Finance Roll

Even though we have begun to see money start to trickle into the commercial markets, lenders as still being as picky as ever when it comes to who they will lend to, and on what properties. As a result, you may not be able to find traditional financing if you are trying to purchase a property that doesn't meet the high requirements of most conventional lenders. However, here are a few alternative ways you may be able to obtain financing:

Bridge Loans

Mezzanine (bridge loans) is used when a borrower needs some extra funds in order to bridge the gap between a primary mortgage's LTV and buyer's equity. Currently, Mezz lenders are accepting yields in the 10 - 12 percent range. Bridge loans can also be used towards properties that need to be renovated, or need to have their build-out completed.

Government Programs

Federally-supported entities (HUD, Fannie Mae, etc.) can also offer financing for borrower's looking to purchase multifamily property. These entities offer both first mortgages, as well as bridge loans. However, which entity you go with will depend on your long term goals.

Fannie Mae currently has very good interest rates, but also has some pretty excessive early payment penalties if you decide to sell or payoff the loan before the end of its term. In many cases, these penalties will outweigh the benefit of the lower interest rate.

Freddie Mac recently rolled out a new program which combines both a typical first mortgage, as well as a Mezzanine (bridge loan). The two loans combines make it possible to purchase a property with a LTV of up to 85 percent.

There is also the HUD 221(d)(4) program that not only has a high LTV, but also has a non-recourse 35-year term. This program allows the borrower to invest less cash up front, and because it's a longer term loan, also allows for much lower payments without any penalty for and early payoff. One requirement of the program is that it is only available on larger multifamily properties built in 2000 or later.

The Small Business Administration offers another great program to help business owners purchase commercial property that they will use for business purposes. The SBA 504 loan program allows a buyer to borrow up to $2 Million, and allows up to 90% financing. In order to qualify, you must use more than 50 percent of the property for business purposes.

Equity partner

In the event you are unable to find financing in these or any other loan program, you may be able to find equity partner that will help you fill the gap. In this situation you would take on the partner in a joint venture. Just make sure that when you draw up the terms of the joint venture, that you address how much if any decision making authority your partner will have, and what percentage of the equity/profits they will share in.

If you are one of those looking into purchasing multifamily apartment buildings, it best to bring yourself up to speed with the common terms and phrases used in the industry. This will help you in speaking intelligently to the various real estate professionals you will engage with throughout the process.

10 Basic Terms Most Commonly Used:

1. Capital improvements: These are non-recurring expenses. Usually these expenses are for new roof, carpet, paint, windows, etc. These expenses only occur once every few years. Many times an owner will put the cost as a normal expense very a capital cost.

2. CAP Rate: This is the percentage figure i.e. 9%, 10%, 7.5%. This is how value for a property is determined. How this works is that the net income from the property divided by the CAP rate will give you a value. Example: net income of $120,000 with a CAP rate of 9%: $120,000/.09=$1,333,000. CAP rate usually translates to the rate of return and investor/buyer would get on a property.

3. Debt Service or DCR: Typically banks want to see at least $1.15 to $1.25 in net income for every $1.00 being borrowed plus all expenses. This function is to insure that the property is in a positive cash flow situation. Banks will not lend on a property that is losing money. Multifamily ownership is a business, and no bank will lend on a business that isn't making money.

4. Adjusted Gross Rents: All lenders will assign some percentage for possible vacancy and collections problems despite what the actual gross rents are.. Depending on the area I can be as low as 3% to a high of 10%. If the property has a vacancy rate higher then 10%, it usually means the area is very unstable and most lenders will shy away from lending.

5. Management Fee: In every case lenders will add management fee as part of the operating expenses of the property. Even if you have clients that will manage the property themselves, all lenders add in management fee. The reason is that lenders assume that if the property is taken back in foreclosure, the bank will hire a property management firm to operate the property. The bank is not in the business of property management.

6. Master metered: Most buildings in Los Angeles are individually metered for each unit. The tenant is responsible for the utilities within their individual units. However, older buildings might have a master meter, which means the landlord pays for all the utilities in the property.

7. Occupancy Rate: Also known as Occupancy Factor, this is a calculation based on the total number of rental units available. Example: If there are 100 units available for rent, and 90 are currently rented, then the Occupancy Rate would be 90%.

8. Operating Expenses: This covers all expenses in the normal operation and maintaining of the property.

Some examples of operating expenses are: Property Tax, Insurance, Utilities, Gardening/landscaping, Repair and maintenance, Pest control, Pool service (if there is a pool), Management, On-site manager & All recurring expenses.

9. Rent Rolls: Record keeping is crucial for proper management and evaluation. Rent Rolls are a current list of what each tenant is currently paying in rent, any credits they are receiving as well as deposits they currently have, These are typical kept on a monthly basis and updated as renters come and go.

10. Reserves: Most lenders will factor in reserves for repair and maintenance above the normal maintenance expenses. The lenders anticipate possible need to replace items like carpet, drapes, paint, window treatment, etc.

Buying multifamily properties can allow you to have relatively low risk and high return for your investment. Multifamily apartment financing is not as complicated as it seems, if you take the time to learn the basics. If you are looking for an long term recession proof investment vehicle, multifamily property investing and ownership is a great way to go.

As I sift through my mail I notice yet another statement from my financial advisor. "Why do they have to send me so much paper?" I wonder. Without bothering to open the envelope, I toss it into the growing stack of financial documents in my hall closet. "I'll get to it later," I promise myself.

Are the actions described above indicative of someone who is in charge of their finances and on top of the many transactions that are taking place? Hardly, and I should know, that person was me. I couldn't be bothered to deal with my finances yet I complained about my salary and dreamed about winning the lottery.

As a Professional Organizer, I am well aware that clutter is all about stuck energy, but it was a bit harder for me to accept that money is simply another form of energy that flows into and out of our lives. How can we expect to attract something that we don't take an interest in? If I don't value my wealth and take care of my financial affairs, I give off the message that "I can't handle the money that I have." The conclusion: there is no room in my life for more money, so don't send me any more. Not very smart, is it?

If you have resolved to be better organized this year consider starting with your finances. Apply the following strategies to ensure that you are open to receiving more prosperity and good fortune:

1. If you haven't already determined where you money goes on a daily basis, do so for a month and get clear about where your money is being spent. This exercise is not about judging, but becoming more aware. You may then choose to alter your spending habits.
2. Open, scan and file your documents on a regular basis. Use clearly labeled folders and recycle outdated materials or announcements. Shred when appropriate or at least archive information on an annual basis.
3. Act on discrepancies immediately. Queries on credit card statements and investment transactions must often be done within a strict time-frame, either 30 or 45 days. Don't let unfinished business turn into mental clutter; boost your energy by crossing something off your to-do list.
4. Whether you donate your pennies to the annual penny drive, support a church raffle or give to a charity make sure money flows both into and out of your life. A willingness to give away that which we attach so much importance to increases the likelihood that we will receive more of the same.
5. If you save loose change, sort coins into separate dishes for easy rolling or handy bus fare. If your grandkids are too old for small coins, roll them up and donate them to a non-profit group.
6. Pay attention to the details. How are the bills organized in your wallet? Are they crumpled up and backwards or smoothly ordered in increasing denominations? Take the time to store bills properly and you will give off the message that you know how much money you have and that you treat it with respect.

Contrary to the vibration that I was previously sending out about money ("I can't be bothered, it's not important, I'll deal with it later"), all of the ideas listed above indicate that you respect money enough to deal with it. By demonstrating that you are able to handle the money you have, you send out the message that you are ready for more.

I had never been to Odessa, Texas. From the perspective of a young stockbroker working in Pittsburgh in 1986, a trip sponsored by the oil and gas concern of Parker & Parsley to this little area of West Texas seemed an adventure. Two of my associates and I joined a number of brokers from across the nation for a two-day seminar discussing the merits of their limited partnerships. While the Odessa /Midland area can be extremely hot and dry - and none of us had ever actually seen tumbleweeds rolling down a major street before - it did turn out to an enjoyable and educational trip.

It was easy to walk away from that excursion with a deep respect for how challenging the oil and gas industry historically has been and remains to be to this day. From the early wildcatters to hydrocarbon exploration, a special type of entrepreneurial spirit is required to be successful. As a partner in a firm that specializes in offshore acquisitions, I can emphatically state that we take pride in assisting this sector with one of its major and reoccurring challenges. What issue seemingly plagues this industry more so than others? The answer is simple: business owners in oil and gas development are asset rich but, at times, cash poor.

Now more than ever, liquidity is hard to come by in this tight credit market. The ability to monetize not only those commodities you are currently mining or in possession of but those natural resources that are yet in-ground is essential to gaining the capital needed to expand your operations. However, obtaining these loans on non-producing reserves is challenging and often unattainable.

For many years now, especially in response to the current economic crisis, business owners and professionals have sought out alternative methods of "taking matters into their own hands." Owning a private bank or Trust Company has long been one strategy for protecting wealth and assets; today, oil and gas professionals are using this same strategy to secure rare and desirable loans against in-ground assets.

