Hello! David J here again bringing you more of the steps on my journey toward financial independence.
I saw an article on Yahoo! recently about the best jobs in America and thought this would be a good way to express what being a real estate investor is all about. It's not a "job", of course, it's a way of life. Still the format seems suitable...
Real Estate Investor
1. Pay Scale: $0 - $300,000+ annually
The money one can make really is unlimited. The only real limit is you and your willingness to do what it takes to succeed.
2. What Do They Do All Day?
An investor's day can be as full as you want or as easy, depending on what needs to be done to achieve your goals at any specific time.
For example, to start your day, you might review various sources of property leads and find any you'd like to visit and analyze that day and then schedule your activities for the day. Then, make some phone calls to attend to the details of deals in progress, maintain contact with your network of fellow investors, title company agents, realtors, and others.
Then, visit the properties you selected earlier, sit down with a notepad and calculator and work the numbers, make decisions about the ones where the numbers look like they add up and decide how to prepare offers and letters of intent to acquire them.
In the late afternoon and evening, you might meet with your accountants and attorneys to discuss the deals you're working on, network some more, have dinner with your contacts, colleagues and friends.
3. How to Get the "Job"
There's no place to interview for this type of a "job", it's really a choice of life style, life course and life goals. If anything, you'll interview yourself to see if you're ready to embrace a paradigm very different from that with which most of us are raised from youth.
By far, the greatest challenge is letting go of one's comfort zone and embracing a new idea of what it means to be an employer rather than an employee, a leader rather than a follower, the one who determines the instructions rather than simply following them.
Only you can decide whether you can be comfortable determining your own income rather than trading your time for dollars, rather than depending on someone else to provide a salary or an hourly wage, rather than depending on someone else to provide work for you to do, supervision and management, a work place, and so on.
4. What Makes It Great?
Real estate investors today are contributors to society at a time when their work is very much needed to preserve and restore the available housing stock, to provide clean, safe, sanitary, affordable housing at a time when borrowers are crippled by credit all but destroyed thru no fault of their own - back in 2009, banks cut credit lines and closed accounts causing credit scores to experience a drop from which they have yet to recover - and crippled by job loss, loss of home equity, loss of retirement account value and economic conditions not seen in this country in almost a century.
Today's real estate investors have had to be creative about borrowing since institutional lending all but stopped. Now, investors can help people recover the value in retirement accounts and achieve returns on their retirement savings that banks, stocks and other options simply can't provide right now.
Real estate investors have been leading the creation of construction and rehab jobs since builders and developers folded up under the pressure of the collapsing economy.
Additionally, by taking foreclosed homes off of lenders' inventories, they're helping the lending environment heal itself and keep banks from failing and from costing the government money when banks fail.
5. What's The Catch?
Wow! That could be a whole series of posts in itself! So, let me summarize...
To start with, with the lending climate the way it is, almost the only available source of financing for real estate deals is private lenders and hard money. So, the investor needs to be not just a transactional analayst and engineer, the investor must be a diplomat, a team builder, a charismatic leader who can attract others to one's efforts to help provide housing where it is needed.
Few of us were taught about money or business at home, and most of us not even in school. So a major challenge is acquiring eduction on the topics surrounding the process of real estate investing.
Another major challenge is that so many less than scrupulous people have tainted the image of the real estate investing profession that one may face a great deal of skepticism from one's neighbors and family. Investors have a reputation as greedy people who take advantage of people in bad situations. This will require you maintain utmost integrity and honesty at all times. Deals must always provide a "win" for everyone involved.
So, there you have it. That's the "job description" for a real estate investor.
Have ya got the guts for it? Do you have "the right stuff"?
We'll talk again soon!
Take care - be well!
Much Success!
Friday, November 02, 2012
Monday, September 17, 2012
Good Is Where You Find It
Hello! David J here again bringing you more steps on my journey to financial freedom.
Well! It's been a while, hasn't it?
Hope your endeavors are going well and that you're planning your work, working your plan, and taking some steps everyday toward your goals!
This post may seem a bit off-topic initially. One aspect of wealth building which is all too often forgotten is the need to prepare yourself for a new life of plentitude and joy, being generous to everyone around you.
Sounds a bit off-the-wall, doesn't it?
Let me tell a bit of a story here and maybe this and a few things I've said before will make a bit more sense.
Over Labor Day weekend of 2012, I drove out to Columbus, Ohio for a weekend seminar by one of the real estate gurus. It was affordable enough, to be sure, and close enough that I could drive - about 5 hours of road time, excluding breaks and lunch.
The drive there went well enough. Great weather until I got into Ohio where the temperature climbed into the high 90's. Still, running with the windows open little red car managed over 38 miles per gallon (2-litre, 4-cylinder). One tank (12 gallons) was enough!
