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What it Takes to Get Your Commercial Real Estate Investment Deal Funded

Lenders will check the past two years of Profit-and-Loss Statements, plus the year-to-date one. They'll examine the current Rent Roll and will inspect the exterior and interior of the property. (At first it's just a visual inspection. If they decide to get serious with the deal, they'll send out their own property inspector.)

The great thing about commercial real estate is that much the lending decision rests on the merits of the property and not on your own financial statement. In addition, they'll want a schedule of real estate owned, and will check your credit history.

The next step will be for the lender to send you a Term Sheet. This is between 5 and 30 pages long, explaining the terms of the deal. It indicates whether the deal is Recourse or Non-recourse. Recourse means you are personally liable for the debt, and non-recourse means you are not. The tradeoff is that non-recourse financing often comes with burdensome prepayment penalties. That's okay if you plan to hold the deal for an extended period.

Tip: Investors usually don't realize that the Term Sheet is negotiable. Even though it comes printed on official letterhead, you don't have to take what they give you.

If your deal is good enough (where did we see that point before?), there will be other lenders who would LOVE to do business with you. If there is something in the Term Sheet that you would like to change, call the lender and start negotiating.

If you're not comfortable negotiating the first time out, then have your attorney do it and listen in on the call. Attorneys who specialize in real estate are well-versed in negotiating Term Sheets.

One key negotiating point is the amount of money that the lender will require up front to start the process. It is likely to be between $7,000 and $25,000. For example, one lender wanted $95,000 from a client of mine and he got it down to $9,000. Part of this up-front money is for the costs that lenders incur at this stage. These include reports from the third parties who are doing the appraisal, the environmental study/ies and the property inspection. Make sure the lender orders the appraisal.

The lender will not start the process until the initial fee is paid and a copy of the Purchase and Sale (P&S) Agreement, signed by both parties, is submitted. Why? Because it's not a deal until both parties sign the P&S Agreement.

Someone at the lender's office now gathers up all these reports from you and the lender's own experts, and sends a package to the lender's underwriting unit. That's where they decide whether to do your deal or not.

It is at this stage that you can improve your chances immensely.

How? By creating your presentation to the underwriter. Of course you will not be in the room when your deal is formally discussed, nor are you likely to meet the underwriter, that's all the more reason to prepare a package that can be in the room, and can do all the talking for you.

The reason behind this is to present your deal in such a way that it answers every question that might be on the underwriter's mind, even before it is asked.

You do this by presenting an overwhelming amount of information about yourself and the deal.

What Being Upside Down on Your Car Loan Means

Everyone wants to upgrade into that latest model with all the cool bells and whistles. Unfortunately, many of us are upside down in our current auto loan so trading it is a little more difficult than normal. What does it mean to be upside down in a car loan and how can I overcome it? Here are a few helpful tips to help you overcome it.

Upside Down Car Loan: An upside down car loan is a loan where you owe more on the vehicle than what it is actually worth. To understand if you fall into that category (and you probably do since more than 70% of all consumers are upside down currently), visit a website where you can determine what the actual wholesale value of your vehicle is. Once you determine that, you can compare that to the amount you and find out for yourself if you are indeed upside down.

What to Do with An Upside Down Car Loan: Just because you may find yourself in one of those upside down car loans, all is not lost. There are options available to you using an online lender. Online lenders offer flexibility that allow you to still trade in that vehicle even if you owe more on it than what is worth. Those lenders allow you to roll in that "negative equity" into a new loan. This does not fix the upside issue, but it will allow you to upgrade that collateral to the latest and greatest model.

Can I Ever Not be Upside Down?: Well, the short answer is yes. However, getting out of an upside down car loan and actually building equity can be a difficult one, especially if you like to trade every 18-24 months. The easiest way to build equity is to keep a vehicle long enough that you can pay down more than half of the original loan balance. Hopefully by doing so you will build positive equity so when you go to trade you can actually use that vehicle as positive down payment instead of needing to roll in more negative equity into another loan.

Overcoming being in a upside down car loan can be done. Do not get discouraged. Find a good online lender to work with and they can assist you. You can find more helpful information related to car financing and refinancing along with useful negotiation tips to use with the dealer online at OpenRoad Lending.

Kaizen in Online Marketing

Many people throughout the life of online marketing have utilized
the use of Kaizen. As a matter of fact I would venture a guess that
almost all successful businesses in today's markets are using it.
Which leaves one to wonder, what is Kaizen? Well, to put it in a
layman's words it is the practice of continuous improvement; the
fact that we should never be satisfied with what we have, and instead
always press onwards to improve what we have to something better.

This can be utilized in many ways, for example, you might own a home
based business such as a plug-in-profit homepage where the biggest
work load is the advertising campaign. To find new ways to complete
tasks in this process easier and faster can mean that you will be
getting more done and earn a better income, or maybe just have the
time to catch up with some sleep that might be long overdue.

However, it is important to know that Kaizen is something that is
utilized over time and is a never ending process. As time goes by
you have to keep in touch with all new opportunities that comes
flying your way to keep competitive in a way that lets you choose
what to improve in you business. This in itself has the effect of
giving you a competitive edge against all those that ignore this
very easy, but vital step.

Many believe that one can get a successful business by working really
hard in the beginning and then wait for the money to come rolling in.
I would say this is the best way to kill a business and it is also
totally against everything that is Kaizen.

