Hard Money Loans What You Need to Know

November 8, 2016 Finance Tips

Have you heard of house flipping? It is a term that has become more popular in part because of T.V. episodes that show exactly what it entails, albeit with better editing than real life. Commercial real estate investing is not as easy as these shows make it seem. What enables people to do so with some success is most often due to having investment property mortgage lenders backing them. In other words, someone else foots the bill. You shouldn’t be discouraged. To find out more about commercial real estate investing basics, read below.

What Are Some Reasons to Invest in Commercial Real Estate?

There are a few reasons real estate is seen as a good investment.

Are you ready to seek out investment property mortgage lenders? You should know about the funding process first.

So, How Do You Get the Money to Buy Some Land?

As stated in Gone With the Wind, “Land is the only thing worth working for,…because it’s the only thing that lasts.” It seems not many would disagree, as owners of lots of land are generally regarded as very wealthy. Do you have to have money to make money, as the old adage goes? Not always, if you know the right people.

The typical business loan offered by banks has a few requirements: the borrower must have been in the business for at least two years, have great personal and business credit, be cash flow positive, and pull in at least $250,000 annually in revenue. There are plenty of people who fit that requirement, and double that who do not but would still like to buy, renovate, and sell a house for profit. Investment property mortgage lenders, or hard money lenders, can step in.

What is a Hard Money Loan, and Is It Even Legal?

There is nothing wrong with seeking a hard money loan, it is simply that most people would rather deal with a public lender, rather than a private one. The lender is putting up their own money for the house to be fixed up. Renovation lending, as it is sometimes called, follows the simple process of buying a cheap, somewhat run down house, and through renovation dramatically raising the value. These hard money loans are well protected, as the equity on the house must be somewhere between 30 to 50%.

Is real estate investing something that interests you? It is not outside the realm of possibility. Hard money loans are not for everyone. But they do make it much easier for many people to get into house flipping. Who doesn’t want to start making more money, that much faster?

3 Reasons to Outsource Your Employee Payroll

November 7, 2016 Finance Tips

If you own a business and have employees, you know that you have to pay them. Many small and medium sized businesses outsource their employee payroll to save time and energy. Here are some benefits to using outsourced payroll services companies:

1. It lets your focus on what you do best.

Doing employee payroll takes a lot of time. While it is something all businesses have to manage, it is also very time and labor intensive a lot of the time. Any mistakes that are made when handling employee payroll can be very costly and painful. There are a bevy of rules and regulations that companies have to comply with.

This is entire process is complicated all the more when companies so business in more than one country. American companies that want to do business in Canada often run into trouble with this. Payroll in Canada is a lot different from payroll rules in the United States. Payroll services have to be very detail oriented. There are a lot of regulations regarding how taxes are recorded and paid.

Understanding the labor laws is also an important part of the employee payroll process. The tax portion of the employee payroll process is complicated but so are the laws governing how long employees can work, what kind of overtime they should get and so forth.

All of this takes a lot of time and energy. That is time that you could be working to build your business and improve your bottom line. Unless you are payroll outsourcing provider, employee payroll is not what you are best at doing. When you hire an outsourced employee payroll company, they can handle all of the minutiae of this and you can focus on your business.

2. Payroll services providers have the right technology and experience.

Companies across the United States have literally tens of thousands of federal, state and local rules and regulations. There are thousands of different state and local jurisdictions across the country that have their own rules for how taxes are collected. These laws are very complicated. Issues surrounding the Affordable Care Act add to the complexity of the employee payroll process.

Companies that handle employee payroll services are experienced at dealing with these kinds of issues. They know how to manage employee data and to manage tax payments and all of the other things that payroll services companies need to do. You may not have the expertise in this area but they do.

Payroll management companies also have the most up to date technology to help them with the task of keeping up with all of the rules and regulations that you need to comply with to do business in the United States and elsewhere. They can compile reports to show their compliance with the Affordable Care Act and other labor laws. Gone are the days where there are a few simple forms that need to be updated. The process of managing employee payroll is only getting more complicated by the day. The software needed to show compliance is always changing. Payroll providers keep up with it so that you do not have to.

3. Outsourcing employee payroll can save you money and reduce your risk.

Companies that outsource their employee payroll have been known to save about 4% on payroll. When you add to that the time you are saving and the time you are able to put into your business and do not have to spend working on payroll, you see a bigger savings in letting professional payroll services.

There are also very harsh penalties for mistakes that companies make while handling employee payroll. The Internal Revenue Service (IRS) reports that at least 40% of all small businesses have to pay penalties for filings that are late or wrong. The average penalty is $845 per problem. This can add up.