Got there the day before. Got settled in okay, but had some discomfort in my gut on my left side that kept me up a good chunk of the night.
The next day started with a bus tour of about six homes for sale in the area. The pain kept getting worse, moved into my hip and then back to my gut. I couldn't drink my water or eat my lunch. Had to excuse myself from the afternoon's activities and go back to my room.
Well, things just kept getting worse. Soon, I had no choice but to seek assistance.
I wanted to avoid the expense of an ambulance ride and the lack of control of not knowing where they would take me.
So, I asked the hotel people for help.
Much to my surprise, they were very willing to lend aid and assistance! The shuttle driver loaded me into the van and drove me to the nearest emergency room.
I'll spare you the details of the ER visit. Long story short, had a 3 millimeter kidney stone.
I cabbed it back to the hotel, but needed to fill prescriptions from the hospital. The hotel van driver helped out again! He took me to the nearest (major chain) pharmacy, and even waited while the prescriptions were filled!
I was seriously impressed by hotel's willingness to help a guest in a medical emergency.
This is the type of helpful attitude I would encourage all my readers to cultivate and maintain.
Whatever happens in this world, we are all in this together. Whatever you put forth into the world will tend to come back to you many times over. So, put forth the best and you'll receive the best!
Do like the hotel people did for me in my time of need: be there when someone needs you. Offer whatever help you can, and give freely without expectation or reserve.
It is wisely said, "As we give, so we receive".
We'll talk again soon!
Take care - be well!
Much Success!
Well! It's been a while, hasn't it?
Hope your endeavors are going well and that you're planning your work, working your plan, and taking some steps everyday toward your goals!
This post may seem a bit off-topic initially. One aspect of wealth building which is all too often forgotten is the need to prepare yourself for a new life of plentitude and joy, being generous to everyone around you.
Sounds a bit off-the-wall, doesn't it?
Let me tell a bit of a story here and maybe this and a few things I've said before will make a bit more sense.
Over Labor Day weekend of 2012, I drove out to Columbus, Ohio for a weekend seminar by one of the real estate gurus. It was affordable enough, to be sure, and close enough that I could drive - about 5 hours of road time, excluding breaks and lunch.
The drive there went well enough. Great weather until I got into Ohio where the temperature climbed into the high 90's. Still, running with the windows open little red car managed over 38 miles per gallon (2-litre, 4-cylinder). One tank (12 gallons) was enough!
Got there the day before. Got settled in okay, but had some discomfort in my gut on my left side that kept me up a good chunk of the night.
The next day started with a bus tour of about six homes for sale in the area. The pain kept getting worse, moved into my hip and then back to my gut. I couldn't drink my water or eat my lunch. Had to excuse myself from the afternoon's activities and go back to my room.
Well, things just kept getting worse. Soon, I had no choice but to seek assistance.
I wanted to avoid the expense of an ambulance ride and the lack of control of not knowing where they would take me.
So, I asked the hotel people for help.
Much to my surprise, they were very willing to lend aid and assistance! The shuttle driver loaded me into the van and drove me to the nearest emergency room.
I'll spare you the details of the ER visit. Long story short, had a 3 millimeter kidney stone.
I cabbed it back to the hotel, but needed to fill prescriptions from the hospital. The hotel van driver helped out again! He took me to the nearest (major chain) pharmacy, and even waited while the prescriptions were filled!
I was seriously impressed by hotel's willingness to help a guest in a medical emergency.
This is the type of helpful attitude I would encourage all my readers to cultivate and maintain.
Whatever happens in this world, we are all in this together. Whatever you put forth into the world will tend to come back to you many times over. So, put forth the best and you'll receive the best!
Do like the hotel people did for me in my time of need: be there when someone needs you. Offer whatever help you can, and give freely without expectation or reserve.
It is wisely said, "As we give, so we receive".
We'll talk again soon!
Take care - be well!
Much Success!
Sunday, July 08, 2012
The Next Crash: Boomer Retirements
Hello! David J here again bringing you more of the steps on my journey toward financial independence.
This came up in the media recently. I hadn't really thought about it.
When I read it, though, it was an "Ah, HAH!" moment.
Y'know how you don't really have access to distributions from your retirement accounts until age 62 or so? Well, past age 70, certain accounts REQUIRE that you take a minimum distribution.
Ok, let's look at that for a moment. The Census bureau says that on average, 10,000 "booomers" a day reach mandatory distribution age. That means 10,000 more people are taking money out of Wall Street EVERYDAY!
Unless there are 10,000 new buyers available to pick up what the boomers' fund managers have to sell to give them those distributions, what will happen to the prices of stocks, mutual funds, etc.?
