The benefits of commercial real estate greatly outweigh the costs. In fact, I would say that commercial real estate is the best industry to be involved with because of the profits that can be made, as well as the fun nature of the work.
There are many who feel that commercial real estate is greatly out of their league, but this couldnt be the further from the truth! Commercial real estate is accessible to everyone who is willing to learn about a new industry and reap benefits no other industry can offer. Below you will find the best reasons why you should get involved with commercial real estate. It is truly the best kept secret of those already succeeding or just starting out.
Lets look at the many advantages of commercial real estate.
The first, and probably the most enticing benefit of commercial real estate, is profit. Huge profits, in fact, which can be made with a limited amount of effort. You can make the same amount of money quick turning or selling 100 single family residences as you would make with a single commercial real estate deal. The profits can be astonishing!
It takes the same amount of work for every commercial real estate deal, meaning you must go through the same processes each time. Why not maximize your results and go for the larger returning deals, rather than the smaller ones? Synergy is a key word in commercial real estate, as small changes can yield huge results.
Another great benefit of commercial real estate is you can work full or part-time, depending on your individual situation! Commercial real estate can easily be a part-time job that brings in incremental cash flow. You can even start out part-time, and hold a job until you have enough cash flow and money so that, eventually, all you do is commercial real estate.
Commercial real estate as a full-time job allows you to have many benefits such as being your own boss and having the ability to work from home. You can create your very own commercial real estate business and quickly build a strong net worth as well as positive cash flow.
In commercial real estate, your financial investment is very low, perhaps even non-existent. You can purchase property with 100% of other peoples money (OPM), and create large profits for yourself. This is the only industry where there are literally hundreds of millions of dollars just waiting to be borrowed! Find the money and get to investing!
Commercial real estate is an industry of abundance, not one of limits. In fact, there is very little competition because there is always commercial property becoming available. There is more than enough for everyone, which allows every person to have their opportunity to succeed in this business.
Another great benefit is that you can start right now, today! It does not take years of training or years of moving up the corporate ladder to be successful. You can begin your commercial real estate endeavors whenever you so desire because there are very few barriers of entry to this industry.
Finally, the greatest benefit I think commercial real estate has to offer is freedom. When you become involved with commercial real estate you have the freedom to do as you please. When you are not stressed about making rent, or finding your next job, life can be enjoyed to the fullest.
Commercial real estate can give you financial and personal freedom that, otherwise, would be wrapped up in a 9-5 job and someone else telling you where you have to be and at what time. For you already successful professionals and business owners, commercial real estate can be a great way to build wealth and equity quickly, without much time investment and headache! It is a great alternative to other types of investments that return 1/100th of what commercial real estate can return!
No matter what business, job, or current occupation in which you are involved, no other industry can supply you with the ability to be in charge of your very own life and create a lifestyle that best fits you and your personality.
It is truly amazing how peoples lives drastically change with only a few income producing properties in their portfolio. I urge you to delve further into this industry and get excited about it! Commercial real estate is a sound, extremely profitable, extremely doable, tried and true business that will always be available to those wanting the benefits commercial real estate has to offer.
It is often the biggest mistake we make when attempting to refinance by overlooking and disregarding equity lines that are right around us and that can possibly be sourced with a little ingenuity. You never overlook any possible source of finance when building a property portfolio. This is a common mistake that can cost us a lot in the future as without the right financing we will be subject to things such as higher interest rates as well.
When we look at the equity available around us we also often limit it to our own belongings. This is not a bad practice however when looking to build out we have to think at a deeper level. In our list of equity lines we should in addition to our belongings have a potential list of persons that we can approach to sign with us as guarantors or even as joint owners. This is important to consider in tandem with refinancing.
There is no need to look too far when compiling this list and in fact this list should be close to home for the most part. Ask yourself this question, “Do you know anyone that owns their own home?” I am certain the answer will be an outstanding yes. What about someone that has their own business? These are all options when you are looking for someone to give you that last edge towards getting a loan or even in given you the additional boost so that refinancing is easier to accomplish.
