Tips for Finding a Rental Apartment

Finding a rental apartment is not always easy. Depending on occupancy rates in a particular area, it actually might be quite difficult to find available apartments that are also within your price range and meet all of your pre-determined requirements. However, even in areas where there is not a great deal of competition for the available apartments, renters may still have some difficulty finding the perfect apartment. This article will offer some tips for finding a rental apartment that suits all of your needs.

Figure Out Your Needs

The first step of any apartment search should begin with the potential renter carefully identifying all of their needs in an apartment. This list of needs will be different for every renter. While some renters are simply looking for a place to eat, bathe and sleep other renters may be looking for a living space which will serve a number of purposes including working, entertaining and participating in leisure activities or hobbies. When making this list of needs the renter should consider the options they cannot live without as well as the options they want to have but can live without. It is important to make this distinction because the renter will want to ensure the apartment they choose has all of the features they need and ideally a few features they want. However, an apartment which does not have all the required features may become an uncomfortable living situation very quickly.

Do Your Research

Once a renter has a good idea of the basic features he is looking for in an apartment, he should begin researching his options. Researching apartments can be done on the Internet, through the newspaper or through rental magazines. Renters may use one of these research methods exclusively or may combine a few of the methods to form a customized strategy for researching apartments. The research phase will give the renter an idea of the types of properties available for rent in the area.

Comparison Shop

The next step is the process of comparison shopping. This basically entails visiting several different rental properties and touring these facilities. During the tour the renter will get a good idea of available options as well as the costs associated with these options. This is helpful for two very important reasons. First it gives the renter a good idea of the types of apartments available within their budget. Second it gives the renter the ability to bargain regarding price. Renters who have proof of other apartment complexes offering more favorable rental terms, may be able to entice another complex to lower their prices slightly.

Ask for Recommendations

Renters can also help themselves in their search for an apartment by seeking recommendations from trusted friends and family members. These recommendations can be taken to be much more worthwhile than recommendations offered by the apartment complex from previously satisfied tenants. It is important to note the apartment complex is likely to only offer testimony from tenants who were happy with their rental agreement. For this reason, opinions offered by friends and family members are much more valuable because they do not have a vested interest in the rental property and simply offer their honest opinion. Friends or family members who share your interests and personality traits can be very helpful in offering recommendations for apartments because it is very likely you will be happy with the apartment they recommend.

Consult the Better Business Bureau

Finally, renters should consult the Better Business Bureau (BBB) before making a final decision and choosing an apartment complex. This can be very helpful especially if the renter finds a particular apartment complex has a number of unresolved complaints against them. While a lack of complaints is not necessarily an endorsement, it is a good sign if the complex has been in business for number of years without a slew of unresolved complaints.

What First Time Home Buyers Need To Know About The Mortgage Process

Buying a home for the first time can be confusing. There are so many things to consider and so many things that must be done the right way before you sign your name on the dotted line. Understanding the steps of the mortgage and home buying process can make it much easier to navigate. Here's a brief guide to what first time home buyers need to know about the mortgage process.

Before you look for a home:

* Decide if you're financially ready to buy a home. When you compare rents side by side with mortgage payments, buying a home may seem like a great bargain, but it's important to consider all the costs that come along with owning a home.

* Learn about the different mortgages available and figure out which is best for you. T

* Get your financial information together. In order to be approved for a mortgage, you'll need to document your income, your assets, your employment, your residence and your existing debt.

* Get pre-approved. A pre-approval letter will give you a firm idea of your prospective price range for a new home, and it will tell your real estate agent and home sellers that you are serious about buying a home and financially capable of managing it. Pre-approval is a more formal and in-depth process than pre-qualification. A pre-approval letter is a formal certificate from a lender saying that you are qualified for a mortgage up to a certain amount. While it is not an agreement to give you a mortgage, it is one step closer to having the cash in hand to buy a house.

* Find a real estate agent. Your real estate agent will work in your best interest and help guide you through the rest of the process.

Once you find your house:

* Work with your agent to determine a fair offer price. A written offer will include the price you'll pay, any conditions that must be met, amount of earnest money, complete legal description of the house, down payment and financing details.

Earnest money is included with your offer to show the seller that you are serious. If your offer is accepted, the earnest money becomes part of the down payment. If your offer is rejected, the earnest money is returned to you. If you pull out of the agreement for reasons other than those stated in the offer, you'll forfeit the earnest money.

