Your Questions About Purpose Of Investing In Real Estate

George asks…

How can I prove physical/legal feasibility of a Real Estate Investment Proposal??

I have to do a project for a class where i have to propse a real estate investment project. I need to prove that the investment is physically and legally feasible. Any suggestions or ideas on things i could include to prove this?? The investment will be for the purpose of rental income and I was assigned a single family residence.

Justin answers:

I think what that means is that you need to show the title is clear, the home has no liens, the home passes an inspection and possibly an engineers report. That the home is a bargain show the land value, and home value from the county tax office. Search google for (county name) tax appraisal district, and then search by address. Show that the taxes are current or of nominal balance owed. Do a market analysis of the area, you may get lucky and a realtor might help you out by giving you a copy of a recent one they already did. If the house needs work but is in a good area you can resale it and make a profit. Any lender likes that because if the property forecloses they can get money back on it. You have to show every aspect of why they SHOULD invest in your investment. Make them believe that if they pass it up they will be making a mistake. Since this is a class, you may say that you have already received a voucher from a lender, so your credit is good. You may add in something like consideration of the age of the home and what sort of maintenance costs your looking at that would be above the income you would make renting the property. Your income vs. Expendature ration should be in the black. If you can’t get a real market analysis, just make one up. You could say that as a backup plan if you can’t find a renter you are willing to rent section 8. Good Luck and HAVE FUN!!!

Daniel asks…

Is it the best time for invest in real estate in USA?

I am going to start my own business. I want to invest in real estate in USA. is it appropriate time for invest in this sector? and also want to know about Real Estate Investors Association (REIA) of USA.

Justin answers:

Real estate investment isn’t cut and dry. So just because it SEEMS like a good investment doesn’t mean it is.

Are you hoping to be a landlord and collect income that way or are you talking about flipping? If you’re thinking about being a landlord, I highly recommend you get acquainted with your state’s tenancy laws so you make sure everything you do is above board (ranging from how much security deposit you can ask for, minimum notice required, lease stipulations, late fees, pet deposits etc).

If you’re thinking about flipping, well the market hasn’t recovered to the point that you can do flipping, even in major cities like NYC and LA. The thing about flipping is it takes time. You have mortgage payments to make as well as property taxes the longer you own the property. Also, in this market where things are still relatively cheap, people can afford to buy and do their own renovations rather than pay jacked up prices from renovations made for the sole purpose of flipping. With shows on tv now, people can identify a cheap for-sale renovation and a quality one. So the idea of flipping is great, but it’s not as easy as it looks. On top of all the expenses, you also have to get a profit. Your profit is also subject to capital gains tax.

Donald asks…

When is the next stock market and real estate crash expected?

Stocks and real estate both are getting out of reach of middle class, want to know should I wait or just invest my money at current rate.

Justin answers:

No one can foretell either the stock market or the real estate market, if any one claims they know, they are a fool and if any one belives them they’re bigger fools.

The stock market is not now, nor never has been out of reach for anyone. The are many investment programs available to those that have modest means. Actually, the sole purpose of mutual funds is to prove an opportunity for investors from all financial means..

Yes you should invest, There are many people just like you that are, or were looking to invest and those that did bought Mutual Funds and/or Exchange Traded Funds (ETFs). One purpose of mutual funds is to help investors like you, who are either just entering the investment world or who have no investing experience. Once you feel you at least have an understanding of investments you should look into ETFs which are similar to mutual funds but are traded on the exchanges.

Mutual Fund companies as well as ETFs have an entire array of products many will fit your needs. You can go to the MSN.Money website
http://moneycentral.msn.com/home.asp it has an entire section on mutual funds and Exchange Traded Funds. Read about the various products and in doing so you will be getting investment ideas and at the same time educating yourself about investing.

You could also contact the funds companies for more information. I have found that Vanguard & Fidelity can meet your needs for mutual funds. The service and information they provide is all free and you will find it helpful.

Regardless of what you decide, do not ever let anyone tell you not to invest, especially those that do not invest themselves.

Joseph asks…

Are there any solid books on Real Estate investing evaluation and Analysis?

Hello

I’m looking to learn about evaluating properties for development purposes.

Please don’t recommend stupid books that are “top sellers” by swindlers who write playing to emotions and hopes of instant millions.

What I want is a thick ‘dry’ textbook that will teach me how to evaluate the value of property. Hard core.

The real estate equivalent of “Security Analysis”?

