Category: Finance and Inveting

Basics To Start Profiting From Your Investing

If you are looking for essential method to secure your finances, and to assure financial stability for you and your family. Investing is essential to making money. You don’t have to be wealthy to be an investor. Investing even a small amount can produce considerable rewards over the long term, especially if you do it regularly.
Whether it be stock investing, investing online, real estate investing, finance investing, investing in bonds, investing in mutual funds.

You should consider the following about the basic rules of successful investing:

Manage your investments yourself. You really shouldn’t let a stockbroker or financial advisor do it for you. As with most things in your life, you really know what you want and need, not your investment guy.

You must always bear in mind the various implications to your future tax payments when investing but never let minimising the tax be the one and only or sole objective. Always try and follow a sensible rule of thinking in terms of reducing your tax returns so long as the investment is sound for other reasons as well.

Be strict with yourself that you’ll cut your losses as soon as they appear from any bad investments and likewise, cash-in when you’ve made a reasonable profit – certainly to the point of securing your initial outlay in those rare cases with investments that climb massively.

It is necessary to have some money sitting intact and safely in an account to deal with emergencies. It should be possible to access this money instantly or on very short notice. This is the ’emergency’ fund, and it will be a bad practice to put it in a unit trust or share, which can lead to fluctuations in the value of the underlying amount.

Secrets of the 100% Real Estate Investment Loan

As a real estate investor you are probably aware that one of your goals is to acquire properties with as little cash out of your pocket as possible. In fact, this is exactly what is touted by every real estate guru. They tell you that you should be able to finance your investments with no money down.

Using other people’s money to finance investment loans is how real estate empires have been built for years. It’s truly all about leverage. It’s the old “borrow your way to riches” scheme. I’m sure you get the idea.

But, for lenders, the less money you have invested in a property, the riskier the loan. This is clearly a double-edged sword. The smart investor realizes that 100% financing does not mean “no money down”. This is especially true since the mortgage meltdown of 2007.

Nowadays you have to be even more creative since the max loan to value ratio (LTV) on most conventional loans is 90%. But there are ways to limit the amount of cash you have to bring to closing, such as asking for the seller to carry back a 2nd mortgage or asking the seller for concessions of 2-3% to cover the closing costs.

There are many conventional loan programs that will allow you to do this. Just make sure you know the rule about your specific loan program before you write the offer to ensure you are maximizing the seller contributions on your deal. And remember, this is a percent of the purchase price, not the loan amount.

But be careful because you don’t want to get so much that the lender starts to question the value of the property. If seller concessions go beyond program limits, a lender might think that the house is over priced.

Imagine making an offer on a duplex that is listed for $180,000. The property has been on the market for some time and you think that the seller will happily offer some “concessions” or “seller contributions” just to get the deal done.

You know that your broker will charge 1% origination ($1800) on this deal if you offer full asking price. Figure your maximum offer and ask the seller to also kick in $1800 in closing costs. The seller doesn’t actually give you $1800, it just gets deducted from his proceeds at the closing.

And, if you need to do some rehab on the property, the most popular way of limiting the cash you put into the loan is to partner with your contractor. You can ask him to do the work in exchange for a percentage of the profits when you sell or ask him to defer his fee until you sell the property.