Ok, it is true that the business starts to flourish in the beginning
when the efforts by the owner and/or employee is at its peak, however
once the well deserved payoff from all the work starts to roll in many
sits back and forgets the most important step in any business; too
keep the payoff at it's peak capacity at all times!.

In essence, the theory of Kaizen can be compared to the fable of "the
rabbit and the tortoise"; a rabbit and a tortoise are going to race
each other from one end to the other, the rabbit runs fast and quick
but gets burned out very fast, while the tortoise takes it slow but
keeps his pace and even slowly increasing it at times, and in the end
he gets past the rabbit and wins the race. The quick rabbit that is
all burned out, and lays in the grass beside the road halfway through
the race, thinks for himself, even I, will take it slow and increase
my pace as I go along next time.

In this fable Kaizen is the tortoise and just like the tortoise slowly
improved his pace, so can a business person improve the business that
is being conducted. Since it is better to take it slow and learn on
the way meanwhile you keep improving all aspects of the business, rather
than to rush things through just for the sake of getting it done.

A famous quote that I heard once goes like this "Rome was not built in
a day...but alas...it was built indeed".

All it Takes is a Decision

When it comes to your finances, you really have a simple decision to make. Do you want to keep going the way you are right now? Or would you rather have money in the bank, retirement in the works and the things you really want?

If you would rather have the money over your current lifestyle, I don't blame you. But how can you get there?

There is one way -- budget. I know you probably automatically think of a miserly person who is a tightwad when you think of frugal living. But it really is the key to getting everything you want out of life. The definition of frugal living is that you get it for less. Not that you don't get it at all. Just that you get it at a lower cost. All too often people assume that budgeting and frugal living are only for poor, low income families. But even the wealthiest companies budget and practice frugality.

So start looking at it in a different way. A budget and frugal living is a business decision that gets you where you want to be. It is simply a way to organize and manage your finances. We often get caught up in wanting more. We want new cars, designer houses and the trendiest clothing. We don't want to seem like we aren't rolling in dough, so we spend our money on the things we think reflect wealth. And above all, we don't want to appear as if we have no money.

But that spending carelessly actually results in having no money. You might feel good temporarily, but one day you will realize that you have no wealth at all. No savings. No investments. No retirement. Only debt and living paycheck to paycheck.

Wealth has nothing to do with how much you make. It is how much you accumulate. Companies that make millions are not wealthy if they spend billions. The same goes for the everyday consumer. A wealthy person saves their money and makes wise financial investments. They budget and spend in a frugal manner. In the long run, their goals are fulfilled. Those that spend on everything they want when they want it aren't left with very much at all. But debt.

So you have to make the decision. Your income doesn't matter. It is how much you spend. It is in your budgeting and frugal living. Ask yourself which you would rather have: that brand new leather furniture or a comfortable retirement? Sometimes you have to make these decisions. However, with wise saving you could have both -- just not right now.

You have to set goals for your family. Do you want to retire? Send your kids to college? Where do you want to be in 10 years? Do you want to lower your bills and reduce your debt? Do you want more time with your family and less time stressing over your financial situation?

Figure out what your priorities and goals are. You have to want to reach these goals before budgeting and financial planning will work for you. Take the time to see how changing your finances could change your life. Then start on the road to successful financial management.

Worried About a Job Layoff? Review Your Finances Now and Be Ready For Any Eventuality

If you think your job may be at risk, it's a good idea to shore up your finances and make sure you're not spending money unnecessarily. Don't assume you'll receive severance if you're laid off; you may not.

The general rule of thumb is that it takes one month for every $10k in salary to find a job (in a weak economy, assume it will take even longer); even with a cushion from severance, it's certainly possible to run out of money before securing your next position.

Take a look at your savings, debt, and monthly expenses. Minimize wherever possible. Skip the daily latte at the coffee shop, and wash the car by hand. Eat meals at home. Put the money you save on expenses into savings.

You should try to have six months of cash in reserve and available at all times. This is another one of those things that you should do as a matter of course. Strange things can happen - and they can happen very quickly. A small technology company ran into financial trouble and was abruptly forced to sell. (Underscore abruptly!) It was less than one month from the day this turn of events was announced until the first employees were let go. The company shut its doors for good just five weeks after that. If these folks didn't have six weeks of cash on hand, they likely weren't going to come up with it in the space of a few weeks.

Avoid dipping into your retirement account for living expenses. This should be a strategy of last resort. Between early withdrawal penalties and state and Federal taxes, you could lose a great deal of money. Of course, you'll also be sacrificing your long-term security.

Alternate options if you need cash:

  • Savings accounts
  • Money market funds
  • Home equity loans (not so easy to secure currently, but still worth a look)

Not only can you get relatively low interest rates, the payments are often tax deductible. However, you should set up an equity line of credit while you are still employed.

While we're on the subject of retirement accounts, if you have a 401(k) with your current company, roll those funds into an IRA to avoid paying a tax penalty. A direct rollover is the best option: in this case, the money goes straight from your former company's account to your IRA without you touching it. It's simple, and you continue to receive tax deferred status on the full amount of money accrued.

100% Home Financing - Home Financing with Little or No Down Payment

These days there are some creative methods for avoiding the need to place a large down payment in order to purchase a home. This is fortunate considering that for many families homeownership would be out of reach were it not for these methods. In the past placing a down payment on a home was commonplace. Recently, as housing prices have risen drastically over the past couple of decades it has become harder and harder to save enough money to put forward a meaningful down payment. Luckily, there are now ways to go about getting 100% home financing. What will work best for you depends on your means and goals.

