Monday, June 29, 2015

My first 'white board' viewer-question video is coming out this week and it's really great. It's going to my e-mail subscribers first though...

My first 'white board' video is now filmed and getting ready for release.

I'm going to be sending out via e-mail first though.  If you're not on my e-mail list, please sign up here:

The viewer question is awesome! 'How do I convince private investors to give me $1.5 to $2 Million to buy an apartment building in Florida that I can manage?'

Also, there will be a very special offer in this week's e-mail as well.  Sign up before Thursday night.


Friday, June 26, 2015

Ontario Students can now use Aeroplan points to pay off student debt!

A blog post was sent out to me in an e-mail which talks about how Ontario students can now use Aeroplan points to pay off their student debt in denominations of $250 by redeeming 35,000 points.

The author looks at this opportunity rather myopically because he assumes that these points need to be earned by personally spending money on a personal credit card.

I think this is another reason why young graduates should consider self-employment.  By funneling all business spending through an Aeroplan credit card, an Ontario small business owner could pay an extra $250 on their student debt EACH MONTH!

This could drastically reduce a person's student debt by years.

For more ways to use credit cards to achieve strategic business goals, read my book Credit Card Advantage.

Buy Credit Card Advantage Now as a PDF $4

Use Aeroplan Points on Student Debt

Ontario Students Can Use Aeroplan Points to Pay Off Student Debt 

Thursday, June 25, 2015

[VIDEO] I was invited to make a guest blog post about the reasons a business may want to lease instead of buying equipment.

This post appeared as a guest blog post:

Lease vs Loan when buying equipment for a business.

Why would a business want to lease a piece of equipment instead of borrowing money to buy it?
For me the answer is quite simple, cash (capital) is scarce.
When you lease instead of borrowing, you can usually get the equipment with a far lower or no down payment.
Why? In a leasing arrangement the lease company retains title to the goods and can more easily repossess it if you default on your payments. Because they’re more ‘secure’ they are usually willing to extend more credit.
A bank may have to go through a more difficult process to seize its collateral in a similar situation.
Leasing companies may also have better expertise in the specific equipment that they finance. This means they are better able to manage losses. Again, another reason to extend more credit than a lender might.
Another great reason why leasing makes sense is because it forces a business to recognize the cost of using the equipment as they are ‘using it up’ to generate cash flow.
I’ve seen too many situations where people have bought equipment outright with no debt. Or, they made a big down payment and amortized the loan over a period greater than the useful life of the equipment.
They end up using and retiring the equipment before they have finished paying for it!
In the case where there is no debt, companies use their better cash flow position to undercut competitors and trick themselves into believing they are making a lot of money.
What they’re actually doing is converting their invested capital in the equipment into cash without setting aside the money to replace the equipment! When it wears out they end up in trouble!
I’ve seen this particularly in trucking businesses where people with no payment make lots of profit and live a great lifestyle but end up in trouble when that truck finally needs to be replaced.
Leasing forces you to recognize the true capital cost of the equipment as you’re using it to make money.
Sometimes you can even finance soft costs such as installation with leasing.
Sometimes leases are only in the company name and don’t require a personal guarantee. This doesn’t happen with loans from the bank.
With lots of advantages, leases sometimes do cost more than traditional loans but sometimes the terms are more important than the price.
I’ve never heard of a lease getting ‘called,’ but it happens all the time with business loans and lines of credit.
Check out my books and blog at and be sure to sign up for my mailing list while you’re there.
David C. Barnett

The Invest Local Book blog is all about small business, franchises, local investing, home economics, small business systems and borrowing money for your business. It's full of great content and I look forward to seeing your feedback.  Sign up for my mailing list and don't miss a thing! [CLICK NOW]

Wednesday, June 24, 2015

[VIDEO] My life as a real estate investor. Tri-plexes, Four-plex and a rental house over six years.

I tell the story of my life as a real estate investor.  I tell you about the mistakes I made and the realizations that finally came to me.  I tell the story of how I first came to see Liquidity Risk first hand and transactional friction.  Also, my first big case of 'Buyer Fever.' Cheers.

