimes bringing fresh firewood for better lighting. On some nights he worked alone till daylight and it wore him down. He was fagged, and friends said he looked like a hard drinker after a two weeks’ spree. Good people said, "You’re killing yourself."

In six weeks, however, he had mastered his books, and Calhoun put him to work on the north end of Sangamon County. The open air and sun helped as he worked in the field and timberland with compass and measurements. His pay was $2.50 for "establishing" a quarter section of land, $2.00 for a half-quarter, 25 cents to 37½ cents for small town lots. He surveyed the towns of Petersburg, Bath, New Boston, Albany, Huron, and others. He surveyed roads, school sections, pieces of farm land from four-acre plots to 160-acre farms. His surveys became known for care and accuracy and he was called on to settle boundary disputes. In Petersburg, however, he laid out one street crooked. Running it straight and regular, it would have put the house of Jemima Elmore and her family into the street. Lincoln knew her to be working a small farm with her children and she was the widow of Private Travice Elmore, honorable in service in Lincoln’s company in the Black Hawk War.â€

Carl Sandburg, Abraham Lincoln: The Prairie Years and The War Years

"The greatness of Napoleon, Caesar or Washington is only moonlight by the sun of Lincoln. His example is universal and will last thousands of years . . . . He is bigger than his country -- bigger than all the Presidents together . . . and as a great character he will live as long as the world lasts."

Leo Tolstoy, 1909

"Actually, the cap rate is the NOI divided by the purchase price (or value), not the other way around."

Corrected--thanks.

Example $500K apartment building with $100K in gross annual income, and $50K in annual expenses. This gives you $50K in NOI. $500K divided by $50K is a 10% cap rate.


Property's gross annual income $100K
minus
Property's annual expenses $50K
equals
Net Operating Income (NOI) $50K
=====
NOI $50K
divided by
Price paid for property $500K
equals
Cap Rate 10%

Property's gross annual income
minus
Property's annual expenses
equals
Net Operating Income (NOI)
=====
NOI
divided by
Price paid for property
equals
Cap Rate

Buy this before you spend big $$ on a seminar

Most of this audio program (13 CDS and 1 DVD) is from an actual weekend seminar recorded in New Zealand. These seminars typically cost a lot of money, sometimes over $1000, so this CD/DVD program is a bargain. I listened to it driving to and from work and for the most part Dolf kept me engaged. I'm on a first name basis with Dolf, because after listening to him speak and interact personally with the audience for 15 hours, I feel like I know him pretty well.

His style is disarming and low key. He seems very approachable and works to make the content accessible. That's great for a beginner or intermediate investor. However it can drag if you are very familiar with the fundamental elements of real estate investment (REI).

Psychology and motivation are doled out liberally. He works to help us believe anyone can do this and that you can learn 90% of what you need to know in a couple of months. He spends a good amount of time on the psychology of negotiation and the value of finding motivated sellers. The audience role plays and then reports back. They look for deals in the newspaper, call the sellers, then evaluate the deals. Audience members describe their actual deals for the group's evaluation. Dolf tells about his own winning deals.

Dolf tells us that REI is really easy. Perhaps it is if you really know what you are doing, but he doesn't warn enough about making mistakes. And one mistake in REI can cost you for a very long time. He really glosses over the risks, especially of over leveraging. He ignores or downplays transaction and ownership expenses. Once you are experienced, what he describes can become easy.

His signature proposition is: "The deal of a decade comes along every week." I have found this to be true when I am actively out looking. This makes it a lot easier when you miss a property that you want, knowing that another great one is around the corner. "Don't fall in love with the property, fall in love with the deal." Let the numbers do the talking.

He also teaches to hold for the long-term and finance all your properties. And as you build equity, borrow more cash against your holdings to do more deals. Don't pay off any of your properties. Hmmm, this has burned plenty of investors over the past couple of years.

He wants us to use property managers so we don't get bogged down in the nitty gritty of land lording. He is all about tax efficiency. He teaches that you should invest in the best possible areas, whether that means out of state or internationally. I would only recommend that to experienced investors.

This gets 4 stars for newbies, and 3 stars for moderately experienced investors. Dolf really is a good and entertaining presenter, but for more depth and techniques, look elsewhere.

This review on Amazon:
http://www.amazon.com/gp/cdp/member-reviews/A1M2I4A22YXB1A/ref=cm_pdp_rev_all?ie=UTF8&sort%5Fby=MostRecentReview

Hannibal, MO. I'll be there next week visiting family, but will not be able to stop myself from looking at deals and learning the market. Anyone know this market?

I would go in person to the the P&Z department and talk to them. Look to build rapport and a relationship. If they say no right off, keep asking for creative or out of the box solutions to get to your objective. Try again later if you fail. Understand their perspective and "sell" how your plan will benefit the city.

I had a parking shortage for a commercial property I wanted to sub- divide. It took me 6 months of visiting P&Z and presenting to the council, but we finally got there, though it seemed impossible at times. Persistance pays.

I am ordering a survey today. I expect an adventure with this property and will post about it when things take shape. Thank you Jon.

The Bible

Romans and Psalms, most recently.