By owning a private financial institution and establishing bank-to-bank relationships with large lenders, commodities owners can monetize reserves without the cash-on-hand typically required for a private business to qualify. Typically, all that is required of private financial institutions is assay reports and geological surveys in order to obtain large loans. Additionally, upon acquisition of a private institution, owners will be offered lower than average interest rates against their non-producing reserves. For example, recently, we worked with a client owning $600M in non-producing oil reserves; he was able to obtain a loan of 5% of those assets, or $30M, at a rate of 3.5%.

In an industry as complex as oil and gas development and exploration, the steps to leverage your business to finance your growth are simple. Ownership of a private financial institution enables you to do monetize assets, both in-ground and non-producing, at lower rates than most major banks.

Recent changes to the amount of money savers over 50 can deposit into their Individual Savings Accounts (ISAs) are seeing record numbers of people making full use of the new regulations. But those who are not eligible, such as those who do not meet the minimum age requirement, are finding less favorable returns available on their savings and are refusing to put their money away - could we be putting our money to better use?

Savers over 50 can now deposit up to £10,200 (half of which must be in cash, the other half in stocks and shares) into their ISAs, whereas before this limit was capped at £7,200. According to research recently published by Nationwide, the new limit - which will be rolled out for everyone in April - has attracted more savings than expected, despite the fact they have been in place for just one month.

Despite this optimism among banks and older savers, research from Abbey has found that huge groups of people cannot afford to save. In data published recently, 28 percent of parents were seen to have no savings at all, while 20 percent of those asked admitted they had less than £1,000 to save which they could use in a financial emergency.

The research has prompted advice from all corners of the money market, with banks eager to highlight the importance of so-called 'rainy day' funds and independent money experts urging people to shop around for the best savings deals before they settle, and for those who already have accounts to review their rates and to consider changing if they see a better deal elsewhere.

The next few months are a particularly good time to start researching different types of savings accounts. New regulations mean that banks and building societies must give at least two months notice to savers before they cut rates, while trends towards efficiency, simplicity and transparency are emerging in the finance sector as banks and buildings societies are eager to appeal to prospective savers at a time when rates are so low.

If you've been watching the news lately, you might have heard the media celebrating the fact that American job loss was lowest in April than it's been since October of last year.  I caution all of you not to break open the champagne just yet, unfortunately.   The stabilizing unemployment rate was a bit skewed by the 72,000 jobs added to Uncle Sam's payroll. Keep in mind that roughly 60,000 of these new employees were hired on a temporary basis to work the 2010 census, but they'll be back in the unemployment line as soon as the gig is up.

And besides, since government salaries are paid by taxpayers and the U.S. is already battling an enormous tax deficit and declining tax revenues, the new jobs will have to be funded by inflation.  The bottom line is that more government jobs isn't a sign of an economic recovery -- it's a sign that we're digging ourselves even deeper into a bottomless pit that will ultimately end with the collapse of the dollar bill.

It's not all doom and gloom out there, fortunately.  There are steps you can take to protect yourself and your family in this uncertain economy.  Americans are losing their jobs in record numbers, and while you're powerless to some extent, read on to learn how you can help safeguard yourself and your financial future.

1 Pay off bad debt

Ideally, you have whittled your debt and monthly payments down to size, using any extra money you can spare each month to reduce them even further.  Or better yet, you're debt-free and can sock a significant portion of your dispensable money away for the rainy days ahead.

By the way, you may be wondering what I mean by bad debt.  Basically, I'm talking anything that is unsecured and has a high interest rate.  Yes, that vacation you charged last year and are now paying back plus interest counts as bad debt.  No, your mortgage or car loans don't count.  They are what I consider to be necessary debt as you need a roof over your head and transportation to and from work (unless you have access to public transportation, but that's another topic altogether).

2. Reduce your expenses.

While you're eliminating bad debt, which is a monthly expense for your family, start cutting other unnecessary expenses as well.  One way is to stop buying in bulk.  What good are 500 rolls of toilet paper going to do you if you lose your job and, as a result, your home?

You'd be better off scouring the sales and finding a good deal on a 24-pack of t.p. and saving your money.  Cash is king, and it's better to have your reserves in cash than depreciating material goods.

The bottom line is that you shouldn't stockpile on items for the future.  Now more than ever, you should be living in the present.  Buy what you need right now and save that extra $10 you would've spent on bulk items for whatever you might need next month.  Most of all, from a biblical perspective, be content with what you have and stop trying to keep up with the Joneses.

Now isn't the time to be making frivolous purchases.  Sure, a new plasma TV screen would make a great addition to your living room, but that money could be saved as a cushion against hard times that can unexpectedly hit anybody at any time.  How many groceries could you buy with the money it costs to buy a plasma TV?  Quite a few!  So until the economy makes it turnaround, hold off on those big purchases and build your nest egg instead.

3. Secure your income.

Easier said than done, I know, but do whatever you can to make sure that your job is secure. Hopefully, you have done your homework and learned that your employer is in good enough shape to keep funding your paycheck in the coming months.  You're doing your job to the best of your ability and offering to help in other areas as needed.  Basically, make yourself as indispensable as possible.  You should also consider avoiding unnecessary job changes that can lead to instability and job loss.  After all, it's much easier for employers to can a worker who's been on the payroll for two months than one who's been contributing to the business for twenty years!

Unfortunately, nothing will guarantee that you'll keep your job.  This is one reason that many savvy investors build their own companies instead of seeking out high-paying jobs working for others.  Many hard-working Americans have experienced the misfortune of unemployment through no fault of their own.  The key is to do whatever is in your power to secure your income and keep putting money aside in case the unthinkable happens.

4. Keep a roof over your head.

By now, you have likely made sure your family will continue to have a roof over its head by either 1) Deciding to stay in your home and using my action plan for saving it come hell or high water -- or, 2) Deciding to sell your home and rent an equal or better home for less.  If you are getting behind on your mortgage payments, you may want to consider moving to a small apartment until you can get on your feet again.  Part of the problem is that you must weight your options with your lender.  Generally speaking, I believe you should stand your ground and try to work out a payment system with your lender to keep your current home.

If you are being evicted due to non-payment, you will still need some money on hand to put down a deposit and first month's rent, so be prepared with cash.  In today's market, most lenders will work with you as long as you are making some type of payment each month.  The banks don't need any more bad debts on their books right now and are more willing to work with you than ever before, so take advantage of the situation before it's too late.

5. Protect your money in the bank.

Make sure your money is in the safest bank available to you.  Contrary to common belief, I recommend keeping some cash on hand at home and using smaller local banks for the rest of your money.  Many of the local banks have managed risk well and are in better positions to hold your cash, so do your homework and ask to see the debt ratio at the bank you use or are considering using.  Obviously, the lower the ratio the better.  Fannie Mae was leveraged 100 to 1, which is a prime example of what not to do.

Reduce or eliminate your exposure to plunging stocks and bonds, saving your portfolio and your retirement from further disaster, and ...

Hedge against further losses in the value of your home and in investments you can't sell. Which leads us to number 6...

6. Make wise investments.

Because the stock market is experiencing a government-inspired rally, now is the time to sell!  Sell every soft stock you have and check out some of the alternative investments below that have stood the test of time.  

Physical gold and rare gems are good investments for economic hard times.  But they aren't the only investments you might consider.  Cash is king, at least in the short run until inflation kicks in and the dollar starts diminishing in value.  Not sure about the best way to buy these items?  Contact me to learn everything you want to know about alternative investments.

Since the beginning of time, metals and gems have increased in value, making them the best safe haven and hedge against dropping currency in troubled times. 

Other investments, like Managed Future accounts, have been growing in popularity.

Managed Future accounts are secure investments that allow professional traders use your money during business hours returned to you at the end of the day.  The volatility in the current market offers day traders opportunities they have not seen in years.  Right now, the stock market is not a buy-and-hold scenario for the savvy investor.   If you are getting that advice, I respectfully warn that you may need to reconsider your financial advisor.

More about Managed Futures: Integrated investment platforms improve profitability and better manage risk.  You keep custody of your own funds, but let professional traders do the trading.   Traders (which are highly regulated) have Limited Power of Attorney to trade the managed account only.  Only you have deposit or withdrawal authorization.  Returns typically average in the 20-30% range, even during shaky economic times like those endured in 2008!   If your portfolio was down last year, you need to get into a managed account today. Don't quit your day job to become a trader; let the professionals do it for you.  Your time is better used doing what you are good at and have a passion for, not pursuing a new carrier in this market.

You can see that while the economy is dismal, there is still hope for a strong economic future.  You just need to take a few precautionary steps to protect yourself and your finances, and then hunker down and weather the storm.  This too shall pass!

Exercise     Sale 
Basis in 100 shares of stock     -2,100 
Call premium received               400 
Call premium paid                  -600 
100 shares deliver at $25         2,500 
100 shares sold at $30            3,000 
Net profit                         $800 

This comparison appears to conclude that you have a better outcome by allowing exercise of the call. That is a fair conclusion only if you would be willing to give up the 100 shares; but it excludes two very important considerations. First, upon exercise you have a capital gain on the stock and a tax consequence. Second, if you keep stock you are free to write covered calls again after expiration or close of the current positions, meaning more income in the future. Exercise ends that possibility.

