Four Ways to Get Money From Your Real Estate Without Selling!

Four Ways to Get Money From Your Real Estate Without Selling!
If you have an existing piece of income producing real
estate that you bought within the last couple years, you
most likely have a significant amount of equity in that
property. Even if you put a traditional 80% mortgage on
the property when you purchased you may now have anywhere
from 20% to as much as 60% to 70% equity on the property.
How do you get that money out and put it to use in a new
investment or use it to pay bills without selling your
property.

Well, here are my top 4 ways to put cash in your pocket
without having to SELL your real estate... Place a private
second mortgage on your property - One of the best ways to
get cash out of the property is by borrowing money from a
private lender and giving them a second mortgage on the
property as security. By way of an example, if you bought
a property 5 years ago for $100,000 and put an $80,000
mortgage on the property at the time of purchase you had
$20,000 equity. That property today may be worth $130,000
and mortgage paid down to $75,000 leaving you with $55,000
in equity. If you borrowed $30,000 from a private lender
you now have $105,000 in total debt on the building. This
leaves the debt-to-equity ratio at a very reasonable 81%.
We do not recommend ever going above 90% debt-to-equity to
allow some margin for future down turns. One of the
primary ways we attract private lenders is through group
luncheons and private meetings. We use the Private Lender
Presentation Kit as our primary marketing tool to generate
leads and convert individuals into our program.

Put a Rent-to-Own Tenant in the building - Under a
rent-to-own program a renter with the desire to ultimately
purchase is given 12 to 24 months to rent while fixing or
improving their credit to the point where they can get a
mortgage and cash you out. The great advantage of this
method, and are many, is the tenant/buyer typically pays
you 3% to 10% of the value of the property upfront in the
form a non-refundable purchase deposit. This deposit can
be anywhere from $2,000 to $20,000 cash in your pocket. If
the tenant/buyer does not cash out or decides to move out
you can legal keep the deposit and do the whole thing over
again. Another advantage is that a tenant/buyer feels much
more compelled to pay rent on time to get the purchase
price credit that is only given if the rent is paid on time.

Refinance the existing mortgage with a new private lender
mortgage - If you have an existing first mortgage on a
property you can refinance the whole amount for new higher
first mortgage using a private lender as your lender.
Using the above example, if you have property worth
$130,000 with a $75,000 first mortgage, you could refinance
the first mortgage with a private lender for $105,000 and
cash out $30,000 for yourself. The advantage of this
method is that the cost of first mortgage alone will be
lower than a first and second combination as describe
above. You also avoid having the loan show up on your
credit report and this usually improves your credit score.

Use your property to secure a line of credit - If you have
one or more properties with a significant amount of equity
you can use that equity to get a line of credit from a bank
or local saving and loan. Again using the above example of
property with $55,000 in equity you may be able to get as
much as a $30,000 line of credit. We have found that banks
will never go above 80% debt-to-equity with these types of
lines. This type of financing has several advantages
including no interest cost until you actual use the money
and generally the interest rates are very competitive in
the prime plus 3% to 6% range.

In Conclusion, we have outlined four ways to generate cash
from your real estate with out having to sell your
property. This has tremendous advantages in allowing you
access to cash to do new projects or pay operating expenses.

----------------------------------------------------
Mike Lautensack is a real estate entrepreneur and creator
of the Private Lender PowerPoint Presentation Kit. This
kit is loaded with tools and techniques to attract a
consistent stream of private investors. To learn more
about this powerful step-by-step kit go to
http://realestatewealthtoday.com/index.html

ETFs vs. Mutual Funds: Miscalculate This And Your Porfolio Will Bleed Profusely

ETFs vs. Mutual Funds: Miscalculate This And Your Porfolio Will Bleed Profusely
If you crawl the internet, as I often do, looking for ways
to accelerate your wealth, you will see gobs of articles
written about ETFs vs. mutual funds. This article intends
to inform you about an often overlooked difference between
the two classes of investments.

It is a difference that could cost you thousands in your
investment or retirement portfolio.

Okay, maybe you do not HAVE thousands in your investment
accounts. If you are just starting to invest your money,
pay particular attention my friend. The following page
should make your decision between an ETF (exchange traded
fund) and a mutual fund clear enough to make an investment
decision or take corrective action if necessary.

More seasoned investors will already know the basics that
follow but saying them again can not hurt.

ETFs and mutual funds are similar in that they both hold
baskets of securities. A balanced mutual fund can hold
bonds, stocks, T-bills and some cash. An ETF is essentially
derived from stocks but takes on many forms.

Before I tell you about the potential mistake that could
cost you thousands, here are the important differences
between ETFs and mutual funds:

* Mutual funds are actively managed by a person who gets
paid by people like us usually from the money that WE give
him to manage. ETFs are purchased by us and can be bought
and sold all day long with few restrictions and almost no
minimums.

