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#FreeFlowFriday: Powerful Investor Presentation Part 2 with Dave Dubeau

#FreeFlowFriday Powerful Investor Presentation Part 2 with Dave Dubeau
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Table of Contents - #FreeFlowFriday: Powerful Investor Presentation Part 2 with Dave Dubeau

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Dave Debeau [00:00:08] Welcome to Free-Flow Friday, powered by the Property Profits Real Estate podcast, I am Dave Debeau and I'm very excited to give you an over the shoulder learning experience around raising capital, as well as other tips, tricks and strategies to help you on your real estate investing journey. So let's start. Let's discover together. All right. Now, the next part of the whole process is what we call the overview and the upfront agreement, the overview and the up front agreement. And if so many folks are familiar with sales strategy, some of the stuff comes from Sandler sales training. David Sadler, brilliant guy, when it came to doing meetings and having sales presentations. So some of this comes from him. And this is something this whole overview, an upfront agreement, hardly anybody does this, but it can make a huge, huge difference with your success rate, with your prospective investors, because it takes the pressure off. It takes the pressure off. All right. So here's what I like to do. I like to remember the chances are Trevor and Lucy are not real estate weirdos like me. And like all of us, right, a lot of our prospective investors are not going to be in the trenches, real estate people, they're going to be regular folks, right? They're going to be people who maybe they bought their own home, but they've never purchased a revenue property ever. So we got to keep that in mind. So what I like to do is I like to start things off by planting some seeds in their minds, planting some seeds in their minds. So this is how this part of the conversation was. So OK, Lucy, as we go through the presentation, naturally, you're going to have a whole bunch of questions for me. You're probably going to want to know why do we focus on multifamily properties, apartment buildings? Why do we like to do this in the Ottawa market? What's so great about Ottawa and what's the time frame for these kind of deals? Why does it work in that time frame? What are the pros? And also what are the pitfalls? Are the cons to investing in multifamily properties and what are some of the returns that we can expect on our investment? Right. You're asking me about that on the phone. So, Krever, are you comfortable asking me those kind of questions? Yes, ma'am. Good. All right. Now, a little note here. A little trick here, you guys. You know what I'm doing. I'm nodding my head now, especially with a one on one meeting. It is virtually impossible for the other person not to nod their head when you're nodding your head. It's just you're just kind of drawn to it. So I like to do this for a couple of reasons. Reason number one is we start off with a nice commitment, a nice agreement. We're starting off on an agreeable standing. Plus, here's the thing, because Trevor is a normal human being and not a real estate weirdo like us, Trevor probably doesn't even know what kind of questions he should be asking. Right. He doesn't really doesn't know what he doesn't know. He's here to kind of see what it's all about. So by planting the seed in his mind of the questions he should be asking, coincidentally, when we cover those things in the presentation, which we will. It's kind of like, oh, that makes sense. Yeah, I was wondering about that. No, it wasn't. I wasn't wondering about that until we planted the seed in his mind. But now he's wondering about does that make sense? And we answer this question. So that's that's the first thing I like to do is questions that they should have for us. Right. And are you comfortable asking me these kind of questions and we get that agreement? Yes, I am. OK, now the next part is this. And Trevor in order, Trevor and Lucy, in order to make sure that this is a good fit for you guys, I'm going to have some questions for you as well. Right, because we want to make sure that it's a it's a good fit. So we're going to want to know things like what other kind of investments have you been involved in? What kind of returns have you been getting with those? Have you done any real estate deals in the past? What kind of returns are you looking for on your money? What would make you happy? And what's your risk tolerance level? What's the time frame you guys are looking for, for your deals? So in order to make sure that this is a good fit for you, are you comfortable answering those kind of questions? Yeah, I guess, yeah. You don't sound very confident that Trevor, this is in order to make sure that this is a good fit for you. I'm not going to I'm not going to be getting too in-depth, but we want to make sure it's a good fit for each other. Does that make sense? Yeah, that makes sense. I just haven't thought of some of these things. All right. No problem. So we've been going over these things. And and again, it's just to make sure that it's a good fit for you and it's a good fit for me. Fair enough. OK, very good. Does that make sense, you guys? So now I've gotten a second agreement from him that he's agreeing to answer the questions I will have for him as well. And you notice I didn't let him off the hook because he was kind of wishy washy about that. I want to get a firm commitment as volunteer. Yeah, OK, now, quick pop quiz, what's the number one answer we're looking for from a prospective investor at the end of our presentation? What would we love to hear? Go ahead, Suzanne. You can name yourself. What would we love to hear from them?