You may hear advertisements for 100% home mortgage loans. What this usually ends up being is an offer for an 80/20 home mortgage, also known as a "piggyback mortgage". An 80/20 mortgage is actually two mortgages that you get at the same time to finance 100% of the cost of a property. Typically, both loans are handles by the same lender and closing on both happens at the same time.

In an 80/20 mortgage, the 20% part refers to a second mortgage that acts as a down payment on the primary mortgage. This second mortgage can be an equity line of credit or a traditional second mortgage.

Because both mortgage's in an 80/20 situation are secured by your home, you need to be sure that you can afford the payments on both mortgage loans. Where you do end up saving money with an 80/20 loan is that you can avoid paying PMI in these situations. PMI stands for "Private Mortgage Insurance" and it can amount to a hefty monthly payment that can be avoided by placing a large enough down payment, as happens in an 80/20 loan.

It is important to know that even in a 100% financing situation, you will still need to have enough money on hand to cover your closing costs. Most lenders do not allow you to roll the costs involved in closing in to your home mortgage, even in a piggyback loan situation. Because you are closing on two mortgages at the same time, your closing costs for an 80/20 mortgage are generally higher than in a traditional mortgage.

Even though a piggyback mortgage will cost you more, it is still an attractive option for families that have adequate income but little savings. By taking advantage of this method of financing 100% of the cost of your home, you can experience the benefits of homeownership and work towards building equity in a home.

Crowdfunding Your Way to Financing

You've got a great idea for an eco vacuum cleaner. Or you need financing for an artsy project like re-cording a ska album, publishing an alternative lifestyle magazine or producing an all 80's film festival. Maybe the film festival project can wait. The point is you might be an entrepreneur, artist, or just a regular person with a great idea and can't get it off the ground because you don't have access to financing.

It used to be that you had to rely on the three F's, friends, family and friends of family. For too many reasons to get into, it always isn't a good idea to go around asking all of your relatives and friends for money. Even if they agree to loan you some money, the added burden might not be worth it in the long run.

Enter crowdfunding, which is another way of leveraging the "crowd" or the three F's and one new S, strangers. You post your project on one of the more than 450 crowdfunding platforms worldwide and you wait for the money to roll in. According to crowdsourcing.org, $1.5 billion was raised in 2011 through crowdfunding.

There are three types of crowdfunding activities that are legal in the U.S. and Canada. Reward-based or using perks is one type of crowdfunding to get sponsors to contribute. For example you would grant certain perks i.e. a free t-shirt, a free version of the video game etc... Then there is donation-based which means if someone likes your idea enough, they just GIVE you some money.

The third type is lending-based crowdfunding which is just borrowing

money from strangers. Equity-based crowdfunding isn't yet legal in the US or Canada because it involves issuing equity, and providing disclosure which would necessitate the involvement of the Securities Exchange Commission and the Canadian provincial securities commissions.

In the US, the JOBS Act, which outlines the specific rules for equity financing was signed into law by President Obama on April 5, 2012. The SEC has 270 days from the enactment date to set forth specific rules and methods to ensure that funding will actually take place. So we're going to find out within the next 6 months exactly how the rules will apply.

But that's not why you're reading this article. You want to know how to raise funds through crowdfunding. This is where your thousands of friends on Face-book and Twitter are going to come in handy. You should tell everyone about your campaign and keep telling them every time you've raised some money. Don't forget they have their own personal network which could contribute to your project.

Write a press release and send it to publications and websites that you think would be interested in your story. They're always looking for an interesting story, so make sure that yours is!

You shouldn't forget to show sponsors how you're going to spend their money and what they should expect in return.

Jumpstart Your 2009 Wellness Plan

So another year has rolled around again. Resolutions for many are in full force and for others, resolutions are only a reminder of goals gone bad! If you are a resolution maker and happen to be someone who has chosen improved wellness as your goal, these tips may be helpful in creating and jumpstarting your plan. I use these tips with great success when working with clients around their health and wellness goals.

Begin by purchasing a beautiful journal and pen, dedicated to your personal wellness. Writing is an invaluable tool when making changes in your life. Find a comfy chair in a quiet location, pour a favorite drink and start writing your way to wellness for 2009.

1. Consider first what personal wellness means to you. Everyone has their own unique idea. For me it is to feel fit physically, mentally, spiritually and financially. Take a few minutes and reflect on this question before writing your answer

2. What areas do you want to improve? Finances, relationships, work, health, personal growth? Some may have one or two and others can have many. Just write them down without allowing judgment and overwhelm to come into the picture.

3. What goals do you want to reach in these particular areas? When you decide, write them down. Make sure they are realistic and specific. For example, to be out of debt by the end of 2008 or to have lost 10lbs by the end of April. Remember, keep them realistic so you don't get discouraged when you notice you may not meet your timeline. These are only guidelines, however having a specific goal to work towards can be very powerful.

4. Consider the areas you have chosen to concentrate on and determine what has already been working for you. You do not have to reinvent the wheel. If you are satisfied with your progress in a certain area you may only need to maintain it or vary it slightly. For example, if your main relationship is healthy but you want to make more time for it, maybe you just need to focus on choosing a specific time each week or month that will be dedicated to the relationship.

5. What roadblocks in the past have kept you from reaching your goals? Was time a factor? If so, look at what would work better. Your plan has to include activities you enjoy and are able to maintain without too much struggle. If you hate running but love walking, don't force yourself to run. Do what you love, not what you feel you should be doing.