Does it exist?

Justin answers:

Hi Kavemons,

I dont have a specif title for you, but I do have an idea.

Why dont you start you search by looking for articles on the internet about that subject.

This way, you can hunt down authors of your mentioned subject !

Kind regards, LASSE

Robert asks…

How hard is it for a US citizen to get a green card in another country for business purposes?

Is it possible to get approved for a green card in exchange for plans to start a small business in the country you want to immigrate to.

Like, let’s say that I have two lifelong dreams:

1. To open a sports bard

2. To move to Australia

I now have enough capital to open a sports bar, but I want to do it in Australia instead of the US.

Since my bar in Australia would mean hiring multiple full time employees and investing in Australian Banks and real estate, is there any Green Card program available for someone like that?

Like since providing jobs in Australia is beneficial to them?

Justin answers:

Not hard (see link below).

Michael asks…

How hard is it for a US citizen to get a green card in another country for business purposes?

Is it possible to get approved for a green card in exchange for plans to start a small business in the country you want to immigrate to.

Like, let’s say that I have two lifelong dreams:

1. To open a sports bard

2. To move to Australia

I now have enough capital to open a sports bar, but I want to do it in Australia instead of the US.

Since my bar in Australia would mean hiring multiple full time employees and investing in Australian Banks and real estate, is there any Green Card program available for someone like that?

Like since providing jobs in Australia is beneficial to them?

Justin answers:

Only the US has green cards other countries have there own version
you need to look at investment visas

http://www.immi.gov.au/immigration/

http://www.immi.gov.au/visawizard/

Mark asks…

Is there a tax peanalty for taking out too much cash from the equity on your primary residence over time ?

My accountant says there is some penalty about taking out too much equity over a long period of time on our primary residence.

My husband bought our home in the 1970s for around $50K and we’ve refinanced it several times over the years. In terms of cash, we took out $200K in 2004 (having taken $600K over the years prior to then) and have a $200K unused home equity line. Does anyone know what she’s talking about?

I know we’ve long maxed out on the mortgage interest deduction, but will we be taxed on our cash out?

We took the $ out to invest in real estate, which we have not yet done, but are now looking at doing. Thanks!

Justin answers:

There is no actual tax “penalty” for borrowing money based on the equity in your primary residence, BUT there are two other tax consequences that can catch you by surprise: The AMT and the gain on the sale of your home (see below).

As you mentioned, you have maxed out on the home mortgage interest deduction which is based on (a) borrowings to purchase the home, (b) additional borrowings used to improve the home and (c) and up to $100k in home equity debt used for any purpose. Interest beyond the $100k home equity debt limit may be deductible as investment or business interest (see page 10 of IRS Publication 936)

Surprise 1 – The AMT (alternative minimum tax) disallows the interest deduction on home equity debt not used to buy, build or improve your home UNLESS it is deductible for AMT purposes as investment or business interest.

Surprise 2 – The GAIN ON SALE with no cash to pay the tax. Let’s say you sell your principal residence for $850k, selling costs including commissions are $50k and you have mortgage debt on it of $800k. You will end up with no cash from the sale. HOWEVER, you will have a taxable gain of $230k equal to the sales price $850k, less cost to sell of $50k, less your original purchase price of $70k, less your $500k home gain exclusion (if you qualify) on a joint return. Paying the tax on the $230k without receiving any cash from the sale is a BIG surprise for many people. If you live in a community property state and your home is community property AND one of you die, the other will inherit the home with a step-up in basis for tax purposes. With this step-up and a $250k exclusion, you will likely avoid any taxable gain.

Richard asks…

When a S-Corp buys another corp and changes its status to S too, how will the parent corp be taxed?

I wanted to know if a person owned a s-corp and bought a aged corp with good credit and used it to obtain the funding it needs to invest in like real estate how will the profits be funneled to the parent corp be taxed. I know that an s-corp’s income is not taxed while the employees are taxed on the pass thru income. My question is is the profits from subsidiary s-corp passed up to the parent s-corp tax free until its passed to its employees?

Justin answers:

Tax effects of mergers and acquisitions is a tricky area of law. Generally, if you make a Q-sub election (qualified Subchapter S subsidiary) for a subsidiary of an S corporation, then for tax purposes it is as if the subsidiary does not exist and all the income would flow through the parent company S Corp to its shareholders. However, you really need someone who knows the tax laws to look at your particular situation because the tax code contains tons of exceptions to every rule, especially if you have a corporation that in previous years was a C-Corp.

