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by: Jimmy Sturo
It is fairly common for real estate companies and mortgage brokers to use leads. There is a difference between mortgage lead generation and real estate generation. Mortgage lead generation deals with people who need to refinance their homes or apply for loans, while real estate lead generation is a service that connects potential buyers with real estate agents.Mortgage leads are generated in a number of different ways. One way to create the leads is for the lender, that is the mortgage broker, to appear in a paper or online directory. This lets potential customers make the first contact. The lenders give information about themselves, like the interest rates they charge and types of lending programs they offer, along with their contact information. This allows potential borrowers to search out the lender that is best for them.
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by: Jimmy Sturo
It is fairly common for real estate companies and mortgage brokers to use leads. There is a difference between mortgage lead generation and real estate generation. Mortgage lead generation deals with people who need to refinance their homes or apply for loans, while real estate lead generation is a service that connects potential buyers with real estate agents.Mortgage leads are generated in a number of different ways. One way to create the leads is for the lender, that is the mortgage broker, to appear in a paper or online directory. This lets potential customers make the first contact. The lenders give information about themselves, like the interest rates they charge and types of lending programs they offer, along with their contact information. This allows potential borrowers to search out the lender that is best for them.
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by: Anita van Wyk
More and more, potential customers are not letting their "fingers do the walking." To find what they need, they are using their fingers to click at Google, Yahoo! or MSN .
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| by: Rick Gomez |
1. Which construction loans are available and which one should you apply for? Home loan banking and the internet has changed the mortgage and construction loan industry forever. Today's construction loan choices include the 30 year fixed, 15 year fixed, 1 year ARM, 3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM and don’t forget the popular interest only loans. The construction loan of the past was a short term 1 year loan that the customer would have to refinance into a new loan once the construction was completed. This two time process cost the customer two sets of closing costs and you would have to re-qualify for the new loan once the home was completed. The most popular construction loan today is the "One Time Close" but not all are created equal. Just like any product there are the best loans, good loans and downright bad loans. With today's technology you now have the ability to obtain a construction loan from the best banks in the country and sign your loan documents at your local title company or escrow office. This benefit allows you to have the most competitive construction loan available. The loan that you should apply for is simple; ask for the lowest rate, one time close for a specific period of time that you think you'll be living there. 2. Which lenders/banks have the best construction loans and what do you need to apply? There are plenty of banks willing to lend money for mortgages, refinancing, home equity loans and every other type of loan. But if you're planning on building a new home, where do you get the best construction loan with the most competitive pricing? More importantly what is a good construction loan? A typical construction loan nowadays is a construction to permanent loan that may or may not allow you to lock-in today's low interest rates until the home is completed. If you choose a loan that does not allow you to lock in upfront, the interest rate may end up higher along with your monthly payment. The most important thing when searching for a good construction loan is to find an experienced construction loan specialist that knows which banks are the best. The best banks can offer you a low rate now, upfront, before you start building your new home. 3. Should you go directly to your local bank or to a loan broker for your loan? Most banks offer loans, and going to them is like shopping at a Ford dealer. The only thing you can get at the Ford dealer is a Ford. But what if you want choices? One way to get different choices is to go shopping to every bank in town. Or you can call an experienced construction loan broker who has done all of the homework for you and has direct access to hundreds of banks nationwide. A broker is a representative for hundreds of banks. Although the broker serves as middle-man, his or her services will not cost you anything extra. That's because brokers get loans at wholesale rates, and pass them along to their clients at retail prices, just like any other business. The difference between wholesale and retail is how brokers make money. Therefore, you get the same rate from a broker as if you went directly to the lender yourself. In Fact, because or their volume, many brokers are able to offer their clients better deals than you can get by talking to the banks on you own. With an experienced construction loan broker you can shop dozens of the most competitive banks nationwide, work with wholesale pricing and can negotiate on rates and pricing. 4. Should you lock in your construction loan before you start building or let the interest rate float? If the rates are heading upward, lock. If the rates are stable, relax. If the rates are headed downward, float. Right now interest rates are at an all time low and can only go up in the near future so make sure your construction loan is locked into today's best interest rates with the ability to float downward. Inexperienced loan officers will offer their customers an enticing low adjustable rate during construction without an upfront lock-in and the customer may end up having to lock into higher interest rates when the home is completed. Or the customer is sold on a higher rate during construction with a float down option after the home is built. Again, the rate could be much higher when the home is completed. Meanwhile the loan officer has been paid and has moved on to the next loan. The only time you want this type of loan is if it’s the only loan you qualify for. Most loan officers do not explain this to their customers until it's too late (Closing). Always ask. Is the construction loan rate locked upfront or floating during the construction loan period? Then ask, is the rate during the construction loan the same rate when the loan converts into the mortgage period. 5. What experience does your construction loan officer have and does it matter? When it comes to money its amazing how fast any loan officer becomes an instant expert at construction loans. You must keep in mind that all loan officers are salespeople. Yes, I know they have fancy titles like loan officer or vice president but the title is nothing but a fancy name for loan salesperson. Loan salespeople usually have one main goal in mind when helping you with your loan request and that is the commission. By the way, the fancy name for commission in the loan business is called a loan fee, points or yield spread premium (YSP). Now don't get me wrong, there are a lot of good honest sales people (loan officers) that work very hard at providing you the best service and rates. What’s important is distinguishing the good from the bad. The following questions allow you to quickly find out if your loan officer is experienced at construction loans. 1. How long have you been doing construction loans? 5 years or more is best. 2. What is the loan to cost (LTC) required for construction loans? This is cash equity such as down payment on land. This can range from 5 to 20%. 3. What is better? The voucher or draw disbursement system and why? Draw is now the most popular because the customer has the control of the money. If the loan officer (sales person) can answer these questions with no problem then they have passed a pretty good litmus test. If you really want to throw a curve at them, ask the loan officer if they have ever built a home themselves and what type of construction loan did they get. If you find a loan officer that has gone through the experience of building a home themselves then the odds are you have found an experienced loan officer. 6. Qualifying for your construction loan, exactly how is it done? The first thing your loan officer wants to see is your completed loan application. The loan application called the (1003) will tell a story of your financial picture. The completed loan application will tell the loan officer many things including, 1. What type of loan you want. 2. How much money you need. 3. Your social security number. 4. Your current employers. 5. A list of all you assets (money) and liabilities (bills). 6. How much money you make. 7. How much real estate you own. Once the loan officer has your loan application in hand they can determine whether you can qualify for a loan. One of the first items pulled is your credit report. The credit report is going to tell 3 main important things. 1. Show your current credit score. The credit score can range from 500 to 800. 2. Show a complete list of all your monthly liabilities (bills). 3. Show all past credit problems including bankruptcies, foreclosures and late payments. With this information the loan officer will do an analysis to determine if you can qualify for the loan amount that you’re looking for. This analysis determines a ratio called the (income to debt ratio) and depending on the banks underwriting guidelines this ratio will usually range from 36% to 45%. The income to debt ratio is the percentage of monthly debt payments (including your new mortgage payment, taxes and insurance). This ratio should not exceed 36% to 45% of your monthly income. Some banks will allow you to exceed this ratio if you have an excellent credit history and excellent credit score. The current and the most popular method of qualifying for a loan today is the stated income loan. Stated income allows you to qualify without verifying your income on your tax returns, W 2's or pay stubs. The only thing the bank verifies when applying for a stated income loan is your credit score, liquid assets and that you're employed. 7. How not to be taken by the oldest trick in the book "Bait and Switch"? The mortgage lending business is notorious for baiting and switching. Baiting and Switching is when a loan officer or advertisement offers you one thing and then tries to sells you something else. Typical signs of baiting and switching are obvious, some basic examples are: 1. Over the phone, you are offered a much lower rate than any other quote and once you've sent in your application the rate you were quoted has all of a sudden vanished. 2. You are offered a construction loan with no points and no loan fee's. What you are not told is that you are paying for it with a higher interest rate and the costs are built into the loan. 3. You are told that you will not have any payments while you're building. What you're not told is that all construction loans have this option and it's called "interest reserves" and the payments are added to the loan amount. Remember three important facts and you will always be in good shape. 1. If it sounds too good to be true there's usually a reason. 2. Always get your quote in writing, (ask for a good faith estimate). 3. If you are satisfied with the rate and construction loan program that you are quoted, ask to lock it in upfront. On the flipside, it is very important to realize that most loan products typically go hand in hand with banking guidelines. These guidelines are provided to loan officers to coincide with the customer's qualifications. For example, if you have a very high (FICO) credit score with land free and clear, you have more loan options than the person with a very low (FICO) score and no land equity. 