6. After writing down your goals, start to develop a plan to get you there. As a coach, helping a client develop a plan is one of the first steps we take after they have set their goals. For instance, if exercise is something you have chosen, decide what type of activity you will do, as well as how often and for how long. A clear focus can make action so much easier.

7. What are the first action steps that need to be taken in order to carry out your plan? If you have decided to get out of debt, the first action may be to determine the total amount of debt you are carrying. Write them down.

8. Once you have determined what steps need to be taken, review them. Are they small enough so as not to overwhelm you? Be realistic. Taking baby steps toward your goal will increase your chances of achieving it. Remember, small and consistent steps will guarantee success.

9. If possible, work with a partner or group for support. Accountability is a great motivator towards achieving your goals and a partner can make it a lot more fun.

10. Most important...recognize accomplishments daily and make a commitment to improve the quality of your life.

Your level of personal wellness plays a huge part in your happiness, ability to deal with stress and fight disease. I challenge you to grab a pen and start writing your unique plan today. Consider what changes you need to make so your personal mantra can be...I feel ALIVE in 2009!

Article Written by Peggy Porter-The Success Coach for Mom Entrepreneurs.

Easy Ways to Cut Back and Save For Christmas

Christmas is the Western world's biggest holiday celebration and although it only comes around once a year it often has us spending months in advance whilst the after-effects can include a big dent in our bank accounts for weeks afterward. Frugal Christmas shoppers often gather presents throughout the rest of the year in order to spread the cost but perhaps the best advice of all is to save rather than spend so you can go all out when December comes around.

There are lots of ways in which we can make small changes to our everyday lives in order to build up our Christmas savings pot. The first piece of advice for those looking to save is to cut back on your food bills. This doesn't necessarily mean eating less, in fact you could end up eating more! A big expenditure with regard to food is eating out at lunch and dinner time. While the lure of the office canteen or local eateries can prove more mouth watering than a home made roll or salad, you'll actually find it much more economic to prepare your own meals rather then opting for restaurant, café or pre-packaged, shop bought grub.

The second way to add to your Christmas savings pot is to avoid taking the car and opt for public transport, walking and cycling where and when you can. Walking and cycling to work is not only a great way to get fit but is also better for the environment when compared to carbon footprint left by car fumes, especially when the car is only used to transport one person. With petrol prices in a constant state of flux, walking or cycling will save valuable pounds - perhaps even hundreds of pounds over a month long period.

When saving for Christmas, the everyday consumer will find there's plenty of changes that can be made to their personal lives in order to save money but not infringe on the enjoyment of their free time. Instead of splashing out on going to cinema, why not see what the DVD rental store has to offer? Enjoying the great outdoors is another money saver - fresh air and a relaxing walk along the beach rarely costs anything at all.

Finally, another money saving tip is to tighten up your financial outgoings and add to your money saving pot instead. The average UK citizen will have a range of necessary monthly outgoings such as car, life and health insurance as well as phone and energy bills. Take a moment to look online at the many sites offering to compare life insurance or health cover and you could end up saving hundreds of pounds when switching to a plan that not only gives you more for your money but also saves you money in the process. Don't get complacent or apathetic about your finances, tightening up here and there won't make a noticeable difference in the meantime but will when you're able to treat loved ones to a dream Christmas.

Union Finance Budget for Financial Year 2007-2008, Government of India... (India is Shining)

Union Finance Minister (Govt. of India) P Chidambaram presented the Union Budget for 2007-08 in Parliament on Wednesday, 28th Feb. 2007.

The Following are the Highlights:

While Chidambaram kept income tax limit unchanged, he increased the threshold limit by Rs 10,000 giving every assessee a relief of Rs 1,000.

Deduction in respect of medical insurance under Section 80 (D) increased to Rs 15,000 and Rs 20,000 for senior citizens.

Exemption limit for women was increased to Rs 145,000 and for senior citizens to Rs 195,000.

Dividend distribution tax raised from 12.5 to 15 per cent.

ESOPs to be brought under FBT.

Expenditure on samples and free distribution items to be exempted from fringe benefit tax.

Additional revenue from direct taxes to yield Rs 3000 crore and indirect taxes revenue neutral.

Tax exemption on aviation turbine fuel sold to turbo prop aircraft extended to all small aircraft less than 40,000 kg.

Withdrawals by central and state governments exempted from Banking Cash Transaction Tax. The limit for individuals and HUF raised from Rs 25,000 to Rs 50,000.

Two lakh people to benefit out of service tax exemption. Govt to lose Rs 800 crore as a result.

Service tax on Residents Welfare Associations whose members contribute more than Rs 3,000.

Surcharge on Corporate income tax on companies below Rs one crore removed.

Tax free bonds to be issued by state-owned urban local bodies.

Five year tax holiday for two, three, four star hotels and convention centres with a seating capacity of 3,000 in NCT of Delhi, Gurgaon, Ghaziabad, Faridabad and Gautam

Minimum Alternate Tax being extended.

Benefits of investment in venture capital funds confined to IT, bio-technology, nano-technology, seed research, dairy among some others.

Excise duty on cement reduced from Rs.400 per tonne to Rs.350 per tonne for cement bags sold at Rs.190 per bag at retail market. Those sold above Rs.190 will attract excise duty of Rs.600 per tonne.

Corporate tax: No surcharge for firms with a taxable income of Rs 1 crore (Rs 10 million) or less.

E-governance allocation to be increased from Rs.395 to Rs.719 crore.