By contrast, working with an outsource payroll company, you can get an affordable service plan that saves you from these penalties and can keep you in compliance. At the end of the day, you really do save money when you outsource your employee payroll.

Handling employee payroll is something that every company has to do. It does not have to be painful, however. By outsourcing payroll, you save time and money.

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5 Tips to Get Financing for Commercial Real Estate Investing

November 7, 2016 Finance Tips

Are you looking to get into commercial real estate investing? There are a lot of opportunities in commercial property investing if you work at it. If you are looking to find investment mortgage lenders to help finance your plans, here are some tips to help you get what you need.

You need a much bigger down payment. If you own your own home, you know that when you buy property, you have to put some of it down up front. If you want to secure financing from traditional investment mortgage lenders, you are going to have access to enough capital to make a much larger down payment than what you have to put up for a residential property. Most investment mortgage lenders require people come up with at least 20% to be able to get a traditional loan. If there is any way that you can come up with an amount closer to or more than 25%, you will put yourself in a position to get a much better deal on your loan.
Run your own credit report. Before you try to get a loan from investment mortgage lenders for your commercial real estate investing plans, you need to look at your finances and credit score with as objective an eye as you can. If you can improve your credit score and become more of a good credit risk you will appeal more to real estate investment lenders. The lower your credit score, the more expensive your loan terms will be. You will pay more in interest and more in fees.
Try credit unions and community banks before you try bigger financial institutions. If you find that you are not able to come up with the 20% that most mainstream investment mortgage lenders require for your loan, you may want to talk to the local credit unions and community banks for help. Their goal is often to help local people get loans for business plans that help the community. If you have an idea for a new business or to get into commercial real estate investing and can show how this will benefit the community, you have a better chance of getting some help from these financial institutions. They also have a lot more leeway and may be more able to say yes to you when you go to them looking for a loan.
Will the owner of the property help with your financing? When people are turned down by investment mortgage lenders, you may want to look into to options for owner financing. It used to be that one of the commercial real estate investing basics that people selling real estate were very wary of buyers who looked out for owner financing. This is becoming more and more acceptable. Before you head down this road, you need to develop a strategy. You need to have an amount you need a loan for and to work through the terms you would accept. You need to be able to make a great pitch and have all of your i’s dotted and t’s crossed before you approach anyone about owner financing.
Be creative. If you have found a really good property that you think you can really do something with and make some money on, you may need to get a little creative in how you come up with your down payment. People have looked to all sorts of alternative financing sources for their down payment arrangements. These have included credit cards, equity lines of credit, life insurance policies and more. At the end of the day, you need to research all of your other options and hunt down all other lines of inquiry, so to speak, before you opt for these very, very risky options. If you really think you are going to succeed, it may be worth it but you should do what you can to not have to get your financing that way.

Commercial real estate investing can be very lucrative. Commercial real estate is a lot different from residential real estate so you will need to do all of your homework before you take the plunge.

Starting A New Business? Start With Financing

November 4, 2016 Finance Tips

Are you the owner of a business who is searching for more information about financing? Maybe you run a child care business and are looking for new financial software to use, or perhaps you are the owner of an auto body shop and need financing to expand your space. Whatever your situation may be, the good news is that you have options. It is good to go into your financing search with a little information, and much of the information you find will be based on the type of business you run. Below are three specific examples of how various businesses find financing options:

1. Restaurant Industry Financing – Whether you have been in the restaurant business for years, or are just getting started it is likely that you have had to consider financing in some form. Whether your restaurant was financed purely by business loans from local banks, private investors, or other means, you had to ask for help somewhere and that is okay. Some of the most respected business men and women in this country today had to do the same thing. Starting a restaurant is difficult because not only do you have to set yourself apart from other places cooking similar cuisines, but you have to make sure you are using quality ingredients and using state of the art equipment. Those things, of course, cost money, and that is why restaurant financing is often times so complex.

2. Automotive Industry Financing – There are tons of ways to insert yourself into the automotive industry. Some people have small repair shops, others strictly sell parts, and others only deal in new or used vehicle sales. Even though each of those businesses is extremely different, they all have one thing in common: the need for initial financing. Small repair shops have to purchase machinery, parts shops have to stock their initial inventory, and new and used automotive dealers must have the vehicles on site for their customers to purchase starting on day 1.

3. Child Care Industry Financing – The child care industry is a growing one. In fact, many parents spend weeks sifting through the recommendations and reviews of local child care facilities before making their final decision. Of course, these parents are looking less at child care industry financing, and more at the credentials of who will be taking care of their children. Nevertheless, child care industry financing is extremely important to business owners to make sure that they can afford things like classroom materials, playground equipment, insurance, and even small items like decor that make the children feel excited to be there.