8. Now for the biggest secret of all, ready? All banks have access to the same rates and the only reason everyone ends up with a different rate is directly related to how much your loan officer and bank is going to profit from you. You should probably read that one again. Your loan officer gets paid like all sales people either by: 1. Salary plus commission 2. Commission only. It doesn't matter if you walk directly into a bank or work with a broker, basically everyone gets paid the same. If you walk directly into a bank the loan officer most likely gets a basic salary and a percentage of the loan origination fee (points and yield spread premiums). If you work with a broker the broker usually works on a straight commission (points and yield spread premiums). Becoming a broker allows the loan officer the ability to offer their customers the best loans with the most options. It always amazes me when I see TV commercials or hear radio commercials advertising $395, zero closing costs. I always wonder if people understand how they can do that. Ok, here is how it is done. The inside secret is that in exchange for these low or zero closing costs the lenders will make their profits and cover the costs of the loan by charging you a higher interest rate. This higher interest rate pays what they call in our industry a (YSP) yield spread premium. By charging you a higher interest rate over the life of the loan the bank can easily afford the commercials, commissions, payroll, and cover the costs of the loan while still making a profit. Also the service is usually very poor and impersonal. So the next time you see advertising with no closing costs you will know exactly how they are doing it. So please remember that there is no such thing as a free lunch in any business. Business wouldn't be business if there were no profits. The most important thing is that you want the best loan available at a fair price with an experienced loan officer. 9. What are interest reserves and contingency funds doing in your closing costs? The two things most customers do not factor into the cost of the building their new home are interest reserves and contingency funds. Interest reserves are added to your loan amount to make the monthly payment on your loan. Yes, you read that correctly, you will not have to make a monthly construction loan payment while your home is being built. The payments are made from this interest reserve account and no, it’s not free. This reserve is added to your construction loan amount. Interest reserves were designed for the benefit of the customer. Most people building a new home are either paying rent or have an existing mortgage payment while their home is being built. The last thing a customer needs is another monthly payment while building. So, banks created the interest reserve account by adding up the estimated interest payments over a 12 month period and add this to the loan amount. If you do not want interest reserves added to your construction loan amount you can ask to make your own monthly construction loan payment. Contingency funds are added to the loan amount just in case you need more money to build your new home. With all good intentions construction loans tend to have cost over runs. The bank adds 5% to 10% of the cost breakdown and adds this amount to the loan amount just in case you have cost over runs or need better appliances. If you don’t need or use this extra contingency fund then it will not be added to your mortgage upon completion of your new home. So when you apply for a construction loan ask your loan officer to provide you a copy of the estimated construction loan budget. The budget is created from your costs and includes every cost within the loan including land balances, closing costs, interest reserves, contingency and bank fees. 10. What is loan to value (LTV) and loan to cost (LTC)? Why it’s probably the most important factor in getting approved for a construction loan besides your income and credit. Initially most banks are concerned with loan to appraised value (LTV) but banks are really more concerned with how much cash you have in the project (LTC). If you were buying a home instead of building you would normally have to put 20% of the purchase price as a down payment. Since you’re building a home your cash equity usually comes in the form of how much cash you put down on your land. Cash equity is king when applying for a construction loan. For example, if you bought a $200,000 piece of land and the land is owned free and clear you have a lot of cash equity. With this much cash equity you will most likely not have to bring in any additional cash. Or if you bought a piece of land over 12 months ago for $100,000 and its now worth $200,000 the bank will use the current value because you bought it over 12 months ago. In both cases you have brought $200,000 cash equity to the table. Now if you just bought a piece of land for $200,000 and you only put down $20,000 most banks will want to see 10% to 20% cash into the total project. Other qualifying cash equity that can be counted are any pre-paid’s such as plans, grading, permits etc. These pre-paid's can be used for cash equity or you can be reimbursed from the construction loan at closing. 11. Should you hire a builder or be an owner builder? Do you really want to be an owner-builder? The goal of being an owner builder is mainly to save money. Some people can save quite a bit of money if done correctly. Some people are not meant to be owner builder. Possible problems when acting as owner builder are: 1. Construction cost over runs. 2. The best banks with the best rates require a builder or supervisor. 3. Managing contractors to finish on time or to show up for work. 4. Depleting your personal savings. 5. The need to borrow more money. 6. Loan extension penalties. 7. Being taken by unscrupulous contractors. 8. The need to refinance your construction loan. 9. Foreclosure. I could go on and on about the horror stories I hear from Owner Builders that did not get a construction loan and acted as their owner builder. If you have never built a home before and absolutely need to act as owner builder please take my advice and hire a reputable builder to supervise you and the building of your new home, for a much smaller fee than their normal fee. The builder/supervisor will help you with the cost breakdown and manage the subcontracting on an as needed basis. If one of your contractors gets out of hand or you need help of any kind, you can call the supervisor for assistance. Your job is to make sure you are hiring the right people to complete your home. It can make the difference between happiness and misery. For those of you that have experience at building homes but do not have a license ask about our owner builder program. To qualify you will need a resume showing your experience. If you decide on hiring a builder to do everything make sure you hire a reputable builder or supervisor with a good reputation and plenty of references. Ask your friends if they know a good builder and when you start to hear the same name over and over you know you've found a good one. Ask the building inspector for a list of reputable builders. The most important point is shop around until you find a builder with the most reputable and honest background. If you pay a little more for an honest and reputable builder or supervisor you will be very thankful before, during and after your home is completed 12. How does your builder determine how much your home will cost to build? The Estimated Cost Breakdown of your home is probably one of the most important forms in the construction loan package. This is the breakdown of each particular cost of construction of the home. The foundation, lumber, framing, plumbing, heating, electrical, painting, and builder's profit, etc. The builder usually completes this form to show you exactly what it will cost to build your new home. The most important thing to remember here is that you do not want to underbid any line item and you do not want to overbid any line item. You want accurate numbers from real bids (not guesses) and a 5% contingency for cost overruns. Good builders will send out the house plans to their contractors for specific bidding on each main item or can estimate the home themselves. The builder will send one set of plans to the foundation contractor, one set of plans to the framer, one set of plans to the plumber, etc, etc. When all the numbers come in, the builder will fill out the cost breakdown and come up with a total cost to build your new home. Bad builders will use the WAG method of estimating the cost of building your new home. The WAG method stands for "Wild Ass Guesses". This method is the most dangerous since it can lead to under and over bidding. The last method of bidding is simply to over inflate every single line item on the cost breakdown. This is the most profitable method for the builder and the most expensive to the customer. This is why you want to find an honest, reputable builder with a good reputation in your community. Once the cost breakdown is completed and you plan on hiring this builder to build you new home you will need to type up a contract. The contract needs to equal the added total of the cost breakdown. Most builders will provide the contract but make sure you read it carefully and that you add your requirements as well. There are two types of contracts 1. Fixed Contract: This contract is simple and straightforward. Take the total of the cost breakdown and put that fixed number into the contract. The builder will provide a list of responsibilities. 2. Cost plus Contract. This type of contract is usually for large construction loan projects. A. The customer wants to make a lot of changes to their home as its being built. B. The construction loan period to build the home is 18 months so construction costs can change drastically. The builder prefers this contract to protect the costs and profits. 13. How does your builder get paid while your home is being built? There are two methods that banks use to make sure your builder gets paid while building your home. The Voucher Reimbursement system has been around for quite a while. As usual you'll have some builders that are very familiar with this method of payment and do not like change. Most builders are really only concerned with how fast they can be paid and how often they can be paid. Most banks find that the voucher system is simply too much paperwork to deal with anymore. The builder is given a big book of vouchers that looks like a check book and when they want to get paid or need to pay a contractor they need to fill out a voucher form. This voucher form is a request for payment and as long as the contractor has signed the lien release the bank will pay the amount requested. The bank will also request an inspection throughout the construction loan to make sure that the work is completed. The Draw Reimbursement system is becoming the standard for construction loan funding for most banks. The main difference is that the bank puts the accounting responsibility on you or your contractor. The bank uses your cost breakdown as the guide for the draws. Some banks use specific schedules of 4 to 7 draws based on completed construction milestones, such as foundation or framing. The draw systems also allow the choice of taking draws on a monthly basis, collecting partial payment for work and material items that have been completed. I personally prefer the draw reimbursement system because: 1. It requires less work. 2. Provides more control for both the customer and the builder. 3. The funds are wired directly into your bank account. 3. It's easier to use than the voucher system. 4. Some banks now have online draw requests. 14. What type of construction loan insurance is required and who is required to get it? The reality of construction loan insurance. There are three types of insurance needed to build. All banks require the first two insurances, course of construction and general liability. Workman's compensation is only required if your builder has employees. 1. Course of Construction Insurance. This policy is an all risk policy to include, fire, extended coverage, builder's risk, replacement cost, vandalism and malicious mischief insurance coverage. 2. General Liability Insurance. You or your builder can provide this policy. This policy is a comprehensive general policy or a broad form liability endorsement. The minimum amount of $300,000 for each occurrence is required. If the builder provides the insurance a general policy of $1,000,000 or a broad form liability endorsement is required. 3. Workman's Compensation Insurance. If your builder owns his own company and has employees that are helping to build your home, workman's compensation is required. If the builder simply subcontracts out the work and does not have employees per se, they will need to write a letter acknowledging that they do not have employees and are not required to have WCI. 15. Has your loan officer structured your construction loan properly and why it's so important? I get loans all the time from customers that went to another lender or broker and were either turned down or were offered a below average construction loan. The reason was because the loan was not structured properly before it was sent into the bank. Structuring a loan properly is simply making sure that you match the customer’s loan request to the banks underwriting guidelines. Recently I received a construction loan request from a customer that was turned down by a large national bank. The loan officer had calculated the income incorrectly and submitted the loan as full documentation. The customer owned his own business and had a lot of tax deductions on his tax returns. The way banks qualify customers as full documentation is very conservative and the loan was turned down. We took the loan, found the problems upfront and submitted the loan as stated income. The customer was approved and built a beautiful home in Rancho Santa Fe CA. Structuring construction loans for approval is vitally important and is the last thing on most customers’ minds. Each and every time I receive a loan from a customer with a bad loan experience it is always because the loan officer did not specialize in construction loans and did not structure the loan accordingly. Other common mis-structured loan scenarios include: 1. Low cash equity. 2. Improperly completed appraisal. 3. Unexplained credit derogatory. 4. Income incorrectly calculated. 5. Mismatch of customer loan request to the correct lender. 6. Plain and simple incompetence The old saying “you get what you pay for” is especially true when obtaining financing in building your new home. About the author: Rick Gomez specializes in construction loans in the state of California. You can download a complete construction loan application package and a list of the best banks at http://www.californiaconstructionloans.com |