Tip: A careful comparison between choices is the only way to decide whether to accept exercise or to close out the whole position.

Method 2: Roll options to avoid exercise. A second technique to avoid exercise involves exchanging one option for another, while making a profit or avoiding a loss in the exchange. Since the premium value for a new option will be greater if more time value is involved until expiration, you can trade on that time value. Such a strategy is likely to defer exercise even when the call is in the money, when you remember that the majority of exercise decisions are made close to expiration date. This technique is called a roll forward.

Example: Trading Expirations: The May 40 call you wrote against 100 shares of stock is near expiration and is in the money. To avoid or delay exercise, you close the May 40 option by buying it; and you immediately sell an August 40 call--this has the same striking price but a later expiration.

You still face the risk of exercise at any time; however, it is less likely with a call three months further out. In addition, if you believe that expiration is inevitable, this strategy provides you with additional income. Because the August 40 call has more time until expiration, it also has more time value premium. The roll forward can be used whether you own a single call or several. The more lots of 100 shares you own of the underlying stock, the greater your flexibility in rolling forward and adding to your option premium profits. Canceling a single call and rolling forward produces a marginal gain; however, if you cancel one call and replace it with two or more later-expiring calls, your gain will be greater. For example, you own 300 shares and have previously sold one call; you can roll forward, replacing one call with either two or three which expire later. This strategy is called incremental return. Profits increase as you increase the number of calls sold against stock.

Here are ten steps you can follow to help improve your personal financial situation and inevitably save more money:

1. Pay Yourself Weekly

This may seem a bit odd, but this is an excellent way to start building a substantial savings. On a weekly basis, pay yourself $25-$50 and immediately put it in a safe place. You can even open a special savings account where this weekly "payday" can by placed to help minimize or eliminate impulsive spending. Think about it this way, if you paid yourself $25 a week, in two years you'll have accumulated $2600 (not including interest)!!! That's almost $3000 from just putting $25 aside every week! Take advantage of this money-saving opportunity. Simple, yet very effective.

2. Don't Shop

For those of you that love to shop, you may find that this is one tip that could save you hundreds, maybe even thousands every year. Start using the "Need or Want" strategy. Before you spend a single dollar on anything, ask yourself, "Do I really NEED this item, or do I just WANT it??" You may find that many of the items we purchase, we do so just because it "caught our eye" or it was "an impulse buy" or "my friend bought the same thing". All these excuses just add up to wasteful spending. You can probably get by without another sweater, or a new pair of jeans, so just buy what you absolutely need, and pass on those items that aren't necessities.

3. Use Your Bank's Own ATMs

Some banks will charge you money for using other ATM machines. Even though you will be able to withdraw money using your ATM/debit card from literally any machine, banks will charge you $2 (generally) for using a machine other than theirs, in addition to a standard $1.50 charge the machine charges for its use. In other words, if you use the ATM at your local 7-11 to take out $20, you'll most likely end up paying $3.50 in additional charges! If you do that 5 times a month, you'll lose $17.50 for that month, or $210 per year! What a waste! Try and stick with your own bank's ATMs whenever possible.

4. Track Your Spending

Take the time to track your spending habits for one week. Take note of every single dollar you spend, even those sodas and candy bars purchased here and there. This will give you a "birds-eye" view of exactly where your money is being spent, thus allowing you to refine your spending habits to essentially save more money.

5. Lower Credit Card Balances

Another very important tip that many often overlook. Pay off those pesky credit cards as soon as possible because you are losing up to 19% of the total. What a waste of your hard earned money! Keep chopping away at the balances until you get to an amount that is reasonable $100-$500 dollars.

6. Use Your Debit Card Instead of Credit Cards

Get in the habit of using your debit card instead of your credit cards. For the most part, debit cards are accepted anywhere a credit card is accepted, however as you know, with a debit card the amount is taken directly from your checking account whereas credit card usage is billed at a later date (along with a hefty interest rate).

7. Changing Jobs? Roll-Over that 401(k)

When people change jobs/careers they will be faced with a decision to either "rollover" their 401k (retirement plan) or to withdraw it. It will be ever so tempting to withdraw the money since it will be a substantial amount, but don't! You will be charged fines and penalties for an early withdrawal that will cut YOUR total by 40%-60%! That's like giving half of your earned retirement savings away to a stranger. Why would you do that? Even though you may want the money now, resist the temptation and roll it over. It will be well worth it in the long run.

8. Avoid Getting Too Many Credit Cards

Why have eight credit cards? That's just going to provide you with more opportunities to go further into debt. It's fine to keep 1-3 cards to build credit, establish yourself, and for emergencies, but credit cards are double-edged swords. They can help or hurt you depending on your self-control.

9. Check Your Credit Score/Report

It's important to know where you currently stand as a consumer and since your credit report is the most important historical list of your financial past and present, it's a very good idea to check it from time to time. There are a number of places where you can get your credit report, however the most detailed compares information from the top three national credit bureaus: Experian, Equifax, and TransUnion. Once you get your report, look through it carefully to see if all the information is accurate. If there are any discrepancies, get those solved as quickly as possible to improve your credit rating - a score of up to 800. Often times, consumers are unaware of unsettled accounts, or accounts that are still open/active when they should be closed. Pay close attention to this when inspecting your report.

10. Finally: Review - Revise - Retry

Once you start implementing these tips and become more familiar with the money saving opportunities you have, take the time to REVIEW your progress. Check and see where it may be possible to REVISE some of your techniques or where you can implement new ones. Once you have revised your plan, RETRY to see if your results improve. The more frequent you review, revise, and retry your saving ideas, the more "in tune" you'll be with your finances and spending habits, and learn what works and what doesn't for you.

Equipment Capital and the financing that's required to complete asset acquisitions is a large part of the Canadian equipment financing puzzle. Business owners in Canada want to stay ahead of the competition and technology curve - to do that they require computers, machinery, and other assets that can help to grow revenues and profits.

Lease financing is one key method that allows that to happen. At the heart of the equipment capital lease financing solution is the premise that business owners want to use equipment and assets for a specified period of time, while at the same time not wanting to outlay huge amounts of capital and use line of credit facilities that otherwise might be used in day to day working capital facilities.

To put it simply, business owners and financial managers want to use assets, but they don't necessarily want to pay to own them - and they certainly don't want to mis - appropriate large amounts of capital as down payments or payment in full for ownership of a depreciating asset.

The hard reality is that equipment capital and lease financing is available to every business in Canada, whether you are a start up or a major Financial Post 100 corporation.

In today's competitive environment it's all about staying ahead of the curve, and business owners want to ensure they have the fixed assets in place that will allow them to grow profits and revenues.

Accountants and miscellaneous financial advisors will also tell you about the other benefits of equipment capital financing, which include balance sheet benefits and income statement benefits re taxes, depreciation, etc. Those truly are great benefits, but the bottom line is that when you acquire assets through a leasing you are profiting form use, not ownership, and we advise clients that is a very powerful statement.

All business owners and financial managers know that it's all about cash flow, and your ability to both save on capital outlay and acquire much needed assets is the key benefit of equipment capital leasing.

When you are well informed about lease financing options in Canada you have the ability to enter into lease contracts which have several other benefits - i.e. you can finance delivery, installation, maintenance, etc. Prudent business owners will match the term of their lease to the expected use of the equipment. For example, why would you buy computers outright, or mistakenly lease them for 5 years, when in fact the reality of computing is that you will replace them every 24 months or so, if not sooner. That's what lease financing flexibility is about. In many industries prudent business owner's use lease financing as a roll over strategy - they continually on a regular pre determined basis acquire new assets which are rolled over into a new lease arrangement.

Utilize equipment capital and lease financing wisely - understand your options, and work with a trusted advisor in this area of Canadian business financing. Use asset acquisition as a key strategy to remain both competitive and profitable.

The oil frenzy's still building.  Last week we peaked at almost $135 a barrel.  According to CNBC and the talking heads, it's the story of the century.  Every tick higher on oil prices brought a new flood of information, concerns, and stories.

Now oil is off $10 per barrel.

Never fear.  The story of the century is not getting away.  The media has shifted their reporting.  Now instead of asking if this is a new high they ask if this is the start of the fall.

Unfortunately for most of us, it doesn't matter.  Gasoline prices are now over $4 per gallon in many areas, and the trend is for higher prices still. What we need is for oil to fall by $50 not $10.

The way I see it there are a number of good ways to profit from high oil prices.  The first and easiest is to invest in the oil producers.  They benefit from high oil prices.  The higher we go the more profits they make.  Buy a basket of the biggest companies and hold on for a wild ride. Another way takes a bit more thought.

To profit from oil prices you need to invest in companies that could help eliminate the world's dependence on oil as the major source of energy.

So, what are the alternatives?

The holy grail of alternative energy is to find a source of energy that's "on" all the time.  Wind and solar power are at the mercy of Mother Nature.  Pollution is also an issue.  That's why nuclear energy won't be completely accepted as an alternative energy source.

Coal, oil, and natural gas are fossil fuels which one day may run out.  And now they're becoming prohibitively expensive.

So what's the solution?  I think part of it is geothermal energy.

