In financial terms, options trading is a contract between two parties, which gives the right to the buyer to buy or sell the concerned asset at a future date and at a fixed price. It is called options trading because there is no obligation on the buyer to go through with the transaction. The buyer of an option pays an amount known as a premium to the option seller. The seller of the option is also known as the writer.
Strike Price: This is the fixed price at which the call option can be bought or the put option be sold.
Types of options:
Two types of options trading exist.
A Call option
A Put option
The call option gives the buyer the right to buy the underlying asset, whereas the put option gives him the right to sell the asset.
Advantages Of Options Trading
Flexibility: You can use options trading for a variety of strategies. This can be used in conservative as well as high-risk scenarios. They can be tailored to a range of expressions, not jut the price of the stock.
Limited Risk: The risk is only limited to the premium paid on the option. (the exception to this is writing for a security which is not already owned)
Leverage: The investor has a clear leverage since he is not committed to the trade.
Hedging: Options trading also allow the buyers to safeguard their positions from fluctuating prices, when altering the underlying position is not desired.
Disadvantages Of Options Trading
Costs: The cost involved in trading an option is comparatively higher on a percentage basis.
Complexity: Options trading is relatively complex, it requires close scrutiny and observation.
Liquidity: With different strike prices, some of them will suffer from low liquidity, which makes trading difficult
Option Traders
There are two main types of players.
Risk Seeker (also known as speculator): This is a type of trader who tries to profit from a prediction in the market direction.
Risk avoider (also known as hedger): This type of trader uses the option market to insure his position against the market moving adversely.
Some Key Terms
1. Option Style: This indicates whether it is possible to do options trading before the expiration date or not. If you have a European option, it cannot be exercised before the expiration date. However, the American option can be exercised anytime during the contract.
2. Option Value: The price of the option comprises the intrinsic value and the extrinsic value. Intrinsic value is the portion that can be realized if the option is exercised. When options trading is done at more than the intrinsic value, it is known as Time Value or Extrinsic Value.
3. Volatility: This provides an estimate of how much a stock can be expected to move over a given time frame.
In options trading, you need not be familiar with the entire market. You can focus on a few of your favorite asset instruments; closely observe the price movements and patterns. You can then plan a strategy to earn from those patterns.
Wednesday, June 3, 2009
Monday, June 1, 2009
Rehabbing Properties - Buy And Sell V/S Buy And Hold
Rehabbing properties is a great option if you want to build wealth over a long period of time with limited time and limited funds. The quintessential question that arises while rehabbing properties is whether to sell properties or to hold on to them. The actual question that needs to be asked is: Why keep rehab properties? Why not buy and sell and then get paid? The first question that needs to be answered is: How soon do you need the cash? Most short term cash can be generated by selling fresh rehab properties. But you will again give away that money in the form of taxes next year in April. However, if you buy and hold the rehabbed property, you will stand to earn a lot more.
While rehabbing properties, if you buy and hold the rehabbed property, you will also enjoy many benefits like cash flow, tax breaks in future and more cash with future appreciation of rehab properties for sale. A few months after you buy and hold the rehabbed property, you can still put more cash into it, when you refinance the property from your hard money to long term financing. While rehabbing properties, the short answer is that you as an investor will make a lot more money if you buy and hold rather than if you buy and sell. However there is a disadvantage to saving rehab properties for sale. You need to be a landlord and its your decision. This is fine as long as the land lording is done properly.
However, there are also a few reasons why you should not buy and hold as far as rehabbing properties is concerned.
• In case of rehabbing properties it is difficult to "buy right" and also get a positive cash flow. If you buy and hold a property for sale, all it takes is one small thing going wrong to put you back to square one.
• Most of the people invest in rehab properties for sale for income purposes. However, this income comes in very small amounts. In case of rehabbing properties, this money is spent along the way. In a period of 10 years, your net worth will not have increased substantially. But, when you buy and sell at a profit, you get large profits instantly. You can use some of the money obtained from rehabbing properties for your living costs and you can re invest the rest to increase your net worth.
• While rehabbing properties, even seasoned investors are unable to judge the "bottom" in case of a rehab property for sale. You can't even be sure when the cycle has "topped". You will have to be extremely lucky to make a maximum yield on the properties you hold.
When you are rehabbing properties with the buy and sell strategy, you are involved in a lot more properties. You may also find a striking deal that will evidently tell you to buy and hold. Hence, you will also have more hard cash which you can again invest and utilize for rehabbing properties.
While rehabbing properties, if you buy and hold the rehabbed property, you will also enjoy many benefits like cash flow, tax breaks in future and more cash with future appreciation of rehab properties for sale. A few months after you buy and hold the rehabbed property, you can still put more cash into it, when you refinance the property from your hard money to long term financing. While rehabbing properties, the short answer is that you as an investor will make a lot more money if you buy and hold rather than if you buy and sell. However there is a disadvantage to saving rehab properties for sale. You need to be a landlord and its your decision. This is fine as long as the land lording is done properly.
However, there are also a few reasons why you should not buy and hold as far as rehabbing properties is concerned.
• In case of rehabbing properties it is difficult to "buy right" and also get a positive cash flow. If you buy and hold a property for sale, all it takes is one small thing going wrong to put you back to square one.
• Most of the people invest in rehab properties for sale for income purposes. However, this income comes in very small amounts. In case of rehabbing properties, this money is spent along the way. In a period of 10 years, your net worth will not have increased substantially. But, when you buy and sell at a profit, you get large profits instantly. You can use some of the money obtained from rehabbing properties for your living costs and you can re invest the rest to increase your net worth.
• While rehabbing properties, even seasoned investors are unable to judge the "bottom" in case of a rehab property for sale. You can't even be sure when the cycle has "topped". You will have to be extremely lucky to make a maximum yield on the properties you hold.
When you are rehabbing properties with the buy and sell strategy, you are involved in a lot more properties. You may also find a striking deal that will evidently tell you to buy and hold. Hence, you will also have more hard cash which you can again invest and utilize for rehabbing properties.