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| by: Richard Romando |
| Infomercials changed the way advertisers sell things on television. Previously, product manufacturers merely presented their wares on TV in the most attractive manner they could come up with. They planted ideas, sought to change habits or to create them where none existed. They expanded market share subtly with one common unifying factor – you watched the commercial and if you liked what you saw you went to the store or the showroom and bought it. From now on television would be different. Infomercials and direct response marketing was born. Now if you liked what you saw, thought it was just the right product, idea or concept for you, you picked up the phone, called the number on your screen and ordered what you wanted direct from the manufacturer. It’s hard to imagine in today’s internet world with overnight deliveries and instantly downloads, but for the very first time you could order something off your TV set without even getting up from your favorite chair. It was unbelievable, magical, and very successful. Almost overnight phone banks sprang up all over the country as the call volume, once numbering in the thousands, surged into the millions. Like Internet domain names today, 800 numbers became a vanity item – the most popular ones disappearing as fast as they became available. Previously only used in magazine advertisements or mail order brochures, the phone business became a very big business with the success of infomercials. To begin with, infomercials and direct response TV selling give a manufacturer an immediate tool to measure whether or not his product, his pricing and even his approach is working. Previously, manufacturers had to create their product, get it into stores where it would be available for purchase on a nationwide basis and then and only then, launch a costly nationwide advertising campaign on popular TV shows. After that, they would wait a minimum of 90 days, sending out squads of sales personnel or making hundreds of phone calls to find out if their product was selling. If it wasn’t it was back to the drawing board to try to figure out what went wrong and then perhaps try it again maybe next year. With infomercials and direct response, there was now a way to measure the success or failure of any project in a matter of hours and at a fraction of the cost. If a manufacturer had his own phone bank, he could conceivably sit there after his infomercials were airing around the country and literally count the orders coming in. And almost immediately, he would have an idea if his project was working. This leveled the playing field for new product launches and led to the creation of hundreds of new products each and every year launched and tested as infomercials before ever hitting a retail outlet. About the author: Infomercials Info provides detailed information on exercise, weight loss, real estate, and make up infomercials and direct response (DRTV). Infomercials Info is affiliated with Business Plans by Growthink. Circulated by Article Emporium |
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By definition, barter is the when parties swap services or resources. But in business terms, it’s an exchange that ends usually with everyone a winner. All parties involved in bartering hold onto their cold hard cash and don’t lose a cent. There’s no worries about getting ripped off as a buyer or seller, so it’s an exchange that’s high on trust, low on tension. And finally, the government doesn’t get its hands on any of the proceeds. Bartering is such a great system, it’s no wonder it’s been around nearly forever.
Historians and archeologists reckon that bartering is a human business practice for the ages. It goes back as far as written history, and perhaps even further into mankind’s (and womankind’s) history of business practices.
Between humans, the actual business practice of money came long before money was invented. In written history, as far back as 9,000 BC, shepherds used cattle as a means of exchange—from sheep to cows, camels to goats. Then when farmers came along during the course of the next couple thousands of years, grains and plants became the hot commodity in the world of bartering.
Bartering may have dissipated over the years, but it by no means went away. That’s the amazing thing about bartering. It still is, to this day, the ideal method of business exchange for some business folk, including companies with millions in assets. But it’s especially helpful for small businesses looking to get a leg up on their competition.
Listen to people talking in today’s business world, and you’ll hear stories such as the programmer who helped to code an interactive Web page for a startup graphic-design company, in exchange for a logo design for his own startup surf-board design shop. Then there’s the story of the new Internet advertising firm rolling out an ad campaign for a restaurant. Later that year, the restaurant hosted a “free” party and dinner for that ad firm’s clients.
Examples in today’s business world abound for bartering. The reason is that bartering still has many advantages to it in this modern business world.
For instance, for companies that are just starting to build up their assets, bartering is an opportunity to save their hard-earned cash. Even established companies love the chance to keep their money in the bank. With bartering, a company can get what it needs, while providing a service that the other company needs.
And because there is no money passed between pockets, the taxman does not even need to know about it. That saves you, and your accountant, the trouble of figuring out one more piece of business income or expense.
Lastly, deals involving money may whip up the old Scrooge mentality—a combination of greed and mistrust. With money deals, you may always be left wondering if you got the short end of the stick. Not so with bartering. With bartering, you get exactly what you need. And in return, you give a fair share of goods or services.
There’s no need to be a Scrooge here. Instead, the whole transaction is one of trust and understanding. Generally speaking, bartering for goods and services feels more worthwhile than paying money, whether you’re bartering for a dinner party for your clients, Internet advertising space, or whatever it is that you and your bartering partner agree to. Perhaps it’s because you can actually feel the value of your own goods and services. Or it may be just because you don’t have to open your wallet.
About the author:
Donald Lee is the public relations manager for Buysellcommunity.com Buysellcommunity provides free classified listing services. Buy, Sell, and trade (barter): auto, computers, household items, real estate, pets and much more. For localized classifieds, please visit
http://www.buysellcommunity.com
Free Buy & Sell Classifieds
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This article is based on a radio interview with Romanus Wolter
on Entrepreneur Radio, September 9, 2005, www.wsradio.com.
How to Create Your Vision with a Capital V
1. Why is it that some business owners persevere after
several disappointments while others, maybe even
the listeners, give up?
A: It is through the power of vision. Your vision can be an
inspiring, energizing idea that you can use to excite others.
You need a vision to be more effective, more desirable and
more attractive to your clients and customers.
2. What is the value of a business vision?
A: Everything you do, the people you speak with, the clients
you attract are all a result of your vision. The right vision
for your business will help you be more satisfied with your
business and generate more abundance and wealth. With
a true business vision, all your decisions are easily made
because all your decisions are in alignment with your vision.
3. How do you know if your current vision is good enough
for your business?
A: It is not so much about your vision being good enough,
it is about having a vision that is clearly visionary. I
recently interviewed several entrepreneurs, independent
professionals and business owners. I concluded that what
they thought was their business vision was actually outcomes
or results they provided for their clients. These outcomes,
while great, were goals, not in any way visionary. To
reinvent your current vision to a Vision with a Capital V,
it needs to be mind-blowing phenomenal. If it can be put
into words and pictures, it can be achieved
4. I already have business goals.
Why do I need a business vision?
A: Goals are specific, measurable realistic outcomes or
results, usually completed by a specific date. Tasks or
assignments support the completion of the goals. Goals,
in turn, support your mission and vision statements. Goals,
mission statements and vision are usually
aligned with your values.
A goal example is as follows: ABC Company will release
two new computer programs in the United States by end
of the year 2005.This supports the Business Vision example
of: US-Based ABC Company is the only software provider
to global nations.
5. How can a business vision increase my income?
A: A Vision with a Capital V will not only increase your
income, you will also get better clients and customers.
Clarity about who you are and what you do is supported
by your vision. The more you focus on what your clients
want and need, the easier it will be for them to see and
understand your contributions. Opportunities abound when
you have a clear vision. The larger your vision, the easier
it is to attract more money.
6. What is the first step we can take to make your vision
a reality?
A: First, eliminate any individual or challenge standing in
your way, real or perceived. Then find a quiet space, have
a tape recorder or journal handy as well as an hour of free
time. Answer the following questions with as much detail
as possible: (there are moreŠI will provide you with four)
1. What does your business look like? Does it provide all
the resources you require?
2. Is your life rewarding? How?
3. Where are you living? Be as specific as possible.
4. Are you living the life of your dreams?
What does it look like?
7. What strategies can I use to help keep my vision alive?
A: It can be easy to lose momentum, to give up part of your
dream. We all need support and tools to inspire us on a daily
basis. In my latest book, I have a chapter entitled Seven
Strategies to Keep your Vision Alive. The list includes:
Values, Meditation, and Inner and Outer Vision Teams. Many
entrepreneurs think they can do it all alone, that no one can
keep up with them. It's possible, but you will use up all your
skills, strength and talent. The Outer Vision Team is where
the real world action takes place. Many results come from
the real world. Your Outer Vision team must first have a
Mentor, someone who will hold the dream for you. Second,
everyone on your team must have values that are in alignment
with your values. Third, keep the team small. You can have as
few as three others to make your vision a reality.