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Forex – Weekly outlook: April 15 – 19

Forex – Weekly outlook: April 15 – 19

Investing.com – The yen rebounded against the dollar on Friday, recovering from four-year lows as weak economic data out of the U.S. underlined expectations that the Federal Reserve will stick with its quantitative easing program. The dollar tumbled
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How to Invest $1000 Right Now

How to Invest $1000 Right Now

Investing is an essential of building financial security, but it can be intimidating when you're first starting out. Saving up $1,000 to invest can take a long time and a lot of effort, and you definitely don't want to make mistakes in your first
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Etrade Stock Marketplace – Great Technique to Trade and Commit

In our fast advancing technological globe, you may find out that just about any and every thing can be done electronically. You can do a number of issues electronically and more than the internet like spend your bills, do your purchasing, guide flights and make resort reservations also, you could also commit and trade securities on the etrade stock market. Imagine you could be able to make tons of money on the etrade stock market extremely easily by purchasing and promoting securities so as to improve your profitability. In situation you are not as well familiar with the etrade stock market, let’s take a appear at it in additional details.

What is The Etrade Stock Marketplace?

The etrade stock market is simply worried with electronic trading of securities this kind of as bonds, shares, foreign trade and other exchange traded derivatives that can improve your general portfolio’s profitability. Unlike your regular stock market, the stocks and other monetary instruments are traded electronically and can be referred to as etrading.

A Suitable Location To Trade Securities

The truth is technology has somehow brought several buyers and sellers collectively through the virtual globe and as a result produced a virtual market place where investing can take place, but real money is attained. This marketplace is widely regarded as by numerous to be a reliable, reputable and stable location to trade securities in comparison to older means and techniques of trading. Some of the most well-liked electronic markets are Globex, Arca, NYSE and NASDAQ, which are reputable locations exactly where a lot of people make tons of money. There are several important implications of the etrade stock market, let’s appear at a couple of of these, so we can know the influence this marketplace has on traders, traders and other agents of trade.

The Etrade Stock Market Lowers Transactions Costs

Initial and foremost, the etrade stock market has permitted for the reduction of high transactions costs. This is as a outcome of decreasing manual inputs and increasing the automation of the trading process lowering incremental expenses of every trade and consequently leading to a drastic reduction in the expenses to investors.

Higher Liquidity

Investing electronically has also impacted positively on several various companies allowing them to effortlessly trade with other large businesses, regardless of exactly where they are situated. This simplification of the trading procedure has direct to more buyers and sellers on the marketplace, as nicely as higher liquidity, which will ultimately increase the effectiveness and potency of the investing markets.

Greater Competition on the Market

Because of to the digital investing of securities, what you might understand that competition has increased, primarily because there has been a elimination of all the traditional barriers in the marketplace. As a result of the barriers being removed many traders can now trade and compete in a globalized manner. Etrade stock marketplace is a fantastic way to do your investing, additionally, you will understand as well that trading electronically has decreased vagueness of discovering out the prices of securities increasing the transparency of the marketplace and opening up the possibilities to make tons of money. You will also stand to advantage from tighter spreads on various financial instruments.

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Your Questions About Stocks And Bonds

Joseph asks…

Isn’t Investing in Stocks, Bonds, etc. the same as gambling? And what is the point?

I have been studying them in my college class. It pretty much seems like pointless gambling. It says to invest in them but there is usually no guarentee your going to get anything back. Why would anyone take this risk? And where the heck do they get the money to do it?
Is this like a “Rich People” thing?

financi4 answers:

“I have been studying them in my college class. It pretty much seems like pointless gambling.”

Damn, you are dumb and in college?

Education is wasted on the young.

Anyways, investing isn’t gambling because you can sometimes tell when a company will profit. How do I know?

Will APPLE INC. Go bankrupt tomorrow? What about Walmart? Amazon? Ect?

Investing is what separates rich people from poor people like you. Rich people take risks and understand how to play the game called investing.

EDIT: Why thumbs down? Are you afraid of the truth? They are facts. Get over it.

Shame.

Daniel asks…

What Stocks/ Bonds Should I Invest In?