Indian investors to be allowed investment in overseas capital markets through mutual funds. Mutual funds to set up Infrastructure Fund schemes.

Any requirement for security of the nation to be provided.

Backward Regions Grant Fund to be raised to Rs 5800 crore.

A high-powered committee report aimed at making Mumbai a world class financial centre submitted.

Public suggestions will be invited.

Rs 50 crore provided to begin work on vocational education mission for which Task Force in Planning Commission is chalking out a strategy.

1,396 Indian Technical Institutes to be upgraded to achieve technical excellence.

An autonomous Debt Management Office in government to be set up.

Government to create one lakh jobs for physically challenged. Government will reimburse the EPF contributions of employers in the case of physically challenged people taken on rolls of the company and included in the PF scheme. A fund of Rs 150 crore to be started which will go up to Rs 450 crore.

An Expert Committee to be set up to study the impact of climate change in India.

Rs 150 crore to be given to Ministry of Youth and Sports for Commonwealth Games and Rs 350 crore to the Delhi Government for the purpose. Rs 50 crore to be provided for the Commonwealth Youth Games in Pune.

Rs 100 crore for recognising excellence in the field of agricultural research.

VAT revenues increased by 24.3 per cent in the first nine months of 2006-07.

A national level goods and services tax to be introduced from next fiscal.

Fiscal deficit to be 3.7 per cent in the current year and revenue deficit two per cent.

Fiscal management enabled States consolidate debt to the tune of Rs.1,10,268 crore and 20 states availed of debt waiver to the tune of Rs.8575 crores. The share of States from the revenue expected to touch Rs.1,42,450 crore during 2007-08 as against Rs.1,20,377 crore during 2006-07.

Total expenditure estimated at Rs 6,81,521 crore.

Increase in gross tax revenue by 19.9 per cent, 20 per cent and 27.8 per cent in first three years of UPA government. Intend to keep tax rates moderate.

Peak customs duty rate on non-agricultural items reduced from 12.5 to ten per cent.

All coking coal fully exempted from duty.

Duties on seconds and defective reduced from 20 to ten per cent.

Customs duty on polyster to be reduced from ten per cent to 7.5 per cent.

Fiscal deficit for 2007-08 pegged at 3.3 per cent of GDP at Rs.1,50,948 crore. Revenue deficit at Rs.72,478 crore which will be 1.5 per cent.

Total expenditure during 2006-07 estimated at Rs.6,80,521 crore including Rs.40,000 crore for SBI shares.

Duty on pet food reduced from 30 per cent to 20 per cent.

Duty on sunflower oil to be reduced by 15 per cent.

Duty reduced on watch dials and movements and umbrella parts from 12.5 to five per cent.

Import duty of 15 specified machinery to be reduced from 7.5 per cent to five per cent.

Economy grows 8.6 per cent in third quarter of this fiscal compared to 9.3 per cent in the year-ago period

Three per cent import duty to be levied on private importers of aircraft including helicopters.

No change in general CENVAT rate.

Ad valorem duty on petrol and diesel to be brought down from eight to six per cent.

Export duty on iron ore and concentrate at the rate of Rs.300 per tonne. Export duty on Cromium proposed at Rs 2000 tonne.

Small-scale industries excise duty exemption raised from Rs one crore to Rs 1.5 crore.

Manufacturing sector grows at 10.7 per cent, agriculture at 1.5 per cent during October-December 2006-07.

Excise duty for plywood reduced from 16 per cent to eight per cent.

Food mixes to be fully exempted from excise duty.

Excise duty for plywood reduced from 16 per cent to eight per cent.

Bio-diesel to be fully exempted from excise duty.

Water purification devices, small and big, fully exempted from excise. Specific rates of excise duty on cigarettes increased.

Excise duty on Pan Masala without tobacco as mouth freshners reduced from 66 per cent to 45 per cent.

PAN to be made single identity card for all securities/stocks/MFs related transactions.

Insurance companies to launch a senior citizens scheme in 2007-08.

Defence budget increased to Rs 96,000 crore

Tourism infrastructure to get an allocation of Rs.520 crore as against Rs.423 crore last year.

The ceiling of loans for weaker sections under deferential rate of interest scheme will be raised from Rs 6500 to Rs 15,000 and in housing loan from Rs 5000 to Rs 20,000.

Regulations would be put in place for mortgage guarantee company for housing loans.

Regional Rural Banks, which are willing to take up greater responsibilities, to undertake aggressive branch expansion programme. One RRB branch for each of 80 districts so far uncovered. RRBs to accept NRE and FCNR deposits.

FDI inflows between April and January this fiscal touched $12.5 bn while portfolio investment reached $6.8 billion

Technology Upgration Fund in textiles to continue during the 11th Plan. Rs 911 crore to be provided for this.

Allocation for National Highway Development programme to be stepped up from Rs 9,955 crore to Rs 12,600 crore.

Work on Golden Quadrilateral road project nearly complete. Considerable progress made on North-South, East-West corridor and likely to be completed by 2009.

Northeastern region will get Rs 405 crore for highway development. Road-cum-rail project over Brahmaputra in Bogibil, Assam.

Health insurance cover for weavers to be enlarged to ancillary industries. Allocation increased from Rs 241 crore to Rs 321 crore.

A scheme for modernisation and technological upgradation of choir industry for which Rs 23.55 crore has been earmarked.

Manufacturing growth rate estimated at 11.3 per cent.

9.2 per cent GDP growth rate estimated in 2006-07.

