Archive for September, 2009
September 30th, 2009 | 
Author: Finance Your Real Estate Investment Properties
Unlike traditional residential real estate mortgages real estate investment financing is way more creative and offers more options than you think. The golden rule in real estate investment is OPM (Other Peoples Money).
I have enough money; shouldnt I buy my real estate investment for cash? No I absolutely advice against investing large sums of cash into a single real estate investment. There are two reasons why not. First you give away most of your profits by not leveraging your real estate investment. Second it is far too risky to put every egg into one basket.
Let me explain the leverage issue for a moment. I will give you an example of a 100000 investment property that typically increases its value (appreciates) by 7 average a year. Maybe more maybe less depending where you live. Paying all cash for this property will yield in a 7 appreciation profit plus the net profit from renting the place. Now youre looking at roughly 15 of returns.
If youre conservative with your investments you might be satisfied with this kind of a return. These days you might get equal or better returns with other conservative investments minus the hassle of being a landlord. But you dont mind being a landlord because you understand and utilize the leveraging method with financing your real estate investment.
With the example above you will make roughly 15000 a year in profits from your investment. Now lets take a closer look at what leveraging can do for you. Today a typical real estate investor can get financing as high as 95 97 of the purchase price. Occasionally 100 financing is available as well. But this would be totally unfair in this example to compare this with all cash purchasing.
15 return sounds like a lot but wait till you see this. Lets assume that the rental income will cover all your expenses including the mortgage payments. Taking the same example from before your net return would be the 7 appreciation profits of your property. This would translate into a 7000 a year profit. With a 95 financing in place you would get 7000 return on 5000 (your 5 down payment) invested. This is a whopping 140 return on investment.
With the same 100000 you can go out there and get 20 investment properties finance 95 of it and make an amazing 140000 profit a year. This beats the projected 15000 profits with an all cash transaction any day.
Of course you will have a lot of trouble to get financing for 20 properties in a single year. Typically 56 new rental property mortgages are the maximum lenders will allow these days. This is the signal to get creative with your financing structures.
In this case sellers financing would be your key to achieve your goal of maximum leverage of your investment dollars. Despite the message from all these late night infomercials seller financing is harder to get than they want you to make believe it is.
It all depends on the sellers ability to offer seller financing and the sellers motivation. Only about 1 out of 20 properties for sale are able to get seller financing. That means that theres no mortgage balance on the property. From this narrow selection the seller must be motivated to sell under these conditions. This could be tax reasons time constraints personal reasons and many more.
As you can see this translates into a lot of work to achieve your goals. But let me tell you one thing. This separates the tire kicker real estate investors from the real gogetters. Wouldnt you agree that a little bit of hard work and determination is well worth it to build a real estate empire?
I think it is well worth the trouble and hard work. At the end of the day you keep building your real estate investment portfolio and sooner than later you will be able to cash in.
Sincerely
Peter Dobler
Copyright (c) 2005 Peter Dobler
About the writer:
Peter Dobler is a 20 year veteran in the IT business. He is an active Real Estate Investor and a successful Internet business owner.
Learn more about real estate investments at http://www.suncoastrenttoown.com or send a blank email to mailto:suncoastrenttoowngetresponse.com
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Feng Shui Improves Productivity In Cube Farms!
When decorating work cubicles a little knowledge of Feng Shui can go a long way. Here are a few helpful hints that will improve your day in the cube. By implementing these simple changes you will immediately feel dramatic improvement to your work day.
The biggest Feng Shui problem with cubicles is that your back is to the entranceway. You are unable to see when people approach the doorway behind you causing a constant unsettling environment for you. Feng Shui is about harmony of your environment and having your back to the entranceway is a major disruption to that harmony. Fortunately there is a cure! To cure this problem when decorating work cubicles place a mirror inside the cubical that reflects the entranceway behind you. This way you can always see who is approaching you from behind.
Even though a cubical is a very small area it is still an office. The rules of Feng Shui that are applied to regular sized offices (and living spaces) also apply when decorating work cubicles. For example you should always sit facing one of your lucky directions and never sit facing one of your deadly directions (See www.fengshuibytroy.com to calculate your directions). Also in 2005 you absolutely do not want to sit facing west! This is where the Grand Duke resides and facing him during 2005 can cause severe financial problems.
Follow the overall directional placement of Feng Shui when placing decorative items on your desk or on the walls of your cubicle. Electronic items like your computer monitor are best placed in the West or North West. Candles and items red in color should be kept in the South. A small moving water feature can be placed in SE E or North just don’t put it behind you.
The most important thing to remember when decorating work cubicles is to avoid clutter! In such a small area this can be difficult but it is still very important. A cluttered desk makes for a cluttered mind. As far as decor keep things around you that are indicative of your business. General business pictures and decor is appropriate as well as a few personal family items. Unless you are a photographer of swimsuit models avoid racy photographs and things that are not related to work. Appropriately decorating work cubicles is your best bet to increase your work productivity.
About the writer:
Troy Doucet is a Feng Shui guru living in South Florida. He answers Internet questions FREE at www.fengshuibytroy.com!
