Real Estate Investing Avoid Buying a Unique Home in Preforeclosure Even From a Nice Family
March 31, 2009
Early in my career as a real estate investor, I got a call from a really nice family about to lose their home to foreclosure. Located in the suburbs, the house looked pretty much like every other house in the middle-income neighborhood on the outside. On the inside, though, the house was very unusual.
You see, the husband and wife were theater majors in college and they remodeled the lower level of their home to look like the set of a movie. The home gym looked like the set of Million Dollar Baby. The playroom looked like the set of Home Alone. And the home theater (with seating for six and a big screen TV) was painted entirely black, floor, walls, and ceiling.
The parents home-schooled all four children, so the lower level also housed a study room with computers and desks. The two-car garage was fully carpeted because the youngest children liked to play there during the day.
The house was a full time home, school, gym and theater for this family. The parents thought they would live there forever - or at least until the last of their children moved away. But sadly, they missed a couple of mortgage payments and found it impossible to catch up. They called me in hopes of selling their house fast so they could save their credit.
When I did my due diligence, I learned that homes in this neighborhood did not stay on the market long. Close to the public schools, it was a quiet neighborhood with lots of green space. Add to that: the neighborhood homeowners association often held potluck dinners and street parties and were the envy of the surrounding community.
What could be better? I thought. A great one-of-a-kind house in a great neighborhood at a great price.
I bought the house with about 20% equity, no money out of my pocket, and cash back at closing. I immediately put the house on the market. At the time I thought the uniqueness of the property would be a great selling point. I thought it would stand out as “one of a kind” and families would fight to live there.
Boy, was I wrong.
Most people who looked at the house thought the unique features of the lower level were just plain weird.
I marketed the house specifically to families with children who I thought would love the spacious gym, the play room, the home theater, and the study rooms as much as the family who had put so much of their personal stamp on them. But no one else seemed to see the beauty of it.
Only the strangeness of it.
The house sat on the market five months without a decent offer. I watched my profit dwindle drastically over six months while paying holding costs, utilities, and lawn care.
Then I made a hard decision. I hired a remodeler to transform the lower level into an ordinary looking basement with smooth white walls, dropped ceilings and beige carpet. I watched even more of my profit evaporate.
But I quickly found a buyer.
Lesson to be learned: Three bedroom, two bath, bread-and-butter houses are the best investment properties for a reason. Everyone can imagine living in an ordinary house. Not everyone can see themselves living in a really unique one.
FOREX Accounts One Size Does Not Fit All
March 31, 2009
Once you have decided that you have the proper mindset and are ready to start investing on the FOREX exchange you are ready for the next step. That step is to select the type of FOREX account you want to open. You should make this decision before you pick a broker to work with. Some brokerage companies specialize in one type of account or another. The type of account you choose could affect your broker choice.
You will find that most brokers offer several types of accounts. The primary differences between the account types will be margin requirements, minimum deposit and lot sizes. You will need to consider your trading strategy and financial resources to select the right account. The three most common accounts are mini accounts, standard accounts and managed accounts.
The most popular account with new investors is the mini account. One of the factors that make the mini account so popular with beginners is that it has the lowest minimum deposit requirements. The minimum deposit requirements for a mini account are dependent on the broker, some will allow you to open an account with only a $100 deposit. Most mini accounts will deal with lot sizes as small as 10 thousand currency units. Mini accounts may provide as much as a 200 to 1 margin rate and only require $50 per lot to trade. This means that with $50 you will be able to control $10,000 worth of currency.
Most mini accounts have a built in safeguard because they are aimed at beginning investors. This is usually referred to as “Guaranteed Limited Risk”; this guarantees that you will never lose more than your initial investment in a trade. In the case where the currency drops and the broker would need to make a margin call to keep your position open they automatically close the trade. This will cause you to lose the money you invested into this trade but you will not end up owing the broker money. The downside to this is that if the currency rebounds you will no longer have a position that you could profit from.
A standard account is another common account that has higher deposit requirements than a mini account. The usual investment to open a standard account with most brokers is $2,000. These accounts usually trade in lots of 100,000 units. With a standard account you will still usually have a margin ration of 200 to 1. To purchase a normal lot of 100,000 thousand units then will require a deposit of $500 from you. It is still pretty common with a standard account to have the “Guaranteed Limited Risk” safeguard included.
Some brokers will also offer what is called a “Managed Account”. With a managed account you will not be actively trading. A professional trader will be assigned to your account and will use your money to make trades. This requires a much lower investment of time and knowledge from you. Managed accounts usually have a higher minimum requirement amount, often of $10,000 or more.