Rob [00:05:49] That they want to hear more about it.

Dave Debeau [00:05:51] Yeah, they want to invest, right? That would be the home run. That's that would be awesome, right? If somebody says, hey, man, Dave, let's go. Right. That's what we're hoping for. What's the second best answer we can get from somebody? Kevin, it looks like you said something there or something. I can hear you got you. Rob, if you want to go for it, it would be no, I'm not interested. Beautiful. That's exactly right. What is the shittiest answer we can hear? Excuse my French. I'll think about. Let me think about it. Yeah. If it sounds really good, buddy, I need to think about it. OK, so what I'm going to show you guys next. Is how to get the other person to commit to giving us a yes or no answer at the end of the presentation, because that's all we really care about. We don't want to get made. Here's why. A maybe sucks a maybe or an I want to think about it is a polite way for the person to say, I'm not interested. It's a polite way for them to say that. But it leaves a little glimmer of hope there where really there's just a sea of darkness, but we don't realize it. All right. So there's this little glimmer of hope that we're going to chase after and we're going to keep following up. And it's going to be we're going to become a pest and we're going to turn Trevor and Lucy off. Whereas if we got a yes or no right now, we know where we stand. Now, here's the other thing. Even if it's a no, that doesn't mean it's a no forever. It just means it's no right now. And I would like to understand at the end of the presentation, does that make sense? Can you guys see value in getting a firm yay or nay? Now, another caveat here, a yay! At the end of the presentation, and at least in my situation, doesn't mean that they're cutting me a check for one hundred grand today. What a yes means to me is they are seriously interested and they want to take it to the next level, which in my case would be having Trevor and Lucy sign on an expression of interest and expression of interest, or some people call it a letter of intent. What is that? It's a very simple document. It is not a contract. It is not legally binding. And it basically says we, Trevor and Lucy, we are interested in investing a sum of up to whatever with Dave Devoe and one of his real estate investing deals any time within the next six to 12 months. What have you guys put in? That's the gist of it, right. And then Trevor and Lucy sign it. I sign it. I get a copy. They get a copy. OK, now, however, it is not a legally binding document. But I tell you what, just by the fact that they have signed it, they have made a much bigger commitment than if it were just a verbal agreement. Does that make sense? All right, so that's my goal. So depending on the kind of deal I'm doing, if I need them to bring capital to the table, if I need them to help qualify for the financing, then part of the process is going to be a letter of intent. And then I set them up with a meeting with my mortgage broker. That would be the second part, right? Get the ball rolling, get things rolling again, nobody has exchanged hands yet because that's not how it works with my deals and probably not with yours either. But we're getting the ball rolling. You thumbs up if you follow me with this, guys. So we're not trying to get them to cut us a check. We're trying to get a yes to me means let's take it to the next level. Now, there's still a chance they could flake out and they could change their mind and they could decide not to invest, but at least we've got things rolling. And my goal and my goal for you folks is to have as many travelers and Lucie's lined up as possible who have signed off on expressions of interest and have told you how much they want to invest when you've got a really good deal on the table. Does that make sense? You guys OK? All right. Very good. So back to our regularly scheduled program. What we want to avoid is that whole maybe type thing. We want to get a yes or a no. Yes would be awesome. No is the next best thing. OK, so here's how we do this. So Trava we can keep playing along here if you're okay with that, buddy. So, Trevor, Lucy, at the end of our conversation here today, one of two things is going to happen. We'll get to the end of the whole thing. And for whatever reason, it might not be a good fit for you guys at this time. And that's OK. That's perfectly OK. I want you to feel completely comfortable to say, you know what, Dave? It's not a good match. Thanks, but no thanks. All right. Or on the other hand, we'll get to the other end of the presentation. And this will look like it's something that you're interested in and you'll want to see what the next steps are and get the ball rolling. So, again, don't worry. I'm not going to ask you to cut me a check for one hundred grand today, but you'll let me know that this is something you're interested in, you're seriously interested in, and you want to pursue it and we'll get started. Does that make sense? So are you guys comfortable letting me know either. Yes, we want to move forward or no, we don't. At the end of the presentation, yes, we are perfect. Commitment. Does that make sense, you guys? Now, this is huge. This really is huge. I have just made it OK for them to say no. I have just made it OK for them to say no. And especially for our Canadian friends. This is big because, again, Canadians, we tend to want to be really polite. Our American friends tend to be a little bit more blunt sometimes when it comes to these things. But even then, because, again, you guys remember a lot of these folks are people that you have a preexisting relationship with, so they don't want to hurt your feelings. So this gives them an out. This gives them permission to say thanks, but no thanks. All right. And here's the other beautifully. It takes all of the pressure off of both of you. It really does, because you're not tied to that yes outcome, you're tied to getting an answer. Either one is OK. Yes would be better, but no, it's OK to follow me here, you guys. Is it making sense? Because here, think about this. How many times have you been in a situation where somebody is trying to sell you something? And, you know, they're desperate to get you to say, yes, the only answer that person wants to hear is yes, I'll buy it. Like that's the normal thing, right? So when we do it this way, it's just this this huge pressure relief for them and it allows us to get a definitive answer, yay or nay. OK, so this is kind of what that might look like. And again, you guys, if you're looking for more in-depth stuff about this, this kind of training is in the online training academy. You can access it there. You can take a look at it again there as well. But this is how it looks. You're welcome to take a screenshot of this if you'd like to. OK, very good. So that's the big thing, you guys. And as we wrap this up. Just let me know how how did this whole idea resonate with you? What are your thoughts? Can you see actually using this or applying this? Do you think you'd make any modifications with the way that you would do this live and in person? Go ahead and yourselves. It's kind of like a free for all type where we kind of brainstorm around this. OK.