The Invest Local Book blog is all about small business, franchises, local investing, home economics, small business systems and borrowing money for your business. It's full of great content and I look forward to seeing your feedback.  Sign up for my mailing list and don't miss a thing! [CLICK NOW]

Hello everyone. 

Last week I had asked you to submit ‘just one question’ and I received an avalanche, Thank You.

Several of the questions surrounded my background.  People wanted to know about my experiences and where I picked up my small business and investing knowledge.

Last week I also moved.  This brought back lots of memories of my days as a real estate investor. I spent a lot of time in empty apartments, showing empty apartments and cleaning dirty empty apartments.

At its height, my real estate portfolio included two triplexes, a fourplex and a rental house.

It all started at the end of 2004. I happened to read Rich Dad's Cash Flow Quadrants.

I believe it was Robert Kiyosaki’s second book where he explains the cash flow quadrants and starts talking about leveraging.  Leveraging means borrowing money to enhance your own returns. 

I had reached the point where I knew that I wanted to leave my career with the Yellow Pages and I actually started to make a list of the things that I needed to do before I quit my job.  

One of those things was getting mortgages. Obviously, if you don't have a regular income it's hard qualifying for a mortgage.

I had been very successful at the Yellow Pages and I was earning over hundred thousand dollars a year and I had bought my first house in 2001.  Real estate prices here are not that high and this was before they became inflated by the 2000s real estate bubble.

I bought an old war-time storey and a half home. It was a two-bedroom home, but it had a nice loft above the garage which became my office. I bought that place in 2001 for 67 or $68,000 and I made extra payments all the time and so by the fall of 2004 I had actually paid off that mortgage.

I went to the bank and I got a home equity line of credit and I went out and I started looking for rental properties to buy and I bought two triplexes within a two-week period using the equity line of credit to make my down payments.

I was putting down 25% on each building that I bought and I believe I bought one for about $130,000 and one for about $139,000.

So that’s two triplexes. I had six units at that time and I went to work as a landlord and I started to rent apartments and I started to learn the ins and outs of collecting from tenants and the legalities of kicking someone out.  I started to learn the best practices as far as renting apartments and writing leases.

It was also one of the first times in my life that I experienced buyer fever.

When I examined the sale information about one of my triplexes there was no expense there for electricity and I assumed that the tenants paid for their own electricity.  

Just before closing my realtor informed me that there were four electrical accounts at the building. Every apartment paid for their own electricity, but there was a 'house account,' as they call it, for the hallways and the hot water heater.

Now I was so happy about the deal I had made I didn't think to look into it any further. I figured, “well hot water heater and a couple of lights, how bad could it be?”

Well I'll tell you how bad it was, here where I live the electrical utility is regulated by the province and is owned by the province and so there are different electrical rates based upon who you are.

Residences pay a much better rate than businesses and since there are three apartments in the apartment building, the power company will only allow 3 of the accounts to be qualified for the residential rate.

So my account, which had the hot water heater, had to be covered under the business rate which was two and a half times higher than the power rate for residences. I was getting power bills for hot water and the lights in the hallway and the coin-op washer and dryer.  Sometimes this would be $300 a month. Basically this electric bill almostate up all the cash flow

Now the other thing that I did wrong about being a landlord is I fooled myself into subsidizing the buildings with my own labour. I would go and mow the lawns, I would go do handyman things, I would go and do minor fix up and repairs.

I would go and make sure that nobody left trash out behind the building and what this meant was that I was losing hours of my life to get that cash flow every month and fooling myself into thinking that was profit.

Later on, after a couple of years when I had children, I didn't have time anymore for that kind of thing.  I hired a property management firm and when I had to pay their bills it gave me a truer picture of what the cash flow scenarios was like for those buildings.

Two years after I bought the triplexes I then bought a fourplex. I paid $137,000 because it needed work. Now I had 10 apartments and then eventually when, after my first daughter was born, we moved to a larger home and I rented out my old house. The old one I had bought for $68,000 and I sold that one on a lease option deal. I did a different video on that (See my Blog).

