It\’s Easier to buy a $5,000,000 Apartment Building That A Single Family Investment Property

By: Joe Florentine

Top 10 Reasons Why It’s Easier To Buy A $5,000,000 Apartment Building Than A Single Family Investment Property.

The day my life changed forever. It started with a phone from my good friend and banker of 15 plus years ?Joe, I can?t believe that I?m going to say this, but your mortgage application has been denied?. (I had done hundreds of residential deals, had an 800 credit score and 25 on their projects.

Here is why I, and you probably should too, move from residential to large multi family projects (commercial)

1. Funds are available for large multi family properties, but not for residential investment homes.

President Obama said during his Economic Recovery Act Speech, “there is no money available for you speculators” and he meant it. Try to get a loan for a residential (1-4 family) non-owner occupied property and see the results for yourself. The days of stated income loans for residential investors are over. If you have been in the residential investment game for a while, you already know it, if you are just starting out; you will experience this problem on your first residential investment deal. Its cash, hard money at 12 LTV or you?re done.

The good news is that government backed funds are plentiful for larger, multi-family properties. This presents tremendous opportunities for those who know how to access the funding sources.

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

2. You don’t have to personally qualify for the loan, the properties qualify.

Imagine that! Anyone who has ever attempted to purchase a residential investment property (1-4 family) has encountered the issue of personally qualifying. Sure the rents may cover part or the entire mortgage, but the lender only considers a percentage of that income toward your ability to pay the new mortgage. You need, tax returns, financial statements, proof of funds for down payment, etc. Not only that, but of course your FICO score becomes a big factor. Get through all of this and every time you buy another residential property your FICO score drops and you are viewed as more of a risk to the lenders. The more successful you become in this arena, the harder it gets……

With commercial financing, the properties qualify for the loan, not you. It’s not on your credit report, etc. The more successful you become, the easier it gets…..

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

3. Loans on large multi family properties are fully assumable.

Ever try to assume a residential loan without having to qualify for it? Not happening, at least not since the early 80’s when FHA and VA loans went from “fully assumable” to “qualifying assumable”. It’s the same as having to secure a new purchase money mortgage, so unless the interest rate is very attractive, it’s never done.

The first home I ever purchased was a little bungalow for $25,000. It was 1980, I was 20 years old and didn’t qualify for a $200 limit MasterCard, but I assumed a $23,000 VA loan, no questions asked.

The same criteria hold true to this date for large multi family projects, but very few know about it.

With the financing on large multi family buildings, the loans are fully assumable. Remember, the properties qualify not the buyer. You can buy 100 + unit apartment complexes without qualifying, no verification of funds, no credit report, no tax returns, just knowledge on how to properly structure the deal.

Click here for an Insiders Look at High Leverage Financing, by Durante Parks

4. You ARE NOT personally obligated to repay the loan.

Try getting a residential mortgage and tell the lender that you don’t want to personally guarantee the loan. Not happening! We have been conditioned that all loans have to carry a personal guarantee. It’s incorporated into every residential mortgage, by every lender in the country. Of course they want recourse if you default, they get the property and then have the right to a default judgment for any balance that may be due after they liquidate the property. Residential loans carry “FULL RECOURSE” to the mortgagee.

Larger commercial loans are “NON RECOURSE” to the borrower. The property and its ability to generate cash flow is the lenders security, not you personally.

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

5. Multi Family Properties are built to CASH FLOW, single family homes are not.

Single family homes are designed, built and priced for owner occupants, not for cash flow. Study the numbers on almost any single family home and you will discover that after you pay the mortgage, taxes. Insurance, utilities, maintenance, etc, you will lose money every month. Single family homes are terrible for cash flow despite what the residential guru’s on TV tell you.

Multi family properties are designed, built and priced to do one thing and one thing only, “make money”. Lenders lend based on the fact that there are sufficient funds to cover the debt obligations, not on what your credit score is, or what the house down the block sold for or what your personal income was last year, etc……

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

6. The value of the property is magnified by a slight increase in rents.

The value of residential property is determined strictly by recent comparable sales in the immediate area. There are really only 2 ways for residential homes to increase in value; a) you add value by physically improving the property or b) you own it long enough for the area to appreciate. So you either spend some time and a considerable amount of money to make the improvements, or wait, lose money every month and justify it by saying that “I have a good tax write off”.