Rob [00:13:54] OK, Dave, Katrien here. So just about the not like not having both decision makers. So I've done two presentations like that that were successful. But the one was I used Zoome and had her record, the whole presentation. And so she, like her husband, was a dentist and we just couldn't connect God.

Dave Debeau [00:14:23] And those are those are the guys are going to invest for the every six months. So, yeah, that worked out really well. Yeah. So, Trina, Trina, this this example was pretty covid post covid where you're meeting with people, one at Timmy's at Starbucks, wherever in this case, if you're meeting with somebody, with people in person, they can't really record no presentation. So if you don't hang around, you might still far rather have both fallen far, far, far better if you absolutely can't do that than your solution is brilliant. So what Trena did is you just had the other person record. The presentation on their end and save it to their computer and show it to their spouses later, that was brilliant. Smart idea. Yeah, well, sorry. Was there any was there anything else that you wanted to say about that, Trena? No, no, no. But again, I would highly recommend Trayner don't rely on that, because here's the thing. It's always better to have both decision makers there live because the second person might have some questions that the first person didn't have and didn't get covered right there. And then and it's always better to be able to cover that live in a person. But your solution. Awesome. Awesome idea. Worked very well for you. So if you can't get around it, that's that's a good solution. Good. Any other comments, you guys, again, feel free to yourselves and just let me know what you think, involvement, did you want to say something? Actually, I have a letter about the letter, so I have a question about the letter of intent. Yeah. When you tell them that there's no obligation, it's not they're not obligated. Yeah. Just because they signed this. What do you say to them when they say, well then what's the point of signing it. Like why do I. Why would we sign it. It's not doesn't have any effect on it. OK, let's let's role play. You be that guy and I'll be there. So we got to the end of the whole presentation. Perfect. All right, great. So you guys are interested in seeing what the next steps are, right? That's all right. Here are the next steps in. The next steps are we'll do what's called an expression of interest. And that's all it is. It's you showing me that you guys are seriously interested in doing a deal. When I have one available and this is what we do, this is you get first dibs on the deals that I have available. The way that I know you're serious about that is with this simple little document. It's an agreement. It is not a contract. It is not legally binding. However, it shows me that you and your spouse are seriously interested in this. So basically, here's how it works in a little document says you in our interest in investing a sum of up to whatever we've decided in a real estate deal, if I have one that meets your your satisfaction sometime within the next six to nine months, that's what it says. And then I sign it. You guys sign it. And that way I know you're serious. And then I'll also put you in contact with my mortgage broker and get you started on the whole pre qualification process. Does that make sense? Yeah, I like the way you were that I was very, very easy, understand, for anyone, because obviously now you can give me a little bit of pushback here if you want to, like we could. This is just for fun, right? We can we can play around with this. So let's say you're you're a little bit hesitant about that, OK? I'm just not sure why I have to sign anything. If you don't have to sign anything, my friend, you don't have to sign anything. This whole expression of interest is just that. It shows me that you are seriously interested. Now, if you're not willing to sign an agreement that's not legally binding, that in my mind, you're not seriously interested. And I should really focus on the people who what does that make sense? Sure. Sure does. So would you like to. Are you seriously interested? Let's go for it. OK, I wish they're all that easy, but thanks for being easy. I'll be there. All right. Very good. Anybody else with any any questions or comments or concerns or or you, you want to throw something at me that you think might come up in an actual live presentation? We can we can play around here, you guys. That's what Dave. Yeah, go ahead.

