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Member You - Investing in Real Estate Profitably: Financing Options for Purchase of Rental Houses, Part 1.
Customer service is essential for the success of your business. Yet many small businesses or solo-shops crash and burn because they confuse customer service with customer tyranny. They imagine that serving customers means giving into endless demands.If you're troubled by customer service issues, try this exercise, an adaptation of Byron Katie's "Work" to business issues.Write down the statement, "I have to satisfy all my customers all the time, and that means..."EXAMPLE: "I have to satisfy all my customers, and that means that I need to accede to all of their requests. Since I can't possibly do that, I'll either go bankrupt or burn-out or get a reputation for bad service."Next, ask yourself what happens to you when you believe this. How do you feel? How do you behave toward yourself, your cus
Beware that the minimum payment in a payment option loan and the interest-only option in any loan program lasts (generally) for only 5 years. However, there are interest-only loans where the interest only option lasts 10 years. The latter is preferable if your intention is to hold the property for more than 5 years without refinancing.
Beware also that, in order to get the low interest-only rate I have used in the example above (about 4.5%), you would need to accept an adjustable rate mortgage (ARM) program where the rates adjust annually or even more often. If interest rates jump significantly in the next two years, you could get stuck with a relatively high payment.
We are recommending for most borrowers who plan to hold properties for more than a year or two to either:
1) Obtain a "payment option loan" as described earlier with minimum payments that last a full 5 years, or
2) Obtain an adjustable rate mortgage (ARM) loan with an initial fixed interest period of 5 years. This will cost 1% to 2% more in rate, but the insurance is absolutely worth it, in our opinion, at this time in the
What is the true difference between selling and marketing? Well first let us look at the basic MBA Textbook definition of marketing; Marketing is the planning, pricing, promotion, packaging, advertising and selling of any product or service. Well then that about says it all does it not? Sure and selling is only a sliver of the over all marketing of any product or service. But as Zig Ziglar says “nothing happens until someone sells something” and what he means is that sales is not a four letter word but a five letter word.Many marketing consultants talk about marketing as the “message to the consumer” or potential client or prospect. This too works well for an over all definition if you are to consider it because there is always a message in; Promoting, packaging, signage, advertising, selling and well you get the
This is because some of these strategies require a degree of deceit and careful timing, others require difficult-to-find pricing or seller situations, and others require sophisticated legal instruments and training, or a combination of all of the above. These complex strategies are good for selling mentoring programs, books and training courses.
However, none of these methods are practical, in our opinion, as a consistent practice for profitable and stress-free ethical investing. For a consistent winning program of investing, you want to be able to act quickly, repeatedly, openly and consistently, which will enable you to build up a portfolio of rental properties in a relatively short period of time.
It is therefore much more profitable and sensible in our opinion to play it safe and keep it simple. This means to focus on obtaining good investments from the point of view of future rental income and appreciation, and pay whatever down payment the banks require.
Simple as that. If you do this, you will be able to build up a portfolio of properties quickly.
You can still get very good loan deals by shopping around for financing, or by using an independent loan broker. Make sure your loan broker shops around on your behalf. Standard bank financing at good interest rates generally needs only a 5% to 10% down payment for investment property, which is not very much in the big picture.
Unless you are going to flip a property quickly, you probably want to maintain positive cash flow for most of the time you own a rental property. This is true even if you eventually plan to sell the property at a profit. After all, you never know how long you may have to hold the property before its value appreciates significantly, particularly if you have to survive the inevitable down turn in property values which can last a year or more. The only way to ensure you can comfortably hold the property as long as you need is to have positive cash flow each month.
To this end, consider the advantages of paying a full 20% to 25% down payment. This will allow you to qualify for the lowest interest rate programs. Lower interest rates mean lower monthly payments, which mean positive cash flow. In fact, with a 20% to 25% down, you may qualify for so-called "payment option loans" with minimum payment rates as low as 1%. With these loans, the minimum payment stays low for the first 5 years, with a payment increase cap each year of just 1.075 times the previous year’s monthly payment. At these levels, you will almost assuredly achieve a very good positive cash flow.
With such minimum payment loans, you still have to pay the current adjustable rate (usually around 4.5% today). However, most of the interest is deferred. At the end of 5 years, the deferred interest is added onto the loan balance. This will probably be much less than the property has appreciated. Therefore, it is a small price to pay for the positive cash flow gained during the first 5 years.