You will want to consider your knowledge, financial situation and risk tolerance when deciding which account type will work best for you.
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Negotiating a Real Estate Purchase Top 6 Tips
March 31, 2009
Negotiating may be the most critical part of the real estate purchase process. Being able to strike an advantageous deal with the seller virtually guarantees your profit. Negotiating is both an art and a skill that you will master with time and practice. Here are six tips to get you started.
Know the Property
You should know as much as possible about the real estate purchase you’re about to make. This knowledge comes from researching the neighborhood and knowing how the property compares to others around it.
Know the Seller
The best way to learn more about the seller is to listen. People will be more likely to volunteer information if you give them a chance to talk. But if you aren’t finding out what you need to know, ask questions. Understanding the seller’s situation and their possible flexibility will help you negotiate financing options as well as price.
You also need to find out what the seller’s motivations are. Why are they selling? Understanding the reasons behind the sale can help you structure a deal that meets their needs and yours.
Think Win-Win
The best real estate purchase deals result from negotiations that seek to provide something to both parties. There are certain things you want out of the deal and certain things the seller wants in order to sell. Every real estate purchase has several facets. If you can give the seller something they want, that will increase your chance of getting something you want.
Negotiate Terms, Not Just Price
Price is not your only negotiating point. Sometimes the terms of the deal are more important to the seller than the price. Once again, if you can address the seller’s needs in a real estate purchase, your offer will be more persuasive.
Maintain Control
If the seller counters your offer with an offer of his own, don’t let things spiral out of control. Prepare for counter offers by starting your negotiations low. Don’t focus on price, but use other aspects of the deal in your negotiations. Don’t re-negotiate things that have already been decided.
Be Prepared to Move On
Don’t walk away from an attractive real estate purchase without offering your best deal, but know when it’s time to walk away. There will always be another property.
As you can see from these tips, negotiating a real estate purchase is more than two people in a room. Negotiations are won or lost in the preparation. Achieving the outcome you desire depends on your research and mental preparation.
Discover exactly how Sal Vannutini combined two of the easiest (yet brutally powerful) real estate investing strategies and made an insane $31,510 Profit In Just 49 Days… And How You Can Do The Same!”. Visit www.FixerUpperFortunes.com.
Why Invest a Santa Cruz Beach House
March 30, 2009
If you are looking for a wise investment in the world of real estate, then consider purchasing a Santa Cruz beach house. Why are beach houses in this area a wise investment? First, these properties always increase in value, and second, they represent a potential source of residual income.
The local beach micro-market is currently up, which means that prices are high and buyers are willing to pay the high prices. While some wonder if this means the market is in a bubble, most experienced Realtors who know the region understand that this trend will continue. The fact is that people with money want to live near the beach, or better yet, in ocean-front property. For this reason, the prices will stay high and continue to increase. Those considering investing in a Santa Cruz beach house do not need to wait for prices to drop. All that is going to happen in the future is an increase in interest rates and prices, so if you are considering purchasing, this is a good time to do it.
Purchasing a California beach house for yourself gives you your own private retreat. The beaches in the area are gorgeous - Sunset, Manresa, Rio del Mar, Seacliff, Capitola, Seabright, Cowell, Natural Bridges - to name a few! This is perhaps not surprising since they are one of the biggest draws of the area. People travel from across the country to visit this awe-inspiring area and spend time on the beach, and purchasing your own beach house gives you the chance to enjoy these beautiful beaches every day.
However, there is another benefit to purchasing a Santa Cruz beach house. Not only is it a great investment because of the potential resale value in the future, but you can also make an income from your home while you own it. If you don’t live in your beach house year round, you can rent it to vacationers when you are not using it. This provides you with residual income whenever you need it.
The fact is, tourists who are visiting the beaches of California want to stay in beach houses, and if you can offer one for lease, you can pocket a decent income. You can use the beach house as a vacation home, and then offer it for lease when you are living in your primary residence. You may even find that you get frequent renters who return to your property year after year.
If you have decided that ocean-front California residential property is a type of real estate that you wish to invest in, you will need the help of a qualified Real Estate agent. Because the Santa Cruz market is so unique, and also so lucrative, finding an agent who has experience in the area is essential.
Look for an agent with at least two years worth of experience and who holds certification from the National Association of Realtors. Talk to the realtor about your desires for your a beach area property, and see what properties he currently has available. By working with a professional with the right experience, you will ensure that you find a property at a fair market price.