Whether you are a thriving chef ready to open your fifth or sixth restaurant, an auto salesman that is ready to break out on your own, or the owner of a successful child care business who wants to take your business one step further: financing can help, and it is available to you!

Making Wise Investments in Commercial Real Estate

November 3, 2016 Finance Tips

Are you a first-time home flipper looking for renovation financing? Or have you been investing in real estate and flipping houses for several years? If either of these situations apply, then you’re probably aware that in 2014 alone, 327,069 homes were repossessed. Many of these homes may be in poor condition, so the need for renovation lending is apparent.

While there are a number of reasons to invest in commercial real estate, expanding your business and investment portfolio may be at the top of your list. If you have already been making real estate investments for quite some time, and are looking for real estate investment lenders for a new or ongoing series of projects, you may be interested in knowing more about hard money rehab loans.

First of all, the interest rates are higher with hard money rehab loans. They do, however, have lower loan- to-value ratios. A hard money loan’s interest rate might range from 15%-to-18% or more.

Secondly, there are faster turnaround times with a hard money deal. These may only take one-to-two weeks in order to process.

Thirdly, the payment period is also shorter for a private loan. When comparing these loans with traditional bank loans, private loans extend for up to five years, while a traditional bank loan payment period is from one year up to 20 years.

If you were previously considering a standard bank loan, then you are probably aware that there are several stipulations for this type of loan:

You need to have been in business for two or more years.

You need to have a minimum of $250,000 in annual revenue or income.

You need to have good personal and business credit.

You need to have a consistent cash flow.

When you apply for secured short term loans, one of the operative terms is “secured.” If you are interested in obtaining a hard money loan, most of them need to be secured by an existing property you own. More specifically, the property you put up to secure your loan will need to have approximately 30%-to-50%.

When you are looking for hard money mortgage lenders, remember to consider the benefits of these types of loans over traditional bank loans.

Performing a Small Business Valuation Steps

October 27, 2016 Finance Tips

If you’re a small business owner, you may ask yourself the question What Is My Business Worth and for good reason. While competing a small business valuation can take up time that may be spent on other parts of a business, a business valuation can benefit any business owner in the following ways:

Full understanding of the parts of the business. Small business valuations can allow a small business owner to see all the parts of their business, from expenses to income, whether that is debt or payroll taxes or merchandise sold.
Full understanding of the circumstances surrounding the business. While the business itself may be the initial focal point of a small business valuation appraisal, the circumstances must be understood before the final value appears.

Those are the two components of a small business valuation appraisal. They are typically called the standard of value and the premise of value. Both are necessary to complete a full small business valuation appraisal, which is a process of measuring business worth. Business worth isn’t absolute. It can vary over time.

The two key starting points toward completing a small business valuation are determining why you need a small business valuation and assembling all the necessary information. There are three approaches:

By comparison to the recent sales of similar businesses.
Based on the business’s earning power and risk assessment.
Based on the business’s assets.

It is an economic exercise, one that requires the ability to analyze information pertaining to your business’s financial information. The key documents needed are the income statement for your business and the balance sheet. For a stronger small business valuation appraisal, those documents need to cover a three to five year period.

The income statement should contain all the ways in which your company is performing in terms of monetary value. Items on the income statement can vary according to the type of company but generally they include merchandise sold and services rendered. Looking at a three to five year period can give you a good understanding of how well the company has performed over a long period of time, which will give you an idea of projections.

The balance sheet should cover how your income is matching up with your expenses. Essentially, if your business is in the red or the black. Expenses can include employee wages, payroll taxes, bills, and debt, among many other expenses that can be a large amount of money or small.

The trickiest part of a small business valuation appraisal is the premise of value. This involves the circumstances surrounding your business and can entail many different influences. Influences on your business can include the local economy, the local market for your goods or services, and larger markets if your business has reached that far.

A company valuation is useful to understand where your small business has been and where it is going and give you information for the road ahead.

Three Reasons Why Having an Initial Public Offerings (IPO) Service is Beneficial

October 26, 2016 Finance Tips

Individuals who choose to invest may not have considered the many benefits that an Initial Public Offerings (IPO) service offers. Here are three reasons why having an IPO is helpful for anyone who wants to invest money with the chance of getting a better return than going the traditional way.