Another option readily available today is "interest only" payments. The "payment option loans" described above usually include an interest-only option. That is, each month you have the option of paying either the minimum payment described above or an interest-only payment. Other loans do not have the minimum payment option and have only an interest-only payment option. In any case, when you make an interest-only payment, you are paying only the interest for the month, and not paying down the principle. This reduces your monthly payment allowing positive cash flow in most cases, but of course you do not build up any equity in the property.
As a general rule in most states, most loans are available with interest-only options nowadays. Sometimes you have to pay a small fee at closing for this option (typically .125% to .250%) and sometimes there is no charge. If there is no charge, you may find that the interest rate is a little higher. You just have to shop and compare loans to get the best deal, as stated earlier, or make sure your independent loan broker is shopping for you.
Here is a comparison of three monthly payments plans
1) A typical minimum payment (in a payment option loan)
2) An interest-only payment (in a payment option loan or any interest-only loan)
3) A fully-amortized payment (in which you are paying down the principle a little each month.)
For a $200,000 loan, a 1% minimum payment is $643 per month. By comparison, a typical 4.5% interest-only adjustable rate loan produces a monthly payment of $750. Lastly, a fully amortized 4.5% payment is $1013.
You can see that the minimum payment and the interest-only options are low and fairly close but the fully amortized loan can make a significant dent in your cash flow.
Beware that the minimum payment in a payment option loan and the interest-only option in any loan program lasts (generally) for only 5 years. However, there are interest-only loans where the interest only option lasts 10 years. The latter is preferable if your intention is to hold the property for more than 5 years without refinancing.
Beware also that, in order to get the low interest-only rate I have used in the example above (about 4.5%), you would need to accept an adjustable rate mortgage (ARM) program where the rates adjust annually or even more often. If interest rates jump significantly in the next two years, you could get stuck with a relatively high payment.
We are recommending for most borrowers who plan to hold properties for more than a year or two to either:
1) Obtain a "payment option loan" as described earlier with minimum payments that last a full 5 years, or
2) Obtain an adjustable rate mortgage (ARM) loan with an initial fixed interest period of 5 years. This will cost 1% to 2% more in rate, but the insurance is absolutely worth it, in our opinion, at this time in the r
As President of an executive search firm, I see resumes from highly qualified and able candidates every day. And it only takes a glance to see why many of these experienced executives are not getting the interviews that, doubtless, they feel they deserve.The reason ? Many of these resumes look and feel the same. Same dry format. Same qualifications and similar backgrounds. Same laundry list of previous achievements. Nothing at all to set one resume apart from the next.To be perceived as a top of the line, A-list candidate, your resume MUST be memorable. It must be impactful. It must sell you to potential employers. A list of what you did last year or the year before just won't cut it. Employers want to know what you are going to do in the future - for them. Here's some tips to ensure that your resume doesn
Simple as that. If you do this, you will be able to build up a portfolio of properties quickly.
You can still get very good loan deals by shopping around for financing, or by using an independent loan broker. Make sure your loan broker shops around on your behalf. Standard bank financing at good interest rates generally needs only a 5% to 10% down payment for investment property, which is not very much in the big picture.
Unless you are going to flip a property quickly, you probably want to maintain positive cash flow for most of the time you own a rental property. This is true even if you eventually plan to sell the property at a profit. After all, you never know how long you may have to hold the property before its value appreciates significantly, particularly if you have to survive the inevitable down turn in property values which can last a year or more. The only way to ensure you can comfortably hold the property as long as you need is to have positive cash flow each month.
To this end, consider the advantages of paying a full 20% to 25% down payment. This will allow you to qualify for the lowest interest rate programs. Lower interest rates mean lower monthly payments, which mean positive cash flow. In fact, with a 20% to 25% down, you may qualify for so-called "payment option loans" with minimum payment rates as low as 1%. With these loans, the minimum payment stays low for the first 5 years, with a payment increase cap each year of just 1.075 times the previous year’s monthly payment. At these levels, you will almost assuredly achieve a very good positive cash flow.
With such minimum payment loans, you still have to pay the current adjustable rate (usually around 4.5% today). However, most of the interest is deferred. At the end of 5 years, the deferred interest is added onto the loan balance. This will probably be much less than the property has appreciated. Therefore, it is a small price to pay for the positive cash flow gained during the first 5 years.
Another option readily available today is "interest only" payments. The "payment option loans" described above usually include an interest-only option. That is, each month you have the option of paying either the minimum payment described above or an interest-only payment. Other loans do not have the minimum payment option and have only an interest-only payment option. In any case, when you make an interest-only payment, you are paying only the interest for the month, and not paying down the principle. This reduces your monthly payment allowing positive cash flow in most cases, but of course you do not build up any equity in the property.