You can use your own resources such as your own equity and any savings you may have and refinance as well but the importance of a guarantor is often overlooked. It is hard to get that loan if you have the requirement of a large amount or sum of money. Even with equity and savings there is no guarantee that the person that is approving the loan will be sufficiently convinced of your ability to repay and hence refinancing is easier with that additional guarantor. It also helps that this person is willing to go out on a limb for you so the provider of the loan is able to establish some level of trust that you are capable of repaying.
This is where building a trust relationship comes in handy. Institutions do not approve loans. We go to many places to source loans such as:
“Banks “Credit Unions “Private Lenders “Wealthy Investors
These are just a few of the institutions that we can approach. However it is the people in these institutions that we have to convince that we are capable to handle a refinancing of our loan and repay it efficiently. We also have to convince them that our plan is one that will be profitable. They are in essence putting there security at stake when they approve a loan for us and as such there must be a certain level of trust in your ability to fulfil the obligation of a loan.
March 24
RefinanceRefinance is one of the most convenient ways to repay a loan because refinancing means to apply for another loan to pay back a previous loan on the same mortgage. The most common mortgage is generally one’s home.
Refinance advantages -
“Refinance reduces the risk of losing ones property.
“Refinance can lower the interest rates on the mortgage and thus reduce the monthly payment of interest with the principal amount. This way the borrower can save a lot of money and utilize it in other resources. If savings increase it also helps the borrower to pay back the loan before the closing of the loan term.
“If the original loan had an adjustable loan rate Refinance helps the borrower to change the loan rate type to fixed loan rate thus reducing the risk on the part of the borrower. This process also lowers the interest rate because when it’s fixed it remains at the same level and does not change with the prime index rate of the market.
“Refinance also allows the borrower to utilize the equity accumulated in the house or any other real property in concern in the term of ownership by turning the equity into cash.
Refinance loan can be opted for at any point of time and there are no special requirements for it. The procedure of taking the loan is the same as taking any other loan in most of the banks. But still the borrower is suggested to take prior information from his bank before applying for the loan.
Refinance loan may have a fixed rate of loan interest and an adjustable rate of loan interest. It is wise enough to select a fixed rate of loan interest as the rate of interest remains static for the life of the loan thus reducing the monthly payments. The adjustable rate keeps on changing and also increases the monthly payments of interest and the borrower’s expenditure. The rate of interest may vary from bank to bank and it is profitable to do a thorough research on banks to find out which bank offers the lowest rate of interest with other facilities.
Refinance can be of two types as given below:
1.Cash out 2.No closing cost
In case of cash out refinance the monthly payments are not surely reduced but the borrower gets other advantages. The borrower can pay off credit card debts, can utilize the money for improvement of home and for medical expenses and so on. This can only happen if the equity in ones home qualifies for the applied amount of loan. Cash out Refinance lets you take an amount of money in loan which is higher than your present mortgage and thus you get the left over money from the present loan. This amount is completely the borrowers property.
No closing cost refinance is suggested only for those borrowers who can pay upfront fees i.e. paying a large part of the loan in the beginning of the term. This reduces the rate of interest of the loan for the rest of the period. Generally the upfront fees are termed as points. The more points you pay early the more beneficial it would be for you in future.
Why You Should Care At All About Choosing A Bank And What To Watch Out For…
People quite often make decisions impulsively, without considering the consequences. This may work okay in some situations but it could come back to bite you when dealing with financial topics like investments, financing, refinancing, insurance and mortgages. To be a wise investor we should take some time to consider and know more about the place where we are going to deposit our money.
A very wide array of banks exist. Just to name a few that you’ll probably recognize; Citizen Bank, Well Fargo Bank, Region Bank and Scotia Banks.