The future of geothermal energy is bright.  The biggest advantage geothermal plants have is no fuel costs.  No coal, no oil, no natural gas. Power production is never impacted by cloudy days or lack of wind.  It's an "always on" fuel source that's just waiting to be harnessed.

Give me a moment and let me explain why I like geothermal.  Then I'll give you an investment idea.

First, what's geothermal energy?

Geothermal energy is produced from the heat of the earth.  The slow decay of radioactive materials in the center of the earth generates enormous amounts of heat.  The melted core of the earth is a giant ball of molten hot magma.  The most obvious signs of this heat and power are volcanoes.

Other signs of this heat include hot springs and geysers.  Magma makes its way close to the crust of the earth bringing with it significant amounts of heat.  When rainwater reaches these areas it's often turned into hot water or steam.

How do geothermal power plants work?

Geothermal power plants are established near these hot areas.  Holes are drilled allowing for water to be injected, and for steam to be extracted. Water is injected down one hole and is heated by the earth.  The hot water and steam naturally look for a way to escape.  The steam rises out of the other holes drilled in the area, and it's used to power a turbine.

Most other power plants operate in a similar fashion.  They use a fuel source (like oil) to convert water to steam.  The power of the steam drives a turbine, generating electricity.

The supply of steam generated by the earth is very valuable.

Unfortunately, geothermal won't ever provide all of our power needs. Most areas that are great for geothermal power are far from major cities. However, geothermal can provide an important piece of our energy needs.

So how do we profit.

When you do your research on geothermal companies you'll realize there are lots of small players.  Lots of companies own land with great geothermal potential.  Some have drilled test wells.  Others are starting to install generation equipment.  Many more are looking for financing.

I'd ignore them all for now.  They're no different than a wildcat oil driller. It's a lottery ticket, not an investment.  You have no guarantee that they'll be able to get a plant up and running.  The promises of great riches are wonderful, but my hunch is that most of them will fail.

However, there's one company that I do like.  It's the biggest geothermal company out there right now.  Ormat Technologies (ORA).  They operate under the build-own-operate business model.  Not only are they working towards getting new geothermal plants built, once they are built they handle all of the operations.  This gives them a steady stream of revenue and profits.

The company is huge, they have a $2.0 billion market cap.  Last quarter they had almost $70 million in revenue and generated more than $10 million in profits.  No doubt they are the 800 pound gorilla in the industry. Look at Ormat as a long term energy play.  They're a great combination of a power plant operator and alternative energy company rolled into one.

1. Your housing debt should not exceed 28 percent of your gross income. Your total debt should be under 36 percent.

2. Invest for your future. Use your 401k, 403b, 457 and max out your IRA's. If you get a match on your 401k, make sure you are taking advantage of it!

3. Have a diversified portfolio. An old rule of thumb is take 100-age and that is the percentage you should have in growth types of investments. The new rule is 120-your age. I don't believe either. It depends on your age, risk tolerance and how much money you have.

4. You don't want more than 5-10 percent of your portfolio in one stock.

5. If you don't understand an investment, don't buy it. Know what you are getting into and how you are investing.

6. If you are not saving 10 percent, you are not saving enough. If you are looking towards retirement, women need to save at least 12 percent and men need to save 10% towards retirement.

7. Have liquid money. You want to have 6-12 months of money in a money market account as your emergency fund.

8. Buy insurance with the highest deductibles so that you are paying less monthly in premiums. But, make sure you have liquid money to afford the deductible if something happens.

9. Generally it is better to buy a car than to lease. But, don't buy a brand new car. Millionaires usually own and drive used cars.

10. Have you ever been pushed to buy an extended warranty on a product you purchased? Generally, not the best idea-usually a waste of money.

11. Keep good records. Keep your cost basis information, your taxes, know where your money is and where your accounts are.

12. Eliminate bad debt. If you have credit card debt you are generally living beyond your means. There is good debt and bad debt. Get rid of bad debt.

13. Know what you are spending. Have a budget and stick with it.

14. Put your possessions into good condition before you retire or go through a life change.

15. Stay in good health. Health insurance is the number one reason people do not retire.

16. Make sure your income exceeds what you have as expenses every month.

17. Don't let CDs automatically roll over. Make sure you are making the most on your money and have a plan. It's not just always the best rate in the short term (or long term).

18. Don't have a number of different IRA's or accounts. Consolidate. If you have an old 401k, roll it over into a Traditional IRA in your own name.

The reality of online customer support typically involve either the "Contact Us" button which VERY FEW virtual visitors are willing to take the time to fill out and punch if their purchasing questions are not answered in detail on your web pages OR outsourced call centers in India and South America.

(Which, by the way, is a nasty little secret that very few consumers are aware of.)

Customer service is a wonderful thing at the brick and mortars. It's the roaming salesperson who knows about the toasters and how brown the bread can really gets at the smaller settings, or it's the associate who is willing to walk your finance questions into the sales manager to get real possibilities (read options) for you.

That's customer service on the front end.

As an online entrepreneur, like most contract, your copy on your pages probably DOES NOT roll over every objection that a prospect will have.

"It's too yellow."

"Is is supposed to be that round?"

"I thought I heard that there were no moving parts...I have kids."

The reality of online business is that your web pages can do only so much to get people over these objections...these reasons why people DO NOT BUY.

But there is help, and there is help aplenty.

Because in the right hands, each and every objection to your bowling alley online supply store, to your cookie distributorship and even to your business opportunity can and should be rolled over through the use of your autoresponder.

And the #1 way to do that is through stories.

Wonderful, entertaining stories that take on the objection head on.

Not by explaining away the ACTUAL OBJECTION, but by making a comparison to a similar objection in a different category in a smart way that ends up actually proving your point.

If the objection is that the central air unit you're selling seems to expensive, your story is not about the cost of your central air unit...it's a story about a couple that lives in your neighborhood (a really nice family) that went for a lesser expensive vacation last year and boy were they fuming when they got back.

These stories HAVE TO BE REAL.

But the exciting thing is that you can make your point through stories that roll over the objections.

In the copywriting game, it's one of the things we do that most prospects NEVER realize that we're doing.

I believe it's true that with NO financial goals you're likely to achieve just that: NOTHING! I've got some ideas on this subject that could help you to not only conserve and save money, and consequently help the status of your family and household budget, but also help you to achieve some major family financial goals.

This is just one of a number of financial strategies that I'll be rolling out for you that should help you learn how to budget just a little better and help your personal finance picture improve. Good goals for us all!

What matters most to you and the other members in your family? Do you really know, for sure? Gather the entire family in one place and, together, make a list of the ten most important accomplishments, purchases, experiences, vacations, whatever, that your family wants to achieve. Rank these ten items in order of importance, using numbers one through ten, with number one being the first that everyone wants to see happen.

Everyone then gets a minute or two to describe, out loud, what it looks and feels like to them when the family reaches that goal. The purpose of this part of the exercise is to help everyone visually see what the family wants to achieve so they'll all really possess and feel a "burning why" for the collective family decision to budget and save for these goals. Don't leave this step out.

Break these financial desires into short-term, intermediate, and long-term goals -- some will take longer than others to achieve. Then determine the specific action steps necessary to reach each of those goals, along with deadlines for each action. Track your actions, checking them off one by one in weekly family meetings, as you work toward these goals.

Seeing and recognizing your accomplishments, the steps you've all made toward these family goals, will help motivate the entire family to continue working hard at saving. If you set a short-term goal of saving for tickets to the symphony and reach that goal, you'll all feel encouraged to keep saving for your joint family intermediate and long-term goals.

Remember, as mentioned previously, to set deadlines for the specific action steps necessary to reach your goals. Don't set deadline dates for the goals themselves -- that very often leads to failure and to goals that just get dropped and forgotten over time.

Finally, there is really NO plan until you write it down. When a person goes into business, they create a business plan which becomes the blueprint of their business. The same principle applies to budgeting and saving money. Create a master family plan that includes everything you've decided together to work toward. And keep those written plans updated as you all jointly reach and achieve the steps toward each goal.

Be sure to encourage each family member to contribute toward determining these family financial goals. This will result in each member "owning" those goals and working hard to make them happen. After all, those goals now belong to each member of the family because each person contributed to the creation of those goals.

If it seems that the family is spending too much on a weekly or monthly basis and that you're not moving quickly enough toward reaching your big financial goals, go back and look at your plan to see where you went off track and figure out how to fix it. Then make the necessary changes and move closer to that goal. Constant course corrections are necessary in budgeting, just as in flying to the moon or sailing a boat across the bay.

Follow these family financial goals guidelines and you'll find your family achieving and experiencing more than you could possibly have imagined. The jointly imagined and created family experiences will bring precious and long-term memories for everyone.

I hope these ideas have put you on the right track to considering small things that you can do, which can add up to big amounts, to improve your personal finances and help to protect your precious family financial resources!