8. What else can I do to keep my Vision with a Capital alive?
A: Continue to see yourself as the best in your field. See
yourself as the best coach, consultant, real estate broker or
publicist. Redefine your website to reflect your new vision.
See yourself surrounded by inspirational geniuses, all
waiting for what you hve to say. Know that dreams never die,
but that dreams require action. You have a responsibility to
create an action plan. If you follow al the instructions in my
book, your vision will become a reality.
As you can see, it takes the power of Vision
With a Capital V to help create the business of your dreams.
If you want to expand your business and expand your life,
follow these eight steps to experience the life of your dreams.
About the author:
Joanne Victoria, 25-year Vision and Business Coach helps
entrepreneurs and solo professionals build successful
lives and businesses by helping them tell their truth.
Author of 3 Books including: Lighting Your Path! How
To Create the Life You Want and Vision With a Capital V
- Create the Business of Your Dreams. Joanne offers
FREE help through her 2 monthly ezines, Lighting Your
Path! -Discover Your Inner Truth at:
mailto:JoanneVictoria-subscribe@topica.com
and Create the Business of your Dreams at:
mailto:CreateYourBusiness-subscribe@topica.com
on Entrepreneur Radio, September 9, 2005, www.wsradio.com.
How to Create Your Vision with a Capital V
1. Why is it that some business owners persevere after
several disappointments while others, maybe even
the listeners, give up?
A: It is through the power of vision. Your vision can be an
inspiring, energizing idea that you can use to excite others.
You need a vision to be more effective, more desirable and
more attractive to your clients and customers.
2. What is the value of a business vision?
A: Everything you do, the people you speak with, the clients
you attract are all a result of your vision. The right vision
for your business will help you be more satisfied with your
business and generate more abundance and wealth. With
a true business vision, all your decisions are easily made
because all your decisions are in alignment with your vision.
3. How do you know if your current vision is good enough
for your business?
A: It is not so much about your vision being good enough,
it is about having a vision that is clearly visionary. I
recently interviewed several entrepreneurs, independent
professionals and business owners. I concluded that what
they thought was their business vision was actually outcomes
or results they provided for their clients. These outcomes,
while great, were goals, not in any way visionary. To
reinvent your current vision to a Vision with a Capital V,
it needs to be mind-blowing phenomenal. If it can be put
into words and pictures, it can be achieved
4. I already have business goals.
Why do I need a business vision?
A: Goals are specific, measurable realistic outcomes or
results, usually completed by a specific date. Tasks or
assignments support the completion of the goals. Goals,
in turn, support your mission and vision statements. Goals,
mission statements and vision are usually
aligned with your values.
A goal example is as follows: ABC Company will release
two new computer programs in the United States by end
of the year 2005.This supports the Business Vision example
of: US-Based ABC Company is the only software provider
to global nations.
5. How can a business vision increase my income?
A: A Vision with a Capital V will not only increase your
income, you will also get better clients and customers.
Clarity about who you are and what you do is supported
by your vision. The more you focus on what your clients
want and need, the easier it will be for them to see and
understand your contributions. Opportunities abound when
you have a clear vision. The larger your vision, the easier
it is to attract more money.
6. What is the first step we can take to make your vision
a reality?
A: First, eliminate any individual or challenge standing in
your way, real or perceived. Then find a quiet space, have
a tape recorder or journal handy as well as an hour of free
time. Answer the following questions with as much detail
as possible: (there are moreŠI will provide you with four)
1. What does your business look like? Does it provide all
the resources you require?
2. Is your life rewarding? How?
3. Where are you living? Be as specific as possible.
4. Are you living the life of your dreams?
What does it look like?
7. What strategies can I use to help keep my vision alive?
A: It can be easy to lose momentum, to give up part of your
dream. We all need support and tools to inspire us on a daily
basis. In my latest book, I have a chapter entitled Seven
Strategies to Keep your Vision Alive. The list includes:
Values, Meditation, and Inner and Outer Vision Teams. Many
entrepreneurs think they can do it all alone, that no one can
keep up with them. It's possible, but you will use up all your
skills, strength and talent. The Outer Vision Team is where
the real world action takes place. Many results come from
the real world. Your Outer Vision team must first have a
Mentor, someone who will hold the dream for you. Second,
everyone on your team must have values that are in alignment
with your values. Third, keep the team small. You can have as
few as three others to make your vision a reality.
8. What else can I do to keep my Vision with a Capital alive?
A: Continue to see yourself as the best in your field. See
yourself as the best coach, consultant, real estate broker or
publicist. Redefine your website to reflect your new vision.
See yourself surrounded by inspirational geniuses, all
waiting for what you hve to say. Know that dreams never die,
but that dreams require action. You have a responsibility to
create an action plan. If you follow al the instructions in my
book, your vision will become a reality.
As you can see, it takes the power of Vision
With a Capital V to help create the business of your dreams.
If you want to expand your business and expand your life,
follow these eight steps to experience the life of your dreams.
About the author:
Joanne Victoria, 25-year Vision and Business Coach helps
entrepreneurs and solo professionals build successful
lives and businesses by helping them tell their truth.
Author of 3 Books including: Lighting Your Path! How
To Create the Life You Want and Vision With a Capital V
- Create the Business of Your Dreams. Joanne offers
FREE help through her 2 monthly ezines, Lighting Your
Path! -Discover Your Inner Truth at:
mailto:JoanneVictoria-subscribe@topica.com
and Create the Business of your Dreams at:
mailto:CreateYourBusiness-subscribe@topica.com
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I’ve spent a lifetime committed to helping others. It’s what gives me the greatest joy, fulfillment and satisfaction in life. I’m also a true believer in the old adage - “What goes around comes around.”
This is reinforced on many occasions when I encounter an old co-worker, friend or acquaintance who reminds me of how I inspired them, gave them guidance or helped them through a difficult time. These kinds of experiences always motivate me to keep putting good things out into the world.
We never know in advance what good may come from the gestures we put out there. Maybe it will inspire, encourage, educate, motivate or actually change someone’s life. In any event, people will always come away knowing that they matter to you.
In business, as in life, it all comes down to people. People are your customers, co-workers, employees, leaders, managers, investors and vendors. Success in your business depends on the people you encounter. How you treat those people will have a significant impact on your bottom line.
Here are some ways to help people in your business and show them that they matter:
1. Deliver incredible customer service.
2. Give a single parent the afternoon off.
3. Pay someone more than you need to.
4. Send a hand-written note to an employee acknowledging a job well done.
5. Loan a subordinate a book that you’ve found to be helpful.
6. Tell someone struggling “I want to help you succeed,” and mean it.
7. Stop by and talk, without an agenda.
8. Share a resource that you’ve found useful.
9. Create a safe space for openness and honesty.
10. Let people tell you how they feel, and listen without interrupting.
I encourage you to think about the people that you impact, the lives that you touch and the positive changes that you can make. These are the true signs of leadership and in my opinion are more important than the money that you make, the position that you hold or the size of your office.
You can do good while you’re doing well. It may require you to think of new ways to do it, but when you focus on helping others, you’ll succeed in ways beyond measure.
This is reinforced on many occasions when I encounter an old co-worker, friend or acquaintance who reminds me of how I inspired them, gave them guidance or helped them through a difficult time. These kinds of experiences always motivate me to keep putting good things out into the world.
We never know in advance what good may come from the gestures we put out there. Maybe it will inspire, encourage, educate, motivate or actually change someone’s life. In any event, people will always come away knowing that they matter to you.
In business, as in life, it all comes down to people. People are your customers, co-workers, employees, leaders, managers, investors and vendors. Success in your business depends on the people you encounter. How you treat those people will have a significant impact on your bottom line.
Here are some ways to help people in your business and show them that they matter:
1. Deliver incredible customer service.
2. Give a single parent the afternoon off.
3. Pay someone more than you need to.
4. Send a hand-written note to an employee acknowledging a job well done.
5. Loan a subordinate a book that you’ve found to be helpful.
6. Tell someone struggling “I want to help you succeed,” and mean it.
7. Stop by and talk, without an agenda.
8. Share a resource that you’ve found useful.
9. Create a safe space for openness and honesty.
10. Let people tell you how they feel, and listen without interrupting.
I encourage you to think about the people that you impact, the lives that you touch and the positive changes that you can make. These are the true signs of leadership and in my opinion are more important than the money that you make, the position that you hold or the size of your office.
You can do good while you’re doing well. It may require you to think of new ways to do it, but when you focus on helping others, you’ll succeed in ways beyond measure.
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Whether it is for is a real estate listing, a trade show handout, a data sheet, or another application, brochures can be a great promotional tool. They can be very expensive or surprisingly affordable, depending on your needs and where you look. Two of the easiest ways to find good prices is to search online or to call printing companies for quotes. There are so many competing printing companies – both offset and digital – that the job of finding a cheap brochure printing company couldn’t be simpler.