As a general rule in most states, most loans are available with interest-only options nowadays. Sometimes you have to pay a small fee at closing for this option (typically .125% to .250%) and sometimes there is no charge. If there is no charge, you may find that the interest rate is a little higher. You just have to shop and compare loans to get the best deal, as stated earlier, or make sure your independent loan broker is shopping for you.
Here is a comparison of three monthly payments plans
1) A typical minimum payment (in a payment option loan)
2) An interest-only payment (in a payment option loan or any interest-only loan)
3) A fully-amortized payment (in which you are paying down the principle a little each month.)
For a $200,000 loan, a 1% minimum payment is $643 per month. By comparison, a typical 4.5% interest-only adjustable rate loan produces a monthly payment of $750. Lastly, a fully amortized 4.5% payment is $1013.
You can see that the minimum payment and the interest-only options are low and fairly close but the fully amortized loan can make a significant dent in your cash flow.
Beware that the minimum payment in a payment option loan and the interest-only option in any loan program lasts (generally) for only 5 years. However, there are interest-only loans where the interest only option lasts 10 years. The latter is preferable if your intention is to hold the property for more than 5 years without refinancing.
Beware also that, in order to get the low interest-only rate I have used in the example above (about 4.5%), you would need to accept an adjustable rate mortgage (ARM) program where the rates adjust annually or even more often. If interest rates jump significantly in the next two years, you could get stuck with a relatively high payment.
We are recommending for most borrowers who plan to hold properties for more than a year or two to either:
1) Obtain a "payment option loan" as described earlier with minimum payments that last a full 5 years, or
2) Obtain an adjustable rate mortgage (ARM) loan with an initial fixed interest period of 5 years. This will cost 1% to 2% more in rate, but the insurance is absolutely worth it, in our opinion, at this time in the
It seems it's a marketing fashion to be the affiliate marketing bad guy. You probably know Day Job Killer, which stated "it's gotta be ugly", "kill or be killed", then, the gurus slayer, the gurus slapper, and I even found a mafia marketing guide. Ebooks authors don't know what name take to seem the king in the marketing jungle. Isn't that too much ?I'm not criticizing their techniques, even if I found they are not bringing something new and some don't deliver what they promise, but I read so much hype about their products. When I see so much efforts to sell information, I can only ask myself if they are not a bit scared their products won't sell. Anyway I found a pure gem, this is The Affiliate Allstar.No fluff, no hype, no scam, but you may also never heard of it. Why ? It hasn't been promoted by the gur
With such minimum payment loans, you still have to pay the current adjustable rate (usually around 4.5% today). However, most of the interest is deferred. At the end of 5 years, the deferred interest is added onto the loan balance. This will probably be much less than the property has appreciated. Therefore, it is a small price to pay for the positive cash flow gained during the first 5 years.
Another option readily available today is "interest only" payments. The "payment option loans" described above usually include an interest-only option. That is, each month you have the option of paying either the minimum payment described above or an interest-only payment. Other loans do not have the minimum payment option and have only an interest-only payment option. In any case, when you make an interest-only payment, you are paying only the interest for the month, and not paying down the principle. This reduces your monthly payment allowing positive cash flow in most cases, but of course you do not build up any equity in the property.
As a general rule in most states, most loans are available with interest-only options nowadays. Sometimes you have to pay a small fee at closing for this option (typically .125% to .250%) and sometimes there is no charge. If there is no charge, you may find that the interest rate is a little higher. You just have to shop and compare loans to get the best deal, as stated earlier, or make sure your independent loan broker is shopping for you.
Here is a comparison of three monthly payments plans
1) A typical minimum payment (in a payment option loan)
2) An interest-only payment (in a payment option loan or any interest-only loan)
3) A fully-amortized payment (in which you are paying down the principle a little each month.)
For a $200,000 loan, a 1% minimum payment is $643 per month. By comparison, a typical 4.5% interest-only adjustable rate loan produces a monthly payment of $750. Lastly, a fully amortized 4.5% payment is $1013.
You can see that the minimum payment and the interest-only options are low and fairly close but the fully amortized loan can make a significant dent in your cash flow.
Beware that the minimum payment in a payment option loan and the interest-only option in any loan program lasts (generally) for only 5 years. However, there are interest-only loans where the interest only option lasts 10 years. The latter is preferable if your intention is to hold the property for more than 5 years without refinancing.
Beware also that, in order to get the low interest-only rate I have used in the example above (about 4.5%), you would need to accept an adjustable rate mortgage (ARM) program where the rates adjust annually or even more often. If interest rates jump significantly in the next two years, you could get stuck with a relatively high payment.