Average growth for last three years is 8.6 per cent.

Saving rate of 32.4 per cent, investment rate of 33.8 per cent will continue.

A number of proposals to perk up agriculture to be announced.

Average inflation in FY'07 to be 5.2-5.4 per cent; govt confident of managing inflation

Bank credit rate grew by 29 per cent during first ten months of 2006-07

Inflation during 2006-07 estimated at between 5.2 and 5.4 per cent against 4.4 per cent during the previous year.

Abhijit Sen report on forward trading to be submitted in two months' time.

Additional irrigation potential of 24 lakh hectares to be implemented, including nine lakh hectares under Accelerated Irrigation Benefit Programme.

Economy in a stronger position than ever before.

15,054 villages have been covered under rural telephony and efforts to be made to complete the target of covering 20,000 villages by 2006-07.

Allocation on Healthcare to increase by 21.9 per cent.

Allocattion for education to be enhanced by 34.2 per cent.

Two lakh more teachers to be employed and five lakh more classrooms to be constructed.

Secondary education allowance to be increased from Rs.1,837 crore to Rs.3,794 crore.

Government committed to fiscal reforms.

Foreign exchange reserves stand at 180 billion dollars.

Allocation under Rajiv Gandhi Drinking Mission stepped up from Rs 4680 crore to Rs 5850 crore.

Government concerned over inflation and would take all steps for moderating it.

Already a number of steps on fiscal, monetary and supply management side have been taken.

Annual target of 15 lakh houses under Bharat Nirmal Programme to be exceeded.

Allocation for National Rural Health Mission stepped up from Rs 8207 crore to Rs 9947 crore.

Gross budgetary support in 2007-08 raised to Rs 2,05,100 crore from 1,72,728 crore in 2006-07. Of this, budgetary support to the Central plan will go up to 1,54,939 crore against 1,72,728 crore.

School dropout rates high. To prevent dropout, a National Means-cum-Merit scholarship to be implemented, with an allocation of Rs 6,000 per child.

Rs 1290 crore to be provided for elimination of polio. Intensive coverage will be undertaken in 20 districts in UP and 10 districts in Bihar. This will be integrated into NRHM.

National AIDS Control Programme to achieve zero level disease.

Measures for significant improvement of health care in rural area.

Allocation for ICDS programme to be increased from Rs 4087 crore to Rs 4761 crore.

30 more districts under NREGA. Additional allocation of Rs.12,000 crore for it.

Rs 800 crore for Sampoorna Gram Rozgar Yojana in districts not covered by NREGA. Swarna Jayanti Swarozgar Yojana allocation increased from Rs 250 crore to Rs 344 crore.

Computerisation of PDS and integrated computerization programme for FCI.

Allocation for schemes only for SCs and STs to be increased to Rs 3271 crore.

Rs 63 crore for share capital for National Minorities Development Finance Corporation following Sachar Committee recommendations.

Allocation for SC/ST scholarships enhanced from Rs.440 crore to Rs.611 crore.

Scholarships programme for minorities students to be of the order of Rs 72 crore for pre-metric, Rs 48 crore for graduate and postgraduate.

Total Budget for the Northeastern region raised from Rs 12,041 crore to Rs 14,365 crore.

New Industrial Policy for the northeastern region to be in place before March 31.

Women's development allocation will be Rs.22,282 crore.

Rs 7,000 crore allocation for better tax administration to be used for social schemes.

Rs 2,25,000 crore farm credit proposed in the new budget. A target of additional 50 lakh farmers to be brought under farm credit.

Farmers' credit likely to reach Rs.1,90,000 crore as against the targeted Rs.1,75,000 crore during 2006-07.

Special Purpose Tea Fund to rejuvenate tea production.

Rs 100 crore allocated for National Rainfed Area Authority.

One hundred per cent subsidy for small farmers and 50 per cent for other farmers for water recharging scheme.

World Bank signed agreement for revival of 5,763 waterbodies in Tamil Nadu. Loan component Rs 2,182 crore. To have a command area of four lakh hectares. Similar agreement with Andhra Pradesh in March for recharge of 2,000 bodies. Command area 2.5 lakh hectares.

Bonds worth Rs 5,000 crore to augment NABARD to be issued.

Death and disability cover for rural landless families to be introduced, known as 'Aam Aadmi Bima Yojana'.

70 lakh households to be covered under a social welfare scheme with LIC and with support from state governments.

50 per cent of the premium at Rs.200 per household to be given by the Centre. Rs.1,000 crore fund to be maintained by LIC for the purpose.

Central public sector enterprises will be given Rs 16,261 crore as equity support and loans of over Rs 2600 crore.

Sources: Times of India; NDTV; StarNews

100% Property Development Finance in the UK

Is there such a thing as 100% Property Development Finance? The short answer is yes, however it may be useful to define what exactly we mean by property development finance and what we mean by 100% funding. Property development finance is the term used by lenders and brokers to describe the finance products employed to help property developers fund their projects. These projects can range from the simple renovation of a residential dwelling to multi-plot new-build schemes. A property developer can be an individual, partnership or company. Broadly speaking we can split property development in to three categories:

  • A property refurbishment project would involve the purchase of a residential dwelling and straight forward refurbishment of the interior. These project usually turn round very quickly as planning permission is not generally needed.
  • Property conversion projects would involve more substantial work such as an extension, conversion of an existing property into flats, or some other structural re-modelling. This type of property conversion will almost always involve planning consent, building control and sub-contractors. The developer taking on a conversion project will probably have carried property refurbishment projects in the past.
  • Top of the list is the property developer who undertakes new-build schemes. Very often a site will be purchased with either full or outline planning permission. Obviously the time scale for this type of project is much longer and the developer will probably have experience in refurbishment and conversion schemes. Lenders are increasingly insisting on some form or warranty such as the NHBC or Zurich schemes, although architects certificates are still accepted.