Just consider "supply and demand" as relates to prices. Where do prices (read: market values) go when there's an over-supply?
Anyone who is still years away from age 62 and has money tied up in Wall Street is about to lose what little is left after the last "crash".
So how can you protect your retirement savings?
We've already talked about self-directed retirement plans in previous posts, and we'll discuss them again in posts to come.
I just thought this important enough to get the word out to everyone by putting out a new blog post.
I'll do some more research and post the URLs I find along the way.
If you have any thoughts on this, feel free post them in the comments area. I'd like to know what you're thinking about this and what your thoughts might be on how we can plan ahead for this and be ready.
We'll talk again soon!
Take care - be well!
Much Success!
This came up in the media recently. I hadn't really thought about it.
When I read it, though, it was an "Ah, HAH!" moment.
Y'know how you don't really have access to distributions from your retirement accounts until age 62 or so? Well, past age 70, certain accounts REQUIRE that you take a minimum distribution.
Ok, let's look at that for a moment. The Census bureau says that on average, 10,000 "booomers" a day reach mandatory distribution age. That means 10,000 more people are taking money out of Wall Street EVERYDAY!
Unless there are 10,000 new buyers available to pick up what the boomers' fund managers have to sell to give them those distributions, what will happen to the prices of stocks, mutual funds, etc.?
Just consider "supply and demand" as relates to prices. Where do prices (read: market values) go when there's an over-supply?
Anyone who is still years away from age 62 and has money tied up in Wall Street is about to lose what little is left after the last "crash".
So how can you protect your retirement savings?
We've already talked about self-directed retirement plans in previous posts, and we'll discuss them again in posts to come.
I just thought this important enough to get the word out to everyone by putting out a new blog post.
I'll do some more research and post the URLs I find along the way.
If you have any thoughts on this, feel free post them in the comments area. I'd like to know what you're thinking about this and what your thoughts might be on how we can plan ahead for this and be ready.
We'll talk again soon!
Take care - be well!
Much Success!
Wednesday, July 04, 2012
What Is An Entrepreneur?
Hello! David J here again bringing you more of the steps on my journey toward financial independence.
I once saw "entrepreneur" defined as someone who undertakes a business goal without knowing how he's going to accomplish it, and without regard to the challenges which may arise.
Today, Corporate America is disaster of apocalyptic proportion. Companies are falling by the wayside like leaves in Autumn. Job losses for the past quarter are once again approaching 2009 levels - pink slips are again flying like confetti. It is reported that student loan debt in America now exceeds credit card debt at the same time that record numbers of jobs are evaporating, never to return.
The need for entrepreneurism is greater now than at any time so far in my lifetime, in my opinion.
Entrepreneurs do need education, but don't necessarily need formal degrees. We need only that knowledge which helps us attain our goals.
For example, ...
As mentioned earlier, recent counts of job losses hark back to the times when we were losing a half-million or more jobs a month. That's a disturbing turn of events at a time when we so desperately need economic recovery. Consumers losing their income and, hence, their ability to consume drags the economy down even further. Sales of just about everything, including necessities like food and clothing, are bound to be hurt.
Still, the current situation holds some odd paradoxes. This is potentially very valuable information:
We're now birthing more babies than we did during the post-World-War "baby boom".
At the same time, housing starts have not been as low as now since the early 1960s.
How can we bring new people into the world without providing places for them to live two or more decades from now? Some economists and market analysts believe that not only are we some 5+ million housing units behind where we need to be right now, we must also ramp up home starts from the current less than 500,000 per year to an average of 1.25 million new homes per year between now and 2050. Those figures even take into account retiring "boomers" and the backlog of foreclosures.
So how DO we do it?
What is the opportunity behind these portents?
How do we put foreclosed homes back into the active housing stock?
What can we do to provide new housing until the market recovers to where home building again becomes a profitable operation?
We'll consider those questions in future blog posts. In the meantime, feel free to enter your thoughts, ideas and comments below.
All feedback is welcome!
We'll talk again soon!
Take care - be well!
Much Success!
I once saw "entrepreneur" defined as someone who undertakes a business goal without knowing how he's going to accomplish it, and without regard to the challenges which may arise.
Today, Corporate America is disaster of apocalyptic proportion. Companies are falling by the wayside like leaves in Autumn. Job losses for the past quarter are once again approaching 2009 levels - pink slips are again flying like confetti. It is reported that student loan debt in America now exceeds credit card debt at the same time that record numbers of jobs are evaporating, never to return.
The need for entrepreneurism is greater now than at any time so far in my lifetime, in my opinion.
Entrepreneurs do need education, but don't necessarily need formal degrees. We need only that knowledge which helps us attain our goals.
For example, ...