Digital printers tend to be less expensive than offset printers, but some argue that their quality is not as high. It is best to investigate what each kind of printer offers and see a sample before making a judgment.
If you have limited internal marketing services, you can still easily make a brochure that will be of high quality, appealing and cheap. The key elements are creating and implementing a clear design plan and doing all of your electronic file work in-house. This will avoid enlisting the extra services printers offer, and help keep the cost low.
Companies will often prominently list their no-frills prices to attract customers looking for bargains. The prices will usually include a few standard paper choices, full color and a standard fold, and shipping (sometimes this is free). If you are sure of what you want and you don’t need any consultation or custom work, your cost will remain very reasonable.
Another option is to build your own brochure online. There are many companies that now offer do-it-yourself graphic design options. This is a fast and easy process that is a very inexpensive route.
Be on the look out for free options and special deals such as seasonal discounts or discounts on discontinued papers. Additionally, make sure when you are pricing your brochure printing job that it includes full color; it is a buyers market and there is no reason to compromise on color. One of the most affordable options is single color or color brochure; this uses only one color and is not appropriate for every brochure.
With the advent of new technologies, digital printing and desktop publishing prices could not be lower. It’s a great time to use a brochure to get your message out there.
About the author:
Brochure Printing Info provides detailed information about cheap, color, and full color brochure printing services, and advice on finding a brochure printing company and quote. Brochure Printing Info is the sister site of Laser Toner Web.
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Digital printers tend to be less expensive than offset printers, but some argue that their quality is not as high. It is best to investigate what each kind of printer offers and see a sample before making a judgment.
If you have limited internal marketing services, you can still easily make a brochure that will be of high quality, appealing and cheap. The key elements are creating and implementing a clear design plan and doing all of your electronic file work in-house. This will avoid enlisting the extra services printers offer, and help keep the cost low.
Companies will often prominently list their no-frills prices to attract customers looking for bargains. The prices will usually include a few standard paper choices, full color and a standard fold, and shipping (sometimes this is free). If you are sure of what you want and you don’t need any consultation or custom work, your cost will remain very reasonable.
Another option is to build your own brochure online. There are many companies that now offer do-it-yourself graphic design options. This is a fast and easy process that is a very inexpensive route.
Be on the look out for free options and special deals such as seasonal discounts or discounts on discontinued papers. Additionally, make sure when you are pricing your brochure printing job that it includes full color; it is a buyers market and there is no reason to compromise on color. One of the most affordable options is single color or color brochure; this uses only one color and is not appropriate for every brochure.
With the advent of new technologies, digital printing and desktop publishing prices could not be lower. It’s a great time to use a brochure to get your message out there.
About the author:
Brochure Printing Info provides detailed information about cheap, color, and full color brochure printing services, and advice on finding a brochure printing company and quote. Brochure Printing Info is the sister site of Laser Toner Web.
Circulated by Article Emporium
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by: Steve Gillman
It was a simple real estate formula. The ads ran in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Maybe a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments.
When a friend started doing the same thing he explained the process to me. It was a way to get a great return on capital, and it was the opposite of buying with no money down. There is no down payment at all when you buy, because you buy for cash.
The Simple Real Estate Formula
You probably know that when you buy for cash, you can often get a much better price. With no financing contingencies in the offer, and the promise of a faster closing, sellers are willing to sell for less. You can offer $95,000, for example, on a house that might be worth $108,000. If you can't get it for less than, say, $99,000, you walk away - there are always other opportunities.
Once you buy the house, you put few thousand into high-return repairs and improvements. These might include paint, carpet, and maybe asphalt for a dirt driveway. For our example, we'll say you spend $5,000. Let's suppose the house is worth $116,000 now. You're ready for the next important step in this real estate formula.
You put it up for sale, targeting buyers who can't get financing easily. You provide the financing. Because you are making it easy for the buyer, you can get more than the $116,000 value for the home - and do it without paying a realtor's commission. Let's say you sell it for 123,000. The buyer needs a down payment of just 5%, or $6,150, and makes monthly payments of $1230 per month. You charge higher interest than the going rates at the banks, of course.
This is a win-win situation. Your buyer is able to buy a home instead of renting, and you get a capital gain of perhaps $16,000 after expenses, plus good interest. Your total rate of return will often be over 20%!
In our town, the first to do this consistently were a father and son team of lawyers. They saved money by doing their own foreclosures when necessary. Once they foreclosed, they raised the price and sold the home all over again.
They made millions. Did you know that if you can get an average return of 18% on your money, you'll turn $75,000 into more than one million dollars in about fifteen years? That's the power of a good real estate formula.
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by: Rick Gomez
1. Which construction loans are available and which one should you apply for?
Home loan banking and the internet has changed the mortgage and construction loan industry forever. Today's construction loan choices include the 30 year fixed, 15 year fixed, 1 year ARM, 3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM and don’t forget the popular interest only loans.
The construction loan of the past was a short term 1 year loan that the customer would have to refinance into a new loan once the construction was completed.
This two time process cost the customer two sets of closing costs and you would have to re-qualify for the new loan once the home was completed.
The most popular construction loan today is the "One Time Close" but not all are created equal. Just like any product there are the best loans, good loans and downright bad loans.
With today's technology you now have the ability to obtain a construction loan from the best banks in the country and sign your loan documents at your local title company or escrow office. This benefit allows you to have the most competitive construction loan available.
The loan that you should apply for is simple; ask for the lowest rate, one time close for a specific period of time that you think you'll be living there.
2. Which lenders/banks have the best construction loans and what do you need to apply?
There are plenty of banks willing to lend money for mortgages, refinancing, home equity loans and every other type of loan. But if you're planning on building a new home, where do you get the best construction loan with the most competitive pricing?
More importantly what is a good construction loan?
A typical construction loan nowadays is a construction to permanent loan that may or may not allow you to lock-in today's low interest rates until the home is completed. If you choose a loan that does not allow you to lock in upfront, the interest rate may end up higher along with your monthly payment.
The most important thing when searching for a good construction loan is to find an experienced construction loan specialist that knows which banks are the best.
The best banks can offer you a low rate now, upfront, before you start building your new home.
3. Should you go directly to your local bank or to a loan broker for your loan?
Most banks offer loans, and going to them is like shopping at a Ford dealer. The only thing you can get at the Ford dealer is a Ford. But what if you want choices?
One way to get different choices is to go shopping to every bank in town. Or you can call an experienced construction loan broker who has done all of the homework for you and has direct access to hundreds of banks nationwide.
A broker is a representative for hundreds of banks. Although the broker serves as middle-man, his or her services will not cost you anything extra. That's because brokers get loans at wholesale rates, and pass them along to their clients at retail prices, just like any other business.
The difference between wholesale and retail is how brokers make money. Therefore, you get the same rate from a broker as if you went directly to the lender yourself.
In Fact, because or their volume, many brokers are able to offer their clients better deals than you can get by talking to the banks on you own.
With an experienced construction loan broker you can shop dozens of the most competitive banks nationwide, work with wholesale pricing and can negotiate on rates and pricing.
4. Should you lock in your construction loan before you start building or let the interest rate float?
If the rates are heading upward, lock. If the rates are stable, relax. If the rates are headed downward, float.
Right now interest rates are at an all time low and can only go up in the near future so make sure your construction loan is locked into today's best interest rates with the ability to float downward.
Inexperienced loan officers will offer their customers an enticing low adjustable rate during construction without an upfront lock-in and the customer may end up having to lock into higher interest rates when the home is completed.
Or the customer is sold on a higher rate during construction with a float down option after the home is built. Again, the rate could be much higher when the home is completed.
Meanwhile the loan officer has been paid and has moved on to the next loan. The only time you want this type of loan is if it’s the only loan you qualify for.
Most loan officers do not explain this to their customers until it's too late (Closing).
Always ask. Is the construction loan rate locked upfront or floating during the construction loan period? Then ask, is the rate during the construction loan the same rate when the loan converts into the mortgage period.
5. What experience does your construction loan officer have and does it matter?
When it comes to money its amazing how fast any loan officer becomes an instant expert at construction loans. You must keep in mind that all loan officers are salespeople. Yes, I know they have fancy titles like loan officer or vice president but the title is nothing but a fancy name for loan salesperson.
Loan salespeople usually have one main goal in mind when helping you with your loan request and that is the commission. By the way, the fancy name for commission in the loan business is called a loan fee, points or yield spread premium (YSP).
Now don't get me wrong, there are a lot of good honest sales people (loan officers) that work very hard at providing you the best service and rates. What’s important is distinguishing the good from the bad.
The following questions allow you to quickly find out if your loan officer is experienced at construction loans.
1. How long have you been doing construction loans? 5 years or more is best.
2. What is the loan to cost (LTC) required for construction loans? This is cash equity such as down payment on land. This can range from 5 to 20%.
3. What is better? The voucher or draw disbursement system and why? Draw is now the most popular because the customer has the control of the money.