Rob [00:18:42] I have to actually the prescreening is done during the presentation. Right.

Dave Debeau [00:18:46] Actually, I prescreened on the phone before I set up the meeting

Rob [00:18:50] on the phone. OK. OK, and the other one, the other question I have. What if they say to you, I really don't have time to meet. My schedule is so busy, I don't really think I can meet and do a 40 minute presentation. To do that, that's just too bad.

Dave Debeau [00:19:15] That's too bad, Suzanne. Give me give me a call when you got more time. OK, because here's the reality, Suzanne. If they don't have time to meet with you to see what the hell they're going to invest. One hundred thousand dollars in. Yeah, I'm never going to invest any. Right. Right. That's just a really good point. That's a bullshit excuse you're not really going to hear unless you're just a real, absolute tire kicker. Yeah. You're assuming you have some questions. You had a question.

Rob [00:19:40] So my question is, you know, how about the letter of intent? You said it gives you a majority to work with them. Let's say if they say no, I do want to work with you for sure. But it's just by design. Let me just when you have a deal, can I decide at that time rather than deciding now?

Dave Debeau [00:20:01] OK, very good question. No, that's not how I work. So in order for somebody to be a serious investor or prospective investor with me, they have to at least sign an expression of interest showing me that they are interested because otherwise a verbal agreement is just worth the paper. It's written on nothing. Now, again, this isn't a contract. It's an expression of interest. That's all it shows me that you are seriously interested in. Part of this whole thing is we'll also start working with a mortgage broker to get you prequalified because that's part of the process. So if you're not comfortable with that, I respect that. However, we won't be able to do business together.

Rob [00:20:41] Thank you. You're welcome. Good, they do.

Dave Debeau [00:20:45] Yeah, who's got to. Yes, yes, go ahead. Just one quick question. Just wondering if the investor is from a different province makes it really difficult to meet one to one. Do you do you fly there for the meeting? I mean, zoom, zoom. That's it, OK? You don't need to fly anywhere, even if somebody is down the street from you right now and you're going to be meeting on Zoom these days, I'm just showing you an example of when things get back to normal. Right. In the meantime, it's going to be zoo meetings, even if they live down the street from you, because most people don't want to know if they don't want to meet you. Massless and having a presentation with masks on is kind of a pain. So I'd highly recommend you do it by zoo. Yeah. Thanks, Dave. Yeah. Now, how about this? You guys anybody want to be a real pretend because you're all a lovely, wonderful, nice people, but does anybody want to try and throw me some some curveballs here, be a bit of a jerk? Come on, just play it here, so. Treat it as treat us.

Rob [00:21:47] I couldn't do I to do it.

Dave Debeau [00:21:51] Yeah, because this is good because you've had a few investor meetings. So you know what? It's kind of like so. So what is the what is the biggest thing you are afraid of in an investor meeting?

Rob [00:22:04] Looking foolish, yeah, I

Dave Debeau [00:22:06] think OK,

Rob [00:22:08] yeah, like like being foolish or like not not being very knowledgeable about a certain topic.

Dave Debeau [00:22:15] OK, so how does how does this come up in our practice here? So you going to throw some some questions at me that you think I can answer or something or maybe.

Rob [00:22:23] I don't know. I haven't thought this through. You're putting me on the spot.