Large multi family properties are valued by the capitalization rate (cap rate). This is easily determined by multiplying the net operating income (NOI) by the standard cap rate in the area. Without getting into too much detail, if you had a 100 unit complex with rents at $700 per month and expenses at 35 per year for 2 years, the property would now be worth $5,300,000. That?s an increase in value of $700,000 in just 2 years. No rehab, no improvements, no headaches, etc. Easy to refi or cash out if you choose.

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

7. No tenants and toilets to deal with - Professionals manage the property.

With residential investment property YOU generally have to manage it. The property can’t cash flow to begin with; there probably is no budget to hire a management company to run it. You go from watching the guru on TV sitting by the pool telling you how great your new lifestyle is going to be once you buy a couple of homes, to fielding leaking roof calls and clogged drain problems on Saturday nights.

With the larger properties a professional management company handles all of that for you. It’s budgeted in just like taxes and maintenance. The lenders require a professional management contract be in place at closing. They handle all the problems; they are staffed for it and deal with repairs, collecting rents, renting vacant units, etc. They send the funds to you. You never have to deal with a single tenant, yet you reap the rewards. Now you have a lifestyle.

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

8. Distressed residential properties will distress you while larger multi family properties will provide a lifestyle.

Anyone who has invests in residential Real Estate is taught to go after the distressed properties, foreclosures, pre foreclosures, sheriff sales, etc. The problem with this process is that those type properties breed lots of distress for the buyer. If you have ever purchased one of these properties, you know exactly what I mean. If you have not, be prepared for many issues including getting utilities on and doing bank and/or municipal required improvements before you own the property, etc. You don?t own the property, so you can?t repair it, don?t have the right to turn on utilities, yet you need these items to secure a lender?s commitment. Get through this, then buy, renovate and find a buyer at a profit, then you will probably run into a ?seasoning? issue. Seasoning has come into play due to all the fraudulent house flips over the past few years. Government backed funds; FHA, etc will not allow a new buyer to purchase your property for more than the purchase price that YOU paid for a minimum of 6 months. Up to a year, you need to provide all kinds of documentation regarding the amount you spent to renovate and improve the property. Your carrying cost, closing costs, etc do not count, and oh did I mention, there is no line item for your profit. Essentially you can do everything right, but still be stuck with the property for a year unless you can find a cash or non conventional buyer.

The hardest thing that I had to overcome when graduating to the commercial arena was putting the distressed mindset behind me. In residential you have to have a distressed situation to create a profit, in multi family, remember, the properties were designed to make a profit; you do not need distress to be profitable, the cash flow is already there by design.

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

9. With a little knowledge you can own apartment buildings with little or no money.

Again, residential investment property requires down payments, qualifying, front end and back end ratios, good credit, proof of ability to pay, etc. This amounts to a considerable amount of time, aggravation and work for a relatively small upside. You can participate in this arena for many years and never achieve the cash flow and lifestyle that you seek.

With commercial projects, remember it?s the properties that qualify, not you personally. There are several techniques used to acquire large multi family properties with little or no money. You can replace the $1,000,000 deposits with the knowledge on how to structure the deal and the right financing contacts in place. The knowledge that you need is not Real Estate, it?s actually financing. It?s easier than you think to understand the commercial financing game.

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

10. What all the Real Estate Guru?s don?t teach you. Understanding financing is the key to wealth in Real Estate.

?Buy low, sell high, buy homes with no money down and rent for cash flow, option homes and flip the contract, flip assignable contracts ??? We?ve heard it all for years and years on end by the Guru?s on TV making it all sound so easy and glamorous. The problem with these strategies is that it?s always about the Real Estate itself, but never about the real key to wealth in Real Estate, understanding and structuring the financing.

If you had an unlimited supply of your own funds, do you think you would be successful in Real Estate Investing? I?m sure that you would. The thing that holds most of us back from achieving our dreams is the lack of capital and/or access to it. Understanding how to secure favorable financing for your projects is by far the most important element in the transaction. When you move to the commercial arena, the Real Estate part is simple. In less than 5 minutes, you can determine the value of a property anywhere in the United States.

Click here: http://www.usapartmentfinancing.com/moreinfo for an Insiders Look at High Leverage Financing, by Durante Parks

Conclusion: It’s easier to buy a $5,000,000 apartment building than a single family home.