It seems that cash loan stores used to be located in the worst section of town. In a seedy neighborhood downtown with a neon sign that reads "Check Cashing" or something similar. Many of those stores were for cashing checks for people without bank accounts. Then the payday loan shuffle happened and everybody started doing it. Check cashing/payday loan stores seemed to be popping up everywhere. That was the convenient way to get fast cash until online cash advance payday loan companies came along, giving consumers more choices than ever. It made sense. Why leave your home and drive around, wait in line, hope for approval and if approved have to worry about getting home safely with cash in hand? If you have access to a computer, you can have cash in the bank by tomorrow. It seemed to be pure genius! At least until faxing documents became a hindrance for those who didn't have access to a fax machine. Online payday loan stores soon went faxless and both local and online payday loan stores don't run credit checks because that is typically who they cater to.

If you have bad credit, but you have a bank account and verifiable income, you can get a payday loan, but there is a high price attached. It's called interest and it can get you in deep trouble if you are not careful. Interest rates can be as high as 700% on the APR. If you don't have a bank account, some local stores will still loan you money. The local stores can provide cash within a few hours, again it's not free money, some while you wait and online payday loan companies can have cash automatically deposited into your bank account within one business day.

There are a couple of ways to get a payday loan, also known as a cash advance or simply fast cash, emergency cash, etc. Until recently, a person would have to look through the phone book to find a payday loan store somewhere in town, then call them and find out what kind of paperwork was needed in order to get the loan. Then you had to search through boxes of records, hoping to find what you need to qualify. Now it's a matter of turning on a computer, filling out a short form and clicking a button.

A payday loan is a quick fix and sure way to take care of a cash emergency, but beware. Because payday loan companies loan money without a credit check, they have to cover their butts and therefore charge a fee that goes up in increments for every $100.00 borrowed. If you need cash quick, don't make a hasty decision. Get the facts. If it is a local lender, call and ask them what type of fee will apply as well as when the loan needs to be paid in full and how much you will end up paying if you need to roll the payday loan over once or twice. Online lenders usually have an FAQ page that will answer those questions, if not, contact them via phone or email. Fees vary from lender to lender making it necessary to take the time to do some research and avoid being gouged.

With tax season rolling around, everyone is concerned about getting their taxes done in the least amount of time and with the least amount of hassle, but at the same time assuring that they are done properly. After all, no one wants to have his or her taxes filed incorrectly or to end up paying in future.

You can make sure that your taxes are done properly by many ways. One of these is to go to a taxation firms that take cares of tax matters of their clients. The purpose of tax management is to make certain that all your finances are in order before your taxes are filed so that you can file your taxes in lesser time and without any ambiguity. Another purpose behind tax management is to reduce the amount of taxes that you pay.

Tax management requires you to understand how the tax system works and the kinds of reductions and tax cuts you can get, it is important that you hire a company in order to save the maximum amount of money.

A taxation services firm can help reducing taxes in three ways. One is by reducing your Adjusted Gross Income. This may sound ludicrous, reducing your income, but this is actually the first step in reducing your taxes. Everyone knows that the higher your income is, the higher a tax bracket you are in.

You can reduce your Adjusted Gross Income (which is your actual income minus any contributions) by increasing the amount of money you put into a retirement fund. Since this adjustment is made before your Gross Income is calculated, you will end up paying less in tax.

Next, a taxation firm helps reducing the amount you pay in taxes by suggesting you the tax deductions you can get. The basic ones are payment of mortgage interest and donations to charity. Other deductions you can get include paying for health care, local taxes, property taxes, job-related expenses, tax preparation fees, and expenses related to investment. The only way to be able to accurately measure these is by keeping proper records of your expenses during the year.

Your deductions will also increase if you are married or have children, or have other people dependent on you. There are plenty of tax deductions available to you and the only way to take advantage of them is by making sure that you hire a taxation firm to manage your accounts in a better way.

The third and final thing is tax credits. These are available for college expenses, adopting children, retirement savings, and other things. You can also reduce your tax expenses by keeping your bank account balance in low.

This is what I call a rock-and-roll week! Anybody scared? You should not! After a good advance of the broader markets these pull-backs are more than normal. The week before, I suggested to take some profits and to forget about the markets until the end of the summer. If you did miss this suggestion, do not get nervous as nothing major is expected soon. As I already have said, the markets are entering a period of a sideways move which could last for a couple of months. The recent decreases are a bit too deep for such a short period and we are probably going to witness some sort of a bounce back action next week. Do not get very excited about this either as it will go nowhere! It would only be a normal adjustment after the fall down.

On the currencies side, we saw a record low for the $US on July 24th and a bounce back right after. It is not easy to break a historical support. The dollar is due for some rest and is not going to fall sharply as many analysts suggest. All the currencies had a good run recently and we can expect that the profit taking action will stop them for sometime before the race continues. This in turn will help the US dollar for now (but not for long!).

The recent decline of the long term interest rates is giving some relief for the bonds as well. However, we should not forget that the major trend is on the up side and this is only a temporary benefit for the bonds.

The stock markets are under pressure after reaching new highs for some of them. Dow still has a room to go down to its good support of 12750 but is unlikely to cross the 12850 mark. The S&P 500, NASDAQ, the TSX Composite and the FTSE 100 indexes are already at their supports and a rebound action is very possible. These respective supports are 1450, 2525, 13710 and 6170.

Crude oil is continuing to outperform its pears from the resources sector. It is now approaching its all time high of $80.64 and has enough steam to reach it and achieve a new record. However, I think this is not going to happen now but rather later this summer or early in the fall. The precious metals are coming back from their recent runs and are still in a process of confirming the beginning of the long awaited new intermediate wave up. Gold and silver should not go bellow $655 and $12.60 respectively. The up side will be confirmed by breaching $685 for Gold and $13.30 for Silver.

We are approaching exciting moments but for the next month or so the markets will give us the opportunity to take advantage of our summer. Keep your energy for the fall action!

Good investing and best regards,

Last night after work and the gym, I headed home. Pulling into the driveway I noticed something unusual. There was a big white piece of paper taped to my front door. I wondered what it could be.

It's not uncommon to find advertisements at our doorstep. Someone's always trying to sell something. But this wasn't an advertisement.

This was some type of official notice.

I grabbed the paperwork and started reading. It was a notice from APS, the local utility. The electricity to the house would be cut for a short while.

Now, I know it's not uncommon to lose power due to a storm, an equipment failure, or even an accident... but this was different. They were shutting off our power to replace the meter. The house I live in is only 3 years old... the meter couldn't be bad already.

I knew in an instant. APS is installing an AMR system.

Now I know that look on your face. You're wondering, "What's an AMR system?"

An AMR system is simply an "Automated Meter Reading" system. It's an automated way for the utility to collect the meter readings from tens of thousands of houses quickly and efficiently. The next time you get your utility bill, look at it closely. Somewhere on the statement they'll list the date the last meter read took place.

In some areas, the time between actual meter reads can be a few months or a year or more.

Bet you didn't know the utility can "estimate" your energy usage and bill you for it! Now, the cost of doing a meter read is fairly expensive. You have to pay hundreds of people to walk from meter to meter and take a reading. Then you need them to accurately record that data. The utility won't admit it, but they have a huge number of errors every day.

Now, I have an investment idea based on the AMR technology... but before I get to that, let me explain how it works.

First, let me say this. There are a number of technologies out there. All of them are different and the technology can get quite complex... here's the simplified version.

When a utility decides to roll out an AMR system, they typically plan to deploy it to all of their customers. Deployment times can take anywhere from a few months to a few years. The utility has two options. They can install a brand new digital meter with the technology already built in, or add on an AMR unit to the old-fashioned meter. Here in Phoenix, they went the digital route, and that means replacing every meter on the grid.

In the new digital meter is a little radio chip. Every so often the chip wakes-up and sends out a signal identifying itself and announcing the last meter reading. Here's the cool thing... this signal can be adjusted to fit the needs of a customer or utility.

In a residential setting the utility might collect data once a month. In a commercial or industrial setting the utility can collect data every day, every hour, or even every few minutes!

All of this data gets routed through a receiver and sent back to the utility.

The technology is a godsend to the utilities. An AMR system gives them a more accurate picture of consumer demand. It allows them to monitor big users of electricity. It can help with energy conservation. It even eliminates meter reading mistakes.

But the utilities won't publicize the best benefit of all... it saves them millions!

These AMR systems take us one step closer to a truly smart grid. And not just for electricity. These AMR systems are available for gas and water utilities as well.

So, after reading the notice on my door I walked into the house. I noticed all of my digital clocks blinking.

I realized they'd already swapped out my meter. I immediately grabbed a flashlight and went running outside. Yes, my girlfriend thought I was crazy.

I got to the side of the house, found the electrical panel and took a quick look.

Unfortunately, I was very disappointed.

It was an Elster Meter. I know that means nothing to you, so let me explain. When I was an investment banker, I worked on a multi-million dollar financing for an AMR company. That company was Itron (ITRI). Elster is one of Itron's biggest competitors.

Now, I'll admit, I'm biased. If I had a choice, I'd want an Itron meter on my house. When I worked with the company, I got to know the management team very closely. I got an inside look at their plants, facilities, and met many of their employees.

In my opinion, Itron is the best AMR company in the world.

I took a look at the stock recently. I can't believe how low it's trading. This stock was consistently above the $100 a share mark, and today it's trading for more than 60% off. The company has a 1.6 billion market cap, making them one of the largest players in the industry. Last year they did almost $2 billion in sales, and were hugely profitable. That alone makes them a great buy, but there is much more to the company than that.