* Once your offer is accepted, make a formal application for a mortgage. At this point, you will usually have to pay a mortgage application fee. If your mortgage is approved, it generally locks in the mortgage rate you are offered for 30 to 90 days.

* Your lender will arrange for a home appraisal to determine that the house is worth the amount you are asking to borrow in order to purchase it.

* You or the lender will order a home inspection, which is not the same as a home appraisal. A home inspection will point up any problems with the home that may have been missed by a casual inspection.

Insurance Policies that You Will Need

* Get home owners insurance and provide proof of coverage to your lender.

* Private mortgage insurance is a policy that will pay off your mortgage if you should default on the loan under specific circumstances. Most lenders require that you carry PMI if you make a down payment of less than 20%. Generally, the cost of PMI is added to the amount financed.

* Title insurance is a policy that guarantees a clear title to the house. When you purchase title insurance, the insurance company will do their own title search. If any issues of ownership related to title arise after you have taken over the house, the insurance company will pay all legal and other costs related to the title issue.

Closing on Your New Home

* Your lender will let you know in advance how much the closing cost will be. This is generally a "good faith estimate", and may vary slightly from the actual amount when all costs are totaled.

* You will be expected to bring valid identification and certified funds or a cashier's check for the amount of the closing costs.

* The closing costs will include any loan fees, prepayment of interest (points), copying fees and administrative fees charged by the lender.

* You will have a chance to read over all the documents concerning your mortgage and your home. The closing attorney will give you concise explanations of each document that you are asked to sign, but you have the right to read each one over yourself as well.

* Once all the papers are signed, you will endorse the check to the closing attorney, and receive the documents that make the home yours. The closing attorney will see to the disbursement of funds - paying off any remaining mortgage, payment to the current owners, and any other associated costs.

by Shawn Thomas

How A Mortgage Rate Is Calculated

One of the most important parts of your mortgage is the mortgage rate - the rate of interest that you'll pay on the money you borrow to buy your house. Often, ads for mortgage lenders make it sound as if they offer a single mortgage rate to all lenders. If that were the truth, it would be easy to find the right mortgage - just shop around for the lender advertising the lowest interest rate and apply for a mortgage with them. Unfortunately for simplicity, calculating a mortgage rate is far more complex than that. The truth is that the mortgage rate that you're offered is influenced by many different things.

Prime Lending Rate

Mortgage lenders generally base their calculations of their mortgage rates on the prime lending rate. That's not to say that the prime lending rate is the mortgage rate that they'll offer to customers. Rather, it's the starting point of their calculations for their mortgage rates. The prime lending rate is the interest rate that most commercial banks charge their most creditworthy customers. It is adjusted up or down, usually in increments of 1/8 or ¼ of a percentage point. It responds to both the availability of money to loan and the demand for loans in the marketplace. Because those things tend to be the same across the board, most of the major banks will be offering the same prime lending rate.

First time borrower?

If you're a first time home buyer and your credit is good, banks and lenders will often offer mortgages at a discounted rate - one that is below the prime lending rate - in order to attract your business. First time home buyers who meet certain income guidelines may also qualify for first-time home buyer loans guaranteed by the federal government. One of the conditions of those loans is a very low interest rate, usually several points below the prime lending rate.

Your credit rating

One of the major factors that affects the mortgage rate a bank or lender will offer you is your credit rating or your credit score. Lenders use your credit score to determine whether or not they'll lend you money, and how much they'll charge you in interest for the money that you borrow. The better your credit rating, the lower the mortgage rate you'll be offered.

The type of mortgage

Different types of mortgages carry different risks for lenders. The higher the perceived risk to the lender, the more interest they'll charge you for your mortgage. Adjustable rate mortgages (ARMs) present the lowest risks to the lenders because your mortgage rate can rise if the interest rates rise. Fixed rate mortgages are riskier for lenders. They're making the gamble that interest rates won't rise above the mortgage rate that they charge you. Thus, fixed rate mortgages nearly always carry higher interest rates than adjustable rate mortgages. This can be affected by the size of the loan, and how adjustments are calculated.

The amount and length of the mortgage

It's a general but not a hard and fast rule that the larger the amount borrowed, the lower the interest rate will be. In addition, the longer the term of your mortgage, the lower the rate will be. These differences can be very slight up front, but they add up over the life of the loan. A difference of an eight of a percent can save you tens of thousands over the course of thirty years.