Here are some guidelines to consider before choosing a bank:
1. Location: While choosing a bank, you must consider the location. If you wish to access your bank account regularly then you should choose a bank located near to your business place or home.
2. Availability of ATM Machines: Always choose a bank with a large number of ATM machines close by. Also, regarding the ATM’s you should ensure they can provide the following services: a) Do the ATM machines allow you to make deposits? b) Do they give printout statements of transaction made by you? Most do nowadays but some countries may not. c) Can you order more checques through the ATM?
3. Telephone Banking: If you are a very busy person and can not go to the bank during banking hours then you should choose a bank, which can provide you with telephone banking services. With telephone banking you can make transactions and check on your account anytime of the day. With the help of telephone banking you can do the following operations:
a) Transfer money from your account to pay utility bills.
b) Cancel recent transactions.
c) Order another cheque book.
d) Sign up for additional services like loans, credit cards or lines of credit. 5. Internet Banking: Internet banking allows you to perform the same services as telephone banking. But here inquiries and transactions can be done via any internet connection through the banks website. If they have one! So do ask as it’s a great convenience when traveling.
If you are searching a bank for small business, here are some guidelines to help you while choosing a bank. 1. Again, consider the location and make sure the bank understands the nature of your business to meet your requirements. For example, if your run a movie rental business that’s open till midnight you may want to do late night or very early morning deposits. So in this case ensure the bank has a night deposit box. 2. Find out the transaction fees and don’t assume the fees are similar to personal accounts. Banks generally charge businesses way more due to the increase in transactions. 3. Find out the rates for small business loans or lines of credit and the turn around time to secure funding. You may find youre self in a situation where you need an extra few thousand or more to secure better pricing on bulk orders of supplies or something else.
The above list is in now way exhaustive but a place to begin if youre just now looking or considering a switch.
Nothing quite matches the convenience of business credit cards. When you are looking for a good alternative to cash, checks, and personal credit cards, it is probably a business credit card you want. With credit-when-you-need-it convenience, savings and discounts on purchases, and extremely helpful reporting facilities, business credit cards can be a good tool in your financial management tool kit.
You will find it easier to get a business credit card than to open a business line of credit. For this reason, business credit cards can do a lot to help you ease your cash requirements even as you are still gearing up with office supplies and equipment. It can never be repeated too often: use business credit cards with caution and afford it the same respect you would afford any other business line of credit!
The ability to borrow money, whether from a business line of credit or from business credit cards, is something that you need for your business. Like business credit cards, the line of credit is a revolving credit, and both charge interest only on the balances that are left outstanding. The credit limit on business credit cards may be lower than on lines of credit, but both do have a predetermined ceiling. There are however a few differences between these two forms of business credit:
Cost
Business credit cards generally have higher annual percentage rates and lower credit limits, than lines of credit. When it comes to cost-effectiveness therefore, the commercial lines of credit will beat business credit cards anytime.
However, if you manage business credit cards wisely, you can maximize the 21 to 25 days grace period or float on purchases. When the statement comes and you pay off the entire balance, you will actually avoid paying any interest. The crux of the matter is that you get a 25-day interest free loan! Not badand only from business credit cards.
Convenience
Business credit cards may lose on cost, but they are miles ahead when it comes to convenience. If your checking account is running low and you need to buy some supplies, you no longer have to call the bank to transfer funds from your credit line. You could easily charge the whole transaction to your business credit card, get out of the store and back to running your business. Business credit cards also offer you the convenience of easy bookkeeping and quick cost analysis.
Whats more, business credit cards are heavily loaded with perks like frequent flyer miles, purchase protection and warranty extensions, discounts and cash backs on hotel stays, car rentals, gas purchases, and more. These business credit card incentives can be valuable to a business, not only for the sake of convenience but also for the cost savings that you get.
Business credit cards and lines of credit are two financial tools that you can use together. Business credit cards are perfect for very short-term borrowings were talking 30 days at the most. You should pay off the bulk of the balance when it falls due, to save on interest. You may want to carry 20% of the balance forward to the next month to make your business credit card issuer happy, otherwise theyre never going to earn any interest income from your business credit card account.