The challenge for the property developer is to fund the acquisition of suitable property and have enough working capital left to finance the development work. Historically banks were content to lend around 65% of the purchase price and 65% or so of the build costs. However, these options were usually reserved for experienced developers or individuals with a high net worth. As with every business cash-flow is king, and having substantial amounts of cash tied-up in a property can seriously hinder business growth.

There are now several specialist property development lenders who will consider loans far in excess of the bank solution. Most of the specialist lenders will offer loans of around 70% of the site value and 100% finance for the build costs. It is very important to understand that the development costs are paid in arrears. This means that the developer will fund the works to a pre-agreed stage where upon the lenders appointed representative (usually an independent surveyor) will carry out an inspection.

On receipt of a satisfactory report from the surveyor the funds are released and the next stage of development works can start. This type of funding usually covers "hard costs" only, so professional fees such as planning, architects fees and insurance would be paid from the developers own resources.

True 100% property development finance includes the purchase of the site, the build costs, professional fees and sometimes even interest roll-up. This type of funding is available for refurbishment projects, conversion schemes and new-builds. The developer does not necessarily need a wealth of experience as the lender will monitor and support the project quite closely. The lenders who are willing to consider 100% development funding can usually only be contacted through specialist commercial finance brokers.

To qualify for full funding the project would need to demonstrate a good profit margin and be in a geographical area known to have an buoyant property market. In essence the lender wants to reduce the risk that a loan will be outstanding for long beyond the development phase.

So, in conclusion 100% property development funding does exist, whether the developer is looking for just the build costs or full funding for the whole project. Naturally these higher levels of funding come at a premium in terms of interest rates. However this should be considered against the cost of having all the available capital tied up in a single project. The main benefit for considering 100% property development funding is the ability of look at new projects whilst completing a current project.

Property Development Bridging Loans

One of the biggest threats to a successful construction project is experiencing cash flow issues, or worse still, running out of financial resources before the project is complete. Having to halt the build or renovation means you may struggle to meet time sensitive milestones and will invariably increase the cost of the overall project. Worse still you may even run into losses.

The smart developer will be prepared for unforeseen funding issues that may impede the projects progress and where the required funds are not available may make use of a property development bridging loan.

Whether you are undertaking a residential or commercial development project, a bridging loan is probably the best funding option to keep the project rolling during funding problems to minimise any cost overrun. Property development bridging loans are secured loans, and commercial or residential property or land can be used as collateral. You will normally be able to raise around 75% of the valuation of your collateral.

A big advantage of a bridging loan is they can generally be arranged in a very short time span which is not usually the case with the high street lenders. This can help to avoid project delays. These benefits do come at a premium in terms of interest rates but as this type of loan is a short term solution it may still work out in your advantage if project delays are avoided. Another advantage is that the principal can be repaid after the loan period so you only need to fund the interest whilst you complete your project and then funds from the resale can be used to repay the principal.

To summaries, if your property development project is liable to be delayed as a result of funding problems a property development bridging loan may be a solution well worth considering.

There is a lot of competition in the market place for bridging loans so be sure to choose a lender that does not charge any exit fee, offers daily interest with no hidden or additional costs other than the required fee for the valuation of your collateral and any legal fees.

Refinance Your Mortgage Without Closing Costs

There are certain factors that come into play with a no closing cost refinance. Sometimes, this can mean that you have no additional expenses when you refinance your mortgage, but it can also mean that you pay a higher interest rate. There are two types of programs that lenders have for a no closing cost refinance. These are a yield spread premium and a roll in your cost program.

With the yield spread offer for a no closing cost refinance, the lender will pay all of the closing costs associated with refinancing your mortgage. You can choose to have only the true costs of the transaction included or the costs of the insurance and taxes added to it. If the taxes and insurance are prepaid, you will get a refund for that amount within 30 days of closing.

Although the interest rate you pay with this program of no closing cost refinance, you can use this method to lower your current interest rate. If you can lower the interest rate on your mortgage by 2 points and still walk away with no out of pocket expenses, this is a very good way to lower your mortgage payments and cut years off the term of the mortgage.

Under the roll in the costs program, you can have a no closing cost refinance if you have equity built up in your home. With this option, all the closing costs are included in the total amount you borrow. The advantage of this method is that you still qualify for the current interest rate. If you intend to remain in the home for at least five years before you sell, this is an affordable option in refinancing. The amount of the closing costs only adds a very small amount to the mortgage total and will play a small part in the amount of your monthly payment.

However, you do need to check around with various lenders because there are some who really mean what they say when they advertise no closing cost refinance. A no cost program should be able to lower your interest rate at absolutely no closing cost to you. Closing costs typically include the cost of getting title searches and credit reports. If you deal with your regular lender and have been making your payments regularly, they won't need to request a credit report. Since the title search was already done when you bought the home, this is already on file, so there is no need for another.

If you have equity built up in your home through the increasing value of real estate or through improvements you made, you might walk away from the no cost closing refinance with money in your pocket to spend as you wish. If you have a FRM that is at least 0.5% above the current interest rate, you can benefit from checking out the possibilities of refinancing your home. If you can afford to pay off a portion of the mortgage when you refinance, it will help you cut years off the term.