The amount of your down payment

In many cases, the amount that you can offer up as down payment will affect your mortgage rate. The reason is simple enough - the more you put down on your house, the more likely it is that you will not default on your mortgage. Zero-down mortgages generally carry mortgage rates that are considerably higher than the prime lending rate. Depending on the lender and the state of the economy in general when you take out a mortgage, a down payment of as little as 5% or as high as 20% may make a difference in the amount of mortgage rate that you're offered.

What about the APR?

The Annualized Percentage Rate is the total cost of the loan expressed as an annual percentage rate on the amount borrowed. The APR includes any fees that are paid in addition to the interest rate, so it may differ from the mortgage rate advertised by the lender. In the United States, lenders are required by law to disclose the cost of the loan as a standardized APR in order to make it easier for consumers to compare loans.

Negotiating A Mortgage Loan

You have found the perfect home. You are ready to move – yesterday. But you have no idea how to go about in the mortgage world. All home owners learn their way through this maze and you are no exception. Take the time to learn – it is well worth the effort you put into it.

To begin, find out what your credit rating is. There are three credit bureaus in the U.S.A. You are entitled to one free credit report per year and either of the bureaus can provide you with your score. Your credit score will give you a lot of information and it may even help you discover if someone has used your credit or your name without you knowing about it.

Once you know your credit score, then you are in a position to negotiate with your lender. While the interest rate may not be negotiable, several other items relating to your loan may be. You must know what to ask for in the negotiation stage. Remember, to go into escrow to buy a house, you will have points or costs that you must pay toward the loan. Points are actually a charge that the lenders use toward the cost of borrowing the money they will need to finance your loan. Each point equals 1% of total amount you are going to borrow. If you borrow $125,000 and your lender is asking you to pay three points, your total cost to borrow the money is $3,750.00. Ask about lowering the points by a quarter or a half.

In some mortgage loan transactions there are still institutions that charge for their attorney’s legal work on the loan. Point out that some of the other lenders you have talked to no longer charge for this service and ask for a break on the lawyer’s fees. There are document preparation fees and there are the advertisements of other lenders across town. Use the competitive price system to your advantage. Saving a few hundred dollars in up-front escrow costs are a few hundred dollars you might need to put in that skylight that would look great in your new den.

Learn how the mortgage loan industry works; learn its lingo. When you know what the person on the other side of the desk is talking about, then the terms and phrases that they pull out of their hat are not so scary and you can converse and ask questions with confidence.

Fill out your application and begin to get quotes from three or four different lenders. Sometimes, looking at the bottom line is helpful. However, knowing what the escrow costs are and what the long-term mortgage rate is will help you make an important decision: do you want to pay more up front in order to get a better long-term rate or would you prefer to pay less up front and pay a little more each month? Examine the various offers and make sure you know what each charge is for and what it means. If they are professionals in the business, the lender will not mind helping you to understand – they want the other business that you might have for them in the future.

Once you have the quotes and you understand what the programs and costs mean, then you are in a position to choose the lender you prefer. Let the lender know that you have gotten other quotes and start asking them to work with you in the places where the other lenders quote might look better.

There are several laws that you also need to be aware of as you begin to search for a loan. The first one is the Equal Credit Opportunity Act. Another is the Fair Housing Act. Both of these prohibit lenders and sellers from discriminating against any buyer/borrower and they make it illegal to charge more for their services to people of a different backgrounds, belief systems, nationalities, etc. These laws are designed to protect you, the buyer and borrower. You need to know your rights as you begin this process.

Even if you have credit problems, there are still ways to negotiate loans. You might need to explain the circumstances of late pay situation, especially if it was due to the loss of a job or an illness. It is especially important to point out to lenders when you have fixed the situation and show them the plan you have in place now to avoid future situations of the same nature.

You need to learn something about interest rates and the different types of interest rates available. Some interest rates appeal because of their stability while others appeal because of their flexibility. Can you work with the flexibility of an adjustable-rate mortgage or do you feel more comfortable with a fixed-rate loan? Those are questions you need to ask and examine with your financial advisor and your lender.

Once you have your questions answered, pursue the dream for purchasing your home for yourself and your family.