Top Ten Credit Mistakes
Credit mistakes are often made by people who lack financial knowledge. Establishing your credit and wisely managing your credit becomes a lot easier when you know how to do it. This way you'll be able to avoid bad credit. You will also feel empowered by taking knowledgeable steps towards good credit. You will also be on your way to purchase real estate and get greater freedom financially. If you plan financing real estate either as a home buyer or as an investor, you can avoid these credit mistakes. This will help you save your credit score and save money in loan costs.
1. Paying Late: Your credit score is based on a few things. It is based on your credit history. It is also based on how you manage your current and past credit obligations.
2. The Feel Good factor: This is one of the credit mistakes most people are emotionally inclined to make. They are called recreational shoppers. These people buy more on spur of the moment than logically. This can often lead to bankruptcy.
3. Close your credit card accounts: This is what you tend to do when you want to resist the temptation to use or abuse your credit cards. But this is a big credit mistake with the FICO scoring system as closing credit card accounts will hurt your credit scores.
4. Teaching your children responsibly: Children are very impressionable. If they see you using your credit excessively and irresponsibly, they will make the same credit mistakes.
5. Applying for many credit cards: If you apply for too many credit cards in a year, or at the same time, can be a big credit mistake as it is easily noticeable to many credit bureaus.
6. Debt Consolidation: You may hire a credit consolidation company to consolidate your credit card debt. This will not make your debt go away! In fact, this may be seen as a write off. It is advisable not to do it unless absolutely necessary.
7. Skip Payments: You can skip payments occasionally. This can happen to anyone. But, this becomes a credit mistake if you are doing it as per your convenience.
8. High Balance: This will definitely affect your credit score. Adding more and more cards is a sure path to bankruptcy. You are better off carrying one credit card and paying it in full. The best thing you can do is not to quit until it is completely paid.
9. Not using your credit card: This is a credit mistake most people make without realizing it. Your credit report reflects on your credit card management. If you have no record, it shows lack of management.
10. Making minimum payment: This is a sure sign you are not managing your card properly. This is a credit mistake which is a personal favorite of credit card companies.
If you can avoid the credit mistakes mentioned above, you should have no credit card debt and it should be all smooth sailing.
1. Paying Late: Your credit score is based on a few things. It is based on your credit history. It is also based on how you manage your current and past credit obligations.
2. The Feel Good factor: This is one of the credit mistakes most people are emotionally inclined to make. They are called recreational shoppers. These people buy more on spur of the moment than logically. This can often lead to bankruptcy.
3. Close your credit card accounts: This is what you tend to do when you want to resist the temptation to use or abuse your credit cards. But this is a big credit mistake with the FICO scoring system as closing credit card accounts will hurt your credit scores.
4. Teaching your children responsibly: Children are very impressionable. If they see you using your credit excessively and irresponsibly, they will make the same credit mistakes.
5. Applying for many credit cards: If you apply for too many credit cards in a year, or at the same time, can be a big credit mistake as it is easily noticeable to many credit bureaus.
6. Debt Consolidation: You may hire a credit consolidation company to consolidate your credit card debt. This will not make your debt go away! In fact, this may be seen as a write off. It is advisable not to do it unless absolutely necessary.
7. Skip Payments: You can skip payments occasionally. This can happen to anyone. But, this becomes a credit mistake if you are doing it as per your convenience.
8. High Balance: This will definitely affect your credit score. Adding more and more cards is a sure path to bankruptcy. You are better off carrying one credit card and paying it in full. The best thing you can do is not to quit until it is completely paid.
9. Not using your credit card: This is a credit mistake most people make without realizing it. Your credit report reflects on your credit card management. If you have no record, it shows lack of management.
10. Making minimum payment: This is a sure sign you are not managing your card properly. This is a credit mistake which is a personal favorite of credit card companies.
If you can avoid the credit mistakes mentioned above, you should have no credit card debt and it should be all smooth sailing.
Rent To Own - What Is A Lease Option
A rent to own is a type of contract used in residential real estate that is typically held between two parties. One, the tenant (who is also called the lessee), who will occupy a house or an apartment, and the landlord (lessor), who owns the homes for sale. A rent to own house is one of the many ways in which you can buy a house even with bad or no credit. It is addressed differently as lease option, lease purchase, lease to purchase, rent with option to buy and rent to own.
In the duration of a lease option, the tenant will pay credit to the landlord towards the value of the rental to own, and is allowed to occupy the house in exchange for the credit. When the contract ends, the tenant has an option to make an outright purchase of the apartment. Tenants typically obtain the money for this, by way of mortgage.
In this rent to own option, the tenant pays to the landlord, over and above the usual market rent. Excess credit may also be levied to the eventual purchase of the apartment, or towards the down payment in getting a mortgage. This is one of the lease options that work as an automatic savings plan for the tenant.
Things To Know
There are a few differences as far as rent to own and lease option agreements are concerned. It is essential for you to clarify these as these terms are used interchangeably in the rent to own industry. In case of a rent to own option, the buyer will make an agreement with the owner that some or all of the rent money goes toward the down payment of the apartment.
This will happen at a fixed date 2 to 5 years in future. The person paying the rent will then purchase the apartment by using the money that was set apart as down payment. If the tenant does not purchase the rent to own apartment at the end of the lease, then all the money paid by the tenant, in addition to the market rent will be retained by the landlord.
Advantages
The money put in at the beginning is not much in a rent to own option, apart from what is needed for a rental home. This is a nice way to get into an apartment with little or no down payment.
The rent to own option carries lesser risk to a landlord than a mortgage would for a lender. Its easier and cheaper to get the tenants to evict, rather than a foreclosure on a mortgaged property.
Another advantage in a rent to own situation is that the money you end up paying over and above the rent for possession of the house is relatively lower than taking out a loan for it.
As you can see, there are many advantages to a rent to own option, hence it is definitely a sensible one to go in for.
In the duration of a lease option, the tenant will pay credit to the landlord towards the value of the rental to own, and is allowed to occupy the house in exchange for the credit. When the contract ends, the tenant has an option to make an outright purchase of the apartment. Tenants typically obtain the money for this, by way of mortgage.
In this rent to own option, the tenant pays to the landlord, over and above the usual market rent. Excess credit may also be levied to the eventual purchase of the apartment, or towards the down payment in getting a mortgage. This is one of the lease options that work as an automatic savings plan for the tenant.