Debt Consolidation Loans Are a Great Way to Simplify Your Finances

Debt consolidation loans are a great way to simplify your finances. You do this by rolling your current debts into just one loan. You can do this in the form of a secured or unsecured loan. A debt consolidation loan will generally reduce your monthly outgoings and ease the stress of dealing with several creditors and juggling multiple monthly repayments.

A debt consolidation loan will increase your total amount of your debt by spreading your repayments over a longer period of time. This should have the effect of easing the pressure on your finances by replacing several monthly repayments with one lower payment.

If you choose a managed debt consolidation loan it can offer a solution to your financial difficulties and provide a way out of the borrowing cycle.

Is a Debt Consolidation Loan suitable for your financial situation?

A debt consolidation loan may be a suitable option for your requirements if you fall into any of the following categories:

1. You are juggling and paying several monthly payments and you want to simplify your debts into one monthly repayment.

2. You are struggling to meet your minimum monthly repayments on your credit cards, store cards and personal loans and would like to reduce the amount of your monthly financial outgoings.

3. You want to reduce the amount of interest you are paying on unsecured forms of borrowing such as overdrafts, credit cards and store cards.

Advantages of a Secured Debt Consolidation Loan include:

1. By providing collateral for the Secured Debt Consolidation Loan you may qualify for more attractive interest rates and loan terms. This is important for sub-prime applicants considered to be high-risk candidates for a loan.

2. You will generally be able to spread your repayments over a longer period of time. This should enable you to keep your monthly payment as affordable as possible.

Disadvantages of a Secured Debt Consolidation Loan include:

1. A longer loan length will generally result in a higher total loan cost; the longer you are repaying a set amount, the more interest you will repay overall.

2. The loan rate offered to you is more likely to be variable. This may make controlling your budget more difficult. Your repayments may increase in the event of a Bank of England base rate rise. If you are late with your loan payments you could be penalised with a rate rise on your loan.

3. If you fail to keep up with your loan repayments you will be risking your collateral, home or car etc, as the lender has the legal right to repossess your collateral, home or car etc , in order to settle your loan. As always you must personally evaluate the risk before taking a secured debt consolidation loan.

Money Rolls Downhill!

I remember when "The Millionaire Next Door" came out telling people how the authors, who are marketing professors, had come up with a big discovery. They discovered more high net worth (wealthy) people in middle class neighborhoods driving a "beat-up pickup truck" (hey, that's what I drive!) than in high class neighborhoods.

These were results we have been well aware of as economists for many years. The reason that these marketing professors thought they had stumbled on something new is because many people are confused about the difference between income and net worth. The difference is crucial to your financial health. Income is nothing more than how much cash you bring in on a monthly or yearly basis.

People focus on income a lot because it puts the bling in bling bling! In other words income is hard cold cash coming in each month to buy goodies right now. It also pays the bills but does not get rid of them. Your cash flow tells you how much of your income you get to keep.

Net worth measures what you owe compared to what you own of value. It measures how much you are worth. Passive cash flow tells you how much of your cash flow would come in if you decided to quit going to work. You can see why guys like Robert Kiyosaki emphasize passive cash flow in their wealth building books.

The trick is to figure out how to get to the point where you don't have to work anymore if you don't want too. As financial economists we have known for years that living well within your means while saving and wisely investing as much as possible is the road to pumping up both your net worth and passive income so that you sleep-in every morning if you want to.

Let me give you an example of a simple decision my wife and I made that has had an enormous impact on our financial health. When we were married we decided we wanted to live in one of the upscale communities here in San Juan. This gated community is so big it actually has sub gated communities and numerous amenities such as the largest and most modern Olympic pool in the Caribbean.

We decided to purchase a 3 bedroom 2 bath condo that was within our means at $125,000.00. Now that we are wealthier and the condo has increased in value to around $200,000.00 we could sell it and move to a $1,000,000.00 house like the ones at the top of the hill our condo is on. We decided to remodel our condo instead and live each day as if we were in a luxury hotel.

Why was this a great decision? By living in a modest priced home we were really able to deck it out. Also, this is really important for you to understand, we are paying only one fifth in property taxes to the local government as compared to what we would if we "moved up" like many people do when their finances improve. Money really does roll down hill because I sure would not want to HAVE to cough up a bunch of cash each year just to pay property taxes!

Another danger people don't grasp is that local governments rely primarily on property taxes to fund their pork barrel politics. The primary source of revenue for most state governments is property tax! The local Puerto Rican government is now in a deficit. I guarantee that it has been discussed among the bone heads in the local capital that property taxes should be "reformed." That sure makes an expensive home a financial powder keg doesn't it!

Why do I suspect that most of the people in the million dollar community up above us are living above their means? Because they are the worst at paying their community fees and have had a lot of their services cut back! Just like they found out in the book "The Millionaire Next Door" many, many households in upscale homes are putting up appearances.

Many of these families are financially unhealthy, and deadbeats when it comes to paying what they owe. These families have less invested in the stock market because they have bigger bills to pay. These families are often less successful in the stock market because the pressure of their high debts focus them no short term stock investing where they are at a disadvantage.

Since we have lower costs in our modest home we are much less at risk if anything changes. Once we cash out the mortgage on our home we could even lose both of our jobs and get buy washing dishes at the local Taco Bell. That is certainly not the case when you have to pay property tax on a million dollar home!