The Real Estate Investor’s Creative Financing Ideas

Finding Financing – Creative Ideas

If you’re an experienced or novice real estate investor, you have many options available for financing your properties. One widely used method is having multiple loans. This is usually a second mortgage. For example, the buyer puts up a percentage and effectively borrows the negotiated balance on a separate loan.

For many years, the way to finance real estate was to make a 20% down payment, and get a loan for the remaining 80%. Of course you could make a higher down payment, but 20% was typically the minimum. Luckily, this standard has changed.

There are now several finance options available to the real estate investor. One popular way to finance your purchase is to have a second mortgage. The buyer makes a 5% down payment, and borrows the remaining 15%, usually at a higher interest rate, on a different loan.

Even though it’s nice to invest less on a property, the higher interest rate isn’t the only drawback. Usually, if the buyer does not meet the 20% minimum, they are required to get costly private mortgage insurance (PMI).

You are able to remove PMI when the loan-to-value (LTV) ratio reaches 80%. This is achieved by paying down the second mortgage and appreciation of the property value. This does not happen often because the property is usually sold or the buyer refinances before PMI can be removed.

For creative investors, other financing sources exist. Manufacturers of homes in planned developments are often willing to provide financing to early buyers.

Another risky and rather complicated way of financing a property is called ‘sub2’ which stands for ‘subject-to’. This type of deal is when the seller gives you the deed to the property, the loan stays in place, but the buyer never legally takes over the loan, just the payments. There are many different versions of this kind of transaction. Because of the complexity and risk, this method of funding an investment is not recommended for beginners.

You can also consider forming a limited partnership to finance your real estate investment. There are many different arrangements on this method. Some types involve each person in the partnership contributing in a portion of the cost, usually 50% each. However, sometimes the profit is distributed relative to the original amount invested. Another arrangement is that one half of the partnership contributes the capital, and the other half provides the needed services, such as repairs on a home that needs to be fixed. There are many different variations of this method.

How about the Lease Option? The lease-option allows a potential investor to lease the property and have some, or all, of the lease money applied to the purchase price if the potential buyer exercised the option to purchase. The investor then sub-leases the property with the option to buy or just rent it out.

In a conventional lease with option to buy, the seller charges the buyer a nonrefundable fee for the option to purchase the property at some agreed-upon point in time. The amount can vary depending on how eager the seller is to sell and the size and quality of the house. Typically, the higher the fee, the better the buyer maintains the property.

Because the lessee has made no down payment, the monthly rental fee is typically higher than prevailing market rates. The two parties agree on what portion of the rent will be applied to the down payment. Any amount can be credited.

Government loans are available to low income investors, or buyers who have served in the military. These programs are usually only available for primary residences.

Did you ever think about buying a home on a credit card? This is another method of financing your real estate purchase, although it’s usually not recommended. Obviously, the interest rates on most credit cards are substantially higher than loan rates. Another drawback is that lenders determine your creditworthiness based on your outstanding debt, and if you use credit card cash advances to cover the 5-20% down payment that you need, you’ll probably get turned down for a loan. This is also true for money borrowed from friends or family, unless you can show that the money is truly a gift.

Daniel Kalenov Global Diversified Partners is an investment firm of choice for individuals seeking to diversify their portfolios into tangible assets.

Each of our investors is a partner in the project and the key to a successful partnership is great communication. Daniel Kalenov Global Diversified Partners investor outreach program is second to none. We saw a need in the marketplace for a down-to-earth, smart, accessible investment firm that finds great deals, treats clients like family, and puts the investor first. It’s that simple.

Call 619-500-4235 us to know more!

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Should We Do Away With Equity Markets?

“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it”. ~ Mark Cuban

 

Here’s a deliberately controversial and provocative perspective: There are good reasons why equity markets, in their current form, need to be eliminated. Some of these are:

 

  • Less than 1% of the world’s population actually owns any equity. Disproportionate media attention is focused on Wall Street and other stock markets across the globe, at the cost of more productive activity.

