Ten Steps to Your First Deal

1. Ten Steps To Your First Deal
Lifestyles Unlimited Inc.
Preferred Investors Group
2006 Revision

2. Start With The End In Mind
Step One To Your First Deal

3. “If there is enough why the how will
always be easy”
Start by deciding what it is that you are really
trying to accomplish. Real estate is only a
vehicle to get you to where you want to be not
a destination in itself.
• Why did you decide to invest in real estate?
• What in your life do you want to change?
• What has to happen for that change to occur?
• Will your plan really accomplish these goals?
• How many steps will it take to get there?
• What will your new life really be like?

4. Take A Personal Inventory
Step Two To Your First Deal

5. “A map means nothing without the dot on
it that says you are here”
To be able to set any type of realistic goals
you must first take note of your personal
financial starting point:
1. What is your actual net worth?
2. What is your liquid net worth?
3. What is your families net spend-able income?
4. What is you families total passive income?
5. What rate of return did each of your investments earn
last year? Cash on Cash? Capital Gains?

6. “The definition of insanity is continuing to
do the same thing and expecting to get a
different result”
Once you have identified your past results it is
easy to set goals to improve on your
performance.
Your Families Dollars Percentages
Net Worth
Liquid Net Worth
Net Spend-able
Income
Realized Cash Flow
Capital Gains

7. Set Realistic Goals
Step Three To Your First Deal

8. “What ever the mind of man can conceive and
believe it can achieve”
Setting goals is the process of drawing the map
for your life.
This process is the most powerful process know to
man. Whenever someone commits his or her
goals to writing and believes that the goals can
be accomplished, some magical universal force
(some might call this force God) takes over which will
supply that person with the resources necessary
to accomplish the goal.

9. “You can have anything in life that you want,
but you can’t have everything in life that you
want”
Life’s resources are by definition limited and the
choices for their use can be mutually exclusive.
For example, you can not be in two places at the same
time, nor can you spend the same dollar twice. For
this reason care should be used when choosing
the use of your resources. When you set your
mind on taking your life in one direction you
are at the same time cutting off the possibility
of taking it in others.

10. “When I can to the fork in the road I took the
road less traveled and it made all the
difference in my life”
Goals must have personal meaning and be
worth while other wise they will not have in
them enough motivation to keep you on
course.
There is nothing more worthless then impotent
goals! Dream of the life you would really like to
live and go after it with all of your heart, no
matter how many others tell you it can not be
done.

11. “Practice does not make perfect,
perfect practice makes perfect”
Goals must be realistic to be motivational.
Setting a series of easily obtainable goals
instead of one large one makes more sense
because:
• It makes it possible to celebrate the small victories
along the way making the process more enjoyable.
• Uses these small victories to build your confidence
which in turn motivates you to keep going.
• Focuses your efforts on the most important task during
each step in the process.

12. “The problem in our society today is not lack of
information but misinformation, anyone with a few bucks
can put up a web site, write a book, or buy a talk show
and claim to be an expert”
For goals to be realistic they must be
based on facts and good models.
• What beliefs are your goals based on?
• Do you have a realistic model to follow?
• Do you know anyone else that has accomplished the
same goals with your model?
• Are you starting with the same resources that they
did? Time? Money? Credit? Knowledge?
• Have you checked your model out with your mentor?

13. What are your goals for this
year?
Your Families Last Year This Year
Passive Cash Flow
Dollar amount
Passive Cash Flow
As a % of net worth
Capital Gains
Dollar amount
Capital Gains
As a % of net worth
Your Families
Net Worth

14. Plan Your Commitment
Step Four To Your First Deal

15. “If you are not planning to succeed you
are by default planning to fail”
• How much money are you going to commit to this
project?
• Where will the money come from?
• Will this leave your family reserves incase of an
emergency?
• Will this be enough money to complete the goal?
• Is it the right amount to invest or should you invest more
or less at this time? Why?
• Who in your family will be operating this business?
• How much time will they be devoting to this business?
• Are they capable and motivated to do the job?