As mentioned earlier, recent counts of job losses hark back to the times when we were losing a half-million or more jobs a month. That's a disturbing turn of events at a time when we so desperately need economic recovery. Consumers losing their income and, hence, their ability to consume drags the economy down even further. Sales of just about everything, including necessities like food and clothing, are bound to be hurt.
Still, the current situation holds some odd paradoxes. This is potentially very valuable information:
We're now birthing more babies than we did during the post-World-War "baby boom".
At the same time, housing starts have not been as low as now since the early 1960s.
How can we bring new people into the world without providing places for them to live two or more decades from now? Some economists and market analysts believe that not only are we some 5+ million housing units behind where we need to be right now, we must also ramp up home starts from the current less than 500,000 per year to an average of 1.25 million new homes per year between now and 2050. Those figures even take into account retiring "boomers" and the backlog of foreclosures.
So how DO we do it?
What is the opportunity behind these portents?
How do we put foreclosed homes back into the active housing stock?
What can we do to provide new housing until the market recovers to where home building again becomes a profitable operation?
We'll consider those questions in future blog posts. In the meantime, feel free to enter your thoughts, ideas and comments below.
All feedback is welcome!
We'll talk again soon!
Take care - be well!
Much Success!
Saturday, May 12, 2012
The Storm After The Calm
Hello! David J here again bringing you more of the steps on my journey toward financial independence.
If you currently own a home and you've been thinking about selling soon, here's some information you may want to consider...
Economists are now projecting a housing deficit in the near future. Unlike the last rise in property values which was fueled by artificial demand (improper / predatory lending, "easy money"), the next rise in property values will be fueled by REAL demand.
As of this Spring's numbers, housing starts in this country have been at or below 1960's levels since the housing bubble burst. Developers and over 2 million construction contractors have been wiped out.
During that same time period, births have been at levels not seen since the post-World-War "baby boom", and are still rising.
Even taking existing and coming foreclosures and "boomer" retirements into account, economists estimate that, given such birth rates, we currently have a housing deficit of some 5 million units, and that an additional 52 million units will be needed by 2050.
At the same time, however, housing starts have been at circa. 326 THOUSAND units annually for the past 10 calendar quarters, even longer in some areas.
This leaves a need for a consistent 1.25 million housing starts per year for the next 38 years just to meet the projected need for housing going forward. There's a significant difference between 326 thousand and 1.25 million - roughly a four-fold difference.
For this reason, some economists are predicting that housing prices will rise going forward just as rents have risen as people have lost their homes to foreclosure and/or loss of income and have become renters.
Of course, home building will not be profitable until existing home values return to levels which exceed the cost to build, and that won't be for some time yet - at least three years, probably longer. So, not only is there a "boom" coming for the value of existing homes, there is also a construction boom hiding in the numbers, waiting to reveal itself in due course.
Commodity investors have long held "buy low and go long" as a way to acquire gains in a volatile market.
I'm recommending a similar approach to any property you may currently own.
Just as this is the best time in decades to acquire investment property, this is also the best time to hold onto any property you currently own so long you can afford to do so.
The coming building boom also means that this is an excellent time to invest in open land, such as the farmland near existing housing developments. That's where the developers will be looking for land in the years ahead.
Short-term is only part of any investing strategy. Investing for the future, using education and insight is also a valuable part of our investing strategy.
Maintain a healthy balance in your investing strategy and in your portfolio. Invest for income now, but also invest in future returns.
We'll talk again soon!
Take care - be well!
Much Success!
If you currently own a home and you've been thinking about selling soon, here's some information you may want to consider...
Economists are now projecting a housing deficit in the near future. Unlike the last rise in property values which was fueled by artificial demand (improper / predatory lending, "easy money"), the next rise in property values will be fueled by REAL demand.
As of this Spring's numbers, housing starts in this country have been at or below 1960's levels since the housing bubble burst. Developers and over 2 million construction contractors have been wiped out.
During that same time period, births have been at levels not seen since the post-World-War "baby boom", and are still rising.
Even taking existing and coming foreclosures and "boomer" retirements into account, economists estimate that, given such birth rates, we currently have a housing deficit of some 5 million units, and that an additional 52 million units will be needed by 2050.
At the same time, however, housing starts have been at circa. 326 THOUSAND units annually for the past 10 calendar quarters, even longer in some areas.
This leaves a need for a consistent 1.25 million housing starts per year for the next 38 years just to meet the projected need for housing going forward. There's a significant difference between 326 thousand and 1.25 million - roughly a four-fold difference.
For this reason, some economists are predicting that housing prices will rise going forward just as rents have risen as people have lost their homes to foreclosure and/or loss of income and have become renters.