We are recommending for most borrowers who plan to hold properties for more than a year or two to either:
1) Obtain a "payment option loan" as described earlier with minimum payments that last a full 5 years, or
2) Obtain an adjustable rate mortgage (ARM) loan with an initial fixed interest period of 5 years. This will cost 1% to 2% more in rate, but the insurance is absolutely worth it, in our opinion, at this time in the
EDM machining actually stands for electrical discharge machining. This is the term used for a machining process that is used in the process of manufacturing those parts that are made from very hard metals and their alloys. Some of the parts or objects that are produced with the use of EDM machining include dies made of hardened steel, critical components of engines and compressor blades of jet engine fans. EDM machining is a thermal process that is able to remove as well as re-deposit material on top of the object that is being machined. The area that is recast is characteristically much tougher than the regular or original surface. It also will have a desirably higher resistance to wear and tear like abrasion and corrosion.In the process of EDM machining, an electrical discharge is made to occur between the obj
As a general rule in most states, most loans are available with interest-only options nowadays. Sometimes you have to pay a small fee at closing for this option (typically .125% to .250%) and sometimes there is no charge. If there is no charge, you may find that the interest rate is a little higher. You just have to shop and compare loans to get the best deal, as stated earlier, or make sure your independent loan broker is shopping for you.
Here is a comparison of three monthly payments plans
1) A typical minimum payment (in a payment option loan)
2) An interest-only payment (in a payment option loan or any interest-only loan)
3) A fully-amortized payment (in which you are paying down the principle a little each month.)
For a $200,000 loan, a 1% minimum payment is $643 per month. By comparison, a typical 4.5% interest-only adjustable rate loan produces a monthly payment of $750. Lastly, a fully amortized 4.5% payment is $1013.
You can see that the minimum payment and the interest-only options are low and fairly close but the fully amortized loan can make a significant dent in your cash flow.
Beware that the minimum payment in a payment option loan and the interest-only option in any loan program lasts (generally) for only 5 years. However, there are interest-only loans where the interest only option lasts 10 years. The latter is preferable if your intention is to hold the property for more than 5 years without refinancing.
Beware also that, in order to get the low interest-only rate I have used in the example above (about 4.5%), you would need to accept an adjustable rate mortgage (ARM) program where the rates adjust annually or even more often. If interest rates jump significantly in the next two years, you could get stuck with a relatively high payment.
We are recommending for most borrowers who plan to hold properties for more than a year or two to either:
1) Obtain a "payment option loan" as described earlier with minimum payments that last a full 5 years, or
2) Obtain an adjustable rate mortgage (ARM) loan with an initial fixed interest period of 5 years. This will cost 1% to 2% more in rate, but the insurance is absolutely worth it, in our opinion, at this time in the
Real estate is a booming business in America. With millions of dollars worth of property being bought and sold every day, real estate is definitely a popular commodity. To deal in real estate, a person needs to acquire a real estate license. This could be considered a passport to a lucrative career in real estate.The process of acquiring a real estate license is simple. There are a few eligibility criteria to be observed. Any applicant must be at least 18 years of age when applying for a real estate license. The applicant should not have had a real estate license denied within one year, or revoked within two years from the date of application. More importantly, if the applicant was originally licensed more than ten years ago, he may not be able to use his prior pre-licensure education unless he has worked in a re
Beware that the minimum payment in a payment option loan and the interest-only option in any loan program lasts (generally) for only 5 years. However, there are interest-only loans where the interest only option lasts 10 years. The latter is preferable if your intention is to hold the property for more than 5 years without refinancing.
Beware also that, in order to get the low interest-only rate I have used in the example above (about 4.5%), you would need to accept an adjustable rate mortgage (ARM) program where the rates adjust annually or even more often. If interest rates jump significantly in the next two years, you could get stuck with a relatively high payment.
We are recommending for most borrowers who plan to hold properties for more than a year or two to either:
1) Obtain a "payment option loan" as described earlier with minimum payments that last a full 5 years, or
2) Obtain an adjustable rate mortgage (ARM) loan with an initial fixed interest period of 5 years. This will cost 1% to 2% more in rate, but the insurance is absolutely worth it, in our opinion, at this time in the real estate cycle.
This article has reviewed some modern strategies for minimizing your loan payments when purchasing investment rental homes. There is much more to say on this topic. So keep an eye out for additional articles by the same authors on this and related topics.
(c) Copyright 2004, Jeanette J. Fisher and Robert S. Kramarz. All rights reserved.
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