16. Decide What You Want To Buy
Step Five To Your First Deal

17. “Successful people plan their work
and then work their plans”
Commit to writing every detail of the plan to
acquire your first deal:
• What are you going to buy?
• How much will it costs?
• How much will you have to put down?
• How much will the closing costs be?
• What is the maximum rehab that you will be willing to do?
• How will you finance the rehab?
• Where will the funds come from to put down on the deal?
• Who will you use to finance the deal?
• What is the most important criteria for your first deal, cash flow or
capital gains?
• Will location be a determining factor in which deal you buy?

18. Understand The Numbers
Step Six To Your First Deal

19. “Numbers came be made to say anything
if you can speak their language”
Sellers and the sellers’ agents have a direct
conflict of interest with the buyer in every real
estate transaction, therefore it would be a mistake
to rely on their disclosure or interpretation of the
numbers to be used to derive the value of the
property being purchased.
To be safe buyers must be able to create their
own financial analysis to evaluate the value of a
property that they want to buy. If you do not
understand the numbers do not buy the property!

20. “The only thing more costly than a good
education is the lack of a good education”
If you do not know how to correctly evaluate the real
estate deal that you are trying to do you could lose
everything. Take the time to educate yourself before
you buy something. We have classes on every detail
from locating, evaluating, negotiating, contracting,
feasibility, entity set up, partnering, closing, operating,
bookkeeping, accounting, leasing, marketing, property
management, tenant landlord relations, rehabbing, and
selling. Even though you are getting hands on help with
every deal you do here at Lifestyles we highly
recommend that you still study each of these workshops
and ask questions if you do not understand something in
one or more of them.

21. Start Making Offers
Step Seven To Your First Deal

22. “Making offers is like asking for a date, you may
think that you are controlling the situation but you
really aren’t”
Negotiating a real estate deal starts right at the
point of making the offer. If your offer insults
the seller you loose creditability with them right
from the beginning. The idea is to make an offer
that is as close to what the seller is asking but
still at a price that you would be willing to buy it
at. The old high ball / low ball way of making
offers which was normal in the past do not work
in this day and age of sophisticated sellers and
educated buyers.

23. It is possible that one could find a spouse by dating everyone
one meets, however I think that this would be an awful waist
of time, money, and emotional energy, the same is true about
your first deal.
Your investment in a business is the second most
important decision that you will make in your life.
It would be a mistake to rush it. One should
have a realistic expectation of what they are
looking to buy and then stick with it until they
find it.
The process of locating a deal can be made much
quicker if you have a clear and realistic set of
expectations. Finding a deal is more about
deciding what you can live with than it is deciding
what you want.

24. Do you ever remember your friends saying to you
something along the lines of what makes them think that
they are good enough for you?
The number one reason for failure to get into
contract on a deal is vacillation. This occurs
when one flips from one unrealistic expectation
to another never really understanding the risk
reward ratios at work in the market place at the
time.
There will always be a realistic risk and reward
ratio for any market at any particular time.
Knowing that ratios is mandatory to the success
of your offer.

25. Have you ever thought that you would hold out
for the hottest cuties on the dance floor only
to end up sitting out the dance?
The second most common reason for failure is
shooting and missing at a moving target.
Markets move and the examples we use to teach
you real estate investing or your past experience
have no basis in reality today. This is why many
investors never get off their first deal. They are
constantly trying to replicate what doesn’t exist
any longer.

26. Feasibility And Inspections
Step Eight To Your First Deal

27. Have you ever wondered why there where so
many divorces in this country, why didn’t they do
their due diligence?
Because it is not very practical to ask someone
that you have no commitment with to tell you all
of their dirty little secrets most due diligence is
done after the contract is signed and the
feasibility period begins.
This is your first and last chance to find out
everything that you need to know about the
property condition, tenants, employees, sub-
market, income, and expenses so make sure that
you do your due diligence on all of them.