Itron is a leader in developing the technology for a smarter grid. Every-thing they do is tied to making energy usage more efficient, and that makes the company a true "green enterprise".

In my opinion, they are one of the few ways to play the "Smart Grid" future. I've run out of room today, but at some point in the future I'll talk more about Itron. I encourage you to take a look at the company. Now might be a great time to add some to your portfolio.

Throughout my real estate investing career, I've spent many dozens of hours speaking with lenders and potential financiers of my deals. With all the different types of loans and equity financing products available to investors these days, it's important to have a good understanding of the benefits and the drawbacks of each, so you can choose the most appropriate financing option for your particular need(s).

Of course, given today's credit situation, options are not only more limited than they were a couple years ago, but the definition of a "good deal" from a lender has changed as well. When I first started looking at financing for single family houses, I passed on a couple potential options that in hindsight were pretty good given today's tight credit market; so it's important to not only understand the types of financing that's out there, but also which types are most prevalent and most easy to come by.

The point of this article is to define the four most common types of financing available to real estate investors; while there are, of course, more than four ways of financing real estate investments, most are a derivative -- or combination -- of the four we will discuss here.

1. Traditional Financing

This type of loan is generally done through a mortgage broker or bank, and the lender may be a large banking institution or a quasi-government institution (Freddie Mac, Fannie Mae, etc). The requirements to qualify for a loan are based strictly on the borrower's current financial situation -- credit score, income, assets, and debt. If you don't have good credit, reasonable income, and a low debt-to-income ratio (i.e., you earn a lot compared to your monthly obligations), you likely won't qualify for traditional financing.

Benefits: The benefits of traditional financing are low-interest rates (generally), low loan costs (or points), and long loan durations (generally at least 30 years). If you can qualify for traditional financing, it's a great choice.

Drawbacks: There are a few drawbacks to traditional financing for investors, some major:

• The biggest drawback to tradition financing is what I stated above -- it's difficult to qualify these days. Just a year or two ago, you could have qualified under a "sub-prime" variation of traditional lending, where income and credit were less of an issue; but given the sub-prime meltdown (many of these borrowers defaulting on their loans), these sub-prime options have gone away. So, unless you have good credit, income, and small debt, you're better off not even bothering with trying to get traditional financing these days.
• Traditional lenders generally require that at least 20% be put down as a down payment. While this isn't always true, investor loans with less than 20% down can be tough to find via traditional lending these days.
• As an investor, it can be difficult to deal with traditional lenders who don't necessarily understand your business. For example, a house I closed on last week with traditional financing almost fell-through because the lender wouldn't provide the funds until the hot water heater in the investment property was working. As an investor, it's common that I'll buy houses with broken hot water heaters (among other things), and I can't generally expect the seller to fix this for me, especially when my seller's are usually banks. In this case, I had to fix the hot water heater before I even owned the house, which is not something I want to do on a regular basis.
• Traditional lenders take their time when it comes to appraisals and pushing loans through their process. It's best to allow for at least 21 days between contract acceptance and close. As an investor, you often want to incent the seller to accept your offer by offering to close quickly; with traditional lending, that can often be impossible.
• If the lender will be financing through Freddie Mac or Fannie Mae (and most will), there will be a limit to the number of loans you can have at one time. Currently, that limit is either 4 or 10 loans (depending on whether it's Freddie or Fannie), so if you plan to be an active investor going after more than 5 or 10 properties simultaneously, you'll run into this problem with traditional lending at some point.
• There are no traditional loans that will cover the cost of rehab in the loan. If you plan to buy a $100K property and spend $30K in rehab costs, that $30K will have to come out of your pocket; the lender won't put that money into the loan.

Some smaller banks will lend their own money (as opposed to getting the money from Freddie, Fannie, or some other large institution). These banks generally have the ability to make their own lending criteria, and don't necessarily have to go just on the borrower's financial situation. For example, a couple of the portfolio lenders I've spoken with will use a combination of the borrower's financial situation and the actual investment being pursued.

Because some portfolio lenders (also called "investment lenders") have the expertise to actually evaluate investment deals, if they are confident that the investment is solid, they will be a bit less concerned about the borrower defaulting on the loan, because they have already verified that the property value will cover the balance of the loan. That said, portfolio lenders aren't in the business of investing in real estate, so they aren't hoping for the borrower to default; given that, they do care that the borrower has at least decent credit, good income and/or cash reserves. While I haven't been able to qualify for traditional financing on my own due to my lack of income, portfolio lenders tend to be very excited about working with me because of my good credit and cash reserves.

Benefits: As mentioned, the major benefit of portfolio lending is that (sometimes) the financial requirements on the borrower can be relaxed a bit, allowing borrowers with less than stellar credit or low income to qualify for loans. Here are some other benefits:

• Some portfolio lenders will offer "rehab loans" that will roll the rehab costs into the loan, essentially allowing the investor to cover the entire cost of the rehab through the loan (with a down-payment based on the full amount).
• Portfolio loans often require less than 20% down payment, and 90% LTV is not uncommon.
• Portfolio lenders will verify that the investment the borrower wants to make is a sound one. This provides an extra layer of checks and balances to the investor about whether the deal they are pursuing is a good one. For new investors, this can be a very good thing!
• Portfolio lenders are often used to dealing with investors, and can many times close loans in 7-10 days, especially with investors who they are familiar with and trust.

• Some portfolio loans are short-term -- even as low as 6-12 months. If you get short-term financing, you need to either be confident that you can turn around and sell the property in that amount of time, or you need to be confident that you can refinance to get out of the loan prior to its expiration.
• Portfolio loans generally have higher interest rates and "points" (loan costs) associated with them. It's not uncommon for portfolio loans to run from 9-14% interest and 2-5% of the total loan in up-front fees (2-5 points).
• Portfolio lenders may seriously scrutinize your deals, and if you are trying to make a deal where the value is obvious to you but not your lender, you may find yourself in a situation where they won't give you the money.
• Because portfolio lenders often care about the deal as much as the borrower, they often want to see that the borrower has real estate experience. If you go to a lender with no experience, you might find yourself paying higher rates, more points, or having to provide additional personal guarantees. That said, once you prove yourself to the lender by selling a couple houses and repaying a couple loans, things will get a lot easier.

Hard money is so-called because the loan is provided more against the hard asset (in this case Real Estate) than it is against the borrower. Hard money lenders are often wealthy business people (either investors themselves, or professionals such as doctors and lawyers who are looking for a good return on their saved cash).

Hard money lenders often don't care about the financial situation of the borrower, as long as they are confident that the loan is being used to finance a great deal. If the deal is great -- and the borrower has the experience to execute -- hard money lenders will often lend to those with poor credit, no income, and even high debt. That said, the worse the financial situation of the borrower, the better the deal needs to be.

Benefits: The obvious benefit of hard money is that even if you have a very poor financial situation, you may be able to a loan. Again, the loan is more against the deal than it is against the deal-maker. And, hard money lenders can often make quick lending decisions, providing turn-around times of just a couple days on loans when necessary. Also, hard money lenders -- because they are lending their own money -- have the option to finance up to 100% of the deal, if they think it makes sense.

Drawbacks: As you can imagine, hard money isn't always the magic bullet for investors with bad finances. Because hard money is often a last resort for borrowers who can't qualify for other types of loans, hard money lenders will often impose very high costs on their loans. Interest rates upwards of 15% are not uncommon, and the upfront fees can often total 7-10% of the entire loan amount (7-10 points). This makes hard money very expensive, and unless the deal is fantastic, hard money can easily eat much of your profit before the deal is even made.

4. Equity Investments

Equity Investment is just a fancy name for "partner." An equity investor will lend you money in return for some fixed percentage of the investment and profit. A common scenario is that an equity investor will front all the money for a deal, but do none of the work. The borrower will do 100% of the work, and then at the end, the lender and the borrower will split the profit 50/50. Sometimes the equity investor will be involved in the actual deal, and oftentimes the split isn't 50/50, but the gist of the equity investment is the same -- a partner injects money to get a portion of the profits.

Benefits: The biggest benefit to an equity partner is that there are no "requirements" that the borrower needs to fulfill to get the loan. If the partner chooses to invest and take (generally) equal or greater risk than the borrower, they can do so. Oftentimes, the equity investor is a friend or family member, and the deal is more a partnership in the eyes of both parties, as opposed to a lender/borrower relationship.

Drawbacks: There are two drawbacks to equity partnership:

• Equity partners are generally entitled to a piece of the profits, maybe even 50% or more. While the investor doesn't generally need to pay anything upfront (or even any interest on the money), they will have to fork over a large percentage of the profits to the partner. This can mean even smaller profit than if the investor went with hard money or some other type of high-interest loan.
• Equity partners may want to play an active role in the investment. While this can be a good thing if the partner is experienced and has the same vision as the investor, when that's not the case, this can be a recipe for disaster.

