The Rewards and Risks of Commercial Real Estate Investment

The Rewards and Risks of Commercial Real Estate Investment
Investment in commercial real estate offers great rewards.
It also offers great risks. The key to seizing the
opportunities and minimizing the risks is knowledge and
preparation.

All that's required beyond that is common sense and an
objective eye about the risks and rewards. And that's the
purpose of this article—to give you a quick guide to
those rewards and risks so you can decide if the field is
the right choice for you. Let's look at the rewards first.

1)The first reward of commercial real estate investment is
that it's relatively easy to get into. In other words, you
don't need a PhD to be successful. In fact, you don't need
a degree at all. What you do need is a willingness to learn
by yourself and from professionals in the field.

2)The second reward of investment in commercial real estate
is it offers a great variety of investment opportunities.
Properties can range from duplexes to multi-unit dwellings
to shopping centers. This provides you with a wide range of
investment possibilities—and profits!

3)The third opportunity lies in the ability to take
advantage of leverage. Leverage is the use of other
people's money (OPM) to finance your commercial real estate
investments. Through the use of leverage, you can get into
the market by investing little of your own capital.

4)The fourth reward of commercial real estate investment is
the opportunity to achieve good returns. Historically, U.S.
investors have received an average 8-10% annual return on
such investments. Plus, unlike the stock market, commercial
real estate is not volatile and doesn't suffer the
sometimes extreme ups and downs of securities investments.

5)The fifth reward—and one of the best!—is that
commercial real estate investments provide long-term
appreciation. In other words, such investments tend to
increase in value over time, putting money in your bank
account on a consistent and long-term basis.

6)The sixth reward is that commercial real estate
investments generate income and can do it over long periods
of time (e.g., apartment buildings, office buildings, etc.).

7)The seventh reward of such investments is that they
provide three real tax benefits--deductibility,
depreciation, and deferability. You can deduct normal
expenses, depreciate your investments, and defer taxes
through the Tax-Deferred 1031 Exchange.

8)The eighth reward of commercial real estate investments
is that it permits you to build wealth. With solid
purchases, you grow equity over time, and, all the while,
you receive income. Talk about a great retirement plan!

Now, let's look at the other side of the coin—risks.
Risks of Commercial Real Estate Investment

The first risk of commercial real estate is risk itself. By
that, I mean that risk in commercial investments can be
much higher, especially with larger projects such as office
buildings or shopping centers. That's why it's important
to keep a cool head and objective eye on every deal you
consider. Remember this central point—the numbers
must always add up! Never, ever fall in love with a
property!

The second risk of commercial real estate investment is
lack of knowledge on your part. In this field, amateurs are
goldfish swimming among sharks. My best advice is to start
with small investments and learn as you go. The best way to
learn is to find yourself a mentor who's willing to teach
you the tricks of the trade. You may want to join a firm
specializing in commercial real estate investments and work
your way up.

The third disadvantage of commercial real estate investment
is that it requires capital. Since you'll be dealing with
professionals, you'll definitely want to "put your money
where your mouth is." You'll go nowhere without proof of
capital.

A fourth risk of commercial real estate investment is that
it ties up capital. You have to have the ability to carry
the costs of such investments over a long period of time.
In most cases, commercial real estate is simply not easy to
sell quickly so you'd better have the reserves to meet
ongoing expenses.

A fifth risk of commercial real estate investment is a
downturn in the economic cycle. If a recession occurs, jobs
are lost and businesses suffer. In that case, your
investments may produce little or no income for a while. As
mentioned above, reserves of capital can help you weather
such economic "storms."

So, there you have it—a quick guide to the rewards
and risks of commercial real estate investment. Now it's up
to you to weigh those risks and rewards and arrive at a
decision—to invest or not to invest. Good luck!

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Jack Sternberg is a nationally recognized expert on real
estate investment who's been in the business for more than
30 years. Sternberg's deals have totaled over $750 million
and he's been to the closing table more than 1,500 times.
For more, visit http://www.askjacksternberg.com

There's a Right Way and a Wrong Way to Compare Credit Cards

There's a Right Way and a Wrong Way to Compare Credit Cards
If you're going to compare credit cards, you'd better do it
right. The process can be overwhelming and a mistake can
cost you hundreds (if not thousands) of dollars. Want to
know how to do an apples to apples comparison, leaving no
margin for error? Here are the things you need to look for.

Intro APR vs. Fixed APR

First of all, don't take an APR at face value. Sure, you
can apply for that 4.99% credit card offer, throwing the
7.99% offer into the shredder, but what if that 4.99% rate
is just a teaser? What if it jumps up to 14.99% after a few
months? That 7.99% fixed rate sure would have been better.

Before you apply for any credit card, make sure you know
the details of the APR. Is it fixed? Is it an intro or
"teaser" rate? If it is, what's it going to jump to when
the introductory period is over (and how long with that be)?

A Nickel Here, A Dollar There

Let's compare credit cards A and B in this scenario. Card A
has an APR of 7.25% and it's a fixed rate. Card B is 9.9%
and it's also fixed. Which card do you choose? If you
picked card A, slap yourself on the hand.

Sure, card A might have a lower interest rate but what if
the annual fee is $59 and there's a minimum monthly finance
charge of $5? On the other hand, card B has no annual fee
and no minimum monthly charge. Card B would be the better
choice.

A low APR is great, but not if it means high fees. When
considering the cost of a credit card you need to consider
ALL of the costs, not just the APR. Is there an annual fee?
If so, how much is it? Are there minimum monthly finance
charges?

What About Grace?

Always compare the grace periods when you try to compare
credit cards. A credit card that offers a grace period of
25 days is always better than one with no grace period at
all. Credit cards that don't offer grace periods begin
charging interest from the day of your purchase. That money
can add up over the years and it's money out the window.