Things To Know
There are a few differences as far as rent to own and lease option agreements are concerned. It is essential for you to clarify these as these terms are used interchangeably in the rent to own industry. In case of a rent to own option, the buyer will make an agreement with the owner that some or all of the rent money goes toward the down payment of the apartment.
This will happen at a fixed date 2 to 5 years in future. The person paying the rent will then purchase the apartment by using the money that was set apart as down payment. If the tenant does not purchase the rent to own apartment at the end of the lease, then all the money paid by the tenant, in addition to the market rent will be retained by the landlord.
Advantages
The money put in at the beginning is not much in a rent to own option, apart from what is needed for a rental home. This is a nice way to get into an apartment with little or no down payment.
The rent to own option carries lesser risk to a landlord than a mortgage would for a lender. Its easier and cheaper to get the tenants to evict, rather than a foreclosure on a mortgaged property.
Another advantage in a rent to own situation is that the money you end up paying over and above the rent for possession of the house is relatively lower than taking out a loan for it.
As you can see, there are many advantages to a rent to own option, hence it is definitely a sensible one to go in for.
Rent To Own - Home Ownership With No Credit Or Bad Credit
Home ownership with no or bad credit may seem like a distant dream to you. You would think how would you ever be able to own a home with no or bad credit? You think the only solution to get home ownership with no or bad credit maybe to wait until your credit scores improve or you have saved enough money for a substantial down payment.
Good News!
However, there is some good news! Home ownership with no or bad credit is also a possibility! 100% financing is no longer only for those with perfect credit. In fact there are plans which are specially designed for those with bad credit. These are known as bad credit loans.
Few Key Requirements
This means that even if you have bad credit, you can still purchase a home. You may not have to pay a single penny for the down payment! Imagine, you can buy a home within a month, where you thought you may have to work for a long time for credit repair! There are a few requirements however for a 100% bad credit mortgage.
1. You must have a minimum credit score of 580.
2. To get home ownership with no or bad credit you must not have more than one late rent or mortgage payment in the last 12 months.
3. You must have sufficient income. This income must be enough to easily pay your monthly payment credits and mortgage. Your monthly debt must not be more than 45 to 50 percent of your total monthly household income.
If you meet the above requirements, home ownership with no or bad credit is no longer a distant dream to you!
A Few Solutions
There are a few things you can do to get home ownership with no or bad credit.
1. Keep it in your family: You can ask a relative who has a good credit history to buy the home on your behalf. This person will get a good interest rate. This will make your monthly payments mortgage payments more affordable. Once your relative has closed on the house, you need to take over the mortgage payments, the insurance and the taxes. This will get you tax benefits.
2. Rent to own: This is a great option if you do not have enough to buy a home and you want to get home ownership with no or bad credit. In this, you pay the landlord a little more over and above your monthly mortgage payments. With your bad credit history, this is better, cheaper and more effective than a loan.
3. Get the seller to finance: Since you have a bad credit history, you can get the seller to finance your home purchase. This way you can bypass the conventional loan if you have a motivated seller.
Hence, for those of you think your dream of owning a home is over it is not! You too can get home ownership with no or bad credit!
Good News!
However, there is some good news! Home ownership with no or bad credit is also a possibility! 100% financing is no longer only for those with perfect credit. In fact there are plans which are specially designed for those with bad credit. These are known as bad credit loans.
Few Key Requirements
This means that even if you have bad credit, you can still purchase a home. You may not have to pay a single penny for the down payment! Imagine, you can buy a home within a month, where you thought you may have to work for a long time for credit repair! There are a few requirements however for a 100% bad credit mortgage.
1. You must have a minimum credit score of 580.
2. To get home ownership with no or bad credit you must not have more than one late rent or mortgage payment in the last 12 months.
3. You must have sufficient income. This income must be enough to easily pay your monthly payment credits and mortgage. Your monthly debt must not be more than 45 to 50 percent of your total monthly household income.
If you meet the above requirements, home ownership with no or bad credit is no longer a distant dream to you!
A Few Solutions
There are a few things you can do to get home ownership with no or bad credit.
1. Keep it in your family: You can ask a relative who has a good credit history to buy the home on your behalf. This person will get a good interest rate. This will make your monthly payments mortgage payments more affordable. Once your relative has closed on the house, you need to take over the mortgage payments, the insurance and the taxes. This will get you tax benefits.
2. Rent to own: This is a great option if you do not have enough to buy a home and you want to get home ownership with no or bad credit. In this, you pay the landlord a little more over and above your monthly mortgage payments. With your bad credit history, this is better, cheaper and more effective than a loan.
3. Get the seller to finance: Since you have a bad credit history, you can get the seller to finance your home purchase. This way you can bypass the conventional loan if you have a motivated seller.
Hence, for those of you think your dream of owning a home is over it is not! You too can get home ownership with no or bad credit!
Wholesale Investor - Philadelphia Is A Real Estate Investors Dream Market
There are many reasons why Philadelphia real estate investing is a good idea. Philadelphia is one of the best places for real estate investment. This is one of the oldest cities in the United States. It has a history of immigrants dating back to as early as the 1500's. Even though there are reports about a down turned real estate market, this is the best time for you to get started as a wholesale investor. There are some factors you can consider when you think Philadelphia real estate investing. These are:
How long do you want to hold on to the property?
Which are the areas best suited for your situation?
Your choice: That is whether you want to use your investment property for a "flip", or you want to develop it over a period of time, while renting it out.
Reasons
There are certain reasons why it is ideal for wholesale investors to venture into Philadelphia real estate investing.
Architecture: You will find such historical architecture only in countries which have a longer history than the United States. These include Chile, Italy and Mexico. However, in the United States itself, not many cities have architecture like this. Real estate investing in Philadelphia is also of aesthetic value as the old buildings show the deep roots America has in history. This makes Philadelphia the birthplace of the history of the United States.
Convenience: Another advantage for Philadelphia real estate investing is the convenience. Everything is at a vicinity. If you are in the heart of the city, you are close to restaurants, shopping malls, entertainment and a lot more. There are many entertainment options with clubs and bars along Columbus Boulevard, South Street and many other areas.