Refinancing Your Home Mortgage

In the past 30 years, interest rates have ebbed and flowed significantly in a financial tide of home mortgage offerings. Near the beginning of the 1980s, for example, rates for traditional 30 year, fixed rate mortgages were around 18 percent. Right now, though, we're seeing rates for the same type of loan around 5 percent - and on some days recently, in the 4 percent range.

Many home owners who bought when rates were sky-high are now considering refinancing in order to reap the benefit of today's lower rates. If you're one of these people, know that there are some costs involved in refinancing your home, such as an appraisal, title insurance, and a loan origination fee, just to name a few. To figure out whether these costs will balance out with the potential money you can save by refinancing, you can use the general rule of thumb called the 2 percent rule. In plain English, this rule suggests that the percentage difference between the current rate you have on your loan and the new rate being offered should be at least 2 points. So, if you were one of those borrowers in the 1980s who got a rate in the teens (and you can get a rate now for around 5 percent), it would make pretty good sense to refinance.

I've included below 3 benefits for refinancing with a lower rate:

1) Lowering monthly payments - By lowering the rate of your loan, you can see a significant difference in your monthly mortgage payment. And, every little bit adds up. Some borrowers who refinance can save thousands of dollars over the course of their loan period. How much you save, though, completely depends on your numbers. So, be sure to talk with a mortgage specialist who can do the number crunching for you to see how much you can potentially save by refinancing.

2) Changing the type of loan you have - Some borrowers choose to refinance even if they won't save any money by doing so. Think of the many borrowers who got an adjustable rate mortgage. We're seeing a lot of these borrowers refinancing simply to switch to the fixed rate mortgages. Also, some borrowers who have a balloon worked into their mortgage choose to refinance when it's gets closer to the time to make that bulk payment.

3) Getting money from your equity - If you've been in your home for ten or more years, you probably have a good bit of equity due to the overall appreciation of your home (even with the current dip in home values) and to the fact that you've been making those monthly payments for some time. For this reason, some borrowers opt to pull money out when they refinance their mortgage in order to help with retirement or with their children's costs for college.

If you're considering refinancing your home, be sure to talk with a home loan professional - someone experienced in refinancing who can sit down with you and go over your numbers and the options available to you. And, know that each situation is different. Your lender should be able to go over short-term and long-term benefits (or consequences) that are specific to you and geared towards your financial future.

Credit Scores and Your Home Loan

Credit scores are a critical component for lenders trying to approve home loan borrowers. Multiple studies by the Federal Home Loan Mortgage Corporation (usually called Freddie Mac) have shown that credit scores are some of the best indicators for a borrower's long term performance. So, what exactly does your credit report show?

The basic information in your report identifies you and is updated as you apply to various lenders. This information includes your name, date of birth, social security number, address, and job history.

Your credit report also shows the lines of credit that you've previously established, such as car loans, home mortgages, and credit cards. Each line of credit shows the date that it was opened, what you currently owe, a history of payment, and how much you're allowed to borrow. These credit accounts basically show a likelihood of spreading yourself too thin financially. Although it's good to have some of these items in your report (otherwise, you wouldn't have a credit history), it can actually hurt you to have too many accounts currently opened. So, if you have more than, say, three or four credit cards, it would be beneficial for you to close some of the accounts that you don't use. Credit counselors can help you determine ways to improve your credit and can give you advice about such strategies.

A report also gives a history of everyone who has accessed it, including you. When you access your own credit report (which you should do periodically in order to check for errors), that's considered a voluntary inquiry. The report also shows involuntary inquiries, which is when lenders request your report for getting you approved. Lenders only order a copy of your credit report if you apply to them for a loan, and you have to give them authorization to do this. When you have five or more lender inquiries in a year or so, this can raise red flags for lenders. Having too many inquiries suggests that you may be requesting a lot of money that you don't have - maybe you've maxed out credit cards, or you've recently bought a lot of items that you can't really afford. So, keep this history in mind when you apply for loans.

The last information on credit reports shows whether you have overdue items such as foreclosures, bankruptcies, property liens, or legal suits. This kind of kind of information goes on public records due to collection agencies, and it can major damage to a borrower's ability to get approved for future loans. In fact, this fourth section can cause the most harm on the entire credit report for borrowers.

If you have questions about your credit report - or questions about how to improve your credit report - be sure to talk with a credit counselor. If you're considering buying a home, the earlier you start on building your credit report, the better your chances will be of getting the home loan you need.