Lines of credit are perfect for larger purchases, particularly those that would exceed your business credit card limit, as well as for reserve funds when cash flow becomes irregular over a period. Lines of credit help you to shore up your working capital, such as payroll, paying off merchant credit and payables, or settling the quarterly taxes.
March 17
Pros and Cons of RefinancingRefinancing can be considered a means with which a person replaces his/her current loan with a new loan in order to save money. The loan can be of any type. It can be any consumer debt or a credit card debt or a mortgage.
Many people shelter to refinancing nowadays because it has many pros:
As it helps people to reduce interests, risk, and periodic payment obligations by either lowering the interest rate owed on the loan or extending the period of loan. Also everyone looks for refinancing in order to be able to achieve equity faster.
There are too many individuals who are “house rich and cash poor.” What value is it if your house is paid off in full, but you do not have any liquid cash to support? Keep in mind that your house will no doubt appreciate over the next few years. It will do so whether or not you have a large or a small mortgage. The more equity you have in your house will put more money in your pocket when you sell it, but while you are living in the house it is only “dead equity.”
In essence refinancing can be used to transform available equity in one’s house into ready cash, available for other purposes or expenses.
refinancing an adjustable-rate mortgage into a fixed-rate one, ensures a steady interest rate over time, by removing the risk that interest rate might increase terribly.
As no one is perfect, also there is not good thing without some risks and cons:
Lenders sometimes offer no-cost refinancing, charging you zero points for your mortgage loan. Generally, you will pay a higher interest rate than on an otherwise comparable mortgage with points, and you’ll still have to pay the other costs associated with the loan. there are also closing and transaction fees typically associated with refinancing a loan or mortgage. In some cases, these fees may outweigh any savings generated through refinancing the loan itself.
Some sub prime lenders charge excessively high fees, but you can screen these out by comparing mortgage rates.
All you need is to determine the goal behind seeking a refinancing, collecting information about several lenders options and then work on your refinancing.
Finally it became aparent that refinancing, as hasing lots of advantages it also has disadvantages and risks. You should pay great attention that some refinanced loans, while having lower initial payments, may result in larger total interest costs over the life of the loan, or expose the borrower to greater risks than the existing loan, depending on the type of loan used to refinance the existing debt.
So you have to be carefull and Calculate the up-front, ongoing, and potentially variable costs of refinancing while making a decision on whether or not to refinance and you have to Check your mortgage agreement to see whether it contains a prepayment penalty, and try to avoid prepayment penalties in any refinanced mortgages.
Curious about how much money you’ll accumulate in your Roth retirement account?
If youve got Microsoft Excel (or just about any other popular spreadsheet program) running on your computer, you can use its FV function to forecast the future value of your Roth IRA or Roth 401(k).
The FV function calculates the future value of an investment given its interest rate, the number of payments, the payment, the present value of the investment, and, optionally, the type-of-annuity switch. (More about the type-of-annuity switch a little later.)
The function uses the following syntax:
=FV(rate,nper,pmt,pv,type)
This little pretty complicated, I grant you. But suppose you want to calculate the future value of an individual retirement account thats already got $20,000 in it and to which you are contributing $400-a-month. Further suppose that you want to know the account balanceits future valuein 25 years and that you expect to earn 10% annual interest.
To calculate the future value of the individual retirement account in this case using the FV function, you enter the following into a worksheet cell:
=FV(10%/12,25*12,-400,-20000,0)
The function returns the value 771872.26roughly $772,000 dollars.
A handful of things to note: To convert the 10% annual interest to a monthly interest rate, the formula divides the annual interest rate by 12. Similarly, to convert the 25-year term to a term in months, the formula multiplies 25 by 12.
Also, notice that the monthly payment and initial present values show as negative amounts because they represent cash outflows. And the function returns the future value amount as a positive value because it reflects a cash inflow you ultimately receive.