The Value: Another reason why Philadelphia real estate investing is a great option is the value it offers. Real estate investing in Philadelphia has been really under priced for many years compared to its neighboring New York. You have many opportunities in Philadelphia real estate investing to buy your dream home anywhere in Philadelphia irrespective of the prices.
Areas of Investment:
For Philadelphia real estate investing there are many developing neighborhoods which you may want to invest in. These are the Art Museum neighborhood. This includes the communities of Franklin Town, Spring Garden, Fairmount, Francisville and Brewerytown.
For many Philadelphia real estate investors, the best neighborhoods are those which are in close proximity to the major medical schools in the city, including the Hahnemann Medical college, the University of Pennsylvania Medicine School, and The Temple University Medical School.
There are many profitable, cash flow opportunities for you as a wholesale investor in Philadelphia. Philadelphia real estate investing can be a highly lucrative option, but it is not risk free. It has all the aspects required for wholesale investors. It is convenience, it has a history, it has arts, architecture. It has entertainment, value and there are many reasons for real estate investing in Philadelphia.
How long do you want to hold on to the property?
Which are the areas best suited for your situation?
Your choice: That is whether you want to use your investment property for a "flip", or you want to develop it over a period of time, while renting it out.
Reasons
There are certain reasons why it is ideal for wholesale investors to venture into Philadelphia real estate investing.
Architecture: You will find such historical architecture only in countries which have a longer history than the United States. These include Chile, Italy and Mexico. However, in the United States itself, not many cities have architecture like this. Real estate investing in Philadelphia is also of aesthetic value as the old buildings show the deep roots America has in history. This makes Philadelphia the birthplace of the history of the United States.
Convenience: Another advantage for Philadelphia real estate investing is the convenience. Everything is at a vicinity. If you are in the heart of the city, you are close to restaurants, shopping malls, entertainment and a lot more. There are many entertainment options with clubs and bars along Columbus Boulevard, South Street and many other areas.
The Value: Another reason why Philadelphia real estate investing is a great option is the value it offers. Real estate investing in Philadelphia has been really under priced for many years compared to its neighboring New York. You have many opportunities in Philadelphia real estate investing to buy your dream home anywhere in Philadelphia irrespective of the prices.
Areas of Investment:
For Philadelphia real estate investing there are many developing neighborhoods which you may want to invest in. These are the Art Museum neighborhood. This includes the communities of Franklin Town, Spring Garden, Fairmount, Francisville and Brewerytown.
For many Philadelphia real estate investors, the best neighborhoods are those which are in close proximity to the major medical schools in the city, including the Hahnemann Medical college, the University of Pennsylvania Medicine School, and The Temple University Medical School.
There are many profitable, cash flow opportunities for you as a wholesale investor in Philadelphia. Philadelphia real estate investing can be a highly lucrative option, but it is not risk free. It has all the aspects required for wholesale investors. It is convenience, it has a history, it has arts, architecture. It has entertainment, value and there are many reasons for real estate investing in Philadelphia.
Top Ten Credit Score Boosters
Credit score boosters are things that you can use to improve your credit scores. Your credit score is not only the numerical expression of your credit files, it represents your credit worth based on the information in your credit report. This is typically sourced from credit bureaus. You can use the following tips as credit score boosters:
Pay on time: Negative items posted on your spotless credit score have a greater impact than those on a credit report which already has a history of late payments. For example, if you have a perfect credit rating and you are late to pay your car loan by, say a month, then the effect could be as great as a negative 25 to 60 points on your credit score.
Removing the errors in 2 business days: You can be rest assured this is the fastest way to rectify errors on your credit report and increase your credit score. Hence, this acts as a credit score booster. However, you can only do this through a bank or a mortgage company.
Deleting your negative credit: This is one of the most effective ways and acts as a great credit score booster. All you need to do is write a letter of dispute to the concerned authority to check credit. They have reasonable time, usually 30 days, to get back to you.
Don't use finance companies: You need to know that the scoring system guys frown on finance companies. Never use finance companies for your credit repair.
Use your credit cards: Your scoring model on your credit report takes into account how long it must have been since a certain account has been used. Credit lines which are used (assuming that they have paid in a timely manner) impact your credit score positively. Paying helps your FICO score. This acts as a credit score booster.
Don't take any new credit: You must keep in mind not to take any more credit. Don't take any more credit on your credit card unless absolutely necessary.
Different credit types: If your credit report shows different types of credits handled, you are rewarded with a great credit score. This is a great credit score booster.
No bankruptcy or foreclosure claim: These will show on your credit report for 10 years! These will always reduce your credit score. The older they are, the more impact they have on your credit score.
Pay your debts: This may seem obvious to you. But, it is not as simple as you think. You must never pay your revolving debt on time. Keep on paying it slowly. This demonstrates your ability to swiftly pay off accounts to avoid managing them. This will decrease your credit score slightly.
Increase your credit card limit: High credit limits will help you to remove debt ratios, thus positively impacting your scores.
Thus, the above guidelines and steps will definitely help to improve your credit score and serve as credit score boosters.
Pay on time: Negative items posted on your spotless credit score have a greater impact than those on a credit report which already has a history of late payments. For example, if you have a perfect credit rating and you are late to pay your car loan by, say a month, then the effect could be as great as a negative 25 to 60 points on your credit score.
Removing the errors in 2 business days: You can be rest assured this is the fastest way to rectify errors on your credit report and increase your credit score. Hence, this acts as a credit score booster. However, you can only do this through a bank or a mortgage company.
Deleting your negative credit: This is one of the most effective ways and acts as a great credit score booster. All you need to do is write a letter of dispute to the concerned authority to check credit. They have reasonable time, usually 30 days, to get back to you.
Don't use finance companies: You need to know that the scoring system guys frown on finance companies. Never use finance companies for your credit repair.
Use your credit cards: Your scoring model on your credit report takes into account how long it must have been since a certain account has been used. Credit lines which are used (assuming that they have paid in a timely manner) impact your credit score positively. Paying helps your FICO score. This acts as a credit score booster.
