All about investment

By Thomas Wheelwright

I'm constantly teaching and sharing the concept of building a business around your wealth. What does this mean? Let's start with a little background.

Historically, all great fortunes have been built in business. Whether it was Andrew Carnegie, John D. Rockefeller, Bill Gates or Warren Buffett, all great fortunes have business as their foundation.

You really don't hear about great fortunes being made by investors. Ever wonder why? It's because business done right provides the most leverage, greatest velocity, and least amount of risk of any money-making activity.

Why do some businesses grow and grow while others seem to hit a ceiling which they can't grow?

The answer to this question lies in the foundation of the business. Small businesses stay small when the owner spends his or her time running the business. Effectively, these people own their job. They have no time to work on the business because they are always working in the business.

The key is how to get the owner out of the business operations and focused on the business growth. The answer is for the business to create a strategy and a set of systems that implement that strategy. Then, and only then, will the business owner have time to grow the business.

When the strategy and systems are in place, the owner only has to manage the systems, not the people. The owner isn't doing the work, the employees and other team members are doing the work.

What does this have to do with investing?

I have discovered that the business principles of strategy and systems can be applied to investing. Investors who create a business of investing, by developing a strategy and implementing systems, can enjoy the same results enjoyed by a successful business owner, i.e., higher profits, more growth, less time spent on investing, total control over their investing and less risk.

Is your investing a business or just a hobby?

Think about your investing. Do you run it like a business? Or, do you run it like a hobby?

Investors who run their investing like a business have:

A clear written strategy

Mission, vision and values

Systems in place to make investing fast, efficient and in line with the strategy

A team of advisors

Reporting to tell them their net worth or cash flow at any given minute

Both informal and formal agreements with their customers and vendors

The list goes on and on. How does your investing activity stack up?

Are you ready to build a business around your wealth?

Historically, all great fortunes have been built in business. Whether it was Andrew Carnegie, John D. Rockefeller, Bill Gates or Warren Buffett, all great fortunes have business as their foundation. http://www.provisionwealth.com

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by Tony Seruga, Yolanda Seruga and Yolanda Bishop

As an investor one of the most important things that you'll want to realize is that banks are not the only place that you can turn for loans. In fact, there are many people who are willing to invest in the idea that they, too will profit financially from the investment. If you are seen as a good investment, in other words, they feel that you can give what you're promising; they will be willing to invest in you without the traditional hassles of going to the bank for such a loan.

A private lender may be a wonderful source for money for your investment idea. The biggest difference between a private lender and a bank is the fact that a private lender is looking into the investment more than your credit history. A bank sees the idea, but is really more interested in your credit standing and your debt to income ratio. If they feel that you, the person, are a good credit risk; that you will pay back your debt regardless of the success of the business, they will approve you for the loan and this will be the beginning of a long process. A private lender on the other hand will like to see a good credit rating and debt-to-income ratio, but they will place their focus on your business idea. If they feel that your idea will bring large profits, even if your credit isn't perfect, they may be willing to invest in that idea. If they decide to invest, they can usually get you the money within a few days. This is much shorter than the process you'd have to go through with the bank.

Another tremendous benefit to a private lender is the fact that through discussion with you the amount that will be borrowed will be decided upon. If you find later that you need more money for some unexpected problem with your investment such as re-wiring a house or something along those lines, a private lender can do that with a little conversation rather than another long drawn out loan process. The terms for paying the loan back will be more flexible with the private lender as will the flexibility of those terms. If you run into trouble in the repayment you can speak to the lender and work out some short term solution until you are able to resume full payments. All decisions of repayment and terms will be between you and the lender.

The main benefit to the private lender to some is the ability to avoid a hard money loan. This type of loan (hard money) is one that caters nicely to those that are having financial difficulty. They are willing to loan money to those that have credit trouble or have had credit trouble in the past. The good part of that is quickly dwarfed by the downside. A hard money loan will have very high interest rates and a strict repayment term. If the loan is defaulted on, the hard money lender will have the right to claim the property and sell it in order to recoup the loss of the loan. You will be putting yourself and the property you're investing in at great risk through a hard money loan. The term of a hard money loan will come to maturity much faster than with a private lender. A private lender will not be as worried about your credit and they will be willing to work with you to stay in good standing with the payback of your loan. In some cases, you may be able to borrow the entire amount of investment into the property including any necessary repairs or updates and pay the entire amount of the loan back when the property has been sold. No bank or hard money loan will allow this type of term.