(Feel free to post this article in its complete format anywhere you wish just include the above byline with web site address). Feel free to send me a copy of where you have published the article!
Famous Business Strategies
Either simply a lookeron or a player in the world of business you see millions piling into the accounts of world’s most famous businessmen and naturally the question pops “How?” wondering what is the alchemy they’ve discovered? Yet there is no magic here it’s mostly pure strategy. And what it takes to spot it and make it real.
Strategy
Identifying the best strategy for your business is the key to all success.
It should give you the lift that makes a difference. The art for your strategy success is planning.
- settling a vision for your business
- defining a mission
- setting out objectives
- establishing values goals and programs.
Vision
It is all there it is all important but first there is the vision.
So is vision a spark is it a moment? How much is inspiration and how much hard work? Is it 99 perspiration and only 1 inspiration? Can we all be geniuses?
According to Edison’s theory I would say yes if we are committed to hard working as it is primarily the hard work that makes a genius. Inspiration comes on the way when involved in as much action as you can handle. Contrary to the conceptual meaning inspiration seems to be driven by propitious conditions in this case by work.
Hard work
So what really happens behind the fairytale success stories is usually not what some would expect a brilliant extraordinary never heard of discovery that changed the world but disappointingly enough plain hard work. What these people have is what I would call “industry intelligence”. How is it acquired? Working of course. That is sharply aware of their industry environment learning all the rules and deeply involved in their own businesses success people have at some point of activity a vision for their business that proves to be a winner the revelation naturally produced as a result of their work commitment.
Let’s take the example of three American legends: Sam Walton Warren Buffet and Bill Gates. What do they have in common? The winning vision the winning strategy.
Sam Walton
In the case of Sam Walton no new innovative business models were launched. He followed the existing lowprice retailing pattern but the competitive successful strategic approach was that instead of focusing on large cities he took his business to small towns becoming the lowprice leader in rural towns.
Warren Buffet
Warren Buffett’s success resides in his different approach to value investing. While usually investors look for stocks they believe undervalued by the market Buffett does not take into consideration the stock market aspects such as for instance the supply and demand ratio. He analyzes the stocks on the basis of their potential as companies. He is interested in longterm results such as ownership in companies with capacity of generating money namely companies with a strong name great historical results strong management and industry expertise.
Bill Gates
Neither is the case of Bill Gates to have made extraordinary innovations. Rather than innovation he had the ability to put together other people’s ideas thus producing big hits and making a profit. He did that first when adjusting BASIC programming language for the Altair 8800 (first PC) neither of which was his original creation. Then the same happened with DOS which Microsoft bought (the original version was QDOS) and adjusted.
Business strategies implementation
Then action comes. As the saying goes planning without action is futile action without planning is fatal. It takes guts to act boldly and take whatever risks are necessary to put your vision into practice. It takes a great deal of tenacity to surpass obstacles and get over unfortunate happenings on the way. So how did they implement their planned strategies? What was the outcome what principles resulted for them to base their businesses on?
Warren Buffet
For the implementation of his strategy Buffett has drawn his company choice principles involving a great deal of analysis of business management financial aspects and a great deal of patience waiting for the right price once the possible investment has been identified.
On businesses
- simple and understandable
- consistent operating history
- favorable longterm prospects
On management
- rationality in treatment of retained earnings and investment of company profits
- disclosure of all aspects of company performances
- capacity of thinking independently of other managers’ way of thinking.
On financials
- look for return on equity not earnings per share
- analysis of free cash flow growth
- unique niche companies with high profit margins
- look for companies with at least one dollar of market value for every dollar retained
On stock valuation
- reasonable price for the company
- stock valuation analysis followed by analysis of a possible significant discount case in which it will be purchased.
Success depends on the investor’s dedication to learn and follow the principles.
Sam Walton
He gives his ten rules for success in the book “Made in America My Story”:
- commitment to business
- profit sharing with partners
- partners’ motivation competition encouragement
- total communication with partners trigerring their commitment
- giving appreciation to what your partners do for the business
- keeping spirits up in celebrating success but also in treating failures with a touch of humor
- listening to everyone in the company encouraging their talking
- a sustained exceptional relationship with the customer exceeding his expectations showing appreciation apologizing for mistakes
- finding a competitive advantage in controlling expenses
- originality doing things differently there is a good chance to find unexplored niches.
Bill Gates
Microsoft’s corporate mission “A computer on every desk and in every home” shortly became a reality. Offering an easily accessible operating system for computers perceiving the importance of customizing their product to the ordinary client and not only to computer engineers and thus addressing masses Bill Gates succeeded in putting together and promoting towards a tremendous popularity (and profit accordingly) the world’s dominant operating system.
What these people have in common is nevertheless an extraordinary ingenuity: they innovated their industry domain building their own strategy tailored for their own business particularities and went further to its implementation.
About the writer:
Laura Ciocan writes for http://www.businessplanning.ws where you can find more information about what is a business plan
Please feel free to use this article in your Newsletter or on your website. If you use this article please include the resource box and send a brief message to let me know where it appeared. Contact: lauraciogmail.com.