By now we’re starting to talk about getting into 2008, 9, 10. 
In 2009 I sold my first building. This was when interest rates were getting really low and the value of these properties were starting to go up way more than what I would have ever paid to own them. I started to sell and this was when I started to come face-to-face with liquidity risk. I talk a little bit about liquidity risk in my book Invest Local.

When you're a real estate investor and you read all these books about real estate investing and you watch the gurus on the Internet and things, you start to think about equity as though it’s real money. As far as my biggest building, I knew that I could probably sell it for about $180,000, and at that time I think I owed about $130,000.

So it's very easy to fool yourself into thinking, hey, I have $50,000 tied up into that building. In 2011 my business brokerage wasn't doing so well and I needed to get my hands on cash. It was the same year that I decided to get out of business brokerage and I had to sell one of my buildings rather quickly.

I was faced with paying a realtor.

I was faced with the legal fees.

I was faced with the mortgage adjustment penalty, because I had signed a term contract at a certain interest rate and the prevailing rate had gone down below that.

I remember one of my buildings I sold that I believed to have had $50,000 of equity in. I think I walked away with $31,000 or $32,000, and it was a real eye-opener to the fact that there's incredible friction in the market when you decide to sell one of your properties.

This was a huge learning experience for me. 

As interest rates went down and the property values went up, I eventually sold all 3 of the buildings and the people who were doing the lease option on my old home eventually exercised that option as well, and I got completely out of real estate. 

If I look back at those years I realize that it was exciting. It was an adventure. We never really got the appreciation in prices here that people experience in other places. From a cash flow point of view, investing $30,000 or $40,000 as a down payment and then borrowing another $100,000 or $120,000 of leverage to produce a cash flow of a couple hundred dollars a month seemed silly.

I began to realize it just wasn't worth it. It was too much to put on the line to produce a couple hundred dollars of cash flow and it was around that same time that I was starting to perfect my own methodology for doing loans and leases.   

I realized that with far less money at a good rate of return I could produce the same kind of cash flow with truly a more manageable scenario. When I lend someone money in a small business investment loan I'm not getting calls about toilets. I'm not getting calls about broken doors. I'm not getting calls about noisy neighbours or anything like that.

It's very easy straightforward. I collect a payment every month, and if something goes wrong I have to manage it, but apart from one second mortgage deal, I haven't had any of these small loans or investments go bad.

So that is my experience as a real estate investor. I bought my first buildings in 2005, got out of the last one in 2011. So, over a six-year period I was a landlord and it truly was a formative experience.

I think that if I ever get back into real estate, I will want to do it from a much stronger equity position and I will want to make sure that I have a manager in place.

What I mean by that is having 50% down to put on one of these buildings. I think that that day is going to come when interest rates start to move back up.

When interest rates move up and the value of these buildings moves down, I believe that a lot of them are going to get foreclosed on by banks.  Many of the late buyers are overextended.  This will be when real opportunity will arrise to get into these rental properties again.

Anyway, if you enjoyed my articles and videos, please make sure that you visit and check out my stuff and maybe even buy my books.

All of my best stuff will be delivered to my e-mail list from now on. [Sign up here] 

If you want to learn how to do small local investment deals you should buy my book, Invest Local or you should take the course, How to do small local Investment Deals from A to Z (includes a copy of Invest Local) which is also available from my blog My courses come with a 30 day money back satisfaction guarantee. Thanks, we’ll talk to you later.
David C Barnett

Tuesday, June 23, 2015

Great article from Forbes about interest rates in small business lending.

Great article.  The author discusses how small business lenders price their services and discusses the pros and cons of discussing 'factor rates' vs. annual percentage rates.



Why do small business lenders avoid talking about APR? [CLICK TO SEE ARTICLE]

Wednesday, June 10, 2015

Moving update and a fun marketing seminar. Gair Maxwell

I'm up to my ears in boxes as I move from the apartment to my new house.  I did take time today to attend a fantastic marketing boot camp hosted by Gair Maxwell who teaches at Wizard Academy in Austin Texas.