I have $100,000 to invest in stocks and bonds for a school simulation. 80% should be stocks and 20% bonds, because i’m in a aggressive-style group. what should my initial investment be if we plan to make a lot of money? we only have a handful of weeks, so i need stocks that will soon be on the rise.
any help is appreciated.
Thanks
Landon.

financi4 answers:

If this is not real money and the object of the game is a huge gain to “win” buy calls on SKF (that’s the trading symbol). You’ll either lose your theoretical hundred thousand dollars or make a fortune.

If the object is to learn about the stock market “invest” $10,000 in ten different stocks. Apple would be one suggestion.

Charles asks…

What company offers IRAS with stocks,bonds and mutual funds?

financi4 answers:

I like Vanguard best.

Michael asks…

How old you have to be to but bonds/stocks etc?

i am almost 20 and want to buy bonds/ stocks etc

financi4 answers:

Yup, as long as you have a social # and stuff you can buy them, im 15 and i know cause my friends parents invested money for him ever scince he was born so he could have collage money or something like that. And i know other people.

Richard asks…

What are stocks and bonds? How can you tell which stocks are best? And where do you get them?

Also, what is better, stocks or bonds, and are they wise things to invest in? How can you tell what stocks are good?

financi4 answers:

A great resource of specific financial definitions, and encyclopedia-type explanations, is Investopedia.com
http://www.investopedia.com/

Go to your local library and walk down the row upon row of books on these subjects. One beginner’s book on investing will answer all of these questions in detail. If you have problems or don’t understand, then ask a question. You’ve asked a question “How do I build a house?” Way too broad and general. You do the work first, then we help.

Try to determine your time horizon. Short-term, long-term?

Take a look at charting and Technical Analysis for following trends in the markets. Why would you own a stock that is in an obvious decline?

Realize right away there are two sides to the market, not just the upside. What goes up, eventually comes down at least part way.

Learn how to analyze risk, and make this your primary approach, not by compounding profits and erroneously analyzing how much money you can make. For example, most traders don’t make any money at all; more than 80% blow out.

Learn about money management techniques, and maybe you’ll stick around awhile.

Try to find these books:
They say “Buy and Hold” for the long term is better, but that depends on when you get in, and what your definition of “long term” is. The phrase “Buy low and sell high” infers that you buy after a decline; but how much of a decline? If you had bought after a 1000 pt decline in the Dow in 2000, you would still be waiting to get back to even, six years later in most stocks.

How to start trading online:

http://www.bernanke.cn/stock-trade/……
Http://www.stock-trading.jims-info.com/….
Http://money.howstuffworks.com/………
Http://www.investopedia.com/
http://sharebuilder.com/
stockcharts.com

Beginner’s Books on Investing

“Which Is Better, Buy-and-Hold or Market Timing?”

“Do You Have What It Takes to Be a Market Timer

The Beginner’s Bible in Technical Analysis is:
Edwards & McGee”Tech. Anal. Of Stock Trends”

Droke, ClifTechnical Analysis Simplified

Kahn, Michael N.Tech. Anal. Plain & Simple

Kamich, Bruce M.How Technical Analysis Works

Lefevre, EdwinReminiscences of a Stock Operator

William asks…

Since you are not allowed to take cash, stocks, bonds or gold to heaven when you die, where do we get the?

startup capital for a business?y

Do they have a banking system so we can borrow money and what about interest rates?

And if you work hard and get ahead, will we have to pay the same tax rates as those who just sit around on clouds waiting for a handout?

financi4 answers:

See the Bachmann booth for Heaven’s grant program . She used to work for the IRS so she learned all the ” codes ” .

Chris asks…

How many mathematics professors invested in stocks and bonds and certificates of deposit?

Most mathematics professors love to invest their hard earned money. A recent survey of 150 math professors revealed that

111 invested in stocks;
98 invested in bonds;
100 invested in certificates of deposit;
80 invested in stocks and bonds;
83 invested in bonds and certificates of deposit;
85 invested in stocks and certificates odeposit;
9 did not invest in any of the three.

financi4 answers:

Use a Venn diagram to help solve this problem. Make 3 circles intersecting and fill in the spaces with numbers that satisfy the info that is given you. For example, you must have a total of 111 in the stocks circle, a total of 80 in the intersection of the stocks and bonds circles, etc. Good luck.

John asks…

I’m 31 and want to start cont’b to my 401k, what do you sugg. stocks, bonds, or money market in this economy?

financi4 answers:

I wish i could help you but when you find out let me know cause this is something that i was just trying to figure out believe it or not. So please forward the answer when you get it!?!?!?! I have money going in there and i dont know what I want to do with it????? I AM SO CONFUSED!