Don't take any new credit: You must keep in mind not to take any more credit. Don't take any more credit on your credit card unless absolutely necessary.
Different credit types: If your credit report shows different types of credits handled, you are rewarded with a great credit score. This is a great credit score booster.
No bankruptcy or foreclosure claim: These will show on your credit report for 10 years! These will always reduce your credit score. The older they are, the more impact they have on your credit score.
Pay your debts: This may seem obvious to you. But, it is not as simple as you think. You must never pay your revolving debt on time. Keep on paying it slowly. This demonstrates your ability to swiftly pay off accounts to avoid managing them. This will decrease your credit score slightly.
Increase your credit card limit: High credit limits will help you to remove debt ratios, thus positively impacting your scores.
Thus, the above guidelines and steps will definitely help to improve your credit score and serve as credit score boosters.
Financing Your First Investment Property
Financing your first investment property can seem to be a daunting task. Its very important for you to be educated and prepared, before you go into commercial property investment. You can read books on property investments, investment property financing and real estate as a whole. You can also attend seminars and discuss with real estate professionals. Once you have received the education, you need to proceed towards financing your first investment property. There are a few things that need to be considered before commercial property financing:
The Type Of Investment Property: What interests you? Are you interested in a duplex flat? Is it a multi-unit complex that interests you? You may also be interested in a single family home. You may also be interested in commercial property financing. This is a very important thing to consider while financing your first investment property. This will determine the rest of the factors. It is advisable to focus on one type of property in the beginning.
The Type Of Area: It depends if you are investing in the city in which you live. If that is not the case, you need to decide, what part of the country will you be investing in? You can find all this information on property investments on the internet.
Your Financing Strategy: Once you have decided on the type of property, you then need to calculate your assets. This will give you an idea of how much finance you require for financing your first investment property. If the property is a small one like a house, then paying outright may be a good option. Even if you don't have the requisite finance, but it’s a property that has made money in the past, the bank will provide for investment property loans.
Your Team: This is a very important resource while you consider financing your first investment property. A team is a necessity. This is because of the large amount of work and financial expertise required to handle such a task. You don't have enough time to learn real estate law and accounting. You will also have to broker your own deals and manage your own property investments. Delegation is the key.
Repair Cost: You also need to take into consideration the repair cost for financing your first investment property. This can also be a huge cost as you want to know whether you want to invest in old buildings or in new buildings. There might be a lot of upgrades required. You need to clearly know what you are getting into and whether you are capable of handling it before proceeding to financing your first investment property.
This is not all you need to know to begin financing your first investment property. Once you get into property investments, you will actually experience it. You will get to know many other things. But, these guidelines will empower you to ask the right questions at the right time. And, as you know, sometimes asking the right questions is even more important than the answers!
The Type Of Investment Property: What interests you? Are you interested in a duplex flat? Is it a multi-unit complex that interests you? You may also be interested in a single family home. You may also be interested in commercial property financing. This is a very important thing to consider while financing your first investment property. This will determine the rest of the factors. It is advisable to focus on one type of property in the beginning.
The Type Of Area: It depends if you are investing in the city in which you live. If that is not the case, you need to decide, what part of the country will you be investing in? You can find all this information on property investments on the internet.
Your Financing Strategy: Once you have decided on the type of property, you then need to calculate your assets. This will give you an idea of how much finance you require for financing your first investment property. If the property is a small one like a house, then paying outright may be a good option. Even if you don't have the requisite finance, but it’s a property that has made money in the past, the bank will provide for investment property loans.
Your Team: This is a very important resource while you consider financing your first investment property. A team is a necessity. This is because of the large amount of work and financial expertise required to handle such a task. You don't have enough time to learn real estate law and accounting. You will also have to broker your own deals and manage your own property investments. Delegation is the key.
Repair Cost: You also need to take into consideration the repair cost for financing your first investment property. This can also be a huge cost as you want to know whether you want to invest in old buildings or in new buildings. There might be a lot of upgrades required. You need to clearly know what you are getting into and whether you are capable of handling it before proceeding to financing your first investment property.
This is not all you need to know to begin financing your first investment property. Once you get into property investments, you will actually experience it. You will get to know many other things. But, these guidelines will empower you to ask the right questions at the right time. And, as you know, sometimes asking the right questions is even more important than the answers!
Rehabbing Properties - Fixing And Flipping Rehab Properties
Flipping houses has become a major activity in the US in these trying times. Flipping houses is a practice in which a house is bought and then sold off for a profit almost immediately. Before deciding how to flip houses, there are many decisions to be made. Where should you buy the house? If you decide to buy a house for a house flip in an upcoming area, you're relying the price of the neighborhood increasing in value. If everything goes well then you should make a profit, but if something goes wrong while flipping a house, you may be stuck with a house that you cannot get rid of.
Fixing and flipping houses can produce heavy returns for you. The biggest problem with most investors is where to find good deals for a house flip. These are some tips which will help you decide how to flip a house:
1. You can use bandit signs in your area: The bandit signs will help bring you deals regularly in your area. It will be best to out these signs to flip a house on a Friday night and take them down in Sunday night. There are certain officials who might mind these signs and take down your signs. There will be other competitors who like you would be interested in flipping houses. They may try to remove your signs. Hence, try to place your signs in high enough places near major intersections.
2. Drive through neighborhoods: While flipping houses, you need to look for neighborhoods which have average-priced homes. To flip a house, homes in the median price range are the easiest for you to fix and flip. In this case, the owners are willing to give you bigger discounts. There are also more buyers when you get the house fixed up. You can document all the research you made to flip a house. If you consider a house flip, notate the addresses of the homes where work needs to be done. You can then find the owner's address at your county's court house records. While flipping houses, you can do most of the research at home, since nowadays most of the contacts are online. Then you can send the owner a letter asking them to contact you, if they are interested in selling their house.
3. You can look for sellers online: While flipping houses, you can use a few online classified websites to find your next house. You can use terms like motivated, must sell to attract more customers for a house flip.
4. REO websites can also help: You will find many REO websites that have property loaned by the bank. While flipping houses, you can search online for these websites. You can then contact a listing agent for an offer. The only disadvantage of using this method for to flip house is that you must have a Proof of Funds letter. A bank will not accept your offer unless they see you have ready cash in hand.