28. Just because I married you does mean
that you own me!
There is no way to get the seller to disclose all of
the pertinent information you need to make the
decision on the deal. The best you can hope for
is to get enough information to be comfortable
with your decision.
Although not always the case the unwillingness to
disclose information could mean that you the
seller has a problem that they do not want you to
know about and should flag you to do more
research on on the topic.

29. How did you ever get scammed into that
marriage? He or she made me feel important!
The number one technique to get people to do
dumb things is to act like their friend and blow
smoke up their butt. Don’t let the seller or the
broker make you believe you are the hero that
can turn this problem around (Even if it is true) or act
like they are your friend and help you evaluate
the due diligence material.
The seller and the sellers’ broker are always
your adversaries and have a direct conflict of
interests with you in the transaction!

30. You should have been there on time, now I don’t
want to go because we are late!
The due diligence process is a time urgent
process that requires you to accomplish
many things with in a very strict set time
line. Failure to get the items done in the
correct order or time allotment will costs
you the buyer large amounts of wasted
money if not the loss of the deal itself.

31. What do you mean you have decided not to marry
me, the wedding is next week?
There are only two realistic reasons to re-trade a
deal:
• Your due diligence found something that was not disclosed
or apparent before going into contract.
• The seller misrepresented the facts to you about the deal
before you went into contract.
Deciding during feasibility that you just don’t like
the deal is not a reasonable reason to re-trade a
deal and may end up costing you your earnest
money if you are not careful.

32. Setting Up Your Entity
Step Nine To Your First Deal

33. Honey if you really loved me and wanted to prove it to me
you would go ahead and purchase a home for us now instead
of waiting!
Once you have decided that you are going to
purchase the property the entity that will house
the purchase should be set up.
Setting up the entity before the final decision to
purchase the property is like buying a house
before you actually get married, it could be a
needless costly mistake that might put pressure
on you to go ahead with something that you
really don’t want to do.

34. What do you mean you want a
prenuptial, don’t you trust me?
As Ronald Regan used to say when he drove the
old soviet union out of existence “Trust with
verification” is the only way to go. Your entity
documents are your first and many times last
defense against bad partners, bad family, bad law
suites and the IRS.
Extreme care should be used when having them
created. Start with a the list of potential
problems outlined in the partnership classes
determine how you will resolve them. Then take
your out line to your CPA and Attorney and have
them finish the job.

35. Close And Learn To Operate
Step Ten To Your First Deal

36. After you close you will get a coupon book with
six months worth of I hate Del coupons!
The first six months of owning your first rental
property will probably be one of the most exciting
and scary times of your life.
The first challenge will be to remember all the
things that you where taught on the road trips but
never learned because you where too busy
worrying about getting a deal.

37. I’m not going to let them embarrass me
like that ever again!
The second challenge will be overcoming your
fear of criticism. No one likes to be criticized
especially in front of others and everything here
at Lifestyles in front of others.
You must keep in mind that we have all been
where you are at and we all have empathy for
your situation. If you trust us we will get you all
the help you need to be successful.

38. It’s not me, this is a bad deal and they should
have seen that when we purchased it and
stopped us!
The third challenge will be trying to decide on if
you will listen to what I have taught you or will
you believe like most do that you can reinvent
the wheel better than 20 years worth of
experience.
Once you decide that you no longer want to listen
you will stop asking for advise and the end will be
near.

39. Del never tells you how hard it really is and how
much time you really need to do something like
this!
The forth challenge will be to not pick the wrong
mentor. There are unlimited numbers of
members that believe that they know more than
the staff here at Lifestyles and they all want their
egos stroked by trying to prove us wrong.
See these people for what they really are ego
maniacs that want to impress you with their
knowledge or disgruntled members that would
listen to us in the first place and have failed
because of it.

40. After you take all of our courses you will know
more than 99% of investors in the market and
you still have us to help you!
There are five ways to obtain the
education you need to operate your
business, they are:
• HAA – IROC classes, CAMS, CAPS
• PIG Help
• Modeling other members
• Road Trips – Interventions & Case Studies
• 200 Hours of classes