Biggest Home Mortgage Mistakes

I've included below some of the most problems borrowers find themselves in after signing off on their home loans. The good news is that all of these mistakes can be avoided! So, don't let these happen to you!

1) Biting off more than you can chew. This is the worst problem we see from past borrowers. Although a lender may approve you for higher loan that what you were expecting, it doesn't mean that you should necessarily buy a home that expensive. Find out what the monthly payment will be, and compare that amount to what you currently pay for housing. Will it be a stretch to make that payment every month? It's not worth taking the risk and having to sell the home later simply because you couldn't afford it to being with. You don't want to be stuck with a home that you never should have bought.

2) Opting for an adjustable rate mortgage. I think all buyers have learned from this mistake by seeing other home buyers on the news in the past year or so. Although ARMs made a little more sense back in the 1980s when rates were triple or quadruple what they are now, it's simply better to know what your monthly payment will be for the next twenty or thirty years. Also, with the incredibly low rates we're seeing right now, it makes sense to go ahead and lock in what may potentially be the lowest rate we see again for years.

3) Getting Mortgage life insurance. In the first few months after closing on your home, you'll get plenty of mail telling you to get mortgage life insurance or mortgage disability insurance. Both of these kinds of policies pay your mortgage bills in the chance that you die or get disabled (and are unable to work). These policies are typically so overpriced that it's practically a rip off. If you want to get an insurance policy to cover your mortgage, it would be better to get a general life insurance plan or disability insurance (not one specifically for a mortgage).

4) Relying on Prequalification. Many buyers confuse getting prequalified to getting preapproved. Some of these buyers learn the difference the hard way when the lender who prequalified them a month ago tells them a day before closing that they're actually not going to be able to get the home they picked out. And, yes, this does really happen to people. Be sure to get preapproved before you make an offer on a home. Preapproval is a much more thorough and accurate process than simply getting prequalified.

5) Choosing a bad lender. Simply put, be sure that you choose a lender who will actually lend you the money when the time comes. This mistake usually ties in with the previous mistake - meaning that some lenders don't take the necessary steps to really look into a borrower's situation until right before closing. Be sure to ask your real estate agent for recommendations. He or she will be able to give you a short list of people you can contact who have a good history of getting their borrowers to the closing table.

How to Avoid Selling a Home For Financial Reasons

The biggest factor in success at either is usually the one factor that is also key in almost everything you do. Know your options, get educated in the process OR find and partner with someone who is.

We'll start on the seller side of the ball. What options here are open to you depend on your own personal situation, yes. But remember the key is not to reinvent the wheel. I'm confident in stating whomever you are, whatever your situation, someone has been there before, before you.

Foreclosure, Relocation, Death, Divorce, Tired Landlord, Upgrading, Downsizing or investment exit. All of these situations are reasons people decide to sell a home but what you want out of selling probably is different in a lot of them.

Some of these people would be seeking relief of financial burden. Meaning they can't pay current payments and obviously don't have money to pay for cost of services to help with that. So the key here would be an exit strategy that you don't have to pay upfront or no cost to the homeowner at all. This is usually the case in foreclosure and bankruptcy. In a vast majority of these cases, the expense of getting your property sold can be passed on to the lender of the homeowner. They are usually happy to pick up these costs in the case that a knowledgeable investor is handling the transaction and is about to turn what was a non-paying liability back into a paying asset.

Example, I'm in the middle of closing out a loan modification for a client (Mr. Avenel we'll call him) whom initially contacted me about doing a short sale on his property that was being foreclosed on. Through questioning the homeowner about his situation and finding out what he wanted to do, a couple of things became apparent. First, that he didn't want to leave his home. Second, he had two mortgages on the property, but only the first was filing for foreclosure. Hmm, reason to dig deeper. I contacted the second position lien-holder only to find they weren't foreclosing because this gentleman has been paying on time and never missed a payment. Again, Hmm, more reason to dig deeper. I go back to the first lien holder only to find almost the same picture. This gentleman was also a prime client until about a year ago when his payments became kind of erratic. Upon learning this and questioning the homeowner, I found that he had not one but two strokes almost back to back! As the only payer on the mortgage who wouldn't have fallen behind! I quickly brought this information to the attention of the loss mitigator whom I was working with. They right then and there requested I get them his personal financial information ASAP.

