8:38 Feb 9th, 2014 | 0 notes
How to Decide Between PreTax Versus Roth Contributions for Your 401(K) or IRA
Primary lenders are where the majority of people are going to go to finance their home purchase. Now with investing there is obviously a huge market for hard money lenders and alternative financing, but here is a list of some of the areas where financing is also available.
1.) Commercial Banks and Savings and Loans Organizations- This is the most common place people find their mortgage loan. They will typically lend for single family homes the most, but they are also able to do commercial loans for much larger projects.
2.) Credit Unions- These institutions primarily lend to consumer homebuyers, but rules will vary by the organization. Many credit unions will allow you to do commercial loans as well, and of course you can use them to purchase a duplex, triplex and do an owner occupied if you live in one of the units.
3.) Insurance Companies- Less common avenue for finding financing, insurance companies will actually lend money out for certain projects. Typically the projects will need to be larger, such as new construction projects, large office buildings, or shopping centers.
4.) Investment Groups- This could potentially fall under the “hard money” category for all intensive purposes. This is basically a group of individuals or companies who pool their money to make mortgage loans.
5.) Mortgage Banking Companies- These are companies that are set up by investors who specifically are looking to make mortgage loans. They do not offer banking services, but focus only on making mortgage loans, differentiating themselves from the banks.
6.) Pension Funds- This is a uncommon avenue for financing, but it is possible. Although pension funds are becoming extinct it seems, there are some pension fund managers who will lend money to fund construction of large real estate projects and purchases. They generally won’t be made to small individual homebuyers however.
Here are just a few different sources for financing, of course leaving out hard money individual loans and private investors. Be sure to check out my blog as www.AspiringFreedom.com for all things personal finance, passive income, and escaping the 9-5 lifestyle.
Full disclosure on this one; you’re not going to be able to quit your day job doing this. There are things called focus groups where you can go to a marketing company and get paid hundreds, maybe even thousands of dollars for sharing your opinions on various topics amongst a group of people. Google search “Focus Groups” and then your town or city and you’ll likely be able to find some. For those of you who would trade the payout for the ability to stay home and not have to communicate with others, there are also online surveys. Online surveys are going to pay you to share your opinion on products, services, etc. Businesses spend a tremendous amount of money on market research, and you can benefit from it. To be upfront, usually the pay is low on these, and you can maybe make $10 an hour if you put effort into making it sustainable. This strategy may be more for your retired parents who need something to do besides browse Facebook, or something a college student can do for some extra cash in between classes. There are a lot of better ways to make money, even online, but this is an option if its something you really want to do. I would check out my “Online Income” page for some better options.
1.) MySurvey - This is the best paying survey site on the internet, but I’ll name a few others to make things objective
2.) Cash Crate- Another good site with a good amount of survey offers.
Here are five sites you can test out if you’re looking to make some extra money online filling out market research surveys. Again, if you’re interested in this you may want to consider a focus group(probably will pay more), or check out my “Online Income” page to the right for more ideas of how to make money online in your spare time, and escape 9-5.
The Art of the Deal was Donald Trump’s first book that he has written, and it was published in 1987. Since then he has written over 13 other books, most of which have become great top sellers and award winners. In this book, Donald Trump discusses much of his life experiences up to that point, and also how he decided to become interested in business.
In The Art of the Deal Donald Trump says
Donald Trump was born on June 14th 1946 and is the current chairman and CEO of the Trump Organization. The Trump Organization primarily focuses on real estate, but has also been known for buying out various casinos’ and other entertainment venues. He is of course also the star of the hit NBC Show “The Apprentice”, and also owns the Miss USA and Miss Universe Shows. Donald Trump’s father, Fred Trump was a wealthy real estate investor as well, which many people believe is the reason that Donald Trump has become so successful in his career. Donald turned his fathers small time middle class housing operation into a huge international luxury brand known all over the world.
The book discusses a day in the life of Donald Trump, and how he got his start in real estate. He began working with his father, but decided to go for it big and move to the shark filled city of Manhattan. Now Trump runs hotels, condos, golf courses, casinos, and one of the most valuable brands in the world “Trump”. The story behind how he got started and his beginnings is a fascinating one, and this is one of the better business memoirs I’ve ever read. You will truly get a recap of some of Trump’s earliest and largest deals.
You can purchase the Art of the Deal by Donald Trump on Amazon by clicking the link below
6:43 Feb 4th, 2014 | 1 note
Four Steps for Financial Success
There are a bunch of options to choose from when deciding what to invest in. Here is a list of every investment property type.
1.) One to Four Family Houses- Commonly known as duplexes, triplexes, and quadriplexes
2.) Apartment Buildings - Anything from 5 Units to hundreds of units
3.) Large Residential Complexes- A residential development that has several buildings, and there are apartments within each building.