Now you know how to flip a house, its time for you to look for a property. These days you get properties very cheap.
Fixing and flipping houses can produce heavy returns for you. The biggest problem with most investors is where to find good deals for a house flip. These are some tips which will help you decide how to flip a house:
1. You can use bandit signs in your area: The bandit signs will help bring you deals regularly in your area. It will be best to out these signs to flip a house on a Friday night and take them down in Sunday night. There are certain officials who might mind these signs and take down your signs. There will be other competitors who like you would be interested in flipping houses. They may try to remove your signs. Hence, try to place your signs in high enough places near major intersections.
2. Drive through neighborhoods: While flipping houses, you need to look for neighborhoods which have average-priced homes. To flip a house, homes in the median price range are the easiest for you to fix and flip. In this case, the owners are willing to give you bigger discounts. There are also more buyers when you get the house fixed up. You can document all the research you made to flip a house. If you consider a house flip, notate the addresses of the homes where work needs to be done. You can then find the owner's address at your county's court house records. While flipping houses, you can do most of the research at home, since nowadays most of the contacts are online. Then you can send the owner a letter asking them to contact you, if they are interested in selling their house.
3. You can look for sellers online: While flipping houses, you can use a few online classified websites to find your next house. You can use terms like motivated, must sell to attract more customers for a house flip.
4. REO websites can also help: You will find many REO websites that have property loaned by the bank. While flipping houses, you can search online for these websites. You can then contact a listing agent for an offer. The only disadvantage of using this method for to flip house is that you must have a Proof of Funds letter. A bank will not accept your offer unless they see you have ready cash in hand.
Now you know how to flip a house, its time for you to look for a property. These days you get properties very cheap.
How To Find A Good Investment Property
If you really want to find a good investment property, there are certain important issues you should know. When you use accurate research and professional expertise for property investment, you build a solid foundation for financial success. You may want to work together with a realtor who can give you advice and identify great opportunities for buying investment properties. You can also choose to work individually. A realtor can provide the inside story on good investment property according to the specific geographical area. However, here are a few tips you can use for buying property hotspots.
Communicate: Let people know you are looking for property for sale. This way, sometimes the property will come to you. There are a lot of people who possess good investment property, but haven't yet listed their property.
Browse: The internet is one of the quickest and most effective tools to look for any information. You can refer a search engine for property buying. You can enter the city and the type of real estate you are looking for. You never know what property for sale you may find. The possibilities are endless!
Travel: You can also drive around your neighborhood to look for a good investment property. You may see many signs such as "For Sale by Owner". You won't see all the properties in the paper because many owners cannot or don't want to pay to keep the ads in the paper every week.
Look for abandoned properties: This can be your golden chance! This clearly means that the owner of the property does not want the property anymore. In buying investment properties which are abandoned, you will actually end up getting a cheaper deal.
Delegate and pay: If you look for a property on your own, the incentive you have is your monetary gain on the particular property hotspot. However, if you pay someone else to look for property & offer them a monetary incentive for their property investment advice, you are more likely to find a good investment property.
Look for eviction notices: Its extremely useful to keep yourself informed about eviction notices. This can be found out form your local newspaper or your courthouse. This is definitely a good investment property. A landlord who has just gone through the process of evicting his tenants is definitely sitting on a property hotspot. This is a property for sale which will definitely sell at a lower rate.
Look for old FSBO ads: it is definitely a good property investment opportunity if you can get your hands on one or a two month old "For sale by Owner" ad. A few owners give up the effort of looking for buyers after some time. However, they are still willing to sell and will most likely sell their property to you for a lower price. This is because you have come to them after they had almost given up.
With proper research and the right amount of effort, it won't be difficult for you to find a good investment property.
Communicate: Let people know you are looking for property for sale. This way, sometimes the property will come to you. There are a lot of people who possess good investment property, but haven't yet listed their property.
Browse: The internet is one of the quickest and most effective tools to look for any information. You can refer a search engine for property buying. You can enter the city and the type of real estate you are looking for. You never know what property for sale you may find. The possibilities are endless!
Travel: You can also drive around your neighborhood to look for a good investment property. You may see many signs such as "For Sale by Owner". You won't see all the properties in the paper because many owners cannot or don't want to pay to keep the ads in the paper every week.
Look for abandoned properties: This can be your golden chance! This clearly means that the owner of the property does not want the property anymore. In buying investment properties which are abandoned, you will actually end up getting a cheaper deal.
Delegate and pay: If you look for a property on your own, the incentive you have is your monetary gain on the particular property hotspot. However, if you pay someone else to look for property & offer them a monetary incentive for their property investment advice, you are more likely to find a good investment property.
Look for eviction notices: Its extremely useful to keep yourself informed about eviction notices. This can be found out form your local newspaper or your courthouse. This is definitely a good investment property. A landlord who has just gone through the process of evicting his tenants is definitely sitting on a property hotspot. This is a property for sale which will definitely sell at a lower rate.
Look for old FSBO ads: it is definitely a good property investment opportunity if you can get your hands on one or a two month old "For sale by Owner" ad. A few owners give up the effort of looking for buyers after some time. However, they are still willing to sell and will most likely sell their property to you for a lower price. This is because you have come to them after they had almost given up.
With proper research and the right amount of effort, it won't be difficult for you to find a good investment property.
Buying Your First Rental
When buying your first rental property, you should ensure that it is the right one for you. This subject is often overlooked when you try to get results by making property investments. Rental property investment can be useful, but you must choose 3 things really well:
1. Your rental house.
2. Your agent.
3. Your location.
Here are a few things you can consider as a first time home buyer:
Location: You must have heard it before that real estate is all about the location. This is even more important while buying your first rental property. If you plan to purchase a multi-family home and then to rent it out, you must find a place with a healthy and booming rental market. Rental houses in college cities and towns are a great idea! Most students prefer living either off campus or in the city in which they went to college. Other locations where rental houses are a good investment option are cities in general.(people prefer living close to where they work)
Your Agent: You can also do individual research, but its better you hire an agent to do it professionally. When buying your first rental property, you can have an agent show you the rental houses in town. Then you can get a grasp on the market values of different houses of different sizes. Also give great attention to detail, while buying your first rental property. You need to pay attention to the amount of renovation done. A better renovated house is a better rental property investment than a larger house in a worse condition.