If the loan officer (sales person) can answer these questions with no problem then they have passed a pretty good litmus test.
If you really want to throw a curve at them, ask the loan officer if they have ever built a home themselves and what type of construction loan did they get.
If you find a loan officer that has gone through the experience of building a home themselves then the odds are you have found an experienced loan officer.
6. Qualifying for your construction loan, exactly how is it done?
The first thing your loan officer wants to see is your completed loan application. The loan application called the (1003) will tell a story of your financial picture.
The completed loan application will tell the loan officer many things including,
1. What type of loan you want.
2. How much money you need.
3. Your social security number.
4. Your current employers.
5. A list of all you assets (money) and liabilities (bills).
6. How much money you make.
7. How much real estate you own.
Once the loan officer has your loan application in hand they can determine whether you can qualify for a loan.
One of the first items pulled is your credit report. The credit report is going to tell 3 main important things.
1. Show your current credit score. The credit score can range from 500 to 800.
2. Show a complete list of all your monthly liabilities (bills).
3. Show all past credit problems including bankruptcies, foreclosures and late payments.
With this information the loan officer will do an analysis to determine if you can qualify for the loan amount that you’re looking for.
This analysis determines a ratio called the (income to debt ratio) and depending on the banks underwriting guidelines this ratio will usually range from 36% to 45%.
The income to debt ratio is the percentage of monthly debt payments (including your new mortgage payment, taxes and insurance). This ratio should not exceed 36% to 45% of your monthly income.
Some banks will allow you to exceed this ratio if you have an excellent credit history and excellent credit score.
The current and the most popular method of qualifying for a loan today is the stated income loan.
Stated income allows you to qualify without verifying your income on your tax returns, W 2's or pay stubs. The only thing the bank verifies when applying for a stated income loan is your credit score, liquid assets and that you're employed.
7. How not to be taken by the oldest trick in the book "Bait and Switch"?
The mortgage lending business is notorious for baiting and switching.
Baiting and Switching is when a loan officer or advertisement offers you one thing and then tries to sells you something else.
Typical signs of baiting and switching are obvious, some basic examples are:
1. Over the phone, you are offered a much lower rate than any other quote and once you've sent in your application the rate you were quoted has all of a sudden vanished.
2. You are offered a construction loan with no points and no loan fee's. What you are not told is that you are paying for it with a higher interest rate and the costs are built into the loan.
3. You are told that you will not have any payments while you're building. What you're not told is that all construction loans have this option and it's called "interest reserves" and the payments are added to the loan amount.
Remember three important facts and you will always be in good shape.
1. If it sounds too good to be true there's usually a reason.
2. Always get your quote in writing, (ask for a good faith estimate).
3. If you are satisfied with the rate and construction loan program that you are quoted, ask to lock it in upfront.
On the flipside, it is very important to realize that most loan products typically go hand in hand with banking guidelines. These guidelines are provided to loan officers to coincide with the customer's qualifications.
For example, if you have a very high (FICO) credit score with land free and clear, you have more loan options than the person with a very low (FICO) score and no land equity.
8. Now for the biggest secret of all, ready? All banks have access to the same rates and the only reason everyone ends up with a different rate is directly related to how much your loan officer and bank is going to profit from you.
You should probably read that one again.
Your loan officer gets paid like all sales people either by:
1. Salary plus commission
2. Commission only.
It doesn't matter if you walk directly into a bank or work with a broker, basically everyone gets paid the same.
If you walk directly into a bank the loan officer most likely gets a basic salary and a percentage of the loan origination fee (points and yield spread premiums). If you work with a broker the broker usually works on a straight commission (points and yield spread premiums).
Becoming a broker allows the loan officer the ability to offer their customers the best loans with the most options.
It always amazes me when I see TV commercials or hear radio commercials advertising $395, zero closing costs. I always wonder if people understand how they can do that.
Ok, here is how it is done.
The inside secret is that in exchange for these low or zero closing costs the lenders will make their profits and cover the costs of the loan by charging you a higher interest rate.
This higher interest rate pays what they call in our industry a (YSP) yield spread premium.
By charging you a higher interest rate over the life of the loan the bank can easily afford the commercials, commissions, payroll, and cover the costs of the loan while still making a profit. Also the service is usually very poor and impersonal.
So the next time you see advertising with no closing costs you will know exactly how they are doing it.
So please remember that there is no such thing as a free lunch in any business. Business wouldn't be business if there were no profits. The most important thing is that you want the best loan available at a fair price with an experienced loan officer.
9. What are interest reserves and contingency funds doing in your closing costs?
The two things most customers do not factor into the cost of the building their new home are interest reserves and contingency funds.
Interest reserves are added to your loan amount to make the monthly payment on your loan. Yes, you read that correctly, you will not have to make a monthly construction loan payment while your home is being built.
The payments are made from this interest reserve account and no, it’s not free. This reserve is added to your construction loan amount.
Interest reserves were designed for the benefit of the customer. Most people building a new home are either paying rent or have an existing mortgage payment while their home is being built.
The last thing a customer needs is another monthly payment while building. So, banks created the interest reserve account by adding up the estimated interest payments over a 12 month period and add this to the loan amount.
If you do not want interest reserves added to your construction loan amount you can ask to make your own monthly construction loan payment.
Contingency funds are added to the loan amount just in case you need more money to build your new home.
With all good intentions construction loans tend to have cost over runs. The bank adds 5% to 10% of the cost breakdown and adds this amount to the loan amount just in case you have cost over runs or need better appliances.
If you don’t need or use this extra contingency fund then it will not be added to your mortgage upon completion of your new home.
So when you apply for a construction loan ask your loan officer to provide you a copy of the estimated construction loan budget.
The budget is created from your costs and includes every cost within the loan including land balances, closing costs, interest reserves, contingency and bank fees.
10. What is loan to value (LTV) and loan to cost (LTC)? Why it’s probably the most important factor in getting approved for a construction loan besides your income and credit.
Initially most banks are concerned with loan to appraised value (LTV) but banks are really more concerned with how much cash you have in the project (LTC).
If you were buying a home instead of building you would normally have to put 20% of the purchase price as a down payment.
Since you’re building a home your cash equity usually comes in the form of how much cash you put down on your land.
Cash equity is king when applying for a construction loan.
For example, if you bought a $200,000 piece of land and the land is owned free and clear you have a lot of cash equity.
With this much cash equity you will most likely not have to bring in any additional cash.
Or if you bought a piece of land over 12 months ago for $100,000 and its now worth $200,000 the bank will use the current value because you bought it over 12 months ago.
In both cases you have brought $200,000 cash equity to the table.
Now if you just bought a piece of land for $200,000 and you only put down $20,000 most banks will want to see 10% to 20% cash into the total project.
Other qualifying cash equity that can be counted are any pre-paid’s such as plans, grading, permits etc. These pre-paid's can be used for cash equity or you can be reimbursed from the construction loan at closing.
11. Should you hire a builder or be an owner builder?
Do you really want to be an owner-builder? The goal of being an owner builder is mainly to save money. Some people can save quite a bit of money if done correctly.
Some people are not meant to be owner builder.
Possible problems when acting as owner builder are:
1. Construction cost over runs.
2. The best banks with the best rates require a builder or supervisor.
3. Managing contractors to finish on time or to show up for work.
4. Depleting your personal savings.
5. The need to borrow more money.
6. Loan extension penalties.
7. Being taken by unscrupulous contractors.
8. The need to refinance your construction loan.
9. Foreclosure.
I could go on and on about the horror stories I hear from Owner Builders that did not get a construction loan and acted as their owner builder.
If you have never built a home before and absolutely need to act as owner builder please take my advice and hire a reputable builder to supervise you and the building of your new home, for a much smaller fee than their normal fee.
The builder/supervisor will help you with the cost breakdown and manage the subcontracting on an as needed basis. If one of your contractors gets out of hand or you need help of any kind, you can call the supervisor for assistance.
Your job is to make sure you are hiring the right people to complete your home. It can make the difference between happiness and misery.
For those of you that have experience at building homes but do not have a license ask about our owner builder program. To qualify you will need a resume showing your experience.
If you decide on hiring a builder to do everything make sure you hire a reputable builder or supervisor with a good reputation and plenty of references.
Ask your friends if they know a good builder and when you start to hear the same name over and over you know you've found a good one. Ask the building inspector for a list of reputable builders.
The most important point is shop around until you find a builder with the most reputable and honest background.
If you pay a little more for an honest and reputable builder or supervisor you will be very thankful before, during and after your home is completed
12. How does your builder determine how much your home will cost to build?
The Estimated Cost Breakdown of your home is probably one of the most important forms in the construction loan package. This is the breakdown of each particular cost of construction of the home. The foundation, lumber, framing, plumbing, heating, electrical, painting, and builder's profit, etc.
The builder usually completes this form to show you exactly what it will cost to build your new home. The most important thing to remember here is that you do not want to underbid any line item and you do not want to overbid any line item. You want accurate numbers from real bids (not guesses) and a 5% contingency for cost overruns.