Some may think that this all sounds great if you can find a private lender willing to work with you. There are more places to look than you may think. A good place to start is with the local investor's association. Most areas should have some association made up of local investors. Since these people have been in the investing game for some time, probably, at least some of them may have had dealings with a private lender. If you can find some that have, they can also give you some tips as to how to appeal best to the lender. They will know what's important to the lender and what things they would like emphasized. This will help you to land the loan you're looking for.

Some other places you may want to ask around about private lenders are your local professionals. Local doctors, lawyers, or dentists, may be private lenders themselves, or they may know people that are. They may be able to again tell you exactly what they or their acquaintances are looking for in a business proposal. They will give you tips as to how to present your business plan and what kind of things included will get you the loan you're looking for.

Friends and family would be the next area that you may want to investigate. You may think that you'd know if they could help you, but you may be surprised. Your aunt's cousin's sister-in-law's little girl may have had a teacher that does private lending. It's always possible so if you're thinking of putting together a business plan and investing in some real estate, commercial or residential, be sure that everyone you talk to knows about it. You may find that there are people among those that you know that can help you get exactly what you're looking for.

A Google search will also help you when you've exhausted all other avenues. You can do a search on "local private money lenders" in your area and the internet may just be able to give you a place to start. You can start calling around from there and through talking to the first on the list, you may be able to find the others.

Wherever you find your investor, know that they are there to help you and themselves with the profits you are both looking for. Be sure that there is paperwork between you and your lender and make sure you have only one lender per property. That will help avoid confusion and may build a lasting relationship between you and your chosen lender. This will keep your profits coming and make your lender money at the same time.


About the Author

Tony Seruga, Yolanda Seruga and Yolanda Bishop of Maverick Real Estate Investments, Inc. work with builders, developers and other players in the commercial real estate industry to acquire and develop properties. They use progressive investment strategies that have proved extremely profitable. In addition to their own deals, they teach both seasoned and inexperienced investors how to be big players in the game. Visit the website for more info.

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by: Monique Fell

There is always a risk when investing in real estate because property values rise and fall. The best protection you can have against this risk is to become knowledgeable of the market you intend to invest in. If you do this, you will be able to buy properties that are undervalued, improve them if necessary and sell at market rates. The more properties you can turn over using this simple formula, the more profit you will reap from your real estate investment strategies.

The two main ways you can buy properties at low prices with a promise of selling much higher, is to buy individual properties that are being sold significantly below their market value and to buy when the real estate market as a whole has bottomed out and is ready to rise. Both these strategies require you to do your research about the market in general and market values of comparative properties in particular.

Before investing in a local market, spend some time researching it. What are the current prices? What has been the market growth over the past twelve months? How has the population grown over the past twelve months? Are these trends likely to continue? You also need to research current and future development plans and assess their likely impact on future prices and market demand. For example, if there are a number of major development projects for apartment complexes that will be available for sale at the same time you will be selling an apartment you may have to lower your asking price in order to make a sale.

The real estate market should not be viewed as an isolated market. It is a function of the local, state and national economies. If unemployment rises, interest rates rise or other economic pressures are placed on people, the real estate market will be affected. Therefore, you need to pay attention to what is occurring in the wider world. If you are thinking of purchasing an investment property in a location where residents are largely reliant on one or two major employers there is a risk to the stability of the real estate market in that area. If a manufacturer closes their factory, for example, people will not be able to afford their mortgages and properties will come on the market depressing prices. Successful real estate investment strategies therefore must include an understanding of social and economic impacts in a market as well as current and expected trends.

Apart from these broader issues, a successful real estate investor will carefully consider all facets of any individual purchase. The current market value, all the costs associated with the purchase, estimated costs of necessary improvements and likely selling price are all important aspects of any decision to purchase a real estate investment property.

If you do your homework and implement sound real estate investment strategies you will be well equipped to make a good profit with minimum financial risk. As you practice sound strategies you will increase your experience and develop an instinct for good buys and become an increasingly successful investor.

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