Of course, home building will not be profitable until existing home values return to levels which exceed the cost to build, and that won't be for some time yet - at least three years, probably longer. So, not only is there a "boom" coming for the value of existing homes, there is also a construction boom hiding in the numbers, waiting to reveal itself in due course.
Commodity investors have long held "buy low and go long" as a way to acquire gains in a volatile market.
I'm recommending a similar approach to any property you may currently own.
Just as this is the best time in decades to acquire investment property, this is also the best time to hold onto any property you currently own so long you can afford to do so.
The coming building boom also means that this is an excellent time to invest in open land, such as the farmland near existing housing developments. That's where the developers will be looking for land in the years ahead.
Short-term is only part of any investing strategy. Investing for the future, using education and insight is also a valuable part of our investing strategy.
Maintain a healthy balance in your investing strategy and in your portfolio. Invest for income now, but also invest in future returns.
We'll talk again soon!
Take care - be well!
Much Success!
Monday, April 02, 2012
Your Recent Opportunity: Lay-off!
Hello! David J here again bringing you more of the steps on my journey toward financial independence.
Back in August of 2009, my "secure" position evaporated after just over eight years.
Yes, I was devasted. It wasn't the first major blow of 2009, but it was the coup-de-gras that sealed my transition into a new stage of my life.
Now, it wasn't the end of my IT career. Yet, it was the end of my career as an employee.
This event solidified in my mind the reality of the new economy that many of us face: our future no longer depends on finding someone else to accept our services and compensate us for them.
Our future is in our own hands now. Who else can we trust to take the best care of us?
A layoff notice is actually an acceptance letter for your new job — at Your Real Estate Investments, LLC with you as the President and Chief Investment Officer.
Your new job is full-time. You'll need to approach it with a seriousness of purpose and dedication to success befitting a professional.
And your new job has just one goal: getting yourself established at your new company getting paid in dollars, not promises or favors. That means activities which generate cash or cash flow.
When the breaks go your way, bank your plenty rather than fritter it away, and make a timely transition into your new job: finding money-making properties, finding funding, finding tenants and finding buyers, depending on your strategy.
For those of you on the Technlogy Ladders mailing list, yes: that's a shameless steal, albeit paraphrased a bit, from Marc Cenedella.
The point is, though, that even as you would make job hunting a full time job, make investment hunting your full time job. This includes hunting for buyers, private lenders, deals, partners, ... in short, replace everything you knew with everything there is to learn about being a real estate entrepreneur.
That's where I'm at now. I invite you to join me!
We'll talk again soon!
Take care - be well!
Much Success!
Back in August of 2009, my "secure" position evaporated after just over eight years.
Yes, I was devasted. It wasn't the first major blow of 2009, but it was the coup-de-gras that sealed my transition into a new stage of my life.
Now, it wasn't the end of my IT career. Yet, it was the end of my career as an employee.
This event solidified in my mind the reality of the new economy that many of us face: our future no longer depends on finding someone else to accept our services and compensate us for them.
Our future is in our own hands now. Who else can we trust to take the best care of us?
A layoff notice is actually an acceptance letter for your new job — at Your Real Estate Investments, LLC with you as the President and Chief Investment Officer.
Your new job is full-time. You'll need to approach it with a seriousness of purpose and dedication to success befitting a professional.
And your new job has just one goal: getting yourself established at your new company getting paid in dollars, not promises or favors. That means activities which generate cash or cash flow.
When the breaks go your way, bank your plenty rather than fritter it away, and make a timely transition into your new job: finding money-making properties, finding funding, finding tenants and finding buyers, depending on your strategy.
For those of you on the Technlogy Ladders mailing list, yes: that's a shameless steal, albeit paraphrased a bit, from Marc Cenedella.
The point is, though, that even as you would make job hunting a full time job, make investment hunting your full time job. This includes hunting for buyers, private lenders, deals, partners, ... in short, replace everything you knew with everything there is to learn about being a real estate entrepreneur.
That's where I'm at now. I invite you to join me!
We'll talk again soon!
Take care - be well!
Much Success!
Saturday, February 11, 2012
Credit Where Credit is Due, Update
Hello! David J here again bringing you more of the steps on my journey toward financial independence.
Quick update to the last post...
The LLC's credit card arrived today!
It only has a $3,000 limit, but that's $3,000 the LLC has access to that it didn't have before.
SO... NOW the question is, what can the LLC do to make the most of that? I have a feeling the answer is coming, but it's not here yet.
There's opportunities coming with my investment group that I don't quite have all the details on just yet.
That said, I can turn you on to this:
Have you ever heard of "Self-Directed Retirement Plans"?
That can be confusing. Some outfits may tell you that sure, you can self-direct your employee retirement plan! (401(k), IRA, whatever...) Just choose from any investment they offer.