Seb Frey is a Capitola, California Real Estate Broker specializing in Santa Cruz Real Estate. He is fluent in Spanish and enjoys helping people find their piece of the American Dream in Santa Cruz. You can find Seb’s blog at SantaCruzHomeBroker.com/blog.
Knowledge Is Power A Research On Stock Market Investment
March 30, 2009
A stock, a.k.a. share or equity, represents one’s ownership of a company. For example, a person who has 100 shares of company A, out of its total of 1000 shares, means he owns 10% of the company. As part owner of a company, the shareholder earns, when the company makes profit. In the same way, if the company loses, so does the shareholder.
A stock market is a place (real or virtual) to trade (buy and sell) one’s stocks. The New York Stock Exchange (NYSE, http://www.nyse.com/home.html) and the NASDAQ (http://www.nasdaq.com/) are examples of real and virtual stock markets, respectively.
That’s a brief overview. For a more comprehensive understanding, go to http://www.investopedia.com. For the stock market investment newbie, try to play a virtual game at http://investsmart.coe.uga.edu/C001759/usmarket/usmarket.htm, without spending dime. Students can practice stock market investment at www.smgww.org. and www.stocksquest.com.
Then why invest in stocks? Because it earns 10% - 12%. This is higher than any other type of investment (savings account, bonds and the like). The way to earn is to sell your stock market investment at a higher price than when you bought it; the price difference is your profit. You can earn in 3 ways:
1. Buying stocks at IPO (Initial Public Offering). When companies decide to sell stocks, they will offer it at an initial price. After some time, with the company’s good performance, the initial price increases, thus the earning;
2. Dividend. As a reward for investing in their company, the company may choose to give a portion of its earnings to its investors through dividends per share. However, this not a requirement for stock market investment, but purely voluntary;
3. Trading stocks. If you intend to invest in Company A, but did not catch its IPO, you can still do so by buying at the stock market. A broker, in your behalf, will bid for the best-priced stock of Company A, according to the price you want. The same happens, when selling. Compare and find the best broker at http://www.fool.com/dbc/tables/compare.htm?ref=60broker.
The key to success stock market investment is to know everything there is to know, about the company and the factors affect its performance. Consult the following:
The official website of the company. This should show the company’s corporate set-up, financial health and organizational structure as well as historical data of their stock performance.
Investment websites such as Yahoo!Finance, MSN Central and DowJone’s MarketWatch;
The news. To be aware of all the factors that may affect your investment, be updated with the news. For all you know, the weather forecast is the ace up your sleeve.
Knowledge is power and so it is in stock market investment. Invest successfully, with the power of knowledge!
Find out more about stocks and shares at http://stocksandshares.us
Negotiating a Real Estate Purchase Top 6 Tips
March 29, 2009
Negotiating may be the most critical part of the real estate purchase process. Being able to strike an advantageous deal with the seller virtually guarantees your profit. Negotiating is both an art and a skill that you will master with time and practice. Here are six tips to get you started.
Know the Property
You should know as much as possible about the real estate purchase you’re about to make. This knowledge comes from researching the neighborhood and knowing how the property compares to others around it.
Know the Seller
The best way to learn more about the seller is to listen. People will be more likely to volunteer information if you give them a chance to talk. But if you aren’t finding out what you need to know, ask questions. Understanding the seller’s situation and their possible flexibility will help you negotiate financing options as well as price.
You also need to find out what the seller’s motivations are. Why are they selling? Understanding the reasons behind the sale can help you structure a deal that meets their needs and yours.
Think Win-Win
The best real estate purchase deals result from negotiations that seek to provide something to both parties. There are certain things you want out of the deal and certain things the seller wants in order to sell. Every real estate purchase has several facets. If you can give the seller something they want, that will increase your chance of getting something you want.
Negotiate Terms, Not Just Price
Price is not your only negotiating point. Sometimes the terms of the deal are more important to the seller than the price. Once again, if you can address the seller’s needs in a real estate purchase, your offer will be more persuasive.
Maintain Control
If the seller counters your offer with an offer of his own, don’t let things spiral out of control. Prepare for counter offers by starting your negotiations low. Don’t focus on price, but use other aspects of the deal in your negotiations. Don’t re-negotiate things that have already been decided.
Be Prepared to Move On
Don’t walk away from an attractive real estate purchase without offering your best deal, but know when it’s time to walk away. There will always be another property.
As you can see from these tips, negotiating a real estate purchase is more than two people in a room. Negotiations are won or lost in the preparation. Achieving the outcome you desire depends on your research and mental preparation.