Although it may be hard to believe, there is more going on in the world than the NCAA Basketball Tournament. And even though it's not nearly as exciting as an expanded sports page, you will soon receive your March (Investment) Tournament Program... in the form of Brokerage Firm Statements. What is this guy talking about? What correlation could there possibly be between an Annual Round Ball Tournament and an Investment Portfolio or its Management? Let's start with a few simplistic similarities: the total unpredictability of the end result; the interim ups and downs, emotionally and numerically; the media hype and expert commentary; the skill and coaching requirements. And a few of the differences: the long-term impact on people's lives; the possibility that all participants can achieve their goals; the open-ended time frame; the non-competitive nature of the event.

Revered Blue Chips (and Blue Devils) fall from grace on the financial hardwood and unknown Cinderellas gain fame and financial fortune with upset victories in both venues. Short-term interest rate gyrations produce an ebb and flow in fan momentum with each FRB meeting, and the betting changes, and changes again, looking for the winning team! BUT, if the legendary Greek was handicapping portfolio management teams, he would be smiling broadly and rubbing his hands together in anticipation of making odds in the Financial Markets! How cool is this, a game with no end. And as every gambler knows, the longer the play, the more likely it is that the "house" will win. In basketball and in finance, the road to the final four is built on four principles: the Quality of the team members (the portfolio), the Diversity of their offensive and defensive skills (Diversification reduces risk of loss), the generation of enough Income (points scored) to exceed projected expenses (points allowed), and Coaching, or the decision making capabilities of team Management.

If you recognize the importance of the Financial Final Four, you can insure that your investing experience will be a winning one. It's certainly easier than getting a team of athletes to the Big Dance. The recruitment of high quality players is the first step, and the similarities between identifying fundamentally sound companies and fundamentally adept players are fairly obvious. Players, who can't dribble with both hands, understand a pick and roll and hit the open man just aren't considered. Similarly, some securities score big while others mostly assist. But successful coaches don't gamble with unproven walk-ons too frequently.

The team needs diversity... quick and unselfish guards for ball control and play calling; tall and athletic forwards for scoring and rebounding; and a big man for intimidation and shot-blocking, if nothing else. Investment portfolios need an Asset Allocation plan that balances the Working Capital between growth and income securities... helping to keep the game plan intact, and the manager's focus on the teamwork needed for goal achievement. Team depth is essential.

The Final Four is comprised of the best teams, not necessarily the best players. The most successful teams will have the right combination of offense and defense to get the job done. You can't win without scoring, but you have to be proactive in limiting the other guys point production as well. If all of your starters contribute some points, and you have the depth to offset a surprise injury or foul trouble, your chances of success are heightened. It should come as no surprise then, that an investment portfolio with no income just isn't going to get the job done. And only with programmed income plus an occasional "three pointer" will the portfolio out shoot team inflation consistently.

It's not uncommon for the winning team to lack a superstar... we've all seen how easy it is for a well-coached team of not-quite-as-skilled internationals to upset second-generation prima donna Dream Teams. Sure, money, organizational size, and program reputation build the most successful college sports programs but the teams that make it to the Big Dance perennially have two things in common... coaching and recruiting. Freshmen with superior fundamentals must be selected to replace graduating upperclassmen... and the beat goes on.

Every successful team needs a decision-maker, someone who designs the game plan best suited to the skills of the players and the uncertainties of the opposition, one game at a time, but with an eye on the future... the final goal. Do we full court press, play man-to-man or zone, fast break, etc? There can only be one decision maker, and experience matters... big time! Investment portfolio management is no less of a decision makers' game. To make the right decisions, you need to know your players abilities and weaknesses, you have to develop the right combination to attain the goals you've identified, and you have be in there all the time making the decisions needed to keep your team at the top of its game. Best performers must be allowed to "graduate". Undervalued "freshmen" must be found. Patience is needed to see things through, etc.

But the investment game plays out over years instead of minutes and with a plan that needs to be adjusted knowledgeably, but infrequently (if it is being done properly). Understand the Financial Final Four, and you'll be in top hat 'n tails at your own Big Dance.

Short sales are becoming the wave of the future for lenders that find themselves enforcing the foreclosure process. A short sale saves them time and money, plus it just makes more sense to cut their losses early with a solid offer on the table instead of listing with a real estate agent and wonder when that particular property may sale.

With the rise in foreclosures mortgage companies are going out of business left and right. Filing a foreclosure and going through the entire process can cost lenders upwards of $30,000 on bread and butter houses. Selling short of the mortgage balance is also in the favor of homeowners that find themselves behind on payments in a house that is over financed.

A lot of homeowners are faced with foreclosure due the Adjustable rate mortgages and exotic loans lenders made available post 911. There are a few ways to stop foreclosure but this article focuses on the short sale process which is one of the most effective ways when a homeowners back is against the wall.

If you don't already know, a short sale is when a lender accepts a lower amount as payoff for the balance than what is actually owed on a mortgage. So if you owe $200,000, your lender might accept an offer from a buyer for the amount of $140,000, which is a discount of $60,000. A few things to take into consideration when thinking about a short sale is what are the setbacks of selling your home short?

First some lenders may come after a homeowner for the balance that is owed or the difference between the actual selling property and the amount that is owed on a mortgage. This is called a deficiency judgment. That's why it is a good idea to know the lender stance when they agreed to the purchase price. Most lenders accept the short payoff as a full payoff but they will issue a 1099 or a tax bill for the benefit of writing off the debt. Another thing you need to know unless you have a FHA loan your lender will not allow you to receive any money as a result of this type of sell. You can't blame them since they are the ones taking the hit.

Don't let someone offer money under the table as an enticement to sell your home to them. It is fraud and your lender will also have you sign off on documents that state you understand you won't receive any of the proceeds from the sale. That is agreement is to bind you and keep you from profiting from their downfall. You must understand that once you sign that agreement and the HUD settlement statement, if you do receive any money you can be fined and imprisoned for conspiracy, so don't fall into the trap.

That tax bill go to the homeowner. Don't worry, new laws have been put in place to protect homeowners from the detriment of the capital gains that come from a short sale, according to my accountant. My accountant said as long as a homeowner is insolvent or broke the 1099 can be written off by the homeowner and allows the homeowner to have a fresh start with no debt from the short sell of their homes. It is recommended that you speak to a professional tax preparer to clearly understand the tax benefits of a discounted payoff.

If your house is listed with a real estate, and you feel like you might fall behind on your mortgage payments it's best to start planning a way to sale your house properly. Ask your real estate agent how many short sales they have performed and out of the ones they have performed how many have actually closed.

As I am writing this article, most agents are not aware how to properly proceed with a short sale nor are the aware of the risk versus rewards of performing one. It may be a better idea to sale your home by owner to a buyer that has the cash and means to submit the short sale to get the ball rolling.

HUD also provides credit counseling to inform homeowners of all the different programs available to stop the foreclosure. Note a short sale is normally possible once you are 31 days late on your mortgage payments. Also short sales can help relieve the burden of a foreclosure on your credit record.

It's best to start the short process as early as possible since each 30 day block your are behind on your payments even during the process shaves points from your credit report. Plus negotiating discounted payoffs normally take 60-90 days to complete so if a foreclosure notice has been sent out more than likely you are already behind on your mortgage payments by 60-90 days, so the short sale process can cause you to be delinquent as low as 150-180 days. Although those late payments are better than a foreclosure, it best to start as early as possible. Now it's time to stop the denial concept and start to become more proactive in selling your house fast.

Alternatives to selling your house without an agent is to list your home with a flat fee agent which can save you half of the realtors commission or sale to a buyer that knows the process.

In today's economy, there is tremendous uncertainty among investors in a variety of commodities, including real estate. I wish I had the crystal ball answer to these questions but, sadly, I am left guessing just like other investors out there.

One of the biggest hurdles faced by real estate investor's in today's economy is the issue of funding. Funding sources seem like they are drying up, and the ones who are still 'open for business' are throwing up an endless array of hoops to jump through. It can be understandably very frustrating, on top of the fact that real estate is already a significant investment in its own right.

One funding option you might have heard of, but may not have considered for multi-family real estate, is hard money lending. In short, hard money is asset based lending, more dependent on the quality of the deal than the financials of the borrower. This should sound real good, right about now, especially if you are focused on multi-family real estate.

Why is this? Well, consider the traditional route for funding multi-family property. Both banks and the ever-decreasing supply of national commercial lenders also look very closely at the asset value of apartments. They'll want to see occupancy rates, rent rolls, and tax returns for the property, among other things. Oh yes, they'll also want to see what your financial strength is like too. Count on getting your personal credit pulled, your assets pored over, and your net worth analyzed.

I'd be remiss to say that hard moneylenders care nothing about your financial strength, because it does carry at least some weight. What I am saying is that it matters less to them than it does with traditional commercial lenders. What matters more to them is that the deals you find are solid investments, capable of producing good cash flow and sustaining themselves through good or bad economies.

In some way, if you're at all unsure about the merit of a multi-family property you're considering for investment, run the numbers by a hard moneylender. If they are interested and would consider issuing a loan for it, then it likely is a pretty solid purchase. If they run for the hills, that should tell you something too. The level of reception you get from a lender can speak volumes about the quality of deal you think you have.