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Your Questions About Advantages And Disadvantages Of Gold Investment

Thomas asks…

Has John Stossel begun channeling Ron Paul on the economy and disasterous bailouts?

“If an athlete injures himself and suffers great pain, we’d recognize the shortsightedness of giving him painkillers to keep him going. The pain might be masked, but at the risk of greater injury later.

That’s a good analogy for the inflationary policies now pursued by Washington. These policies may temporarily “stimulate the economy,” but they also disguise and aggravate the underlying problems. We will all pay a serious price.

Policy makers have thrown caution to the wind. Twelve-digit dollar figures are tossed about casually. The other day, after Treasury Secretary Henry Paulson changed course — yet again — and announced that the Federal Reserve would commit $800 billion more in “new loans and debt purchases,” The New York Times reported, “Fed and Treasury officials made it clear that the sky was the limit.”

The total federal commitment to date is over $7 trillion.

The Fed had given up trying to make it easier for banks to lend to each. Now, the Times reports, it “is directly subsidizing lower mortgage rates … doing so by printing unprecedented amounts of money, which would eventually create inflationary pressures if it were to continue unabated.”

No kidding.

When we hear that the U.S. Treasury is doing this or the Federal Reserve is doing that, we should remember that these agencies are run by mere mortals, and as such, they cannot know how to “fix” something as complex as an economy. But they certainly are capable of wrecking one.

That’s what their inflationary policies will do.

In a free market, prices do more than tell us what we have to pay for things. They are messages emitted by an intricate communications system that inform us of the relative scarcity of resources, labor and consumer goods, and the relative intensity of consumer demand. Thanks to prices, we can tell producers how we rank our preferences, and they in turn can arrange production according to our priorities. Without prices, economic coordination is impossible, which is why attempts at state planning produce, in Ludwig von Mises’s words, “planned chaos.”

We associate inflation with a rising price level, but equally important, relative prices change when new money is created. That garbles the messages. As Mises writes, “The additional quantity of money does not find its way at first into the pockets of all individuals; … [P]rice changes which are the result of inflation start with some commodities and services only. … [T]here is a shift of wealth and income between different social groups.”

The Fed gives money to AIG or Citicorp, but not to Lehman Brothers, or you and me. The new bank reserves also push interest rates below what the market would have set, further distorting production by encouraging investment plans to be made on the basis of artificially low rates.

How can the economy straighten itself out if it is being systematically skewed by government inference with prices?

We are in the mess we’re in precisely because of earlier government interference. Easy mortgage terms and guarantees contrived a housing boom and irresponsible lending that could not be sustained. The consequences have shaken the foundation of the financial industry. But instead of freeing the market and allowing the errors to be corrected, the government is seducing the economy into a whole new set of errors. That will lead to the next bust.

http://townhall.com/columnists/JohnStossel/2008/12/03/government_sets_us_up_for_the_next_bust?page=full

Do you think Stossel and Ron Paul are right?
Slew, oh, I agree. Ron Paul didn’t invent sliced bread, he’s just the one beating his head against the wall in Congress trying to persuade others it actually exists.

financi4 answers:

Ron Paul seems to be the only national politician that understands basic economics.

Why?
At an early age he learned how to turn a product { production of milk } into a profitable family business.
At the same time he must have seen the expense involved in his family business, and learned from his father and uncle how to budget the money they made to pay for the business expenses and at the same time take enough money out of the business to feed their large families, and save some for any emergency expense.

Apparently, the other politicians/bankers of today have never earned their keep in a production type business.

Thomas Jefferson and many of the other founders were farmers that produced products of value.
They insisted on trading their products for other valuable production type products, Silver, Gold, Copper, etc. That stayed about the same in real value, all over the world.

They demanded in the Constitution that nothing but Silver/Gold be used as money, because they very wisely knew that bankers would figure ways to debouch paper currency, to their advantage and the producers disadvantage.
America later became the most prosperious nation on earth following the monetary guidelines set in the Constitution.

We can plainly see that in society today where minimum wage production workers are the working poor.
Ask any young American kid what he wants to be when he grows up and most will respond with super athlete or super entertainer, nobody wants to produce anything because of the current inequality in wages since America went off of the Gold/Silver standard.

Dr. No, Ron Paul is RIGHT about monetary affairs but needs more like minded people in government to help and agree with him to turn the USS America into a profitable ship once again, before it sinks completely from sight.

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