Dave Debeau [00:22:27] OK, so let's just talk a little bit about it. So first of all, chances are the person you're meeting is not really up to speed on real estate investing in Trina. Correct me if I'm wrong. You've been doing it for over 10 years. The kind of deals you're doing are not anything really new to you. It's something you're already familiar with.

Rob [00:22:51] No, that I'm doing are all new to me.

Dave Debeau [00:22:54] Are they OK? Yeah. So what the rental strategy?

Rob [00:22:58] No. The agreement for sale. I've never I've never done that before rental. And I've never done that. This year was the first time. So.

Dave Debeau [00:23:06] OK, but now you've done a couple of them. You've done one of them or something, right. Yeah. OK, yeah. You're already ahead of. Virtually anybody that you're going to be talking with as a prospective investor partner, so you've got to remember, even if you've only done one or two deals, if you've been in the trenches doing them, you are head and shoulders over most people. It's kind of like they're in kindergarten and you're in grade three or four. You're not in graduate school or anything yet, but you're still leaps and bounds ahead of them. It's going to be very hard for them to to catch you up. But let's say they did. Let's say they asked some. Let's say you're meeting with a CPA, right. An accountant or something like that. And they ask you some wonky accountant accounting question. Here's what I would do. I'd say, you know what? That's a really good question. I don't know the answer to that. But if that's important to you, I will find out what the answer is and I'll get back to you within the week. Does that make sense? Yeah. Don't bullshit. Just, you know, be upfront. Chellaney, I had a question.

Rob [00:24:04] OK, so say somebody meets with you and they say they have the money, but it's all tied up in recipes, so they have it. So how do I

Dave Debeau [00:24:15] know that's a whole that's a whole other competition shows.

Rob [00:24:19] How how would I deal with that?

Dave Debeau [00:24:21] Well, that's actually part of our presentation is where's the money coming from? That's part of the whole thing. OK. If your particular strategy and remind me, what is it that you focus on primarily multi-family. OK, so you have any properties on the go already? No. No. All right. So it'd be very difficult to get somebody in on board. From what I understand, I could be wrong. Very difficult to get somebody on board with. There are fees for the initial purchase. But once you've got it up and going and you've got some equity in the property, you can bring them on in a second position as a second mortgage fairly simply. Right. You just have to get there. Are Espy's into a self directed fund. Grants is the same as a 401k is what we're talking about here, right? Yeah. So don't have time to explain that whole process, but it really interested in learning about that. My friend Paul Black here is the number one guy that can teach and train you about all of that and just I'll be able to connect. Thank you. Yeah, good. There are Craker. You get to try and throw Zager at me.

Paul [00:25:24] Yeah, well, it's it's you got to you did it to yourself every time I talked to a private investor and we talk, you know, we'll do this deal, this deal, this deal. It's always I have to be first on on mortgage happy for someone. I'm not funny. Anyone that is looking or will accept being second on mortgage because as soon as they hear second on mortgage, well, I'm not protected. My money's gone if something goes south. Right. Is there a better way to explain it? Like the way I've been explaining is the guy who puts the most money in goes first on mortgage, right? I'm not. I'm not. And this might be, I guess, remittance from two thousand eight where the states were overinflating mortgages and the house is only worth one hundred thousand. But they're getting mortgages for four hundred thousand. I'm sorry, sweetie. I can't get a mortgage more than the house is valued or more than the after repair value. So your assets are protected in there. But I don't know if people are just reading too much into things where they think second mortgage means they're not protected.

Dave Debeau [00:26:29] Well, I mean, and there's some legitimate concern to that. Right. So here's the deal. And Craig, we probably have to and I'm happy to do this. I have a one on one conversation. You kind of really dig into what you're offering. But just off the top of my head, if somebody is nervous about that, you might sweeten the pot by saying, OK, well, in order to make you feel more comfortable about this, not only will we put you second on this property, but how about if I put you a second on my primary residence to on my house or I'll put part of this as a lean on my free and clear fifty thousand dollar pickup truck or whatever the hell it is. Right. If you can provide more assurance to that person, then that that will make them a lot more comfortable. Does that make sense? Yeah, to be perfectly frank with you, I have in the past had too much problem with getting people on the second mortgages, especially if you're using registered funds like RRSP money or things like that, then it's a cakewalk because the returns you're offering them are so much higher than what they're currently getting. And the security with you even in a second position is so much higher than what they've got, a mutual fund. It really is. So really it's about educating them about what what the benefit is and where that money's coming from as well. Right. But, Craig, again, I'd be happy to have a one on one call with you about Zoome and really kind of look through things and and go through a couple of examples where you came up with that. We could come up with some ways to overcome those objections. So good. All right, anybody want to throw a zinger at me, like kind of be a jerky kind of a person that's that that I'm meeting as a prospective investor? Homeowners clode. Come on. Go ahead.

