Issue 10

In Search of an Excellent You Newsletter
April 26, 2009


Libraries are full of books on how to succeed, methods on being the best, and an enormous quantity of guidelines and recipes to reach the top quickly and easily.

From all directions you receive offers of the philosophical stone-the magic rock. With this stone they offer to bring you the gold of triumph with no effort, fatigue, nor dedication.
Adam and Eve found the same temptation in Eden: to access all knowledge, all that was required was a bite from a fruit (the "stone") that, as described in the biblical text, appeared tasty and excellent for the acquisition of knowledge. Even in the spiritual arena you are offered easy ways and solutions quite befitting the New Era.

A good number of people seek simple and fast solutions to life, and they are seduced by the promises of candles, angels, quartz stones, pyramids, bells and other paraphernalia (including positive thinking in a vacuum) touted to bring health, welfare and riches. You need a good dose of discernment to not fall for these empty promises and end up worse than before; in other words, attempting to get nowhere fast.
At the Center for Personal Excellence we do not promise you a recipe for easy success. On the contrary, we seek to remind you that great conquests require great effort and that the art of success is learned through failures. Only the strong and those who go the extra mile survive: you cannot quit and expect to get ahead. You cannot expect to advance if you never start.

The ultimate goal of the In Search of an Excellent You program is to bring out the best possible person within you. The person you are, whether personal or professional, is the person you created through your thoughts, dreams, and actions-you are here, wherever "here" may be, because you chose the road that brought you to this place.
Neither mother, nor father; siblings, family, the government, the school system, nor God, placed you where you are. It was a doing all your own. And, making the change, getting out, will also be a doing all your own (with the help of the Center for Personal Excellence and whoever positively joins your "team.")
Follow our program by "attending" the sessions and doing the work. When you do this, when you make the commitment, you will be in a position to reach personal freedom, professional status, financial tranquility... in essence, you will transform into a person
you may not recognize, nonetheless, a person of whom you will be proud; a person you will truly love and appreciate.

Commit to an Excellent You. You will be rewarded extraordinarily for the rest of your life.Let's begin to build YOU together.

Yours in Success and Achievement,
Dr. Manuel Escalante (Dr. E)
dre@hopetrainll.com

Today, I found this video which was very thought-provoking and tug at my emotional strings to do more and be more - which is why I'm writing to you now. Watch and learn:http://www.youtube.com/watch?v=d6wRkzCW5qI

When Three Old Men Bring Wisdom to Your Doorstep

A woman living in downtown Ontario, Canada came out of her houseand saw 3 old men with long white beards sitting in her front yard. She did not recognize them.

She said "I don't think I know you, but you must be hungry. Pleasecome in and have something to eat." "Is the man of the house home?" they asked. "No", she replied. "He's out."

"Then we cannot come in", they replied. In the evening when her husband came home, she told him what hadhappened. "Go tell them I am home and invite them in!"The woman went out and invited the men in."We do not go into a house together," they replied. "Why is that?" she asked.

One of the old men explained: "His name is Wealth," he saidpointing to one of his friends, and said pointing to another one,"He is Success, and I am Love." Then he added, "Now go in anddiscuss with your husband which one of us you want in your home."

The woman went in and told her husband what was said. Her husband was overjoyed. "How nice!!" he said. "Since that's thecase, let's invite Wealth. Let him come and fill our home withwealth!" His wife disagreed. "My dear, why don't we invite Success?"

Their daughter was listening from the other corner of the house.She jumped in with her own suggestion: "Would it not be better toinvite Love? Our home will then be filled with love!" "Let us heed our daughter's advice," said the husband to his wife. "Go out and invite Love to be our guest."

The woman went out and asked the 3 old men, "Which one of you isLove? Please come in and be our guest." Love got up and started walking toward the house. The other 2 also got up and followed him. Surprised, the lady asked Wealth andSuccess: "I only invited Love, why are you coming in?"

The old men replied together: "If you had invited Wealth or Success, the other two of us would've stayed out, but since you invited Love, wherever he goes, we go with him. Wherever there is Love, there is also Wealth and Success!"


Finding the Right Business Partner

One of the best pieces of business advice I ever got was "You can't do a good deal with a bad partner."

Having had many partners over the years, I can say that this statement holds true. So I thought I'd offer some personal experiences I've had with partners both good and bad.