That 0 at the end of the function is the type-of-annuity switch. If you set the type-of-annuity switch to 1, Excel assumes payments occur at the beginning of the period (month in this case), following the annuity due convention. If you set the annuity switch to 0 or you omit the argument, Excel assumes payments occur at the end of the period following the ordinary annuity convention.
March 13
Preventing ID TheftIf you use credit cards, drive a car, have a bank account or just have a Social Security number, you could be at risk for identity theft. According to the Federal Trade Commission, more than 9 million people each year are victims of identify theft–one in every 25 Americans-resulting in costs to consumers and businesses of more than $50 billion annually.
It’s a horror story that happens daily across the country. For example, Kathryn Lasater of San Jose, Calif., is a typical college sophomore with just enough in her savings account to cover rent and utilities every semester. You can imagine her surprise when she received a phone call from a bank in Omaha, Nebraska, regarding a defaulted home loan taken in her name. Kathryn learned that someone had used her Social Security number to apply for and receive a home loan in her name. She spent the next six months making countless phone calls and penning dozens of letters to restore her good credit.
Unfortunately, most people who commit identity fraud are never caught or penalized. While the U.S. Secret Service investigates frauds over $2,000, most credit card criminals stay below this threshold.
The single most effective way for consumers to prevent ID theft is to “freeze” their credit with the nation’s three credit bureaus (Experian, TransUnion and Equifax). Once activated, a credit freeze prevents financial institutions from issuing any credit–including new credit cards-without the explicit permission of the consumer. Credit freezes, currently available under state law in more than a dozen states, stop the problem of identity theft at its root.
Retail industry lobbyists have begun to fight for changes in state and federal laws to protect consumers and merchants from fraud, but the credit card industry has opposed many of the requested laws. Now Congress is considering a bill that could deny consumers the rights they have under existing state laws to freeze their credit reports. This federal legislation, if passed, would effectively hand over control of credit freeze to the credit bureaus.
Consumer advocates are urging Americans to contact their members of Congress and ask them to oppose this legislation, currently known as HR 3997.
March 9
Best money market accountBest Money Market Account
When you are looking for a good safe way to invest your money you should look into a money market account. They are a great way to maximize your savings potential without any risk. Many people don’t understand the way money market accounts work and therefore they don’t know how to choose the best money market account for their financial situation.
What is a Money Market Account?
A money market account is an account that works like both a checking and savings account. They offer you the ability to earn a much higher rate of interest then a standard savings account. This is because you only have the ability to withdraw money from your account six times a month, this is standard and every financial institution has the same rules. You can either write a check or a debit card to access your money.
What to Look for in a Money Market Account
One of the first things you should find out when searching for the best money market account is if the financial institution that you are going to use is FDIC insured. This is basically saying that the federal government is insuring your money, so if your bank, for whatever reason, goes out of business your money is not lost, you will get it back.
Another important factor is monthly maintenance fees that some financial institutions have. Many of them will waive all monthly fees if you keep a certain minimum balance each month and if you look around, especially on the internet, you can find many of them that have no fees and have require no minimum balance requirements. This is especially helpful if you are just beginning to start saving, the last thing you need is having your savings eaten up by fees.
Opening balances vary from institution to institution. Almost every money market account has a minimum opening requirement. However, they run the gamut, many require only $50 to open an account but as you get the better interest rates you will often have higher opening balance requirements, in fact several of them get up to the $5,000 mark.
Where to Find the Best Money Market Accounts
Until recently the only place to open a money market account was to go to a local bank. With the internet becoming so prevalent in society, lending institutions have begun to use it to recruit new customers. Some of the best money market accounts are available by internet. They don’t have the high expensive of having lots of buildings to maintain so they are able to offer higher interest rates.
The only real difference between using an internet bank and a local branch is how you make your deposit, you will make your deposit two ways you can have your employer do a direct deposit or you can mail them a deposit. It is recommended that when you mail your deposits you send them certified.