Discover exactly how Sal Vannutini combined two of the easiest (yet brutally powerful) real estate investing strategies and made an insane $31,510 Profit In Just 49 Days… And How You Can Do The Same!”. Visit www.FixerUpperFortunes.com.
Investment Scams and How to Avoid Them
March 29, 2009
Most people, especially those new to the investment arena, do not realize there are a number of common scams which are used to victimize investors each year.
The misconception about investing scams is that most smart investors believe they will “know one when they see one” - this is simply not true. Especially in the modern marketplace were criminals have all the resources of the world wide web to create realistic investing schemes which capture the investors attention as well as their money.
The anonymity of the world wide web is a breeding ground for scam artists targeting individuals who so desperately want to get rich quick. Many of these criminals will set up web pages with news letters, forums, and prospectus for companies which do not even exist.
These sites are design with information including success stories from other investors. This is used to lure new investors in. By following un-research claims an investor can easily lose his investments, retirement, and education funds.
Remember professional investors live by the mantra that customers buy products but investors buy securities. Do not be lured in but what merely sounds good. The key is to keep a keen ear for what sounds and is valuable. Major red flags include the use of emotional and subjective words in combination with an investing recommendation.
If you become interested in a stock there are several ways to check if it is a valid stock tip or not. The first place to start is research the company that the stock is for. Take a look at their financial statements to get an idea of how well the company is doing by checking both income and debts. If both of those are in order call the company and speak with human resources. Ask them to validate th claims in the newsletter, email or web page are true. These are great ways to check if a stock tip is fact or fiction.
Another great place to look for information about a specific company is the SEC. Public companies must register with and file yearly reports to the SEC to document their growth and development.
These reports are thoroughly checked to make sure they are truthful and accurate. This helps not only to confirm if you have a valid investment but will also document if the company’s profits are going to continue to increase or decrease.
Access to the SEC and public companies can easily be found on the world web wide. If the advertisements claim to have certain investors feel free to call those companies and confirm their investments and their satisfaction with the company.
Many scam artists will use high profile company names to make the document more alluring to potential investing victims.
Additionally the NASD can be contacted. This organization helps states’ regulate securities and has all the information needed to verify if a company is real or not.
Only through being an aggressive and educated investor can you utilize your money to it’s fullest potential. Take the time to do the research, ask the questions, and if something feels funny, go with your gut.
There are plenty of real investing opportunities out there if you take the time to look.
More Articles & Tutorials and a Free Investing For The Beginner E-Course at http://www.Global-Investment-Institute.com
No Money Down The Benefits of Real Estate Joint Ventures
March 29, 2009
Investors are attracted to the real estate market because of the incredible potential it has to multiply their money. Appreciation rates of properties are very high and almost all property deals guarantee you certain amount of profit.
One of main reasons why many others are not able to invest in real estate is that they do not have sufficient cash to pay the down payment for the purchase. However, there are plenty of financial schemes with ‘No Money Down’ option available for small investors to enable them to sustain the costs of purchasing property.
New investors can consider joint ventures, wherein one person finances the project and the other does the actual work. As a result, the one who does all the work has to put no money down for upfront costs. If you are new to the real estate game, and do not have enough funds to bear the upfront costs, you can opt for a joint venture. It is legally binding, and both parties agree upon a certain percent of profit each would receive after the project is completed.
It is a mutually beneficial partnership, wherein profits are divided according to individual contribution in terms of labor and money. The joint agreement is drawn to provide legal protection to the concerned parties in case the project fails.
A joint venture is beneficial if you are in one of the following situations:
1. When you lack borrowing capacity
If you have some money to pay the down payment, but are not eligible for a loan, joint venture would be beneficial for you. You can enter into a partnership with someone who has the necessary funds or is eligible for a loan to support your project.
2. When you do not have liquid cash or equity
You may be eligible for a loan due to your income or credit score. However, you may not have the necessary cash required to pay for the down payment of property purchase. In such a case, you can enter into a partnership with a person who can take care of the down payment.
With literally ‘no money down’ towards down payment, you can begin your dream project. There are instances wherein the seller carried a certain amount of the loan as a second mortgage. In exchange, you are required to give him a certain percent of the profits as decided in the agreement.
3. You have the necessary skills
There are investors who have the expertise to carry out a project or who have skills required for renovation. They may lack the funds for the project or may not have the inclination to invest money in the project. If you are one of those, then you can find a partner who has the money but lacks the time and expertise to complete the project.
It is important to draw an agreement carefully including all minute details to avoid any form of dispute in future.