 

  • The financial industry’s primary reason for existence – efficient capital allocation – has been exposed as a myth in the meltdown. Innovations in financial services are not focused on delivering more capital to productive activities. Instead, debt is sliced and diced to create multiple transactions out of the underlying debt – increasing deals and commissions but not leading to new capital.

 

  • Similarly, trading a company’s equity on a daily basis does not bring the company fresh capital -the same equity changes hands and only the brokers get rich. The only purpose it serves, if and when it works, is price discovery.

 

  • Everyday people have no clue about stock prices – most buy after prices have risen and sell when prices are bottoming. For most everyday people, who have little knowledge of the markets, buying stocks is akin to gambling.

 

The so-called experts aren’t much better – they just have more money and more discipline to get in and get out ahead of the crowd. There is no justification for an investment banker earning many times the salary of a plant manager, a sales manager or a branch manager on Main Street.

 

  • Stock prices are artificially inflated by the markets. Stocks should be valued only by what they earn – their dividends. Otherwise, it is like valuing land at more than its rental value.

 

The idea of a joint stock company, popularized by British shipping ventures, is outdated. Venture capitalists fill that role today, allowing rich people to make risky investments for a chance at enormous payoffs.

 

We need to put more emphasis on traditional businesses, family owned, operated as partnerships or proprietorship firms, with unlimited liability. Those firms traditionally access debt from private sources or banks; managers are personally accountable, and run their companies with more discipline and oversight.

 

Small investors like to think of themselves as part owners when they buy shares. This is a myth perpetuated by companies, banks and the media. The fact is that owning hundred shares, or even a million shares, of a company will not fetch one even an ounce of a say in how that company is run, or how that company keeps getting merged and demerged.

 

The shareholder is at best a supplier of money. The stock goes up and down and changes hands, but none of those transactions have any direct impact over the functioning or finances of the company.

 

We need a clear distinction between venture capitalists – who understand the risks and the returns related to their equity investments – and normal investors who are better served by debentures and bonds that offer predictable returns. Further, valuations of companies should reflect dividend yields rather than hopes about future growth or profitability.

 

Daniel Kalenov Global Diversified Partners is an investment firm of choice for individuals seeking to diversify their portfolios into tangible assets. We help people take control of their financial well being by educating them on the benefits of investing in tangible assets and by altering their perception of what “smart investing” means. Call us 619-500-4235 today!

Learn about real asset investing, retirement security, offshore diversification, and many other topics you can use to shape your future, please visit here: http://www.globaldiversifiedpartners.com/blog/

Use Your IRA For Investing in Real Estate: Daniel Kalenov

One of the best, most secure, most certain to grow investments you can make is real estate, but with an IRA, investing in real estate never seems to be an option offered. That’s not, however, because you’re not allowed to invest in real estate with your retirement cash; rather, it’s because most IRA funds don’t take advantage of a little-known IRS rule that allows for it.

If you’re like most people holding IRA account, you have your funds invested with a bank or a brokerage. That means you’re limited to stocks, bonds, annuities, and other paper securities – not real property. In today’s market, that may mean your IRA funds are tanking, and it certainly means that they are not growing as robustly as they were five years ago. The real money to be made right now is in real estate.

You can get into IRA real estate investing by looking for custodians that specialize in real estate IRAs, using the rules contained in Section 408 in the Internal Revenue Code. These special IRAs build a portfolio around all kinds of cash-generating and appreciating real estate: commercial, residential, rental, industrial.

It is not legal to hold your own 408-based IRA; investing in real estate with your retirement funds must be done by special custodians. However, you have freedom in many ways to work with your IRA real estate. For one thing, your custodian holds your property, but doesn’t necessarily administer it, select properties to purchase, or even set and collect rents. These may all be your tasks, and they give you a great deal of leeway in how your own money gets invested.

It’s easy to see that an IRA investing in real estate gets very complex. Do rents get re-invested in your IRA? Can you charge yourself for administering your own properties and make cash from your IRA in that manner? What kinds of property can you purchase to include in your real estate IRA? Is it possible to hold foreign real estate in your domestic IRA? A good custodian can tell you the specific rules governing your IRA; real estate investing through this route is more complicated than just doing it yourself but the tax advantages make it worth it.