* Mutual funds charge 2% or more between loading and
maintenance, whereas ETFs typically charge between .5 and
1%. Mutual funds usually have no transaction fee. Brokerage
commissions must be paid when purchasing an ETF.

* Mutual funds incur capital gains even though no
distribution activity (money back to you) takes place. ETFs
usually find a way to avoid these taxable events. This is a
significant advantage for an ETF and worse, it is not
always clear to the investor how and when it happens.

* Mutual funds mitigate risk by sometimes holding cash in
anticipation of a down stock market. ETFs are not actively
managed, therefore, YOU the investor and purchaser of the
ETF must account for this risk when you decide to buy them.
Position sizing is one important consideration with an ETF
purchase to manage this particular risk.

Here we go now. The biggest mistake you can make in your
decision to allocate to mutual funds or ETFs is to overlook
one HUGE advantage an ETF holds over the mutual fund:

* STOP-LOSS order: This is a tool you can employ to
nail-down a floor beneath which the price of your ETF
cannot fall. You arrange this with your broker or click a
button if you are investing with an online brokerage. NO
SUCH PROTECTION IS AVAILABLE with a mutual fund. And do not
expect your fund manager to point this out.

This tactic can stop the bleeding if things really go wrong
with the stock market. Better yet, you can set the stop
loss and put it on automatic.

This is proactive management of your money, not merely
active.

Whether you are just starting your investment portfolio or
are a qualified investor you will want to keep yourself
informed about the risks and strategies inherent with each
class of personal financial investments. Certainly part of
this is deciding the credibility and point of view of the
people providing the information you are seeking.

When seeking information or advice on how to accumulate and
protect personal wealth it is always useful to keep in mind
one question: has the person from whom you are seeking
advice actually done what you want to do?

____________________________________________________________
____________

----------------------------------------------------
Randall and Nancy Berry help serious entrepreneurs
accumulate, accelerate and protect their wealth with a
home-based business. An income of $250K during the first
year is realistic and attainable IF you believe and let us
guide you. No selling or telling. About $3000 to start.
Please visit us at http://www.YourLastBusinessEver.com

Curtailing The Risk Factor Of A UK Secured Loan

Curtailing The Risk Factor Of A UK Secured Loan
In a secured loan, the house of the borrower needs to be
pledged as collateral. This is to reduce the risk faced by
the lender in case the borrower is unable to repay the
loan. Due to a lower risk factor, UK secured loans carry a
lower rate of interest. For borrowers with adverse credit
this is an easy way to get a loan because otherwise they
are denied credit due to low credit scores. Secured loans
are also known as home equity loans or homeowner loans.

A secured loan offers no security to the borrower. The term
'secured' refers to security provided to the lending
institution or bank. For the borrower there is enhanced
risk as he/she stands to lose his/her home if there is
default in the scheduled repayment. The lender can
repossess the house and sell it for satisfaction of his
debts.

This is one of the reasons why many people are apprehensive
of obtaining a UK secured loan. A borrower, especially one
saddled with an adverse credit history, should carefully
assess his credit needs and ability to repay while pursuing
a UK secured loan. It would be wise for a borrower to look
into alternative options of availing credit before opting
for a secured loan. If nothing else is feasible, then the
best way would be to be to shop around for a UK secured
loan with the lowest rate of interest and also arrange for
a payment protection plan.

It is usually possible to obtain a UK secured loan with
some type of a payment protection plan added to it. A
payment protection plan is in fact an insurance cover that
protects a borrower in case he is unable to honor his
payment obligations for the secured loan due an unforeseen
exigency. If the payment protection is taken at the time of
obtaining the secured loan then the amount of the insurance
premium is added to the monthly repayments against the UK
secured loan. This will ensure that the borrower is
protected against any missed repayments against the loan
due to some unexpected happening beyond his control like
sickness, accident, unemployment, disability, or leave of
absence to take care of an immediate family member. In case
of a borrower's untimely demise, the balance of his UK
secured loan is paid by the insurers sparing his loved ones
from the added burden of loan repayment.

If you are a UK secured loan borrower, it would be a wise
move for you to take payment protection insurance in order
to reduce the risk of losing your home pledged as
collateral. Life is full of uncertainties and it is not
possible to be sure if things will always remain in a state
of wellness. When times are tough, the peace and security
offered by your own home is of immense value. By paying a
little amount each month against payment protection
coverage you can protect one of your most valued assets and
be sure of enjoying the continued security offered by your
home.