4.) Individual Retail Store
5.) Strip Malls/Shopping Centers
6.) Enclosed Retail Malls
7.) Office Buildings
9.) Motels and Hotels
10.) Industrial Properties and Factory Buildings
11.) Vacant Land
Here are pretty much all the different types of investment properties. Now obviously it is difficult to pin down every single type of investment, but this is a good starting point. There are of course condos and mixed use properties, and the ability to convert one property type into another. Using the list will get you in the right state of mind and give you a place to start. Find your niche, decide where you would like to start investing, and start researching and taking action!
Estimating the net operating income of a property is extremely important when analyzing a deal. You will need to have access to income and expense statements for the subject property or similar buildings in the area to be able to accurately estimate NOI. Below are the four steps to reaching your number.
1.) Estimate the Potential Gross Income- Potential gross income is simply what you expect the building to realistically generate based on 100% occupancy and before taking out any expenses. Be sure to add in income from all sources including laundry machines, parking, or any other additional income that will be generated from the property.
2.) Subtract Out Vacancy - It is unlikely that your building will be rented out 100% of the time. Usually vacancy is expressed as a percentage, which can vary considerably by the type of property and the location. Find out what you can expect for vacancy from similar nearby properties.
3.) Estimate All Other Expenses For This Building - There’s generally going to be three types of expenses here. The main two are fixed and variable. Naturally fixed expenses are those that remain the same regardless of the occupancy of the building. Variable expenses are any other expense for the most part. This can include snow removable, utilities, management fees, etc. This is where if you have the financials for this property or a similar nearby property you will have a major benefit.
4.) Subtract Lines 2 and 3 from Line 1 - This will result in your net operating income.
Net operating income can be used to value a commercial property, factoring into the Capitalization ratio formula. This is the most common use for this calculation, when evaluating the potential investment of a commercial property.
A lot of people often wonder whether they should stash money into their 401(k) or if they should use an Individual Retirement Account or an IRA. There are three different types of accounts within each of these. Pretax, Roth, and After-Tax. Pretax means that you are taking the tax deduction now, but you will need to pay taxes on any earnings from this money when you withdraw down the line in retirement. Roth means that you are paying taxes on the money now, but it grows tax free assuming you don’t tap the earnings early. After tax is primarily for those who are above income limits, or who have maxed out the pretax or Roth portion in their 401(k) by the IRS contribution limit. I will have more articles outlining 401(k)s and pretax versus Roth in later articles. This article is focusing primarily on the Pros and Cons of a 401(K) versus a IRA.
1.) May have lower fees than an outside IRA, depending on your employer
2.) May have limited withdrawal options or restrictions on normal of withdrawals in retirement
3.) No ability to access basis (see Roth IRA)
4.) Pre selected investment options make investment decisions less complex
5.) The ability to save automatically out of your paycheck makes it automated and forces you to save
6.) Ability to withdraw at age 55 or older if you separate from the company versus 59.5 always for an IRA
7.) Company Match
1.) More investment options (individual stocks, more mutual fund options, etc)
2.) More control over your investments- You decide when and what you invest in
3.) Ability to withdraw your basis (contributions) out of a Roth IRA at any point tax free (earnings would still be taxed however, but contributions come out first as a default)
4.) Consolidation of Accounts –Having all your accounts under one investment company umbrella may be appealing
5.) More control over withdrawals in retirement –Typically not going to be a limit on size or amount of withdrawals you can make in retirement
Websites are the real estate of the internet. Just like many people will try and flip real estate deals, there are also countless people working on flipping internet domain names. It is one of the less popular ways to make money online, but it can be extremely profitable if done well. The goal is to buy a domain that you feel has potential and try and later resell it for a profit margin of several times what you paid for it. You will likely need to put in some work in order to increase the value of the domain, but this can be accomplished. If you can increase traffic and earnings of your site you will be much more successful in your site flipping venture.
1.)Flippa- This is without a doubt the most popular website to use when trying to flip your domain name. If you are looking to learn how it works and what average prices for quality domains are, this may be a good place to start.
2.) Sedo - This website is similar to Flippa, but not as popular. There are countless domains sold on this site as well.
3.) Warrior Forum- This is actually a forum for people who are trying to make a living online. Although the site isn’t specifically designed for trying to sell or resell domain names, you should be able to find some buyers on this site as well.
4.) WebsiteBroker - This is extremely similar to Flippa, just not as popular. Another avenue worth exploring for looking at places to sell or buy domains.
As you can probably guess, Flippa is most likely where you want to begin. Warrior Forum can give you a good place to learn about making money online and domain flipping, but Flippa is probably where you’ll end up finding a buyer. Be sure to do your research, but this is a good low risk investment with the opportunity for very large profits online.