While if you work it properly you can benefit to a certain degree from IRA real estate investing beyond the simple IRA, you cannot put your own home into your IRA, nor can you lease space in one of your IRA properties for your own business. You also can’t put properties you or your immediate family already own into your IRA.

IRA investing in real estate rules does allow you to purchase property in conjunction with others to put into your fund, and it allows you to include some leveraged property as well, provided your custodian allows for it. You can also sell properties while they are in your IRA, provided you don’t sell them to yourself or to a family member.

One of the best ways to realize a great benefit from IRA investing in real estate is to hold a property that will become your retirement home in a Roth IRA. Upon maturity, you have the custodian distribute the property in-kind – assigning the title of the home directly to you. If you did this with a traditional IRA, you’d be liable for income tax based on the value of the property at the time of distribution; with a Roth, you owe nothing outside of costs associated with the transfer. There are few nicer gifts to give yourself to celebrate retirement.

Daniel Kalenov Global Diversified Partners can help you for your retirement savings plan. Global Diversified Partners are San Diego, CA financial planners who can develop a retirement savings plan for you. We are prepared to help you in the investments you want to pursue. With our help, we can help you safely plan your retirement income. Let us get you started right, for your retirement money at Retirement savings plan.
To know more about us, please visit here: http://www.globaldiversifiedpartners.com/

How to Make Better Real Estate Investments

Real estate investments are actually meant for the expert players of this field. That is true. Nevertheless, people who have already tried their hands in real estate investing know well that if the investments are made well, one can easily get profitable returns. As per our experts at Daniel Kalenov Global Diversified Partners in the Real estate field, there are plenty of ways to earn significant profits in the real estate deals. If you feel that the place where you have invested is quite profitable, you can earn a handsome amount of profit.

For a novice in the field of real estate, there are many challenges and pitfalls to encounter. However, if s/he is able to take the chance and is mentally prepared to bear the risk, there is definitely a lot to earn and much to learn. However, in the long run, when he or she has gathered some experience, he can become a real estate investment master closing quite a number of lucrative real estate deals.

As you want to be a good player in the fields of real estate investment, you need to acquire few skills before hand, which can help you to be a real achiever in the field of real estate. There are a few skills that are needed for investing in a real estate deal, which are mandatory for a profitable real estate deal.

Learn how to find the right sellers-

You should be aware of how and when to find serious sellers, as these authentic sellers can help you to earn a profit in the field of real estate. Make sure the sellers are of high repute, as if you are investing for the first time; this may cause the investing at risk.

Learn to be a master negotiator while you are closing a real estate investment deal.

While you are a novice, you try to acquire the skills of how to deal with the real investment issues. However, all your effort goes in vein when you are not able to negotiate well and end up with high prices. For that, it is quite necessary to acquire proficiency i8n closing the real estate investment deals.

Capable to analyze real estate investment deal accurately-

If you are capable to analyze the real investment deal, you will be able to understand where and how to deal perfectly. This will help you to be a gainer in a long run, as you can calculate the risks to some extent.

Gain expertise in all the fields revolving around the real estate investment-

In order to gain expertise in the real estate investment field, you must acquire expertise in all the areas, which involves the real estate investment. You must be aware of the lingo and terms used in the real estate investment world.

Develop understanding on the Real estate and the financial risks involved-

If you are able to understand what the concept behind the real estate investment is and the risks and benefits involved, you can easily be a master of this field. This understanding can be developed easily by educating yourself in this field.

At Daniel Kalenov Global Diversified Partners we can suggest you more information about using specialized skills to manage your real estate investment business. We help people take control of their financial well being by educating them on the benefits of investing in tangible assets and by altering their perception of what “smart investing” means. The firm has a global focus and we’re opportunistic, but prudent.