Set up a budget: Before buying your first rental property, you need to fix up a budget for yourself. If you end up buying a rental house with a fixer-upper, you may not spend enough money initially. However, once you own the property, expect to arrange for some investment property financing to spend for repairs. When buying a fixer-upper, you as a first time home buyer must bring a knowledgeable contractor with you to estimate the repair costs.
Get pre approved for a mortgage: You need to understand that mortgages for property investments are much more than residential property mortgages. Before buying your first rental property, you need to be aware of the fact that the down payments are often enormous.
Know your tenant: While buying your first rental property, you need to know the people in and around the area. it does not matter if the rental house is in an area which is going to appreciate. You must ensure the people residing in your rental house are the kind who will treat your property with respect. So, you must try buying your first rental property in an area where you won't attract the wrong kind of renters.
Motive: There is a motive behind every act. So, while buying your first rental property, try to find out why the seller is selling the house in the first place?
Buying your first rental property is not a big deal, if you understand the things we discussed above.
1. Your rental house.
2. Your agent.
3. Your location.
Here are a few things you can consider as a first time home buyer:
Location: You must have heard it before that real estate is all about the location. This is even more important while buying your first rental property. If you plan to purchase a multi-family home and then to rent it out, you must find a place with a healthy and booming rental market. Rental houses in college cities and towns are a great idea! Most students prefer living either off campus or in the city in which they went to college. Other locations where rental houses are a good investment option are cities in general.(people prefer living close to where they work)
Your Agent: You can also do individual research, but its better you hire an agent to do it professionally. When buying your first rental property, you can have an agent show you the rental houses in town. Then you can get a grasp on the market values of different houses of different sizes. Also give great attention to detail, while buying your first rental property. You need to pay attention to the amount of renovation done. A better renovated house is a better rental property investment than a larger house in a worse condition.
Set up a budget: Before buying your first rental property, you need to fix up a budget for yourself. If you end up buying a rental house with a fixer-upper, you may not spend enough money initially. However, once you own the property, expect to arrange for some investment property financing to spend for repairs. When buying a fixer-upper, you as a first time home buyer must bring a knowledgeable contractor with you to estimate the repair costs.
Get pre approved for a mortgage: You need to understand that mortgages for property investments are much more than residential property mortgages. Before buying your first rental property, you need to be aware of the fact that the down payments are often enormous.
Know your tenant: While buying your first rental property, you need to know the people in and around the area. it does not matter if the rental house is in an area which is going to appreciate. You must ensure the people residing in your rental house are the kind who will treat your property with respect. So, you must try buying your first rental property in an area where you won't attract the wrong kind of renters.
Motive: There is a motive behind every act. So, while buying your first rental property, try to find out why the seller is selling the house in the first place?
Buying your first rental property is not a big deal, if you understand the things we discussed above.
Important Information on Vacation Rentals in the US
Vacation rentals is a term commonly used in travel industry. It means to use a home or a furnished apartment temporarily as a hotel room. These have been popularized in Europe as well as in Canada. However, they are now becoming increasingly popular all over the world. Some also address these as self catering or villa rentals. There are certain countries like England, France, Spain and Ireland where the government itself promotes and certifies holiday rentals. Some of them also offer their own vacation rental programs.
Vacation rentals are commonly referred to as villas in Europe. The client, in this case rents out the vacation property for a fixed period of time. Many people rent out on a nightly basis in a similar manner to hotel rooms. The practice that is more prevalent in this industry is weekly rentals. An actual vacation rental is not a property to be sold to the guest. What actually happens is that the guests use the property for a predetermined duration.
Pros And Cons Of Vacation Rentals:
Villa rentals appeal to people for many reasons. One of the most prominent reasons is to save on costs. There is more space, one does not have to pay any tips, taxes and service charges that one would normally find associated with hotel rooms.
They provide you more of a local flavor. Since, it is an apartment to start off with, you have food cooked in kitchens, there are gatherings in the living rooms and you can experience the feeling of living in a real neighborhood.
One of the disadvantages, maybe the main one, is that there aren't many systems in place. Hence, this may tend to make it more unorganized. You may not get personalized room service, as in hotels. This may mean compromising on your comfort level. So, this may also lead to concerns about quality and cleanliness.
The advantages like more living space, more facilities, convenience in location and more privacy generally outweigh the disadvantages. These rentals vary in size from budget studios to lavish private villas. Vacation rentals are available almost all over the United States, but they have a bigger market in Europe. This has been a travel option for European travelers since a long time.
There are many agencies specializing in vacation rentals. They can be booked through the internet. Many such property owners employ Vacation Rental Management companies. They take care of marketing these properties. They furnish the information and the photos to the guests and they handle the billing and reservations with the homeowners. Guests who make their bookings through these companies enjoy all the benefits they would enjoy in a hotel. There are many companies specializing only in vacation rentals.
Go in for a reputable vacation rentals management companies as they will be more familiar with the area. However, the cancellations if any, need to be made directly with the owner. Guests who book directly with owners or listing services can enjoy the benefit of lower rental rates.
Vacation rentals are commonly referred to as villas in Europe. The client, in this case rents out the vacation property for a fixed period of time. Many people rent out on a nightly basis in a similar manner to hotel rooms. The practice that is more prevalent in this industry is weekly rentals. An actual vacation rental is not a property to be sold to the guest. What actually happens is that the guests use the property for a predetermined duration.
Pros And Cons Of Vacation Rentals:
Villa rentals appeal to people for many reasons. One of the most prominent reasons is to save on costs. There is more space, one does not have to pay any tips, taxes and service charges that one would normally find associated with hotel rooms.
They provide you more of a local flavor. Since, it is an apartment to start off with, you have food cooked in kitchens, there are gatherings in the living rooms and you can experience the feeling of living in a real neighborhood.