----------------------------------------------------
Graham Bradlington is the marketing manager for Quickly
Finance Limited, a company which specialise in Fast track
Secured Loans & Remortgage for homeowners. Quickly Finance
is 100% independent & can search the whole market for the
best deals. For more info: http://www.quicklyfinance.com

Private Lender Note Clauses That Make You Money!

Private Lender Note Clauses That Make You Money!
One of the most important documents you will ever sign with
a private lender is the actual Note that creates the loan
obligation. In a typical private lender transaction, you
the real estate investor (borrower) borrow money from a
private individual (private lender) and that transaction is
documented by a Note and Mortgage.

The Note lays out the terms and conditions under which the
private lender is willing to lend you money and under which
you are willing to borrow money. The Mortgage is the
security document for the borrower's performance under the
Note and usually is secured by a piece of real estate you
own or are about to purchase.

The Note is where you want to control the private lending
process in your favor and give you the borrower the control
and flexible you may need in the future. If the Note does
not have the right clauses contained within it, you are
potentially giving away tremendous control to your private
lender and tying your hands.

When dealing with private lenders it is critically
important that you remain in control of your future options.

If you were to go to your local Staples and buy one of
those template note forms you are potentially leaving your
future control over to your private lender without even
knowing what is happening.

We recommend the following two clauses in any Note with a
private lender.

Prepayment Penalty Clause: "The Borrower reserves the right
to prepay this Note (in whole or in part) prior to the due
date with no prepayment penalty"

The prepayment penalty clause allows you the borrower the
right to pay off a Note prior to maturity without a
prepayment penalty. Without this clause, you may not be
able to pay off a Note early or worse yet you may have to
pay a large penalty for the right to prepay the Note.

For example, if you have a three year Note secured by a
piece of real estate you own and you get a great offer to
sell the property. You see a big pay day in your future.
But without the above clause you may have to pay the lender
their full interest for the three years for the right to
pay off early or the lender may require a penalty of
several percentage points to allow you out of the Note.

With the prepayment penalty clause outlined above you have
the full right to pay the Note off early with no prepayment
or interest penalty. The benefits of this clause can be
very powerful and beneficial to you the borrower.

Substitution of Collateral Clause: "Borrower has the right
to substitute like collateral of equal or greater value".
The substitution of collateral clause allows you to sell
the underlying real estate without paying off the private
lender Note by substituting the collateral with a different
piece of real estate of equal or greater value.

With this clause you can flip a property without having to
pay off your private lender every time you sell a property.
Imagine the work and inconvience to you and your private
lender if every couple months you sell a property and have
to them off. Then a couple weeks later you call them to
reborrow the money and now you have to sign all new paper
work. This can be real burden on both of you and
eventually the private lender will tired of the process.

A much better solution is to use the above clause and every
time you want to flip a property you have the right to
transfer the Note to another property of equal or greater
value without paying off the private lender. The private
lender is much happier because his money is always working
without any inconvenience of new documents every couple
months.

Be sure to use these two clauses and months or years down
the road when you have a big payday coming by selling a
piece of real estate you will have the flexibility and
ability to realize that payday.

----------------------------------------------------
Mike Lautensack is a real estate entrepreneur and creator
of the Private Lender PowerPoint Presentation Kit. This
kit is loaded with tools and techniques to attract a
consistent stream of private investors. To learn more
about this powerful step-by-step kit go to
http://realestatewealthtoday.com/index.html

Do You Fall Outside the "Average Credit Card Debt" Range?

Do You Fall Outside the "Average Credit Card Debt" Range?
If you carry a balance on your credit cards, you might
assume that the amount of your debt is in line with the
average credit card debt in America. After all, millions
have thousands of dollars in debt and if everyone's doing
it, then it must be okay - right? That line of thinking can
be deadly to your financial future. Here are some things to
keep in mind when analyzing your credit card debt...

1. What Do You Think is Average?

If you think that your credit card debt is in line with the
average credit card debt in America, you probably have some
preconceived notions of what "average" really means. If
you've been following statistics, don't kid yourself --
statistics can be misleading.

If you're quoting that the average American's credit card
debt is about $9,000 you're wrong. Technically, that's what
the statistics say, but that's not the real picture. The
average person owes less than $3,000 in credit card debt
according to MSN's Money Central.

The $9,000 that people quote is a statistic that was
obtained by dividing the total credit card debt in the
United States by the number of credit card holders. Let's
say (for simplicity's sake) that there are 5 credit card
users in the country. Four of them have credit card debts
of $2,000 each. The fifth has a credit card debt of $50,000.

If you use the "statistic method" that's behind the $9,000
figure that so many people go by, the average credit card
debt is more than $11,000 according to the model, although
almost every single credit card holder has a debt of just
$2,000. Starting to see the picture?