Can you see where this is going? They saw that they didn't have enough information abut Mr. Avenel's case and decided to see if he was currently on stable enough ground to rework his loan. Why? Because after the first lien holder contacted the second and found he was the model client. They looked back in their records and saw that he was the model client until sickness intervened. They were able to come to the decision that if we can get him back on track, it is reasonable to assume that he will become a model payer again. Now remember, this is someone whom one week earlier was willing to just let his home go. Know to bring this back full circle this all started by knowing what options were open. I knew Mr. Avenel still had a full-time job which he was employed for years, stability. I knew he made a decent amount of money, enough to afford the house. This is a classic case in which banks would and should consider a loan modification. A situation out of the ordinary came up, in this case twice, that caused Mr. Avenel to fall off pace with his payments. It's just up to me to show them that if they make certain allowances on past due balances, this could be worked out. Not only did they do that by spreading past due payments over the length of the loan, they picked up past dues tax payments and attorney fees, reduced the interest rate and required no initial balloon payment to reinstate mortgage payments and removed the foreclosure.

Now this does bear mentioning that these results could never be guaranteed to anyone, just remember how this all started. This guy was getting ready to walk away from the biggest investment of his life. Don't you think if in the same position, you'd want to do all you can to see that your cards fall where you want them to land? Look at your options or find someone who knows them. Fast.

Next time we'll take a look at going down the short sale path, and what you can do to help ensure this is as smooth a process as possible. As difficult as it is to walk away from your home, there are definitely times when this is the only smart choice.

How to Modify Your Home Loan: It's Not That Difficult

Millions of homeowners across the country are wondering how to modify a loan. To most homeowners it seems like one big mystery, but in reality it's quite the opposite. Modifying your loan isn't easy, but lenders and banks aren't accepting and denying applications based on some secret formula: They are looking at how big of a risk you are.

It's true that lenders are picky about who they give loan modifications to, but if you were in the same position you would be the same way. Your lender needs some sort of evidence that continuing to finance your home is in their best interest. A lender may be lending you money, but they are still a business.

The first step on how to modify a loan is this: Find out what your lender's requirements for modification are. You may be tempted to jump right in, but having a general idea as to whether you'll be approved initially or not beforehand can save you a headache. Next, if you're not confident, try to make an appointment with a representative under the Home Affordable Modification Program. These consultations are free and these representatives can even help you negotiate modification terms with your lender.

Approach your lender with any documentation you can gather on your income: pay stubs and bank statements are both great (if not required) proof of your income. You will need to provide expense documents as well, such as any bills. Also show your lender your income tax documentation for the previous year. Any proof of your past, current, and possible future financial status is going to help you plead your case of financial hardship.

Besides the actual documents your lender is going to want to see, you are going to have to write a hardship letter to send in along with your application. The hardship letter is not only a place for you to explain why you're in the situation in now, but you can also state what your plans are to get out of it. The lender looks for proof of your intent in your hardship letter, so it is a huge crucial point in your negotiations. Your hardship letter needs to be formal and to the point. Don't hop around what has happened or what you want. Lenders don't have all day to read a whole length of a letter or a sad story. They want the facts and only the facts.

It's no big mystery how lenders work and how to modify a loan. Get all of the documents listed above and present them to your lender. If they do not initially approve your loan modification application, ask why. If it seems like you should be qualified, the reason is probably something you can work out.

5 Reasons to Build a Real Estate Property Portfolio

I think you’ll agree with me that real estate investment deserves a closer look when I tell you that according to many sources 90% of the world’s richest people made their fortunes from property!

So here are just five quick reasons why I think you should consider building yourself a real estate portfolio.

1) Freedom – By working to create a profitable business from your underlying property assets you can free yourself from the shackles of 9 – 5 employment where your creativity is zapped and your potential overlooked!

In this day and age those who can say that they love their job are the much envied few. For the rest of us the daily grind is simply necessary to keep a roof over our heads, feed and clothe our children and hopefully be able to afford to retire some day.

Does that sound like freedom to you?

I don’t think so!

The creation of a profitable property portfolio will allow you the freedom to make your own business decisions, to work when you wish and to manage your family’s finances more effectively. 2) Leverage – if you place a twenty thousand dollar lump sum into a bank you will earn interest on that figure alone – the interest rate will likely be poor and taxation and inflation will eat away at any gains you make.

Alternatively, by placing twenty thousand dollars into a property worth one hundred thousand dollars and using a bank’s money in the form of a mortgage to leverage up, you make will make the average annual increase on the full value of the property not just on your twenty thousand dollar investment!