Having a money market account is one of the best ways to save your money with no risks like stocks or bonds. You keep your money liquid and earn a great interest rated so take some time and find the best money market account for you and your financial circumstances.
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Wealth Secrets of Millionaires: Become Wealthy By Not Repaying Your Debt
Wealth. Does that sound like a foreign word to you? If youre saddled with loads of consumer debt the way so many Americans are, it is probably a very unfamiliar word. Commercial and consumer debts are the greatest barriers to wealth. And when youre suffocated by thousands of dollars of debt, it may seem impossible to get out.
Theres good news! Its not impossible to eliminate your debt and move toward wealth. Most people and small businesses simply dont have a system for paying off their debt, and as a result they perpetuate bad habits and remain stuck in it. By using the proper debt management system, you can get out of debt quicker than you probably imagined with minimal change to your existing lifestyle.
To top it off, there is a system you can use that will allow you to simultaneously create and feed the Wealth Cycle, a cycle of wealth millionaires use to consistently and exponentially build their wealth. In other words, you can simultaneously become wealthy and repay your debt.
Skeptical? I bet you are. But, youll be surprised at how easy this is.
So whats the best way to abolish consumer debt? Many financial advisors will tell you to scrimp, save and cut back on absolutely everything that makes life fun. Theyll tell you to create a very tight budget and then pay off your debt before you can even think about making investments of any type. Sounds a lot like a diet, one that will cause you to starve yourself and your children, depriving them of wealth.
So what does work?
To tackle consumer debt, Lorals five-step debt strategy includes the following steps (explained in considerable detail in her book, The Millionaire Maker):
- Create a debt elimination box
- Calculate a factoring number
- Make a priority payoff box
- Use a jump start allocation
- Make your debt payments
By using this system, your debt payments start to build as you pay of your creditors, all of whom have been listed in order of priority. Your capacity to pay off your debt accelerates quicker and it does require you to shave down unnecessary expenses, but not cut out everything you love. In short, its realistic – and mighty effective. You simply have to commit to it.
But wait, theres more to it!
Earlier I mentioned that you can pay off your debt and at the same time actively build your wealth. Remember that Wealth Cycle mentioned earlier? This is where it comes in.
The Wealth Cycle used by millionaires consists of 12 steps:
- Gap Analysis
- Financial Baseline
- Freedom Day
- Debt Management
- Entities
- Cash Machine
- Wealth Account
- Forecasting
- Assets
- Leadership
- Teamwork
- Conditioning
Its okay if you dont know what each step means right now. The main thing to understand is that the key to success in using the Wealth Cycle is knowing which steps to take, and in what order.
Everyones financial situation will require its own order of sequencing. A wealth mentor can help you determine whats right for you. For some people, the first step is to develop the proper legal entities for their business and investments so as to maximize tax strategies. For others it may mean first
reallocating assets so you can bring in increased monthly income that enables you to start investing. This will in turn bring in passive income which will allow you to pay off your debt quicker.
Heres an example of when entity structuring might be used first:
Lets say you have a graphic design business but its not incorporated. This means your debt includes a lot of expenses — cell phone, office supplies, postage, etc — that you paid for out of your personal account. If you make your design business an entity, lets say a Subchapter S Corporation, then the portion of your debt that includes those items can now be transferred over as business expenses. Now you can write off that portion of your debt against your income, giving you more money at the end of the year!
The interesting thing about the Wealth Cycle is, as stated above, that you only focus on debt management after you develop a Cash Machine, the proper Entities, and engage in forecasting. Building wealth from a position of great debt takes courage, discipline, and positive energy. I realize this may seem a difficult scenario from which to create wealth, but my hundreds of successful clients prove that getting out of debt and building wealth is very doable. What it takes is a commitment to gaining awareness of your psychology, your finances, and a willingness to let go of old habits that no longer serve you.