That's NOT self-direction! Thus, when I talk about this I take an example from the folks who taught me about them... I call what I'm talking about "true" self-directed , or "genuine" self-directed. That means you've rolled your retirement funds into a plan where YOU select the investments from a list of anything in which your retirement plan can LEGALLY invest.
Now, again, I'm neither an accountant nor an attorney - please refer to your financial professionals for advice.
You'll also need to find a custodian for your SDRP(s). This might be an outfit such as American Pension Services, Equity Trust Corporation or the like. (Disclaimer: I am in no way connected with either American Pension Services or Equity Trust Corporation.)
Whether you have regular savings, retirement funds or a line of credit, you always have the option to invest in something which produces returns above and beyond the "cost" of your money. Heck, that's how the banks work! They borrow money from the Fed or each other - some even get it from depositors! What a concept! - and lend it out at higher interest rates than they pay to get the money to start with.
So, "be the bank". If you can acquire money at, say, an introductory 0% rate for a few months or you are set up to self-direct your retirement plan, and can lend money out at any positive rate of return, then you're making "free" money off of cheap or "free" money!
Where do you get high returns?
Here's a couple examples to get you started. Disclaimer: I am in no way connected with any of these other than as an "investor" or potential borrower:
o Prosper.com
o Lending Club
Read up on their terms and conditions, their introductory pages, etc. and find out what they're all about. Be advised that last time I looked at Lending Club there was no way to "join" without taking out a loan and, once you begin that process, there's no way to cancel it without contacting their customer service department.
There's also borrowers such as real estate investors who are very willing to pay above-market rates for short term funding, 3 to 6 months or more, secured by real property. Since banks aren't lending in that space right now - at least not at the volume the industry demands - it repesents YOUR chance to "be the bank"!
When you lend money out of your retirement plan, the returns have to go back into your retirement plan, of course, but hey - any positive rate of return is better than losing double-digit percentages every time something newsworthy happens in the Wall Street Casino!
Now, again, let me reiterate: I'm neither an accountant nor an attorney - I am NOT quailfied to give either legal or financial advice! Please refer questions to your qualified professionals.
Watch this space for an update. Stuff is happening here!
We'll talk again soon!
Take care - be well!
Much Success!
Quick update to the last post...
The LLC's credit card arrived today!
It only has a $3,000 limit, but that's $3,000 the LLC has access to that it didn't have before.
SO... NOW the question is, what can the LLC do to make the most of that? I have a feeling the answer is coming, but it's not here yet.
There's opportunities coming with my investment group that I don't quite have all the details on just yet.
That said, I can turn you on to this:
Have you ever heard of "Self-Directed Retirement Plans"?
That can be confusing. Some outfits may tell you that sure, you can self-direct your employee retirement plan! (401(k), IRA, whatever...) Just choose from any investment they offer.
That's NOT self-direction! Thus, when I talk about this I take an example from the folks who taught me about them... I call what I'm talking about "true" self-directed , or "genuine" self-directed. That means you've rolled your retirement funds into a plan where YOU select the investments from a list of anything in which your retirement plan can LEGALLY invest.
Now, again, I'm neither an accountant nor an attorney - please refer to your financial professionals for advice.
You'll also need to find a custodian for your SDRP(s). This might be an outfit such as American Pension Services, Equity Trust Corporation or the like. (Disclaimer: I am in no way connected with either American Pension Services or Equity Trust Corporation.)
Whether you have regular savings, retirement funds or a line of credit, you always have the option to invest in something which produces returns above and beyond the "cost" of your money. Heck, that's how the banks work! They borrow money from the Fed or each other - some even get it from depositors! What a concept! - and lend it out at higher interest rates than they pay to get the money to start with.
So, "be the bank". If you can acquire money at, say, an introductory 0% rate for a few months or you are set up to self-direct your retirement plan, and can lend money out at any positive rate of return, then you're making "free" money off of cheap or "free" money!
Where do you get high returns?
Here's a couple examples to get you started. Disclaimer: I am in no way connected with any of these other than as an "investor" or potential borrower:
o Prosper.com
o Lending Club
Read up on their terms and conditions, their introductory pages, etc. and find out what they're all about. Be advised that last time I looked at Lending Club there was no way to "join" without taking out a loan and, once you begin that process, there's no way to cancel it without contacting their customer service department.
There's also borrowers such as real estate investors who are very willing to pay above-market rates for short term funding, 3 to 6 months or more, secured by real property. Since banks aren't lending in that space right now - at least not at the volume the industry demands - it repesents YOUR chance to "be the bank"!
When you lend money out of your retirement plan, the returns have to go back into your retirement plan, of course, but hey - any positive rate of return is better than losing double-digit percentages every time something newsworthy happens in the Wall Street Casino!