3) Profit Twice – with property you can profit once in the form of regular rental income earned and you can profit twice and big time from the average price gains your property will enjoy each year.

Even during a real estate market down turn when prices stagnate or readjust your property will hold at least the majority of its value before once again attracting positive capital growth when the property market cycle begins to turn to profit again.

4) Consistent Growth – over the last fifty years real estate has doubled in value every seven years. If you average that out that means that property has grown consistently by just over ten percent a year.

5) Passive Income – As your property portfolio grows so the amount of income you generate will increase. You will not be able to stop this growth once it starts because each year your properties will go up in value and regularly you’ll be able to push up rental income!

While you retain ownership of your properties so you will retain ownership of all the income and all of the growth in underlying value – this is a passive income that you can take into retirement and hand on to your children and grandchildren when you’re gone.

A Final Word – Making an investment into real estate is just like making any other form of investment. There are associated risks and past performance is not an indicator of future potential. Furthermore this article does not constitute personal direct advice.

by RHIANNON WILLIAMSON

What Good Is a Real Estate Investing Course If It Doesn't Contain A Marketing Plan?

You’re a Real Estate Entrepreneur or Investor, and you’re out there in the market place looking for deals. I have a question. for you.

Are you doing a bit of advertising and just hoping that a deal will fall in your lap, or are you operating in a way that makes certain it will happen. If you don’t have a process for making sure deals happen, you don’t yet understand the importance of having a marketing plan.

The sad fact is that even after all their training, less than one percent of all real estate entrepreneurs and investors actually have a marketing plan. Even though it’s very simple, don’t underestimate its power.

The most important thing about marketing is to have a marketing plan!

Why?

A) It’s a concrete result you put out for your mind to seize on and strive to achieve.
B) It allows you to clarify exactly what you want to achieve in the coming 30 days.
C) It allows you map out the activities needed to achieve that plan.
D) It allows you to plan in advance to delegate off the lower paying activities, so you don’t end up doing them.
E) It allows you set time deadlines, to hold others accountable so everything gets DONE!
F) It results in you being free to concentrate on your highest payoff activity: Making Offers On Great Deals!
G) You have a business that operates consciously, not by accident.

More people fail in real estate because they simply do not have a plan or goals. You should have a detailed marketing plan of what you want to accomplish and how you are going to accomplish it.

And, don’t be vague, either. Things like, I want to make more money than I can ever spend, and I want to be rich, and I want to make $10,000 a month, are not plans. They are too vague, and they won’t help you get there. Be as specific as you can possibly be.

In planning for monthly revenue, try to put your money goals in cash income, not gross revenue. I know gross revenue is what you’re used to thinking in, but cash is obviously more important. It’s what you take to the bank, and it’s what pays bills.

First, examine your current numbers. More than 80 percent of all real estate entrepreneurs know how many houses they are buying each month, but they don’t know where those houses came from and how many leads they had to process to develop them into the single deal. And, this is a deadly sin.

You simply must know how you are currently doing.

You should know:
1) the total leads that call each month (each week is more manageable)
2) where those leads come from
3) how many "qualified" seller prospects (i.e. those that you are willing to invest follow-up in if they don’t sell now; they have motivation, you are interested in the house.) you get each month
4) the ratio of total to qualified
5) the number of deals you close
6) the ratio of closed deals to qualified leads for each lead source
7) how much you make from each seller
8) and how much it cost you to acquire a new seller.

With this information you can look at your current resources, look ahead, and then plan out what you want to have happen. The number of deals you want to do, the amount of money you want to make.

For example, let’s say you are bringing in around $10,000 a month and your average deal gives you $5,000. Yes, I know that’s low, but for the sake of example. That’s two deals a month. These are cash proceeds and after expenses you net 50 percent of your gross or $5,000 a month. And let’s say that you want to double your net income next month.

You will have to get twice as many deals to double your business. Goal? Four deals a month, or one a week.

Let’s say you currently gets one deal a month from a classified ad, and one deal a month for mailing expired listings. But, you get ten qualified calls a month from his classified ad and 10 qualified prospects calling a month as a result of mailing expired listings. So, you currently close ten percent of your prospects.

Firstly, you can improve on this situation by improving that twenty percent close ratio. By improving your closing ratio by things like more precise targeting, the present lead-flow would stay the same, you’ll get your same twenty real prospects and achieve your goal of doing four deals next month.