One of the disadvantages, maybe the main one, is that there aren't many systems in place. Hence, this may tend to make it more unorganized. You may not get personalized room service, as in hotels. This may mean compromising on your comfort level. So, this may also lead to concerns about quality and cleanliness.
The advantages like more living space, more facilities, convenience in location and more privacy generally outweigh the disadvantages. These rentals vary in size from budget studios to lavish private villas. Vacation rentals are available almost all over the United States, but they have a bigger market in Europe. This has been a travel option for European travelers since a long time.
There are many agencies specializing in vacation rentals. They can be booked through the internet. Many such property owners employ Vacation Rental Management companies. They take care of marketing these properties. They furnish the information and the photos to the guests and they handle the billing and reservations with the homeowners. Guests who make their bookings through these companies enjoy all the benefits they would enjoy in a hotel. There are many companies specializing only in vacation rentals.
Go in for a reputable vacation rentals management companies as they will be more familiar with the area. However, the cancellations if any, need to be made directly with the owner. Guests who book directly with owners or listing services can enjoy the benefit of lower rental rates.
Forex Pips – All You Need To Know
You should have comprehensive knowledge about forex pips if you are entering into the highly volatile forex market. A forex pip is a way to measure gains and losses when you are trading currencies. Let us discuss about this exhaustively in the following paragraphs.
What Is It Exactly?
Forex pips are least increment in price in forex trading. Pip stands for‘Percentage in Point.’ One pip is equal to $0.0001 of a US dollar and most other currencies, except Japanese Yen. I will give you a simple example to understand this concept easily. Suppose a EUR/USD currency pair is bid at 1.1615 and offered at 1.1620. Here, the spread is 5 pips (1.1620-1.1615). If you have bought it at the bid price and sold at the offer price, you would have made 5 pips. Your aim should be to maximize your forex pips. When you think about trading forex for a long time, you should aim for more pip gains than more losses. You should understand that you will not win always. Hence it is wise to think minimize the losses. You can aim for small forex pips in short term trade.
Value Of Forex Pips
Now you know what forex pips are. The next important thing you need to understand is what the actual value of a pip is. The pip value depends upon the value of your transaction. Your pip will worth around US$10 if you begin with $100,000 or a full lot, based on the currency pairing. Your pip value can go to $1 if you are trading with $10,000 or mini lot and to $0.10 if you are trading with $1000 or a micro lot. The important point for you to remember here is that profits and losses will be depending upon the value of the forex pips. If your pip is $10 and you trade with high leverage, chances are that you will make huge amount if the trade is favorable to you. At the same time, if the trade goes against you, you will end up in making huge losses. Traders with a long term perspective normally look for more than 100 forex pips, while short term traders look for 20 pips per trade.
A Good Strategy
Forex brokers would offer very high leverage to attract you towards them. If you divide the value of your transaction by your actual capital, that is called leverage. Let us see this with a small example. Say, you have $1000 as capital and your broker offers you 200:1, the transaction value is $200,000. Brokers make a lot of money from this margin. However, if you want to go for a mini lot or a micro lot, you need not to go to a forex broker. You can very well trade with the help of a good forex trading software. A forex trading software or forex bot helps you to trade with less risks. The automatic forex bot will help you to build wealth consistently with smaller investments through scalping. By scalping, I mean making small gains in forex pips over a short period of time. If you are a beginner, it is better to build your wealth with small leverage with an automatic forex trading bot.
Finally…
Although the daily movement of forex is very low these days, you should know that the current volatility is cyclical in nature. A complete upturn of the current forex trading signal trend is likely in the near future. It will be very difficult for the investors to make profits in the forex market if the Fx movement is low. An efficient forex trading software that is developed following extensive research, testing and deployed in trading for a long time would help you improve your forex pips even in these difficult times.
What Is It Exactly?
Forex pips are least increment in price in forex trading. Pip stands for‘Percentage in Point.’ One pip is equal to $0.0001 of a US dollar and most other currencies, except Japanese Yen. I will give you a simple example to understand this concept easily. Suppose a EUR/USD currency pair is bid at 1.1615 and offered at 1.1620. Here, the spread is 5 pips (1.1620-1.1615). If you have bought it at the bid price and sold at the offer price, you would have made 5 pips. Your aim should be to maximize your forex pips. When you think about trading forex for a long time, you should aim for more pip gains than more losses. You should understand that you will not win always. Hence it is wise to think minimize the losses. You can aim for small forex pips in short term trade.
Value Of Forex Pips
Now you know what forex pips are. The next important thing you need to understand is what the actual value of a pip is. The pip value depends upon the value of your transaction. Your pip will worth around US$10 if you begin with $100,000 or a full lot, based on the currency pairing. Your pip value can go to $1 if you are trading with $10,000 or mini lot and to $0.10 if you are trading with $1000 or a micro lot. The important point for you to remember here is that profits and losses will be depending upon the value of the forex pips. If your pip is $10 and you trade with high leverage, chances are that you will make huge amount if the trade is favorable to you. At the same time, if the trade goes against you, you will end up in making huge losses. Traders with a long term perspective normally look for more than 100 forex pips, while short term traders look for 20 pips per trade.
A Good Strategy
Forex brokers would offer very high leverage to attract you towards them. If you divide the value of your transaction by your actual capital, that is called leverage. Let us see this with a small example. Say, you have $1000 as capital and your broker offers you 200:1, the transaction value is $200,000. Brokers make a lot of money from this margin. However, if you want to go for a mini lot or a micro lot, you need not to go to a forex broker. You can very well trade with the help of a good forex trading software. A forex trading software or forex bot helps you to trade with less risks. The automatic forex bot will help you to build wealth consistently with smaller investments through scalping. By scalping, I mean making small gains in forex pips over a short period of time. If you are a beginner, it is better to build your wealth with small leverage with an automatic forex trading bot.
Finally…
Although the daily movement of forex is very low these days, you should know that the current volatility is cyclical in nature. A complete upturn of the current forex trading signal trend is likely in the near future. It will be very difficult for the investors to make profits in the forex market if the Fx movement is low. An efficient forex trading software that is developed following extensive research, testing and deployed in trading for a long time would help you improve your forex pips even in these difficult times.
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