If you have been looking for ways to reduce debt so that you can manage your finances better, receiving a structured settlement annuity may seem like the break you have been waiting for you. However, there are several things that you should know before signing on the dotted line to receive your annual or monthly payments.
- Prolonged Process
After you find out that you are going to be receiving annuity payments, it can still take a very long time for you to actually have them in hand. The waiting period could take months, even years before you ever see a penny of your money. The reason for this is that there are so many legalities and processes that a company must go through when doling out this type of cash. Then there’s the question of how they will report it on their taxes and so their accountants have to hold on to it for awhile. What it really comes down to, is they are dragging their feet.
- Small Payments
If your settlement is coming from lottery winnings or winning a case like an auto accident, these companies will do everything in their power to not have to pay out a lot at one time. Setting up payments with you will be done in such a way that it benefits them. They are not thinking of your best interests. Sure, they may give you options of amounts and time frames but all of them are first of all beneficial to the one giving away the money. Usually, annuities are spread so thin and for so long that the payments you end up getting every year or month are so small that they barely make a difference. You may be receiving money for the next 30 years but the payments will be very small amounts.
- No Tax Breaks
You will still have to pay a very large amount in taxes the following year after receiving your earnings. This is on top of what will already be taken out in order for the company to pay taxes. Yes, they will take it out of your money. And then you have to pay your own taxes out of it also.
So, what else can you do? How can you avoid these problems? You can sell your annuity. What does that mean? Well, once you know the amount that you are going to be getting, you can sell that amount to a company that will buy it for a certain price. While there may be fees and things like that involved, there are many benefits that could outweigh waiting for your yearly installments. If you choose to sell your annuity, this means several things:
- Immediate Payment
Typically, When you want to sell your annuity, you don’t even have to wait to find out if you have won your case or not. If you know the amount of the settlement, you can put in an application for sale at one of these places. They will give you an offer and once you accept it, you can expect a check within days.
- Quick Turnaround
The whole process can take less than two weeks once it’s started. Actually, the main waiting periods are up to you. Your application will be reviewed and an offer made, as mentioned above and then it really is up to you how long you wait to accept or deny. You can negotiate the final amount as well if you don’t mind waiting a few extra days for your payment to get to you.
- Lump Sum
Selling your annuity payments means that you will receive your money in one lump sum. No more waiting year after year for your money to get to you. You can have it all right here and right now. This is extremely beneficial if you are trying to pay off medical bills, get out of debt or pay a large item.
Deciding whether or not to sell your annuity is a big choice. It really comes down to what is in the best interest of your life goals. If all you are doing is saving for nothing in particular, annuity is fine. But if you have plans to travel or live large, you’ll need all of your money as soon as you can.
Commercial realtors deal exclusively will business property. It has been estimated that the American commercial real estate industry is worth about $945 million, according to IBIS research. This makes investing in commercial property a valuable think to consider. If you are thinking, “should I invest in real estate?” Here are some tips to get you started.
Tips to Investing in Real Estate:
- Patience pays off. You know the saying, “Rome was not built in a day”? The same can be said for investing in a commercial real estate property. You want to take your time. You can buy a variety of different kinds of buildings. You can manage a 10 apartment building or buy office space. If you are not sure what kind of commercial real estate is right for you, talk to people who work in the business you are interested in owning. Get to know the business and see how you like it. You can talk to several people. In fact, really take your time with thus decision. It is a big purchase.
- Be prepared for it to take some time. Buying commercial real estate is not like buying a home. The process takes a lot longer. Expect this going in and it will bother you less when you are going through it. There is also a learning curve with commercial real estate, as with everything else in life. You may be surprised about how complicated the process can be.
- Consider bigger property. If you decide to buy a housing building or office space, it does not take a lot more work to manage more property. You will also see a higher return on your investment. This is because you will get more in the rents you charge your tenants.
- Expect to pay good money for your due diligence. You have to do your research and spend some money on your due diligence. This is a critically important step. If you scrimp here, it will cost you more later. Any time and money you spend making sure you have the right property and terms for your financing, you will get back later.
- Seek out advice from experts. If you are new to commercial real estate, talking to some established real estate partners is your best starting point. They can help guide you through the process and navigate the terrain. In commercial real estate your relationships can make all of the difference in the world. Developing good relationships with partners and lenders can help more the process alone and just makes good business sense.
- Get good financing. That seems like a no brainer but getting the right financing can make all the difference in your commercial real estate deals. Your town or city may have funding for entrepreneurs or you may qualify for funding from the Small Business Administration. They cannot say yes if you do not ask.