Getting an IPO Allows Those Who Are Buying to Potentially Save More Money

When buying an IPO, it is not uncommon for them to be cheaper than trading the traditional way. An IPO can cost anywhere from 13 to 15% less than buying traditional stocks, allows the buyer to save money in the process. Having an IPO can also help those who would like to buy a great deal of stock before it officially debuts on the market. There have been cases where the stock was sold right after becoming available on the market, and the return was triple what investors paid for it. Using an IPO service can help investors make the most of their money.

Having an IPO Can Be Viewed as Having Regular Stocks with More Return

For individuals who choose to get an IPO, the learning curve is not as difficult as one would expect. Even though an IPO varies from the traditional stock market, it can be viewed in the same way. If experts agree that a particular market is going to do well, then the IPO will also do well. If the IPO is up, the chances that it will out-perform the market is very good. Professional traders will find that an IPO service can be very helpful in getting a better return than expected.

IPO Services Have Been Around Longer Than Most People Realize

Although those new to trading may be unsure about what type of IPO company to go with, or if is it even worth it to use one, they can rest assured that IPOs have been around longer than many think. Since the late 1990?s, brokers and stock traders have been using the word when talking about IPO news.

Given that IPO service can allow individuals to save money, as well as offer a greater return, it makes sense that prime brokerage services encourage trading with it. It is not a new fad, and has actually been around for a while. With these factors in mind, it is helpful in reviewing IPO data, and knowing that it is a solid investment to make.

Commercial Real Estate Investment Groups In Your Area

October 18, 2016 Finance Tips

Commercial real estate investment groups could be the answer you need if you are looking into American capital partners who can help you. Often times these investment firms will offer you the best financing options for a piece of your businesses profit. While this might seem bad initially, if you employ the top real estate investment companies, you could wind up making three to four times as much as you were before.

Real Estate Investments Are Important

When it comes to your financial future, it is important to understand just how important things like real estate will be for you. As a millennial, you are already set in your ways a bit, but you need to make sure that you are taking investment seriously. As you grow older, you will begin to regret the time you wasted not investing in real estates, your 401k and other areas. This is why you should hire some of the best commercial real estate investment groups to help you out as needed. You deserve this much and it’s time you look into your financial future.

They Can Help Set You Up with Long-Term Revenue

If you need an investment firm, they might be able to help you with investing in REITs. These are properties, usually involving commercial real estate, where you can invest your money into. As a commercial real estate property owner, this could be your solution to getting the funding you need, quickly.

You need to know that you are going to be able to cover costs as a business owner. Failure to do so will result in your business eventually closing down. This is not something you want to happen to you. This is why you should take your investment in REITs now, so that you can get it back later when you build your business even further.

Initially, you can have people investing into your commercial real estate and then you can then hire real estate investing companies to come help you out with setting up your own investment. With the investments you are getting for your building for being under the REIT and you getting REIT stocks, you’ll be able to have a lot more financial freedom than you ever thought before.

Look for Commercial Real Estate Investment Groups with Experience

When it comes down to it, you need to know that the company you are hiring is reputable and is going to be able to give you the best commercial real estate investment opportunities. Most companies who have been in the business for a few years have the connects to private-listings and other public-nondisclosed properties as well. Having this can help with your investment opportunities and getting you the money in the stocks you want.

Real Estate Trading Market Should be Taken Seriously

You should take real estate seriously because the market is just as valuable as the stock market. With people always in demand for homes and businesses, you can easily invest in properties and join their “stocks” to get the most returns.

This is going to be a long-term solution that will require only the best services and groups by your side. If you are new to the real estate market, you shouldn’t have to worry about whether a company can help you or not ? they should just be able to do it no problem. Commerical real estate investment groups need to be the best and you need to make sure you’re looking into them thoroughly before trusting them with your finances.

7 Tips to Help You Get Started in Commercial Real Estate Investing

October 16, 2016 Finance Tips

Are you looking to change up your investment strategy? Do you own your own home? Have you considered commercial property investing? Whether you have thought about it or not, there are a lot of reasons to invest in commercial real estate. If you are not sure how to get into this area, here are some tips to help get you started.