Suzanne [00:28:17] You know, it's I really don't have anything. Dave, I. I agree with you. Registered funds are going to make things a lot easier since the returns are so darn low anywhere else.

Dave Debeau [00:28:28] I don't know if we like to play money anyhow, so.

Suzanne [00:28:31] Yeah, exactly. I mean, I don't know if this is appropriate. My one of the things I mentioned in the intro portion was I have no problem. Most of my deals are very, very lucrative. So I've no problem with investors sharing in a very healthy way, but eventually I want to get them out. So I don't know if that's an approach you've worked with in the past. Do you have any ideas on how you might structure that as far as whether it's a straight interest to start with or all the net income until they reach a certain times their money?

Dave Debeau [00:29:02] Yeah, there's all sorts of ways that you can set that up. I haven't personally done it myself, but I know people who have. So it definitely is doable. The question is whether they're on title originally or not. So again, Claude, this because it's very, very specific to your thing, I'm happy to jump on a one on one call with you and we can kind of put our heads together on that.

Suzanne [00:29:24] Sure. You know what I thought? I thought of one for me to get you. So you're the real estate investor. I'm the money guy. Right. OK, Dave, listen, if you're so confident in your product and what you can do, you're going to personally guarantee completely all the money that I'm putting in right now.

Dave Debeau [00:29:41] Of course not. OK, so you're not gonna take your money. It is an investment clode, OK? There are risks to every investment. In fact, in the presentation, I've shown you exactly what the risks are to this investment and you need to go in with your eyes wide open. But here's the thing. At the end of the day, I only make money if you make money. So I wouldn't get us into this deal unless I was very, very confident that we were going to be making money. Does that make sense?

Suzanne [00:30:09] Yes. And a quick follow up to that. But it's a different question. If somebody asks you, Dave, I think it's great that you're scaling your business so well. You've had some great successes recently, but you do have some sort of skin in the game in every deal, right?

Dave Debeau [00:30:23] That's a really good question, Claude, in this particular deal. No, I don't. And here's why. Because I've got all my capital already tied up in other properties, and that's why I'm offering you this opportunity to come on board as one of our capital partners. You guys bring the capital to the table. I bring the deal. I bring the team. I bring the management during the years of experience. And even though I'm bringing the majority to the property to the deal, we're sharing the profits 50/50. Does that make sense?

Suzanne [00:30:52] It does. Do you see in this again, a follow up, slight, more informal. Do you see any harm with consciously? Personally, I probably will always have skin in the game. But for other people who are on the call, do you see any harm in making sure that you do have a thousand twenty ten thousand dollars in each deal if possible, so that you can say, I mean, it's in a sales for that much easier, it seems to me?

Dave Debeau [00:31:16] Yeah. Unless they ask you how much you've got in the deal, you say I've got one thousand dollars of the deal and that's sure. You know, that's it's not going to look it right. So, yeah. I mean, if you do have money in the deal for sure, say, yeah, we've got capital in this deal. But you don't have to. You don't have to. Right. Because again, when it comes to real estate, like my good friend Stefano used to say, there's three parts to any deal. You've got the money, you've got the people, the team, and you've got the deal. So your investor partners just bring one third of the equation to the table. You're bringing to the table and you're sharing things depending on how you do it. 50/50. I fully agree with you. Yeah, good. Well, hey there. Thanks for tuning into the property profits podcast. If you like this episode, that's great. Please go ahead and subscribe on iTunes. Give us a good review. That would be awesome. I appreciate that. And if you're looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book right back there. There it is, the money partner formula. You get a PDF version at investor attraction book, dot com again, investor attraction book, dot com ticker.

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