2. What's Good For Mr. Goose Isn't Necessarily Good For Mr.
Gander

Let's call you Mr. (or Ms.) Gander for a moment. You have
$10,000 in credit card debt, but that's okay because your
friend Mr. Goose has $10,000 in credit debt too. Time for a
quick reality check...

Just because Mr. Goose has $10,000 in credit card debt
doesn't mean it's okay for you to have that much debt too.
You are not Mr. Goose. You are Mr. Gander. And regardless
of what you think, just because it's okay for Mr. Goose to
have $10,000 in credit card debt doesn't mean it's okay for
Mr. Gander too.

Mr. Goose may very well be overextended or his income might
be two or three times yours. Either way your situations are
not identical and you can't compare his credit card
situation to yours.

So before you assume that your credit card debt is in line,
ask yourself why you really think that. Are your finances
really under control, or have you been comparing your debt
to the debt of others, assuming that you're fine if you're
going along with the flow?

Remember, just because you think that your debt reflects
the "average credit card debt" in America, it doesn't mean
you have a healthy credit situation.

----------------------------------------------------
For more tips on credit cards, saving money and avoiding
getting taken, check out CreditCardTipsEtc.com, a website
that specializes in providing credit card tips, advice and
resources.
http://www.creditcardtipsetc.com

Maximize Your Contracting Income

Maximize Your Contracting Income
The UK tax legislation surrounding contractors seems to get
more and more confusing and convoluted every year.

The aim of the HMRC is to remove the tax advantages from
contractors who are selling their services via
partnerships, under umbrella or managed service companies.
The view of those very generous people at the Revenue is
that contractors are, in effect, full time employees and
should be taxed accordingly. Contractors, unsurprisingly,
do not agree.

The legislation that governs this often fraught
relationship is IR35. IR35, in (very) brief, a ruling that
states if you can be considered 'employed' by the company
you are contracting your services to, then you are liable
to pay tax and NI contributions as is you were directly
employed by that company.

Some of the indicators that a contractor falls under the
IR35 legislation are as follows :

1)The contractor has no financial risk from working on the
project in question.

2) The contractor does not use his own materials and/or
equipment on the project.

3) The contractor has fixed hours, as a normal 'employee'
would.

4) The contractor works soley for a single client and does
not have several clients.

Contractors looking to maximize their income would be well
advised to be aware of IR35 before signing any contracts.
Avoiding IR35 can make a huge difference to a contractor's
income.

Even better, they should, at the very least, speak to an
accountant who has experience in dealing with contractors
and freelancers.

In essence, contractors falling outside IR35 have two basic
choices, now that Managed Service Companies have
effectively been outlawed by recent changes in legislation.

The first choice is the Umbrella Company.

An umbrella company acts as your employer for tax purposes
when undertaking a contract with either a client or
employment agency.

Umbrella companies raise invoices on your behalf and pay
you once they have received the funds. Many umbrella
companies pay you the same day they receive the funds, but
some will pay you only once a month.

What you will receive from an umbrella company is a payslip
detailing not only your tax and NI contributions (both
employee and employer contributions), your umbrella
company's fees and any expenses claimed.

Umbrella companies have a special dispensation that means
that they can process some expenses without having to
record them on a P11D. This does not mean that, if
investigated, you don't have to produce receipts for all
expenses. You do.

However, all expenses are processed by your umbrella
company, making things very much simpler for you. Expenses
that can be charged to your employment agency or to your
client will be refunded to you in full, while those
expenses which are not are processed as a tax benefit.

The second option available to UK contractors is setting up
a limited company, where you, the contractor, become a
shareholder and director in the company.

Usually, a limited company is the most tax efficient option
for a contractor.

This is because a wider range of expenses can be claimed
back as a limited company and the legislation governing
things like capital allowances is far more detailed for
limited companies. Accountancy fees, capital expenses such
as machinery, research and development costs - all these
things can be claimed back.

In practice, there isn't really that much paperwork
involved, particularly if you choose to hire an accountant
or bookkeeper to take care of such things as your VAT
returns, monthly accounts and payroll.

The limited company offers a greater scope for reducing tax
liability of contractors than does an umbrella company. One
of the reasons is that, as a shareholder and directory of
your company, you can choose to pay yourself a small wage
but take the bulk of your income as dividends, thereby
attracting smaller national insurance and tax liability.

Taking advice from accountants experienced in dealing with
contractors should be your first step in ensuring you
minimise your tax bill and maximise your earnings. At the
very least, you will get to understand the issues and,
perhaps more importantly, how much paperwork is involved in
each of the options available to you.

----------------------------------------------------
Jim Haines works freelance for Just Accountants, a UK
website where contractors can find accountants specialising
in their needs. Visit
http://www.justaccountants.co.uk/ir35.html for details.