But assuming that’s not something you have control over right now, the other way to double your income in the next month is to double the number of qualified prospects you talk to and make offers to. So instead of getting 20 qualified leads to call, you would need 40.

Your plan to get forty qualified prospects would need 10 to come from expired listing mailings, 16 to come from flyers in target neighborhoods, 4 from business cards handed out everywhere, 6 to come from signs placed in the ground at high traffic count intersections, 10 to com from classified ads that drive people to the website. Total: 46 prospects. Cool! That’s six to spare.

With this number of leads coming in you have what is needed closed four deals and reach your goal of doubling your net income. Actually, it’s more than doubling because your fixed expenses don’t increase with the income.

You should have a monthly plan. Schedule thirty or forty minutes out of one day to make up your monthly plan and see how you did last month. Schedule this time and keep to it. Don’t do any work or take any calls during this time. Keep it strictly for planning. If you do this and you allow yourself to get into the whole spirit of planning, and making things happen on purpose, you will easily double your income in twelve months.

Your monthly plan should include the following:
1) A goal for total net income.
2) A goal for number of deals signed up
3) A goal for number of appointments made.
4) A goal for number of qualified, interested sellers.
5) A goal for total number of leads.
6) Average net income from each deal.
7) The number of prospects you have to generate to reach your goal.

A detailed plan to generate the number of prospects you need. Your plan doesn’t have to be typed out or put into a computer. It can be handwritten on paper. It doesn’t have to be pretty.

Scratch pad plans are good enough. The important part is that you do a plan every single week and keep on top of things.

This is a simple thing to do, but it is just as easy to not do. Blowing it off is the equivalent of you absolving yourself of responsibility for your business. On the other hand, taking the time to think through your goals each month, both for income, and marketing activity, then committing them to paper will make things start happening by plan and put you in control of your business.

by BEN

Five Reasons to Incorporate a Company Offshore

When it comes to the term ‘offshore’ used in conjunction with company incorporation, the term ‘offshore’ generally refers to any jurisdiction other than one in which the company incorporated will conduct the majority of its activities.

Usually such a jurisdiction has some degree of taxation or reporting benefit attached that makes it attractive to the company owner, and the concept of incorporating a company offshore will bring at least one of the following five benefits to a business owner: -

1) Ease of Operations – depending on the jurisdiction and the type of business activity to be conducted under the company name to be incorporated, the operating restrictions, auditing and accounting requirements and standards to which the business and its employees and directors must adhere are often far less restrictive offshore than onshore.

Exceptions to this rule are financial services based companies in many jurisdictions for example, who have to comply with extra regulatory legislation for the protection of the company’s clientele.

The advantage of easing operations particularly for a small or start up company is a reduction in operating costs and in the amount of time a company’s directors have to dedicate to form filling and report filing.

2) Reporting Simplification – this ties in with the first benefit; in the majority of offshore jurisdictions favoured for company incorporation the company activity reporting requirements are often far fewer and simpler as the business activities entered into by the company are conducted outside of the jurisdiction in which it is incorporated.

Furthermore personal information relating to the company’s directors and shareholders need not be declared in all cases or the extent to which personal information is required is far less intrusive.

3) Taxation Reduction/Negation – the reduction in taxation liability is one of the main benefits associated with investing offshore, opening an offshore bank account
or incorporating a company offshore.

If you set up your company in a low or no tax jurisdiction you could potentially save yourself substantial amounts of money legally. Often the rules are that if the company incorporated in a particular jurisdiction never derives an income from the local economy it can operate tax free.

It’s therefore possible to use an offshore company in an overall international business structure and ensure profits are posted in the offshore jurisdiction and so no tax is liable! Many international corporations operate in this way and actually negate their tax liability fully.

4) Asset Protection – by operating a company offshore, i.e., outside the jurisdiction in which the company operates, it is sometimes possible to position assets away from the reach of any potential litigious action and also to shield business transactions from the eyes’ of the competition.

5) Personal Privacy Protection – the level to which a director or shareholder’s personal information is required, held, visible or investigated offshore is likely to be far less invasive and intrusive than onshore. It is also possible to appoint nominee directors and secretaries for offshore companies in many jurisdictions thus keeping the true company owner’s identity shielded.

by RHIANNON WILLIAMSON