Discover exactly how Sal Vannutini combined two of the easiest (yet brutally powerful) real estate investing strategies and made an insane $31,510 Profit In Just 49 Days… And How You Can Do The Same!”. Visit http://www.FixerUpperFortunes.com
To Win Or To Fail Tips For Successful Trading
March 28, 2009
Investing money entails a great amount of risk. Like they always say, “It takes money, to make money.”
Money doesn’t grow on trees, you know.
But it doesn’t necessarily mean that to achieve good profits, one has to invest heavily and risk greatly. That is not the case all the time. A well-informed investor can make sound decisions that will help him earn considerable profits with minimal loss.
The first lesson a successful businessman will tell you is that any endeavor carries potential risk along with potential gain. The trick is to determine if the profit is worth the risk. If it is, it is now time to consider if you are willing to take the risk.
So before you start trading, ask yourself this:
a.) What are your achievement goals?
b.) Are your investments going to lose money?
c.) Are you willing to take bigger risks for better profits?
Setting your achievement goals will allow you to know how long you’re willing to wait for a stock to gain profit. It will also give you a limit on how much you’re willing to lose. It will also give you an idea on how to go about investing in a stock.
If you choose a low-return investment, it will mean that either you increase the amount you invest or increase the length of time invested.
After you have made up your mind with the above questions, there are some tips you may want to use to evaluate your trading philosophy.
a.) When to invest. Ordinarily, you want to trade all the time. You get excited when you see shares go up or when they fall down. You make decisions based on a whim and factors that don’t usually affect a stock in the long run. The best traders wait 50% of the time waiting and studying how a stock performs. They do not trade every day and all the time.
b.) Discipline yourself. You are so excited to make trades that you trade on a stock that looks half-decent enough rather than waiting for the best stock to come along.
c.) Small moves big payoffs. Don’t waste time dabbling in so many small stocks with minimal profit. Watch out for big stocks and concentrate on a few.
d.) Do not be too emotional. Making money is exciting. Losing money can get very depressing. Detach yourself from your emotions; otherwise, you won’t be able to look at things objectively.
Trading stocks is a high-risk, high-profit venture. Dabbling in the stock market half-cocked is suicide. Take your time. Study, research and be patient. After all, it’s your money, so it’s your loss.
Find out more about stocks and shares at http://stocksandshares.us
Private Moneylenders The Real Estate Investors Secret Weapon
March 28, 2009
Real estate investments are very lucrative and offer a variety of other benefits such as tax deductibles and asset appreciation. However, it is beyond the financial means of most real estate investors to pay the cost of their property up front. Such investors have to obtain a home loan from private lenders or financial institutions to bear the cost of their new home.
It is very common for real estate investors to procure finance in a range of eighty to hundred percent of the property value. The homeowner is required to make monthly payments to the financial company for an agreed period.
Private moneylenders or ‘hard’ moneylenders are generally third party lenders that provide the necessary funds to buy or renovate your home. In exchange, the homeowner agrees to pay a certain percentage of the profits earned after selling a property after renovation. This form of lending is mutually beneficial to both parties. It guarantees lenders better returns for their money, as the rate of interest is quite high.
The loans, often short-term loans, are especially beneficial to real estate investors who have a financial need for a very short while or who have been turned down by other financial institutions due to poor credit score. Another advantage of obtaining loans from private moneylenders is that they offer fast loans unlike many other financial companies and banks that offer loans after following a long internal procedure for loan sanctions. As a result, investors are drawn to such lenders owing to the flexibility and convenience offered by private moneylenders.
Typically, private moneylenders are most eager to work with people who have a promising venture. If a venture is good enough, they are willing to overlook their credit records. This form of financing can prove to be extremely expensive as such loans attract very high interest rates as compared to other banking and financial institutions. Another difficulty is that such lenders are quite hard to locate as compared to other traditional lenders.
People, who have surplus liquid cash and are on the lookout for ways to multiply this amount in a short period of time, become private moneylenders to provide funds to borrowers who are in need of quick cash.
However, it should be noted that all private moneylenders differ in their dealings and the amount of funds provided and the repayment terms may greatly differ. They may charge an interest in the range of 12% to 18% and have a well-drafted loan agreement to secure their investment. They may finance 50% to 75% of the home value post renovation for a period ranging from six months to five years.
The funds can be held in trust or escrowed until the renovation project is fully completed.
Discover exactly how Sal Vannutini combined two of the easiest (yet brutally powerful) real estate investing strategies and made an insane $31,510 Profit In Just 49 Days… And How You Can Do The Same!”. Visit FixerUpperFortunes.com