Properly purchased real estate pays for itself by producing monthly cash flow income. Add to that the appreciation in value over time that real estate has also historically recognized and you have a powerful winning investment combination. When you can think out of the box and consider alternative sources of funding like hard money, more doors of opportunity can and will open for you.

Garbage trucks are essential for sanitation companies to transport wastes to recycling centers or to some other places. These trucks come in different configurations to suit various purposes. They are unique in nature and they can be used for limited purposes only. Due to their unique nature, they are highly expensive. However any banks or traditional financial institutions would not be willing to finance garbage trucks. Hence a specialized financing company that has experience in various types of equipment is required to seek garbage truck financing.

There are different types of garbage trucks to dispose different types of wastes. Front loader truck is a garbage truck which has fork like structure at its front. These forks help lifting the garbage bin to deposit wastes inside the container in the truck. The truck can contain large portions of wastes since they compress them tightly inside the container.
Rear loader truck is yet another garbage truck that can carry wastes at its rear side. The wastes need to be dumped by the service workers. It is the largest form of garbage trucks used in many places. They are expensive and so the sanitation companies need to go for garbage truck financing.

Roll off truck performs the same function of other garbage trucks. Additionally it has the capacity to raise their bed and roll off the container on the unloading area. At the same time, another container would be put on the truck to accept another load of wastes. Due to this special nature, the truck carries a high price tag. Hence companies prefer garbage truck financing to acquire it.

Grapple truck is another type of garbage truck which has the ability to haul heavy wastes. It has a grappling arm to lift the bulk wastes and it can also lift and empty the garbage bins. The truck is rugged and strong and so it is much costlier. Traditional financial institutions would not be ready to finance these trucks. Hence seeking the help of some other legitimate financing company that has good experience in the field is essential for garbage truck financing.

Recycling truck also performs the same function of other garbage trucks. But they accept specialized wastes like glass, asphalt, plastic, paper etc and transport them to recycling centers. Recycling trucks are extremely expensive and so most of the companies prefer seeking finance to acquire these garbage trucks.

Side loader trucks are another type of garbage trucks that accept wastes in sides. They are built with special narrow design in order to carry wastes in residential areas and even within buildings like warehouses.

Garbage trucks due to their specialized nature and limited scope do not attract many of the financial institutions. However there are some valid financing companies that understand the need of these trucks. They offer financial assistance in better terms. There would be no red tapism in getting approval for the desired amount. They require minimum application procedure only. Hence companies can seek their help to acquire garbage trucks.

One of the most bitterly cruel aspects of the winter months is that even though animals have the luxury of hibernating until the summer time rolls back in style, we humans must carry on as normal and worst yet, contend with the ever spiraling costs of fuel and heating expenses. Pleas upon energy and heating providers fall upon deaf ears, and so the winter months provide additional concerns for those of us who must struggle with low income.

Unless you are prepared to put the health and well being of both yourself and that of your family at a considerable level of risk, there is regrettably, no real or easy way in which you can help minimize the expenses incurred in relation to the usage of fuel during the winter seasons. However, be sensible about the usage of heating services, if you are leaving the house then you should make sure that you turn it off.

You may find it more cost effective and more gentle on your long suffering finances if you actually take the time to purchase and install loft insulation which is specifically designed to prevent excess heat from dissipating from your home. This means that more heat is retained in the house, less heat escapes meaning that the house will warm up quicker and remain so for longer periods of time. What is the end result of all that? Significant long term savings. What more could you possibly ask for?

An overwhelming majority of heat escapes from body through our heads and so if you ensure that you keep your head covered with a thermal hat then you will notice that you do not feel the cold quite as severely as before.

Make sure you do not get caught out this winter season due to excess usage of your winter fuel, and that if you are on low income, that you carry out research to see if there is any grants or concessions that you can rely upon to help alleviate the financial burden a little easier.

If your company's fortunes reverse, resulting in negative cash flow, where can you turn for a loan? What about pre-profit start-ups, where are they to turn? All is not lost. There are specialty lenders who cater to companies facing these challenges.

Most lenders shun companies beset with negative cash flow for the obvious reasons. A credit basic is to avoid borrowers with insufficient cash flow to service debt obligations and operating requirements. Negative cash flow often signals deeper borrower issues and usually represents a large red flag for most lenders.

For certain specialty lenders, however, companies with negative cash flow can represent attractive opportunities. What are some of the things these lenders look for to offset the impact of negative cash flow? The short answer is strength in some combination of other basic credit elements: a highly talented management team, an otherwise successful operating history, significant unencumbered assets, low financial leverage, a viable plan to turn cash flow around, and/or the ability of the borrower to offer credit enhancements.

Credit enhancements can take many forms: a pledge of company assets, a pledge of personal assets, security deposits, personal guarantees of the principals or investors, other corporate guarantees, or other enhancements. These enhancements come into play when these specialty lenders are able to structure transactions offering what they believe is sufficient downside protection to offset the risk of negative cash flow.

Who are the lenders that specialize in lending to companies with negative cash flow? There are usually a few lenders in every credit segment that serve high-risk borrowers. Corporate borrowers with negative cash flow often fall into the high-risk category. Lenders to this high-risk group usually lend against hard collateral such as heavy machinery, rolling stock, manufacturing equipment, lab and test equipment and other items with proven after-markets. Some lenders specialize in accounts and notes receivable. They look for a pledge or an outright purchase of quality receivables. Other lenders take a more general approach. They look at a borrower's complete situation, and then structure a transaction with several credit enhancements. These enhancements might include the guarantees of the principals, a cash security deposit and an all-asset lien against the company.

In addition to high-risk lenders, there are high-risk leasing companies that target companies with negative cash flow. These lessors approach their transactions in much the same way as high-risk lenders, except they structure lease transactions (usually with the lessor retaining ownership of the underlying leased asset).

For taking the additional risk, most secured lenders and lessors look for higher transaction yields commensurate with the risk. It is common for high-risk lenders to require loan rates several hundred basis points above those of traditional bank lenders. A few lenders and lessors take even greater risk. They are willing to trade off the downside protection of additional collateral for an opportunity to receive larger yields. They seek yield enhancements in the form of stock warrants, royalty payments or other equity participation. These yield enhancements are often an acceptable price to pay for borrowers with no where else to turn.

Where do you find lenders and lessors who serve companies with negative cash flow? Look for sub-prime lenders or ones holding themselves out as high-risk lenders. A good way to find these lenders is through referrals from bankers, accountants, attorneys and other business colleagues. In many markets, finance brokers actively bring borrowers and high-risk credit providers together. Also, a good place to check is your industry trade association and the trade associations for lenders. A last place to check is online. A Google search of sub-prime lenders or lessors specializing in specific asset categories, high risk business lenders, or high risk leasing companies will usually turn up quite a few providers.

If your company develops negative cash flow, this set-back is not an automatic sentence to corporate purgatory. With a compelling story and the ability to muster attractive collateral or sufficient credit enhancements, you can probably attract lenders willing to assist your firm. Launch an effort to identify these lenders, be prepared to tell your company's story, and be prepared to negotiate.

Also known as seller financing, owner financing is growing in popularity in today's economy. With the credit markets slowing down and people finding it harder and harder to borrow, owner financing is looking better and better as an alternative to traditional financing. Owner financing is when the seller of the property basically agrees to take payments rather than a lump sum. Here are a few things that need to happen in order for the owner to be able to finance your deal:

1. The owner needs to have considerable equity in the property. The owner will usually have their own mortgage they will need to pay back in full when they sell the property to you. If they don't have a whole lot of equity, they usually can't offer to finance a whole lot of the deal. The best scenario is an older owner that is close to retirement. Odds are that they have a good amount of equity or even own the property free and clear. They are looking to retire and just want a steady cash flow rather than a lump sum when they sell the place.

2. The owner should have a desire to accept owner financing. If the seller wants to roll the funds over into another property or needs the lump sum of cash for one reason or another, they probably won't want to take on very much seller financing.

3. The terms need to be right for both parties. The interest rate, duration and repayment structure need to be acceptable for both parties. This usually requires a good deal of negotiation.

If you have all your ducks in a row and seller financing seems like it might be a possibility, here are some of the benefits to consider if you are thinking about locking in owner financing:

1. You might not have to get traditional financing. This depends on how much the owner is willing to finance. If they are willing to finance just a little bit, this might help you lower your down payment or help you qualify for traditional financing, but won't completely eliminate traditional financing unless you pay the remaining amount due as a down payment.

2. You could get more flexible terms than you would on a standard mortgage. You have the power of negotiating so that both the buyer and the seller walk away with a fair deal. You typically can't do this with a traditional bank.

3. The seller is still somewhat on the hook for the property. You know that you aren't getting totally ripped off, because the seller still hasn't received all their money. There is a possibility that you could pay a little bit of a premium for the deal. If they end up totally screwing you, and the property completely falls apart in a few years and you let it fall into foreclosure, the seller only stands to get the property back. The seller isn't going to want to lend to you using a bum property as collateral.

If owner financing seems like it would work for you, there is no reason to start looking for properties for sale with owner financing. Even if a property isn't advertised as offering owner financing, you may be able to talk with any seller and see if they are willing to negotiate on terms.