All Play and No Pay

The first partner is a former CPA who does spectacular pro forma projections. His numbers on the future viability of a real estate project are always well laid out and convincing.

In fact, after first meeting him and his business partner, a Wall Street whiz kid, and looking at some photos of a property they were interested in and an architect's rendition of what it would look like upon completion, I was sold. I became their money partner. So far I've done three deals with this pair, and to date, we haven't made a dime. The numbers still look neat and tidy every quarter, just the way a CPA should present the financials.

The problem is in execution: The projects never finish on time or on budget. Something always goes wrong, and there's always some kind of drama -- problems with environmentalists, city planners, or banks.

Finally, after years of squabbling, his partner (the whiz kid) left the relationship. The projects of theirs that I invested in are still operating, but to date I haven't made any money on them.

A Complementary RelationshipThe second partner is Ken McElroy, a writer and personal friend. My wife, Kim, and I have made the most money with Ken. There are several reasons why:

· We share the same investment philosophy.We buy, improve, hold, and refinance. We generally don't like selling our properties.

· His expertise makes up for gaps in mine.Ken owns the largest property management company in the Southwest, and his partner, Ross, is a real estate developer. Both men have nearly 20 years of experience in their respective fields.

Because of Ken's years as a property manager, he has the experience and skill to evaluate the value of an existing property. And Ross has the know-how to bring the reconstruction of properties in on time and often under budget.

· We adhere to the same strategy.Ken, Ross, Kim, and I like to put our money in, improve a property, bring in better tenants at increased rents, reappraise the property, and then borrow our money out and move the equity on to the next property. We then repeat the process.

A Near-Infinite Return

For example, we put approximately $2.5 million into a $9 million, 300-unit apartment house, and secured a construction loan to improve the property. A year later, due to attracting better tenants at higher rents and a lower vacancy rate, the property was appraised at $14 million.
With the higher appraisal, we refinanced the property with a new loan at a better interest rate, and were able to take out $4 million tax-free. The money is tax-free because it's a loan, not profit. The debt service -- the monthly mortgage payment -- is paid for by the tenants. With this investment strategy, our ROI is practically infinite. We have no money in the investment, yet we collect a monthly cash flow and still have control over the property. To me, this is better than buying a property, selling it, and having to pay taxes on our gains -- or be in a rush to buy a new property just to avoid capital gains taxes via a 1031 tax-deferred exchange.

(A 1031 tax-deferred exchange gives sellers a certain number of days to move money from a sale into another property and defer paying taxes on the gains. The process is more complicated than it sounds, which is why I strongly recommend using an exchange agent to guide and assist you in the process. Most real estate brokers can recommend an exchange agent if you live in the United States; other countries have different rules.)

Lip Service

Finding a great partner like Ken is similar to finding a great husband or wife -- you have to kiss a lot of frogs before you find the prince or princess of your dreams. I don't know of a magic formula other than to keep kissing. My rich dad often said to me, "You need to be a good partner if you want to find a good partner." Obviously, this is as true in business as it is in love. In my opinion, the best way to begin is by looking in the mirror and asking yourself, "What do I bring to the table? Am I the kind of person I would want to do business with?" It's important to evaluate your strengths and weaknesses honestly.

One of the reasons Ken, Ross, Kim and I do so well together is because we all love real estate; we complement each other in terms of our individual strengths and weakness; and we're all adept at raising money. We make a good team because there's synergy between us, and synergy is money.

A Way Out

My most important partner is my wife, to whom I've been married for nearly 21 years. When Kim and I first met, I was deep in debt from a disastrous business partnership. Regardless, on our first date I asked her, "Do you have a problem with being rich?" It's tough to get rich if your partner doesn't share that goal, and I would never have become rich without her.

That brings me to my next point: All partnerships should have an exit strategy. My partner Donald Trump says that married couples should always have a prenuptial agreement. True, a prenuptial is important if one partner is much richer than the other before marriage, but Kim and I don't have one. Instead, we have our own corporations that we control independently.Still, Donald is right: The best time to think of an exit strategy is before becoming partners -- that is, after you've kissed a few frogs and have found your ideal business companion.

But remember: They sometimes turn back into frogs, and you can't do a good deal with a frog.

-- Robert Kiyosaki