Now, again, let me reiterate: I'm neither an accountant nor an attorney - I am NOT quailfied to give either legal or financial advice! Please refer questions to your qualified professionals.
Watch this space for an update. Stuff is happening here!
We'll talk again soon!
Take care - be well!
Much Success!
Wednesday, February 08, 2012
Credit Where Credit Is Due
Hello! David J here again bringing you more of the steps on my journey toward financial independence.
We haven't talked about corporate credit for a while. I've been still working on that and now my LLC has been approved for its first credit card!
I did what we talked about earlier, including getting some Net-30 lines and getting a DUNS number. That's right - you can find the LLC on Dun & Bradstreet.
Now, marketing remains a major source of new revenue for the credit card companies, even in THIS economy, and even in the commercial market - corporate credit.
So, lo and behold, the LLC gets a solicitation for a cash-back credit card! I went to the URL listed in the mailing piece (yes, it came snail-mail!), filled out the application on-line, and - long story short - I got the reply that the application was approved!
This is so new that I don't even have the card in my hands yet. So, I can't even tell you what the credit limit is or any other details.
Obviously, I read and agreed to the Terms and Conditions on-line. So, I know about interest rates, billing practices and such.
...and yes, it is personally guaranteed by me. Now, my credit score remains good thru all my tribulations, but my credit utilization is VERY high. Remember from earlier posts I mentioned that when the credit card servicers started cutting credit lines back in early 2009, I lost some $50,000 in open credit including losing one $14,000 line entirely when the servicer lost their funding.
So, I can't get new credit lines in my own name, but my LLC just did!
Even if you can't complete the whole credit building program for your business entity as we discussed back in December of 2010 - I didn't, you can still build corporate credit for your entity. The key is going to be to build some kind of a good credit reputation for your entity, and ensure that D&B makes that information available to the world.
We'll talk again soon!
Take care - be well!
Much Success!
We haven't talked about corporate credit for a while. I've been still working on that and now my LLC has been approved for its first credit card!
I did what we talked about earlier, including getting some Net-30 lines and getting a DUNS number. That's right - you can find the LLC on Dun & Bradstreet.
Now, marketing remains a major source of new revenue for the credit card companies, even in THIS economy, and even in the commercial market - corporate credit.
So, lo and behold, the LLC gets a solicitation for a cash-back credit card! I went to the URL listed in the mailing piece (yes, it came snail-mail!), filled out the application on-line, and - long story short - I got the reply that the application was approved!
This is so new that I don't even have the card in my hands yet. So, I can't even tell you what the credit limit is or any other details.
Obviously, I read and agreed to the Terms and Conditions on-line. So, I know about interest rates, billing practices and such.
...and yes, it is personally guaranteed by me. Now, my credit score remains good thru all my tribulations, but my credit utilization is VERY high. Remember from earlier posts I mentioned that when the credit card servicers started cutting credit lines back in early 2009, I lost some $50,000 in open credit including losing one $14,000 line entirely when the servicer lost their funding.
So, I can't get new credit lines in my own name, but my LLC just did!
Even if you can't complete the whole credit building program for your business entity as we discussed back in December of 2010 - I didn't, you can still build corporate credit for your entity. The key is going to be to build some kind of a good credit reputation for your entity, and ensure that D&B makes that information available to the world.
We'll talk again soon!
Take care - be well!
Much Success!
Sunday, January 29, 2012
Perfectio, Perfectere, ...
Hello! David J here again bringing you more of the steps on my journey toward financial independence.
I made that title up, by the way. No, it's NOT proper Latin.
I must confess myself disillusioned. After writing an entry on this blog called, "Nobody's Perfect", I have since viewed some more of these TV shows like "Flip This House", "Property Ladder" and such.
My favorite is actually Mike Holmes's "Holmes Inspection". He at least knows what he's doing and focuses on how to correct what he finds wrong when he's called in at a property.
In the other shows, they seem more like "(How NOT to) Flip This House" and "(How to Miss The First Wrung of the) Property Ladder".
Ok, I'm showing my colors here. Now you'll begin to understand a little bit of why my ex left me.
That said, maybe I'm missing the point of these shows. Maybe they're trying to convey the message that we should learn from the mistakes of others rather than repeat them.
THAT is a message I am behind, whole-heartedly. Many mistakes have already been made, many lessons have already been learned - we don't need to repeat them. These shows document the pitfalls to avoid so that we can benefit from others' missteps.
Still, too often, we go forth believing that since we've been successful as, for example, an IT problem solver or one example from "Property Ladder" was a hairdresser who believed that on a budget of only $10,000 she could pull off a rehab in six weeks on a house she'd bought sight-unseen... We go forth believing that we can accomplish a fix-and-flip or a rehab on sheer attitude alone, even if we have no building or "handyman" skills.