- Consider taking on a partner. No one person can always finance all of their commercial real estate deals. That is where partners come in. They can provide funding themselves or have access to funding sources. They can also help with the stress of running a business, which can be very taxing if you take it all on yourself. Having a partner to vent with can ease your stress level at least a little.
- When you start in commercial real estate, you will have a lot of questions. It is imperative that you know where to go to them answered. You need someone to be totally honest with you even when you do not want them to be. If you cannot hear that a business deal might not work out the way you want it to, maybe this is not an investment for you. You need brutal honesty from the experts you talk to.
Commercial real estate investors make their money from profits from their property, rental fees, parking fees and tax credits. These business can be residential property, office space, restaurants, retail stores, or multi-family housing units. You really are only limited by your imagination. When you ask your self, “Should I invest in property?” Consider what kind of property you would enjoy managing and then check out the area market.
As you grow older, it’s important to start asking yourself a few tough questions about your personal finances. Should I invest in real estate? Should I invest in property on a commercial level? Am I too old to start investing?
If “should I invest in property?” is a question you’ve asked, you are on the right track to financial independence. Specifically, commercial real estate property is one of the most fool-proof investments in this current market. However, you need professional help to fully capitalize on these investments. An REIT (real estate investment trust) is a company that owns money-generating properties. Once you learn how to invest in a REIT, you’ll quickly find that investing is not as daunting as you thought.
Before you invest even one cent, you should know the basics of REITs. Here’s how commercial real estate can provide you with the financial dependence you deserve:
- Identify lucrative properties. According to IBIS World research, the commercial real estate industry is worth approximately $945 billion U.S. dollars in the U.S. alone. There are few (if any) other markets producing this type of revenue on an annual basis, and there will always be a demand for high-quality commercial properties in the U.S.
- Manage risks accordingly. Finding an REIT is important because it will allow you to identify a “boom” from a “bust.” Real estate partners help investors like you evaluate the risks involved with purchasing commercial properties, in addition to analyzing the costs you will incur to maintain the property.
- Obtain a consistent cash flow. Commercial real estate investment typically allows for a consistent cash inflow due to the influx of rental fees, vending fees, parking pees, tax benefits, and other sources of revenue. If you’re looking for a long-term investment, you need to start investing in commercial property.
After seeking help from a qualified expert, your question will change from “should I invest in property?” to “which property will net the biggest profit?” Once you’re at this point, the rest is smooth-sailing. Find an experienced REIT and start making money on your own accord.
How does a hard money loan work? This is an asset-based loan, and the borrower will receive funds that are provided by real property. In other words, they are basically groups of investors that will lend money to real estate developers or house flippers. Because the loans are secured by property, the investor tends to be better protected than with a typical loan. The loan is based on the property, rather than the credit score of the developer. Not surprisingly, this type of loan often means higher hard money loan rates accordingly.
According to Investor Intel, there?s a few good reasons why money lenders are likely to get into the hard money loan crowdfunding space this year. Let?s review.
1. Crowdfunding Approved by Securities Exchange Commission
Although many have been tepidly exploring the waters, the truth is that crowdfunding spaces have opened up lately thanks to a 2015 approval from the SEC that opened up real estate crowdfunding to non-accredited investors. The new rulings under Title III and Title IV mean that there are more investor protections in place as well, ensuring that a wider range of investors will be comfortable trying their money here.
2. Money Needed Quickly
Hard money lenders often appreciate the quick progression of this loan type. Entrepreneurs developing a product may need months, even years, before reaching their financing goals. Real estate entrepreneurs, though, need money very quickly in order to close deals. The money, given out quickly, then has a faster turnaround time as well for repaying the loan. On average, hard money deals have a quick turnaround of about seven to 14 days of processing.
3. Crowdfunding Removes Geographical Barriers
For lenders looking for investment opportunities further out, crowdfunding is a potential boon. According to the 2015 Times Realty News Real Estate Crowdfunding report, in 2015 the amount of capital raised from real estate crowdfunding more than doubled, soaring past $2.5 billion. This is no chump change. It also means that more entrepreneurs are relying on crowdfunding for raising capital, period. This industry is growing and it?s going to continue to attract new investors to the field.
Do you think the world of hard money loans are changing? It does seem like, at the very least, crowdfunding, real estate and hard money loans are going to be intersecting more frequently within the next decade. Only time will tell where investor interest really lies, though.