Commercial real estate investing success relies on planning. People who are not involved in commercial real estate investing look at people who do well and may think, “that person is very lucky.” While that may be true, the simple fact of the matter is that success in this area is really more about property preparation and planning and less about luck. This is one of the commercial real estate investing basics.
Look for areas that are being developed. When you are looking at commercial real estate investing opportunities, it makes a lot of sense to look at up and coming areas and less to established neighborhoods. For example, a decade ago, the Anacostia section of Washington, DC was probably the toughest part of town. Today, it is one of the trendiest parts of town. If you were looking to invest in an area of the nation’s capital and you invested in this part of town, you would be in great shape. Look to these areas that may develop. This is something you can research and you can find trends to give you an idea of what areas may be on the verge of renewal.
Keep an open mind about the kinds of properties you look at. It is easy to look only at retail space for instance but when you have your blinders on, you may miss great opportunities in apartment buildings or office parks. Commercial real estate investing is not limited to one kind of building or business. You may have a preference for what kind of buildings you want when you start the process but do not let that limit your options or blind you to other opportunities.
Go big or go home. Well, not really but if you are looking at apartment buildings, do not limit yourself to smaller buildings, for instance. Whether you are renting to retail tenants, residential tenants or office space, if you have 20 units that are as easy to manage as if you had only 10. The main difference is the amount of money you will make every month. Again, be open to new ideas as you scour the commercial property investing sector for new opportunities.
Get advice from someone “in the know.” If you are new to the world of commercial real estate investing, you should by all means talk to someone who is not. Find someone you trust and see if you can pick their brain about the market and your ideas. Be prepared to get some news you do not like. Do not be offended by that. Just take it in stride and listen to the advice.
Consider taking on a partner or two. The really big deals are not made by one person, for the most part. If you are looking to get started in this, it is a good idea to take your thoughts to someone who is more experienced with commercial property investing and see if they will partner with you. There are a few good reasons to do this. On a human level, you will have someone to talk things over with and vent to. On a more practical level, you may find that you have more access to needed financing or real estate secured lending when you have a partner. Remember, two heads are usually better than one.
Patience is absolutely your friend. You may have bought residential real estate but the process of buying commercial real estate is very different. In the first place, it will take you a whole lot longer to get the commercial property investing deal finished and done than it does to buy a house. If you go into the process with that in mind, you will be much less frustrated and will be more sane when it is over and done.

Finding the Best Ways On How to Invest in a Reit

October 13, 2016 Finance Tips

American real estate partners buildings earn leed

If you’re wondering to yourself, “Should I invest in property right now,” the answer is yes! This is the time for you to go ahead with your plans and make a successful career for yourself as a real estate partner. You don’t even have to necessarily be a real estate agent to join the perks of the real estate world. We will explain a little bit in this guide what we mean. You will be looking into how to invest in a REIT and get the most benefits from your real estate partnership.

What Are REITs Exactly?

A REIT is also referred to as a Real Estate Investment Trust and is a company that owns or finances to different real estate properties that generate a lot of income. REITs allow you to invest in them, similarly to that of a mutual bond system. This will help you with generating more dividends, as a shareholder.

How to Invest in REITS

If you want to know how to invest in a REIT, then you are on a good path because this could be a huge financial cash out for you. Essentially, you are able to invest in portfolios of large-scale properties. This works similarly to that of the stock market, giving you the ability to have dividends instead of stocks. This is what most people are looking into doing now because it replaces the need to have to go out and purchase the physical property.

Are There Major Stock Exchanges?

Yes, there are major stock exchanges, similar to the stock market. However, there are multiple types of REITs that you will need to look into if you are looking into this investment opportunity. You will have an open market, public non-listed market, and private market. Each of these will depict where your REIT stands and if it?s a worthwhile building to invest in.

There are also two types of REITs right now that are the most popular and dominate the market. These include Mortgage REITs and Equity REITS, which generate income in slightly different ways. Equity REITS are for renters and they generate income via renting out to other people and the final sale of the property in the long-haul. Mortgage REITs work slightly different when investing and they are invested in mortgage loans. These can be tied to both residential and commercial residences.

New Sector for Equity REITS

As of August, 2016, when you begin learning how to invest in a REIT, you need to know that equity REITs are now considered to be part of a new sector in the real estate industry. They will no longer be considered part of the Financials Sector in the Global Industry Classification Standard (GICS), which is going to be great for getting better returns on your finances here.

You Should Always Look into Your Stock Options

Sometimes, it is just necessary for you to look into your stock options. This could be with the stock market or with the real estate market. Most Millennials, which are coming into the working industry, are beginning to learn about investment and the best practices. This is definitely one of the better practices if you are looking for a quick, easy start in the real estate industry. You just need to be thorough when you learn how to invest in a REIT and get the right financial planner to help you.

Even if you have a little knowledge, hiring someone for the first initial startup of the process can help land you better success and learn more actual tips when learning how to invest in a REIT. The more that you can learn from someone, the better off you will be when you go on your own and start investing in different REITs on the market.

Invest in Your Future

You are investing in your future when investing in a REIT. This is going to be something you can carry over and eventually cash out on when investing in your kids’ education. You could also use this as an investment for when you want to purchase a new house for yourself in the future. Whatever you plan to do with your investments, it will have a major impact on your future.

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Author: Finance Tips