?When the student is ready, the teacher appears?. It?s no accident that you have stumbled upon this article. It?s your prepared mind meeting with opportunity. Just like my chance encounter with an old friend that I had not seen in over 10 years who wrote down Durante Parks’ website address on a napkin and told me that Durante could teach me how to buy apartment buildings easier than houses; you happen to be at the right place at the right time. Just a couple of months after this chance encounter, under Durante?s training, I am purchasing 2 large multi family projects, with no money out of my pocket, plus I’m developing a solid income by providing financing to investors looking to do the same. A day that started out as a disaster, turned into the best opportunity of my life.

If you would like more information on how you can go from residential to large multi family projects, I encourage you to start by simply reading a report containing an actual case study where 102% financing was obtained on a $10,000,000 multi family transaction. The report is written by my mentor and brilliant commercial financier, Durante Parks. The report is posted for free with Durante’s permission at this link: http://www.usaprtmentfinancing.com/moreinfo Insiders look at High Leverage Financing

This is a “Shareware” Article

This article is shareware. Give this article away for free on your site, or include it as part of any paid package as long as the entire article is left intact including this notice. Copyright © 2009 .

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11060.shtml

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Real Estate in Toronto: 5 Reasons to Back Out of a Transaction

By: Robert Kennedy

Buying a new home is an exciting time. From the very first moment you see the home you want to make an offer on, you are emotionally attached. The first time you walk through its rooms, you imagine your furniture there; you decorate the spaces instantly in your mind. You can see your family living there happily year after year. Even before the ink dries on your offer, you are planning improvement projects.

Yes, it is emotional. Yes, it is exciting. But what if something goes wrong? Should you blindly hold onto a home and follow through with the transaction just because you love the home? When should you back out of purchasing real estate in Toronto? The following 5 are red flags that you should pay special attention to:

1. You should seriously consider backing out if there is debt attached to the house. Back taxes and some liens are inherited by the purchaser. You could end up paying more for your home than you bargained for.

2. If there is serious structural damage to the home, you might want to rethink your offer. Some foundation problems are very expensive to fix. Although rare, some homes have to be torn down due to structural issues that cannot be fixed.

3. When you purchase a house, the house is not as important as the neighborhood you buy in. You should always purchase a home in a good neighborhood where property values are rising. Housing prices in impoverished neighborhoods steadily decline. If you purchase such a property, your home will be worth less in the future than it is now.

4. You should always purchase a home where you will have room to grow. Choosing cuteness over space could end up being the bane of your existence later on down the road. Remember, you can always decorate your home to suit your style. On the other hand, it is difficult to add more space to a home and lot that is cramped and limited.

5. It is highly advisable to purchase several professional inspections before you purchase real estate in Toronto. If any of the inspections come back with negative results, you will have a difficult choice to make. You will either have to repair the issues yourself, ask the seller to repair them or back out of the deal.

Once you are emotionally attached to a home, it can be very difficult to call off the transaction. But don?t try to fool yourself. If you can envision a future where you will regret going through with the purchase, back out. There are too many homes on the market. You will find something else. There is no reason to get stuck with something that is less than perfect.

And don?t worry about the legalities of it. There are clauses on every offer that give you a legal way to back out of the contract. If you?re unsure, ask your agent.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_10978.shtml

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Permanent Insurance Explained - Permanent Life Insurance Types

By: Donald Lusan

Permanent insurance, also referred to as permanent life insurance, affords the policy owner the opportunity to accumulate a little cash in addition to providing a death benefit in the event of premature death. When most people today think about life insurance today they think in terms of the largest amount of cash they can leave for a spouse and children. The result is that they buy a term policy. Term life insurance is the cheapest type policy you can buy. The problem with this however is that if you keep the policy for the duration and don’t die there is nothing in it for you.

Your permanent insurance policy is entirely different. It costs more than term but if you keep it for 20 or 30 years or longer you will likely get back whatever you have paid into it if you choose to surrender it for it’s cash value. There are many different types of permanent policies. Let us take a look at a few of them.

Universal Life

Universal life insurance combines a term policy with a savings plan. The amount of money you apply to savings is flexible. It does not need to ne a set amount. This policy also pays a death benefit in the event the insured dies.

Variable Universal Life

This policy is also considered a permanent policy as it combines an investment plan with a permanent type policy. A special licence, an NASD License, is needed to sell this product as some of your money is invested in mutual funds or other equity linked products.

Variable Life

This policy is a combination of whole life insurance and an investment. The agent selling this product also needs an NASD License in addition to his Agents License.