Good builders will send out the house plans to their contractors for specific bidding on each main item or can estimate the home themselves. The builder will send one set of plans to the foundation contractor, one set of plans to the framer, one set of plans to the plumber, etc, etc.
When all the numbers come in, the builder will fill out the cost breakdown and come up with a total cost to build your new home.
Bad builders will use the WAG method of estimating the cost of building your new home. The WAG method stands for "Wild Ass Guesses". This method is the most dangerous since it can lead to under and over bidding.
The last method of bidding is simply to over inflate every single line item on the cost breakdown. This is the most profitable method for the builder and the most expensive to the customer.
This is why you want to find an honest, reputable builder with a good reputation in your community. Once the cost breakdown is completed and you plan on hiring this builder to build you new home you will need to type up a contract. The contract needs to equal the added total of the cost breakdown.
Most builders will provide the contract but make sure you read it carefully and that you add your requirements as well. There are two types of contracts
1. Fixed Contract: This contract is simple and straightforward. Take the total of the cost breakdown and put that fixed number into the contract. The builder will provide a list of responsibilities.
2. Cost plus Contract. This type of contract is usually for large construction loan projects.
A. The customer wants to make a lot of changes to their home as its being built.
B. The construction loan period to build the home is 18 months so construction costs can change drastically. The builder prefers this contract to protect the costs and profits.
13. How does your builder get paid while your home is being built?
There are two methods that banks use to make sure your builder gets paid while building your home.
The Voucher Reimbursement system has been around for quite a while. As usual you'll have some builders that are very familiar with this method of payment and do not like change.
Most builders are really only concerned with how fast they can be paid and how often they can be paid.
Most banks find that the voucher system is simply too much paperwork to deal with anymore. The builder is given a big book of vouchers that looks like a check book and when they want to get paid or need to pay a contractor they need to fill out a voucher form. This voucher form is a request for payment and as long as the contractor has signed the lien release the bank will pay the amount requested.
The bank will also request an inspection throughout the construction loan to make sure that the work is completed.
The Draw Reimbursement system is becoming the standard for construction loan funding for most banks.
The main difference is that the bank puts the accounting responsibility on you or your contractor. The bank uses your cost breakdown as the guide for the draws. Some banks use specific schedules of 4 to 7 draws based on completed construction milestones, such as foundation or framing.
The draw systems also allow the choice of taking draws on a monthly basis, collecting partial payment for work and material items that have been completed.
I personally prefer the draw reimbursement system because:
1. It requires less work.
2. Provides more control for both the customer and the builder.
3. The funds are wired directly into your bank account.
3. It's easier to use than the voucher system.
4. Some banks now have online draw requests.
14. What type of construction loan insurance is required and who is required to get it?
The reality of construction loan insurance. There are three types of insurance needed to build. All banks require the first two insurances, course of construction and general liability. Workman's compensation is only required if your builder has employees.
1. Course of Construction Insurance. This policy is an all risk policy to include, fire, extended coverage, builder's risk, replacement cost, vandalism and malicious mischief insurance coverage.
2. General Liability Insurance. You or your builder can provide this policy. This policy is a comprehensive general policy or a broad form liability endorsement. The minimum amount of $300,000 for each occurrence is required. If the builder provides the insurance a general policy of $1,000,000 or a broad form liability endorsement is required.
3. Workman's Compensation Insurance. If your builder owns his own company and has employees that are helping to build your home, workman's compensation is required.
If the builder simply subcontracts out the work and does not have employees per se, they will need to write a letter acknowledging that they do not have employees and are not required to have WCI.
15. Has your loan officer structured your construction loan properly and why it's so important?
I get loans all the time from customers that went to another lender or broker and were either turned down or were offered a below average construction loan.
The reason was because the loan was not structured properly before it was sent into the bank. Structuring a loan properly is simply making sure that you match the customer’s loan request to the banks underwriting guidelines.
Recently I received a construction loan request from a customer that was turned down by a large national bank. The loan officer had calculated the income incorrectly and submitted the loan as full documentation.
The customer owned his own business and had a lot of tax deductions on his tax returns. The way banks qualify customers as full documentation is very conservative and the loan was turned down.
We took the loan, found the problems upfront and submitted the loan as stated income.
The customer was approved and built a beautiful home in Rancho Santa Fe CA.
Structuring construction loans for approval is vitally important and is the last thing on most customers’ minds. Each and every time I receive a loan from a customer with a bad loan experience it is always because the loan officer did not specialize in construction loans and did not structure the loan accordingly.
Other common mis-structured loan scenarios include:
1. Low cash equity.
2. Improperly completed appraisal.
3. Unexplained credit derogatory.
4. Income incorrectly calculated.
5. Mismatch of customer loan request to the correct lender.
6. Plain and simple incompetence
The old saying “you get what you pay for” is especially true when obtaining financing in building your new home.
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by: Anita van Wyk
More and more, potential customers are not letting their "fingers do the walking." To find what they need, they are using their fingers to click at Google, Yahoo! or MSN .
If you do not have a website – you are loosing them before you even have a change to tell them about your product or service. Think of a Web site as multiple, full-page Yellow Page ads that gets 100 times more results for your local business.
Cover every business category and geographic region for a fraction of the cost of a single Yellow Pages ad.
A Web site that works is the most cost-and-time efficient way to:
1. Build loyal lifetime customers
2. Grow Your Client Base
3. Build Trust With Potential Customers
4. Get the Jump on Competitors
5. Develop and Stay "Top of Mind"
6. Extend Your Reach - Attract new local (and global!) customers
7. Diversify: Open up new revenue streams.
But where do you start?
Well, you need to register a domain name, host your new site, build the site pages, submit your site to the directories and
them promote it. You’ll need other people to link to your site and you’d want to send your customers emails.
Perhaps most important of all you’d need to know how many people are visiting your site and how many of those are buying
from you.
It might seem like a lot at first glance and it can be, but not if you choose a company that gives you all the tools, in one place, with a straightforward, integrated, step-by-step process to support you every step of the way. Site Build It! (SBI!) is the only product in the world that combines site-building,
site-hosting, and site-marketing and that makes it easy for you to build a professional, popular, and profitable business. You don’t need any technical experience (html, ftp, etc.) either, they handle all that for you.
Sites built using SBI! consistently get high traffic, as a recent Alexa.com survey shows.
- 62% of SBI! sites fall within the top 3% most popular sites on the Internet
- 53% fall within the 2% most popular
- 35% fall within the 1% most popular.
If you can use e-mail and surf the Web, you can create a professional-looking, traffic-generating, sales-producing site.
Real estate agent, landscaper, restaurant owner, health practitioner, artist, alarm system distributor, boutique owner...whoever you are and whatever you do... Site Build It! (SBI!) is the affordable, all-tools-in-one-place solution you need to build and host a
Web site that WORKS.
There is no better time than now to get your business on the World Wide Web... before you competition does.
This article may be freely reprinted as long as all links and author information remain.
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by: Richard Romando
Only in America could billions of dollars be made selling weight loss products to people who need to shed a few extra pounds. In a world full of starving people, Americans seem to have emerged as a nation of overfed, under exercised fatties who can’t put down that bag of potato chips, stop eating that ice cream or refuse that second (or third?) helping of pasta. America’s weight problem – historically solved by eating less and exercising more – had now proliferated a dizzying array of products. Celebrities, nutritionists, doctors, herbologists, hucksters and former fatties have come up with thousands of products designed to melt fat, reduce cravings for bad foods, block carbs, sugar and fat, lose pounds while you sleep, and more..Many products claim that, as long as you take one of the pills, you can eat what you want and actually lose weight. There are diet plans, calorie counters, diet food cooked and delivered to your doorstep daily, dance and walk your way to weight loss, the hula weight loss program, the Brazilian weight loss program, the fat burning, belly reducing, balanced woman, unbalanced woman. You name it and it’s on a weight loss infomercial. In fact, weight loss programs (separate from fitness programs and equipment, which may result in weight loss but are sold as ways to improve your appearance) account for more than 50% of all revenue generated in today’s infomercials.
One of the most successful weight loss infomercials ever produced featured a product called Bio Slim. Created by Doctor Josh Leightberg, Bio Slim was a science-driven, medically sound program consisting of several herbal pills which when combined with a diet plan also created by Dr. Leightberg resulted in a changed metabolism, an improved digestive system and a stronger anti-immune system, all of which ultimately led to a steady, healthy weight loss. Following the success of Bio Slim, a steady stream of niche players, knockoff artists and entrepreneurs took to the airways with their twist, their hook, their product designed to produce quicker, easier results. One of them was the well known and extremely successful Fen-Phen diet, which was a combination of two herbs known to doctors and other professionals in the industry as herbal speed. While still legal at the time, the pills killed the appetite completely, created a euphoric state in the user and led to many problems including heart attacks which led the FDA to ban the main substances from use in the USA.
Weight loss infomercials are so powerful and so successful that you have to be careful which products you choose to use. As with anything else in life, if it sounds too good to be true, it probably is. There really is no magic pill or substance that is going to let you sit on the couch and eat huge quantities of bad foods and make you lose weight without paying some kind of terrible price. I mention Bio Slim as an example of a stellar product designed by a professional doctor whose goal was to improve people’s lives and make money. You could call a number given out to anybody who ordered Bio Slim and speak directly with Dr. Leightberg if you had questions or concerns about his product. That should tell you something about the man and the product he’s putting his name on.