Remember, on the surface two credit cards can seem similar
or one can seem way better than the other. It takes digging
a little deeper to really see which credit card is better
for you. The next time you compare credit cards make sure
you take all the above factors into consideration before
making your choice.

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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

Raising Money - $mart Kids

Raising Money - $mart Kids
GRAND RAPIDS, MI -- It's never too early to begin teaching
your kids about the value of money. But where do you begin
- especially if your own money-saving habits haven't been
the best. Following are some tips to help you get your
children started.

1) Provide an allowance. Age six or seven is a common
starting point. Before receiving an allowance, kids should:
be able to count, add and subtract, be familiar with the
different coins and bills, show an interest in money or
spending.

2) Set an example. Show your child how you've created your
household budget and involve your child in shopping. Create
a shopping list together - then stick to it.

3) Teach children to comparison shop. Go online to research
prices at different stores. Instruct kids to keep receipts
so defective items may be returned.

4) Limit TV time. The constant messages buy, buy, buy
everything from fast food to toys can take a toll on a
parent - and a child's - wallet.

5) Take a trip to your local bank or credit union. Even
five-year-olds can benefit by opening their own savings
account.

6) Make teens responsible. By buying some of their own
clothes and other necessities, teens may better appreciate
how much things cost.

7) Set short-term goals. Five- or six-year-olds might save
for a five-dollar toy that they can get in just two or
three weeks, while 10-year-olds might save for a
larger-cost item over several months. When kids feel the
power of delayed gratification, it teaches them that they
can set meaningful goals.

Use the 10 - 30 - 30 - 30 "Percent System"

Many financial professionals recommend using the "10
percent - 30 percent - 30 percent - 30 percent" system to
help your child split up any money he or she earns or
receives. Show your child how to divide the money and put
it in four separate jars. Here's how it works:

1) 10 percent Charity - Take 10 percent off the top to
share.

2) 30 percent Quick Cash - Use this 30 percent for instant
gratification.

3) 30 percent Medium-term Savings - Save this 30 percent
for 1-6 months to purchase something special.

4) 30 percent Long-term Savings - Use this 30 percent for
important things in the future, such as a college fund.

Giving Back While some families tithe or require their kids
to set aside part of their allowance for charitable giving,
other activities can also make an impact on children. Here
are some suggestions to help teach kids the value of giving
back.

1) Designate a container in which your children can deposit
their loose change. When the jar is full, they can donate
the money to a charity.

2) Ask your kids to help choose a gift for a holiday toy
drive.

3) Have your kids round up clothes they've outgrown or toys
they no longer play with. Take them with you when you
donate the items to the Goodwill or Salvation Army.

4) Remember that charity involves gifts of time as well as
money. Encourage your children to offer their services
(without pay) to help the elderly or water plants and feed
pets for vacationing neighbors.

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In 1999 Daniel Wansten founded Professional Education
Services as one of the nations leading authorities on
solving cash flow problems for families. Daniel has been
seen on TV 13 news and featured in several newspapers and
magazines. For free help on paying the college bill go to
our website http://www.HowToAffordCollege.com and for free
help with rollovers or other financial planning please
contact our office at 866-949-7935.

Panama Banks Offer Best Privacy Protection

Panama Banks Offer Best Privacy Protection
Panama was once listed as a "non cooperative tax haven" but
the small country has worked hard to shed itself of that
rogue image. If you are interested in a Panama bank, you
should educate yourself about the policies, procedures,
risks and benefits involved in doing business with a Panama
bank.

Panama has recently tightened its anti-money laundering
laws and has created a banking system that is extremely
private and highly competitive, but it is monitored well by
the international offshore banking community. If you decide
to do business with a Panama bank, you can be assured that
our privacy will be strictly guarded and your assets will
be in a bank that is reputable and safe.

Before the major reforms of the mid 1990s, Panama was home
to over 150 offshore banks, but that number has been
trimmed to around 80 banks. All of the banks that are
remaining stick to a strict interpretation of the recent
offshore banking regulations that help prevent criminal
activity and ensure bank customer confidentiality.

Panama banks have several advantages over offshore banks in
other countries. The only types of funds that are taxed in
Panama are those that are generated inside the country's
jurisdiction. If you choose to incorporate your business in
Panama, but you decide to conduct your business elsewhere,
you can deposit all of your assets and earning into your
Panama bank without being responsible for paying local
taxes on your money.

Panama banks offer a wide variety of banking services for
the banking customer that requires a number of different
options for their business. Merchant accounts are
available, as are business accounts and personal accounts
as well.

Non-resident Panama bank customers can have Internet
account access set up by the bank's management in order to
access any necessary account information and in order to
transfer funds to and from your Panama bank. It is also
easy to apply for and receive a debit, ATM or credit card
from a Panama bank to make access to your money even easier.

Most banks in Panama require that all potential account
holders have a minimum deposit in order to open an account
in a Panama bank. Many banks also require that each account
must maintain a minimum balance in order to avoid costly
fees.

If you decide that a Panama bank is for you, you are able
to choose many options. You can open a personal account or
you can takes steps to incorporate an IBC or an offshore
company. You should be prepared to prove your identity by
providing a copy of your passport that has been notarized
as well as letters of financial reference from a current
bank or business partner.

Only you can decide if opening one of the many available
accounts at a Panama bank is for you, but you can rest
assured that Panama is no longer the place for shady
business dealings. The Panama bank system has been cleaned
up and offers savvy customers the opportunity to keep their
money in a safe account while watching it grow with little
tax burden.

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To learn more about banking in Panama or Panama Banks
please visit the author's website at:
http://www.offshorelegal.org/