Learn about real asset investing, retirement security, offshore diversification, and many other topics you can use to shape your future, please visit here: http://globaldiversifiedpartners.freeblog.site/

Smart Investing In The Stock Market: Global Diversified Partners

Business Graph with arrow and coins showing profits and gains
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Money earning requires lot of toil and efforts. Intelligent people make it a routine to save a particular part of their income for meeting out the unforeseen expenditure and for security in old age. Beside this are many other reasons to save. Whatsoever the reason is, but saving is always beneficial for the upliftment of an economy as it leads to investment.

There is another class of people who interested in putting their savings for speculative investments as they believe in multiplying their money in short duration of time but without gambling. These people may be those having huge money to invest or simply a common man who believes in fast lucrative investment but in right way. So stock market is an answer to them. Here they can invest their money and draw high dividends when the market is booming.

Since this market is unpredictable and risky, so it calls for abnormal returns in the form of high dividends. But at the same time as mentioned the risk element can lower the returns in case of falling market or recession. One has to be mentally prepared for the best and the worse equally. At Daniel Kalenov Global Diversified Partners we help people take control of their financial well being by educating them on the benefits of investing in tangible assets and by altering their perception of what “smart investing” means.

Smart investing in the stock market is an acquired skill, not something you are naturally gifted with. In other words, investing in the can be learned. Even if you are poor with math, even if you don’t understand anything about how businesses work, and you didn’t do well in Economics class in high school, you can learn the art of smart investing in the stock market, and become very successful over time.

But what exactly does smart investing in the stock market actually entail? How do you learn the skills necessary to invest wisely? What exactly is it that you need to learn?

Essentially, smart investing in the stock market involves an in depth understanding of all of the different types of entities that can be traded on the market, such as stocks, bonds, mutual funds, currencies, commodities, and precious metals. It involves an in depth understanding of the analytical process that you should follow in determining whether a particular investment is worth it or not. It involves understanding how to interpret various trends in the market, in order to determine when and how much to buy or to sell.

Smart investing in the stock market also requires you to lay out some clearly defined goals. Indeed, it helps to know what your financial goals are, in order to better and more effectively plan your investment strategy. If you know how much money you want to earn, and how often you want to earn or by what date you want to earn it, then that will dictate what kind of strategy or investment vehicle you should use.

What are some of the investment strategies you need to learn? There are more ways to invest than to just “buy and hold” or to “buy low and sell high”. There’s a lot more to investing than that.

When it comes to your finances, if you don’t know where you’re going, any road will get your there. We at Daniel Kalenov Global Diversified Partners partner with your to re-claim your decision making, and ultimately your future. Our goal is to be the investment firm of choice for individuals seeking to diversify their portfolios into tangible assets, not just paper ones. Daniel Kalenov Global Diversified Partners has a global focus and we’re opportunistic, but prudent.

Call 619-500-4235 us for more details!

Learn about real asset investing, retirement security, offshore diversification, and many other topics, please visit here: http://globaldiversifiedpartners.strikingly.com/

Things You Can Do to Take Back Your Financial Future: Daniel Kalenov

The bills are piling up. The stress is reaching new heights. You find yourself unwilling to answer the phone, unable to get to sleep, and lacking any desire to get out of bed in the morning. The pressure of your debt is also affecting your relationships. Your kids walk on eggshells around you. You are constantly at odds with your spouse. You even feel like kicking the family dog every time he gets in your way. These are common things to feel. And no, it’s not really you or your loved ones who are creating the situation, but the burden of your debt.

financial-future

No one likes to be in so much debt that he can’t keep his head above water. And you don’t have to be that guy (or girl). Here are things outlined by our experts at Daniel Kalenov Global Diversified Partners you can do to take back your financial future from the creditors:

 

Balance transfer: When it seems to be piling up faster than you can pay it, you may decide to engage in debt consolidation by way of balance transfer. Grant it, you must have wisdom and discipline to make this work, but you can greatly reduce principle by taking advantage of low-or-no interest balance transfer rates. These won’t last forever, but they will allow you to make payments that shave hundreds if not thousands of dollars off your principle. Of course, you will have to make sure you’ve managed it wisely by the time those rates expire, or you could be paying a lot more than you were before. Pay due diligence, and this could be a viable option.