Whole Life

This policy has been around probably from the idea of life insurance came into existence. This is the original permanent policy. Most of these policies last to age 100.

Single Premium Life

This policy is a variation of the whole life policy. It allows you to pay one premium and keep your policy for as long as you wish. You can turn it in to the company at any time for it’s cash value.

Limited Pay Life

This permanent insurance policy is set up so that you can pay into it for a given number of years and pay no more thereafter. You have your policy for as long as you live.

Graded Premium Life

The first year you pay a smaller premium which increases every year for a given period of time, usually 5 or 10 years, then levels off. The premium remains level for the balance of the time you keep your policy. The first years premium is usually slightly more than half of the payment required for a whole life policy. When the premium levels off it is again more than you would pay for a whole life policy.

All permanent insurance policies have cash values and most earn dividends is the company performs well with it’s investments.

For additional information go to: http://www.life-insurance-answers.net/types-of-life-insurance.html

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11049.shtml

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Background Checks - A Business Owner\’s Guide

By: Shelley Phelps

Background Checks - A Business Owner’s Guide

Over the last decade, pre-employment background checks have become a standard risk-management tool for U.S. employers both large and small. Fear of negligent hiring lawsuits, the need to comply with state and federal mandates, and the high cost associated with employee turnover have significantly increased the number of companies that conduct pre-employment screenings.

For smaller businesses without compliance and/or risk management departments, the development and launch of a pre-employment background screening program can be somewhat confusing. There are many things to consider:

-Documentation of policies

-Different types of background searches

-State or federal legislative mandates

-In-house vs. outsourcing

-Choosing a background screening provider

-Overseeing the process

This article is intended to provide small businesses with a general overview of pre-employment background screening guidelines.

Documenting Your Background Check Program

Before implementing a background check program, an employer should ensure that pre-employment screening becomes part of any written policies or procedures already in place. Decisions need to be made regarding which (if not all) positions will be screened and what searches will be conducted for applicants applying for those positions. Written policies and procedures are important in maintaining consistency so that all applicants for a given position are considered in the same way.

At this stage it may also be helpful to consult with legal counsel regarding what information may legally be used in making a hiring decision. You?ll want to consider what specific requirements may already be in place for your particular industry. Chat with owners of similar companies and find out what types of background checks have been most useful and how they implemented their programs. Colleagues can very often be an invaluable resource. Keep in mind, you may want to develop several different packages, depending on the types of positions your company staffs.

In-House vs. Outsourcing Your Background Checks

Once an employer has decided what the pre-employment screening program will consist of, it?s important to sit down and figure out if it makes sense to process most of the searches internally or whether this is something that should be outsourced. There are many aspects of a background check which can be conducted in-house, such as education and employment verifications and reference checks. Terrorist Watch Lists, Federal Sanctions lists and Sex Offender registries are also available to the general public. However, with ever-changing federal and state hiring laws, many smaller businesses may not have the time or personnel to dedicate to conducting these searches, as well as keeping up-to-date with the Fair Credit Reporting Act (http://www.ftc.gov/os/statutes/fcrajump.shtm) and what information may or may not be accessed in each state.

The cost of outsourcing is certainly a consideration. Any employer conducting background checks in-house will need to devote staff time and resources to the physical management of the process, including computers and a software solution to manage and track all applicants being screened.

They will also need to dedicate staff and resources to remain up-to-date and knowledgeable of evolving state and federal laws in all of the jurisdictions in which they operate. This includes FCRA compliance, as well as compliance with any applicable state data collection and storage, privacy, and/or hiring laws. On the other hand, a typical report from an outside background screening firm should cost less than the first day?s salary of a new employee. When compared with the cost of a bad hire, this is an extremely minimal investment.

How to Choose a Background Screening Company

Because there are currently so many background screening companies to choose from, an employer needs to take several things into consideration before making a decision. First, smaller businesses should look for a professional partner, not just an information vendor selling data at the cheapest price. Second, although cost is always a consideration, employers need to be sure that the selected firm is capable, experienced, knowledgeable and reputable, as well as being reasonably priced.

Above all, an employer wants to be sure that they are dealing with a background screening firm of integrity. A review of the potential vendor?s website and materials, as well as contacting current clients for professional references, should help in establishing the firm?s qualifications. Lastly, an employer should confirm their potential background screening partner is a member of the National Association of Professional Background Screeners (http://www.napbs.com). Membership in this organization demonstrates a commitment to professionalism and an industry-wide code of conduct.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11033.shtml

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Handling Redundancy

By: Darren Bourke

1.) Review Your Organisational Chart. First things first. Review your Organisational Chart in terms of fulfilment of product or service delivery and the operational necessity of each position. Also consider the impact a redundancy has on customers, continuing employees, team morale, revenue and operational efficiency.