I'll post more on this awesome day later.. I've gotta get this stuff out of here.

Here's Gair's book if you're interested in how storytelling is the key to marketing success.

Also, I've collected lots of great information on how I'm going to be revamping the blog and YouTube channel, stay tuned.  

If you haven't already subscribed to my e-mail list, please do. 

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Friday, June 5, 2015

[VIDEO] The surplus Military home is finally mine. Acadia Park Moncton.

Well, after a fun bidding process and then a bunch of waiting the surplus Canadian military home is finally mine.  Closing was supposed to happen on the first of June but delays with the subdivision plan caused it to finalize on the 3rd.  I have keys now, check it out...

The Invest Local Book blog is all about small business, franchises, local investing, home economics, small business systems and borrowing money for your business. It's full of great content and I look forward to seeing your feedback.  Follow me on FaceBook at

Wednesday, June 3, 2015

[VIDEO] I review goal setting from Napoleon Hill and give some newfound insights into MLM systems.

I attended a seminar Friday night and got some great new insights into goal setting as described by Napoleon Hill in his book; Think and Grow Rich.  I also got an glimpse of the seedy world of MLM recruitment and how some systems REALLY work.

The Invest Local Book blog is all about small business, franchises, local investing, home economics, small business systems and borrowing money for your business. It's full of great content and I look forward to seeing your feedback.  Follow me on FaceBook at

Tuesday, June 2, 2015

Great article about how to make a game-plan for getting out of debt.

I came across this great article at on how to get out of debt.  The author has a very common-sense approach.  I give the article two thumbs up.


Laura Shin

The Ultimate Guide To Getting Out Of Debt

Contributor Laura Shin

Five years ago, when I was in my mid-30s, I opened my first adult savings account. I was attending a friend’s wedding in India and wanted to make sure I had enough money to go.

What I didn’t consider but later realized was that, at that time, I had $6,500 of credit card debt and $18,500 of student loan debt. Looking back, I can see that a more practical person would have said that going to India for three weeks might not be a prudent idea.

By the time I got back that August, the credit card balance had grown to $7,500. Panic gripped me. I had been in this situation before, in my 20s. The only difference was that, then, I had an okay excuse to fall into credit card debt: I was making very little money, and doing so irregularly. But this time around, I had a good, steady job, making decent money. I had nothing to blame but my own stupidity.


Monday, June 1, 2015

I love getting a good deal. My story of 'auction week.'

Sold! to #53!

Well, if you follow my blog you'll know that I'm getting my new house today.  One of my problems is that I don't have enough furnishings to fill it.  Seriously, I don't believe in clutter so I don't own a lot of stuff.  I think I'm probably half-way to being a full fledged minimalist.

This lack of furnishings poses a problem though since the new house has more rooms.  I actually need some things to be able to use all of the rooms.  Also, there's the whole problem of the yard and household maintenance items.

I need stuff for gardening, repairs and maintenance, etc.  Some of my tools are still at my ex-wife's garage and I can move them over but I do need things like shovels, weed trimmers, lawn mower, etc.

And you know... I'm very thrifty.  I don't like to spend money.

This week I've been going to some of the regular auctions here in town.

On Tuesday, I went to one auction and got the following bargains:
1. Electric lawn mower.. works great, needed to have the blade sharpened. $27.50.
2. Camera tripod.. like new. This will come in handy for filming YouTube videos.  $5
3. Plush rocking horse.. like new. This will be my Xmas shopping for my 2 year old niece. $12

Sunday I went to another estate auction and got a few other items:
1. Set of three white boards (for the new office or opportunity lab) $10.
2. Digital picture frame. $5.
3. Awesome blue armchair for reading! This will 'make' the new living room. $10.

I do love a deal.. I'll be hitting the garage sales next week with the kids because my son will need a dresser and my daughter needs a bed.