 

Seeking counsel from a professional: A professional can not only help you to manage the debt in your life, but they can help you find a worthwhile debt consolidation option. Make sure that you do not fall victim, however, to exorbitant fees and unscrupulous counselors. They’re out there, and they can do more harm than good, getting you locked into options that aren’t all that great, and that can actually hurt your credit score. Make sure you check with the reputable agencies like Global Diversified Partners in your area to determine whether or not a debt counselor is right for you.

 

Debt consolidation loan: A common debt consolidation loan from a bank is a safe and secure way of knowing whether or not the option will actually be beneficial to your situation. A bank will make sure that your decision to consolidate is a wise one, and it will enact a plan to help you meet your goals.

 

Budgeting: Once a clear path is ahead of you, you can start to focus on budgeting and the benefits that it will bring to your life. Budgeting is the key to not falling back into debt, and it also gives you freedom and peace of mind, whether you are debt free or not.

 

While debt consolidation is a useful tool in the eradication of your debt and freedom from creditors, the most important thing you can do for your financial future is to not forget how to live and have a good time. Because keeping yourself sane and happy is key to keeping yourself motivated in controlling your finances.

When it comes to your finances, if you don’t know where you’re going, any road will get your there. We at Daniel Kalenov Global Diversified Partners partner with your to re-claim your decision making, and ultimately your future. Call us 619-500-4235 today for the best advice!

 

Find out more about our professionals, please visit here: http://www.globaldiversifiedpartners.com/global-diversified/#ourteam

Tips by Daniel Kalenov for Smart Investing Made Easy

Daniel Kalenov is the founder and Principal Fund Manager of Global Diversified Partners, LLC. Since 1999, Daniel has analyzed, purchased, repositioned, and managed income-producing real estate assets. GDP was born out of Daniel’s frustration with the volatility of the stock market, and the realization that relying on stocks alone for stability in retirement was largely a game of chance.

Smart Investing made easy begins with doing your background research, building your personal investment strategies and diversifying your investments. Your financial future depends on your smart investing or you could lose a tremendous amount of money quickly. With proper research, a good thought out investment strategy and some help from a personal financial planner like Global Diversified Partners of Daniel Kalenov and you should be able to see your investment returns increase.

Research Your Investments and Options for Smart Investing Made Easy

Smart investing requires a lot of thought on your part, before you can develop a strategy for your investments with a personal financial planner. What investment strategies make the most sense for you and your family? What are your investment goals, what do you want to accomplish? Are you investing to put kids through college? Maybe you want to buy a new house or you are trying to set yourself up for a comfortable retirement. You need to know the risks involved and what expenses that may occur with that particular investment. Someone who is about to retire is going to be much more conservative in their investing style than a young person who is just starting out and does not yet have a spouse and kids. Taking a look at personal needs and then taking the time to find the answers can make decision making with a financial planner much less overwhelming.

Your Personal Investment Strategy for Smart Investing

The next step is to make a plan and build a strategy to work your plan. This is where a good financial planner with his in depth knowledge can really be a big help. The financial planner can guide you to make the best decisions as to how best to invest following your criteria for risk and meeting your personal goals. It is very important that you remain up front and honest about your risk tolerance, everyone is different.

Your personal investment strategy is a road map for a life time of smart investing made easy. Through good research, knowing what you want to accomplish, setting goals and working with your personal financial planner to make those investment goals attainable, you will be well on your way to financial freedom. Although you can work with a good financial planner, since you are ultimately in charge of your money, it is your responsibility to understand the mechanics of investing. Once you have learned and mastered this, you are well on your way to a life time of financial freedom and opportunities.

When it comes to your finances, if you don’t know where you’re going, any road will get your there. We at Global Diversified Partners partner with your to re-claim your decision making, and ultimately your future.

Our goal is to be the investment firm of choice for individuals seeking to diversify their portfolios into tangible assets, not just paper ones. Daniel Kalenov Global Diversified Partners has a global focus and we’re opportunistic, but prudent.