2.) Review Your Employment Obligations. This is key once you have decided to make staff redundant. Are your employees covered by an EBA or Collective Agreement? Is your work force unionised? Are they under an Employment Agreement? Is there an award that applies also? Be very careful in understanding your legal obligations fully before taking any action.

3.) Understand what Redundancy means.  It’s important that you get advice to confirm that your staff cuts are in fact legitimate redundancies. Research first take action second. After you terminate, it’s too late to reverse your actions.

4.) Get Advice. Obvious but often overlooked. I could not stress this point enough. Don’t accept advice from a mate, a website or a colleague as gospel. Spend some money on legal or professional advice here to fully understand your position. Get it in writing.

5.) Determine the total cost of Termination Payments. Get your Internal or External Accountant to create a spreadsheet of all termination payments after receiving the advice on your redundancy obligations. Don’t forget to include employee entitlements and other termination payments applicable beyond any redundancy payout.

6.) Budgets & Cash flows. Once you know the total figure of the termination payments, calculate the impact on your budgets and cash flows from a timing perspective.

7.) Do all your Homework before Execution. You have total flexibility in scoping redundancies before execution and absolutely none after execution. The manner in which you handle your terminations is binding so do as much homework beforehand as possible given financial and time constraints.

8.) Don’t Over-React in cutting staff. If your forward demand can change from week to week or a staff member’s performance could turn around in the short-term, don’t cut head count too dramatically as you may quickly be under-resourced.

9.) Be Human. While all of this is happening and your gut churning, try and remind yourself to be human in your approach and interpersonal dealings with exiting staff. They will never forget the way you behaved. Forever.

10.) Be prompt in Redundancy Payments. Once you have budgeted, decided on action and executed redundancies you must make the payments promptly as agreed. Holding over payments to your advantage is illegal and unethical. Your departing staff will hate you for it and you are potentially causing default on their mortgage payments and rendering them unable to put food on the table.

11.) Explain the situation fully to Exiting Employees. Don’t guild the Lily here. Talk human to human. Explain the situation truthfully and outline your committed action. Explain to them their Continuing Obligations. Let them speak providing it remains civil. Let them pause to absorb the news and think of questions.

12.) Explain the situation fully to Continuing Employees. Don’t underestimate the impact of the redundancies on your continuing staff. You’ve just sacked their workmates and you may have increased their workload. Again be direct, truthful and allow grieving and questions.

13.) Decide on what Support you will offer if any. Consider if you will act as a Referee for their future employment. Will you offer counselling services? The provision of any support must be weighed up and advice taken.

14.) Ensure Exiting Employees meet their Continuing Obligations. Protection of company assets, non-disclosure of intellectual property, poaching of customers and other actions are often strictly forbidden under employment obligations that continue after termination. Monitor this.

15.) Acknowledge that some Exiting Employees may go Legal. Relationships change after a divorce. Never assume this can’t happen to you despite how well you believe you behaved.

16.) Return of Company Property. Prepare a checklist to tick off receipt of all company property. Remember that company property can be both tangible items such as cars and intangible items such as computer files.

17.) Acknowledge that You may have to go Legal. As non-litigious as you may be, an Exiting Employee that creates havoc for your business must be defended.

18.) Consider Security. Depending on your industry, premises and personality types of Exiting employees, be aware that you may have to increase security during and following the redundancies.

19.) Immediate Departure or Serving of Notice Period. Consider whether you wish Exiting Employees to serve their notice period or exit immediately. Most employers request employees exit immediately to reduce risk and protect morale.

20.) Consider the transitional impact on Continuing Employees. Monitor the workload, productivity and morale of your continuing workforce. Stay close to this issue and focus on feedback mechanisms both internally and externally.

21.) How will you handle Customers? The delicate decision of how much or how little to disclose to your Customers after redundancies is a case by case situation. This needs serious attention around the time of the redundancies and in the weeks following.

 

© Darren Bourke, Business Influence, 2009. You are welcome to ?reprint? this article online as long as it remains complete (including the ?about the author? information at the end).

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11008.shtml

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