If something seems "easy", it probably isn't - until you learn how. That is, until you learn how to avoid the major mistakes people can make doing it, whatever it is. Often times, tasks we may attempt are "easy" once we have acquired some experience and certain basic skills, yet before then the mistakes we might make through inexperience or just not knowing can ruin us financially.
If you're contemplating undertaking a fix-and-flip or a rehab, consider your own experience when setting your timelines and budgets. The less experience you have, the more time and resources you should allocate.
Remember: Bringing a project in ahead of schedule and under budget makes you look a LOT better to prospective future partners than over budget and behind schedule.
Am I saying to "fudge" the numbers and over-estimate? Of course not. What I AM saying is that your first projects are your most powerful learning experiences. Expect stuff to go wrong. Expect the unexpected: material issues, structural issues, financial issues.
Go ahead and cut those crooked furrows when you can, but remember to call the utiity locating services first!
Even if you think you can do it yourself, try to avoid that. Hire it out! In fact, your trades people will be much better able to provide estimates of time, materials and cost until you've acquired some experience, seen what can go wrong and seen what kind of unexpected issues can turn up.
Remember: There's only one of you. If you can have two or more trades working your project at the same time the work gets done that much faster.
Oh, yeah - one more thing: try to avoid painting a brick exterior! People buy brick because it is relatively maintenance-free. If you paint it, brick immediately goes from low-maintenance to high-maintenance, and your likely selling price comes down by a BIG margin! Brick, regardless of its color, is never "dated" - it's timeless! Clean it up with acid wash, if necessary, but NEVER try to paint brick!
We'll talk again soon!
Take care - be well!
Much Success!
I made that title up, by the way. No, it's NOT proper Latin.
I must confess myself disillusioned. After writing an entry on this blog called, "Nobody's Perfect", I have since viewed some more of these TV shows like "Flip This House", "Property Ladder" and such.
My favorite is actually Mike Holmes's "Holmes Inspection". He at least knows what he's doing and focuses on how to correct what he finds wrong when he's called in at a property.
In the other shows, they seem more like "(How NOT to) Flip This House" and "(How to Miss The First Wrung of the) Property Ladder".
Ok, I'm showing my colors here. Now you'll begin to understand a little bit of why my ex left me.
That said, maybe I'm missing the point of these shows. Maybe they're trying to convey the message that we should learn from the mistakes of others rather than repeat them.
THAT is a message I am behind, whole-heartedly. Many mistakes have already been made, many lessons have already been learned - we don't need to repeat them. These shows document the pitfalls to avoid so that we can benefit from others' missteps.
Still, too often, we go forth believing that since we've been successful as, for example, an IT problem solver or one example from "Property Ladder" was a hairdresser who believed that on a budget of only $10,000 she could pull off a rehab in six weeks on a house she'd bought sight-unseen... We go forth believing that we can accomplish a fix-and-flip or a rehab on sheer attitude alone, even if we have no building or "handyman" skills.
If something seems "easy", it probably isn't - until you learn how. That is, until you learn how to avoid the major mistakes people can make doing it, whatever it is. Often times, tasks we may attempt are "easy" once we have acquired some experience and certain basic skills, yet before then the mistakes we might make through inexperience or just not knowing can ruin us financially.
If you're contemplating undertaking a fix-and-flip or a rehab, consider your own experience when setting your timelines and budgets. The less experience you have, the more time and resources you should allocate.
Remember: Bringing a project in ahead of schedule and under budget makes you look a LOT better to prospective future partners than over budget and behind schedule.
Am I saying to "fudge" the numbers and over-estimate? Of course not. What I AM saying is that your first projects are your most powerful learning experiences. Expect stuff to go wrong. Expect the unexpected: material issues, structural issues, financial issues.
Go ahead and cut those crooked furrows when you can, but remember to call the utiity locating services first!
Even if you think you can do it yourself, try to avoid that. Hire it out! In fact, your trades people will be much better able to provide estimates of time, materials and cost until you've acquired some experience, seen what can go wrong and seen what kind of unexpected issues can turn up.
Remember: There's only one of you. If you can have two or more trades working your project at the same time the work gets done that much faster.
Oh, yeah - one more thing: try to avoid painting a brick exterior! People buy brick because it is relatively maintenance-free. If you paint it, brick immediately goes from low-maintenance to high-maintenance, and your likely selling price comes down by a BIG margin! Brick, regardless of its color, is never "dated" - it's timeless! Clean it up with acid wash, if necessary, but NEVER try to paint brick!
We'll talk again soon!
Take care - be well!
Much Success!
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