Another thing to look out for in weight loss infomercials are the add-ons. Popular diets like the Atkins diet which were not sold on infomercials, but became successful through book sales, interviews and word of mouth led to the creation of a whole host of products you didn’t need that were designed to help you stay on or perform better while on the Atkins plan. Low carb foods and low/no carb candy imitations, sometimes ten times more expensive than their higher carb counterparts, flooded the airwaves. Pills designed to reduce the difficulties associated with the Atkins diet surfaced in infomercials. These items are usually designed by less than professional individuals looking to cash in on a craze they had nothing to do with in the first place.
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by: David Riewe
With a relatively increase of the everyday commodities, more and more people are finding ways how to earn additional sources of income so as to compensate their expenses. That's why most people who look for alternative ventures resort to real estate business.However, even if real estate business appears to be lucrative to many, it still needs a lot of effort and skills to survive in the industry. So, for those who want to succeed in real estates business, here are some tips to ponder:
1. Set practical and sensible objectives.
Just like any venture, the key to a successful real estate business lies beneath a sound and sensible target. This will serve as the guiding principle of those who wish to make it to the top. Through these objectives, people who are involved in real estates business can focus more on areas that need concern like the market, clients, and strategies that will make their business profitable.
2. Choose the right real estate strategy.
The key to a successful real estate business is to come up with a certain strategy that will supplement the objectives stated on the entrepreneurs’ business plan. This strategy will also provide the right moves to take based on the kind of profit the real estate entrepreneur wants to achieve like an express cash or wealth establishment.
3. Entrepreneurs should acquire the characteristics of an ideal real estate agent.
In order to succeed, people involved in this kind of business should acquire the characteristics of an ideal real estate agent. He or she should be adept in finding the motivated seller, determine the value of properties, and knows how to negotiate with their clients.
4. It's a must to know the laws.
Part of being successful in real estate business is to know the existing laws of the state such as tax laws. Such that, if a real estate businessman does not know the laws, he or she may end up losing a lot money or worst end up in jail.
5. It is important to hire a reliable accountant.
This is extremely important to almost any type of business. This is, in reality, significant in order to succeed in real estate business because the transactions involves money, and one of the person who is skilled to analyze and interpret monetary information is a certified accountant. Through the help of an accountant, people behind the real estate business will be able to track the ebb and flow of the market.
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by: Ross Bainbridge
Everybody speaks. Some people speak and get elected president of the United States. Other people speak and armies of business people take to the streets, generating huge sums of money. Still others speak and people’s lives change. What makes for difference between those who speak and are received by a rapt audience, and those who merely fill the air with noise?Speaking clearly and effectively is a science and that science is called motivational speaking. For some it is more art than science but unlike art, true motivational speaking can be learned, can be taught effectively, and must be practiced. To begin with, the thought of getting up in front of a live audience and speaking about anything at all frightens most people to death. They’d rather do almost anything else, be almost anywhere else than in front of a large audience of people, all of whom are listening to them intently. But for some rare individuals, the idea of speaking to large groups of people is exciting. They thrive on the attention. And if they take the time to learn the basics, and if they have something of value to say, there are brilliant, lucrative careers waiting for them as motivational speakers.
The best of the best become motivational keynote speakers. You may get an invitation to attend a seminar or lecture about specific topics. They are usually all centered on the very popular subject of making money but most are more specific in their targets. Some zero in on real estate, some on trusts and wills and estate planning, some are about accumulating wealth through savings strategies or investment plans, others on finding the hidden, illusive keys to success.
You may attend one of these and find yourself sitting through a half dozen or so less than brilliant speakers before one man takes the stage and the audience is suddenly alert and paying full attention. This man is the motivational keynote speaker and he’s the reason most of the people in the audience are there. He’s the one they came to hear. Why? Because his way of presenting his ideas and concepts to an audience is the most professional, the most concise and the most readily accepted of the speakers present that evening.
Because of the many business conventions that are held each year in Las Vegas, there are motivational speakers who work only there all year around. Las Vegas motivational speakers are highly regarded as some of the best in the business as only the best of industry personnel attend the conventions in the area. Some speak of very specific techniques geared towards specific industries. Others are more inspirational speakers, who speak broadly about leadership values and techniques to get teams of employees moving forward enthusiastically as a team. Whatever their particular niche, motivational speakers are well studied and rehearsed in the art of delivering their message effectively.
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by: Al Walker
Here's a real simple way to become wealthy.Marty and his wife live at home with their 2 children. They own
a 3 bedroom house in a middle class neighborhood and try to live
within their means. Marty works full time in the Printing
Industry, while his wife is in charge of the home and looking
after the children.
They've accumulated some credit card debt and have 2 years left
on a car loan. They try to stay out of debt as much as possible
and together they've managed to contribute a total of $32,000 to
their own Retirement Fund. It is kept in term deposits receiving
5% interest annually.
Two years prior, the couple bought an older house that they
fixed-up and rent out for $850 a month. After paying the
mortgage and taxes $300 is left over each month. This goes into
their savings account each month.
At Christmas, the family bought themselves a new computer and
decided to start a home-based business. Things started out
fairly slowly but after 8 months they were receiving a steady
check of $400 a month which also goes into their savings
account. This part-time business will continue to grow with the
effort they dedicate to it.
This business also offers them some very lucrative tax savings.
By taking advantage of these Tax Strategies they are able to
save an additional $300 a month on tax that was normally
deducted from Marty's paycheck at work. This monthly income is
also added to the couple's savings.
Marty has just begun writing an E-book about his "production
expertise" at work. His plan is to market this book on the
internet for profit
Every Sunday the couple takes a drive to stay familiar with the
Real Estate market in their area. They're looking for another
property, a "handyman's special" to fix-up and rent out. They
have saved enough for a down payment and their credit with the
bank is well established.
The family's total monthly expenses are $2000. Now, here's the
question:
Does Marty's family have Wealth yet?
To answer this question properly you first have to understand
exactly what "wealth" means.You achieve wealth when: *Your
Passive Income is the same or greater than your Expenses.* So
what does this mean?
First, what is Passive Income?
Passive Income is money that you are paid over and over again
for work that you only do once. (This excludes using a gun or
finding cash on the street) Some examples of this would be
royalties for writing a book or a song, commissions that you
receive for sales that others make and interest from bank
savings or dividends on stocks/options that you own.
Second, what Expenses are we talking about? This one's a little
easier to understand. Expenses are the total amount it takes to
run your household and your life. This includes, rent, mortgage
payments, car insurance, food, credit card and loan payments,
etc………
Let's look at Marty's family a little closer…………. Does Marty
have any Passive Income? Yes he does. Marty's salary is not
considered Passive Income. That's because he has to work 40
hours a week just to get the basic amount. If Marty doesn't go
to work then he doesn't get paid. His overtime also doesn't
count as Passive Income.
The interest from their Retirement Fund does though. It's paid
to him month after month as long as it's left in that account.
So, $32,000 at 5% is $1600 a year. Divided by 12 months equals
$133 a month in interest. Ok…..what else?
After the mortgage and expenses are paid with the rent money
they receive on their rental property they are left with $300
every month. This is Passive Income. Just as long as the tenant
stays and pays his monthly rent.
How bout that $400 from the home-based business and the Tax
savings. Is this Passive Income? Well, Marty's wife made sure
that she chose a company where she could sign new business
accounts and get paid commissions on those accounts over and
over again. They've made a 5 year commitment to build this
business part-time. So yes, both the $400 and the $300 in Tax
Savings would apply as Passive Income. Let's add up Marty's
total Passive Income.
Interest $166.00 Rental Income $300.00 Home Based
Business$400.00 Tax Savings $300.00 Total $1166.00
Not including Marty's salary from work, his family's Passive
Income is $1166.00. Not bad. Every month this amount flows into
the family's bank account, regardless of anything else they do.
We said that Marty's monthly expenses total $2000.00 a month.
And we also said………… You have Wealth when: *Your Passive Income
is the same or greater than your Expenses.*
$2000 Expenses subtract $1166 Passive Income = $834 monthly
balance needed to have Wealth.
Marty's Expenses are still more than their Passive Income so
they're not wealthy just yet. But they're well over half-way
there. With this kind of knowledge a family can know exactly
where to focus their financial attention.
Maybe when Marty writes that ebook he could get some sales and
royalties from it. Also the new Real Estate and more work on
their Home-based business would certainly help them to attain
more Passive Income. Once Marty's Passive Income is more than
the family's Expenses then Marty could start to have much more
freedom. He may even choose to quit his job and continue
developing his Passive Income streams.
Take a look at your own finances. What are your monthly
expenses? Do you have more Passive Income than your Expenses? If
you do Congratulations. You're Wealthy!!! If you don't. It's
time to get started and start adding Passive Income from other
areas as soon as possible.
When you truly understand this principle, you'll be well on your
way to becoming wealthy