Nov
26
Buy Property and Pay Off the Mortgages
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Recently I received a message from someone I know via Facebook, a fellow property investor, sourcer and financier. He gave us his opinion via a well written piece, some of which I agreed with, some I didn’t. Below is my response to him which you will enjoy reading and probably learn something useful.
Everyone talks about contrarian investing… “buy property now while the market is in a downturn” yada yada yada. Nobody says “pay off the mortgages”. It’s always seemed to me that people just buy and buy and create more debt, never paying back that debt for “tax reasons”. Uhm… check out Lord Sugar’s debt on his multi-million property portfolio. I don’t see any banks chasing HIM for repayment of their loans!
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Hi Mark,
Nicely written piece, well done, but you have to admit there’s a certain self satisfaction in knowing that once all the mortgages are paid off that you have oodles of cash flowing in to your bank account and the banks are no longer at the beck and call of the banks, at the mercy of the economic conditions prevailing at any point in time etc.
If the property falls empty, so what. As long as you’ve got money to cover the property taxes and utility running costs, and this can be as low as £2,000 for the YEAR, then you’re not going to end up bankrupt servicing an empty property with a huge mortgage on it.
What investors on the outside don’t is that investors on the inside are in fact doing is leveraging up in the downturn, buying loads of property that cashflow now in order to “park” the property, then they intend to SELL half their portfolio, pay the taxes and use the profits to PAY OFF their remaining mortgages.
Why does nobody say this anymore? The likes of Andy Shaw would shout “buy property and wait” and “never sell property”, but look at him now. His business model, as with so many business models I see, are fundametally flawed. They only work in upwards markets and rely on increasing values in order to remortgage, increase the debt on the property and then use the cash to live, but on the premise that this cash is debt and therefore not taxable. WRONG! If the money raised from the refinance is not used for the purpose of investing in more property or for repairing and renewing existing stock, then the interest element on that portion of debt is NOT tax deductible!
My goal is to have all my properties totally debt free within the next 10 years, if not sooner. That way the banks and everybody else can do what they like, my income will be bomb-proof from the vagaries of the economy because with all that lovely cash sitting in my bank account, I will be able to weather most storms!
My advice?
Leverage up, buy as many properties as you can handle yourself or handle the agents to handle, and then pay off the mortgages on them as soon as possible. Then live a less stress life knowing it will take a major calamity or personal screw up for you to lose the lot.
Sep
25
The majority of the Americans has just under $10,000 dollars of credit card debt. We are hungry for things we cannot manage to pay for and have a sense of entitlement despite the fact that the money isnt there. Thus we make use of our credit cards to purchase things with money we dont have. But there are times when credit cards are good for you. With credit card debt, it is exactly about what kind of interest rate you hot on you credit cards. How much is your credit card debt costing you is the most important concern. Whenever it isnt costing you much money then you could possibly be in ok shape. Yes, sometimes when credit card companies are excellent for you.
When you have credit cards and recognize what your rate is you happen to be on a much more desirable route to debt relief then if you really don’t know what your money is charging you. In fact I have about $7,000 in credit card debt. I often switch jobs and had to make use of them for my needs. On the other hand as opposed to most folks in credit card debt, I’m entirely mindful of how much that credit card debt is charging me. The answerZero.
I have a balance on two cards. Either of the credit cards are at 0%. Now please do not get this twisted up. These card are not going to be at zero % interest permanently. This is part of exactly how the credit card companies make money. What the banking companies are doing is providing me a 0% interest rate for the first year on the card. This is tempting. There after year the cards will jump up to a much increased rate. There are two hopes of the banks with an offer such as this. Reason one is that the credit card companies are hoping that I will miss a payment or come up with one late. When you skip a credit card payment or come up with 1 late, you can be sure that your rate will increase. They are wishing that you will mess this up. Most do. One thing I recognized is that while the credit card companies make the preliminary rates very obvious. They make it very, very hard for you to find out when the actual payment is scheduled. This is a underhanded but efficient step. Most individuals obtain the notice when it’s too late.
The next part is that they presume that you are going to forget when your introductory rate will end. So that once you hit the end of that peroiod of time, your rate jumps up drastically. Yet here’s the great news. When you’re on the ball and recognize when the rate is going to jump up, you can be prepared for it. I constantly look on the mail box for a new 0% APR offer so that I can do a balance transfer before I have to pay the higher rate. This is the attractiveness of competition. Companies want you to switch to their card in the hopes that you will mess up. Sure, other credit card offers are an outstanding thing for you. The banks can tell if you have been timely on your payments and target you with their much better offer.
Something I would look for on the new credit card offers is the APR on balance transfers. Some actually have 0% APR on balance transfers. This is excellent as it won’t cost you anything to move your money. Nevertheless this is not at all times the option. When a company gives a 3% apr on balance transfers, however you rate is about to go to 15%, TAKE the 3%. Its still better than getting hammered with the 15% if you stayed around. Make use of the credit card companies to acquire debt relief. Find out how to eliminate credit card debt with debt relief programs like virginia debt relief and michigan debt relief as they will help free you from your credit card debts.
Aug
14
Need More Information About Unsecured Personal Loans?
Sometimes when people do not have enough money to buy something that they wish to have, they apply for unsecured personal loans. This will provide enough money to make the purchase. Of course, the loan will have to be paid back, and with interest as well.
You can use loans to pay for multiple things. They can help you to get caught up on bills, to purchase clothes, books for school, a computer, or other electronics. Sometimes people take loans to pay for holidays such as Christmas or even for birthdays. It can be difficult to come up with a large some of money on short notice.
You can take a secured loan or an unsecured loan. A secured loan will help you to get a lower interest rate but you will have to put something up for collateral such as a car, boat, or motorcycle. So if you take this type of loan be sure that you pay it back in a timely manner otherwise you will risk losing your collateral. Not to mention you can hurt your credit if you do not make your payments on time. An unsecured loan does not require collateral but it will come with a higher interest rate.
It is good to check around from bank to bank and research the different loan interest rates that are offered. Some banks will offered lower rates than others and if you can get a lower interest rate that will save you a lot of money in the long run.
Do not apply for a whole bunch of loans and THEN make your decision. Base your decision off of the initial information that you have gathered. Each time that you apply for a loan your credit is pulled. That can effect your overall credit score. It is better to apply for just one loan than five different loans especially if the original plan is for just one loan.
Do not just take out loans here and there for no reason. This only risks you getting into debt and not being able to repay your loans. It is best to only take a loan in an emergency or situations where you have no other choice. A few loans here and there is not bad but a whole bunch of loans will only lead you into the wrong financial path.
Personal loans unsecured are good to take when you really need to money but do not have the cash to pay for it. Be sure to check around for the best rate before submitting an application. You want to be sure you are getting the est rate possible for you so you can save as much money as possible.
In order to really get the answers to your question, I highly recommend you go straight to the net’s leading site about this issue here. Go there now!: <a href=”http://www.loansforbadcreditonline.com/loans-by-web.html”>Loans By Web</a>, <a href=”http://www.loansforbadcreditonline.com/online-cash-loans.html”>Online Cash Loans</a> and <a href=”http://www.loansforbadcreditonline.com/”>loans for people with bad credit</a>
Jul
5
What is a charge-off and how does it affect your credit?
The rules of business and accounting specifically require that non preforming debt be charged off. This is directed at people who do not pay their bills and if the lender sees that there is little hope of collecting, well, these accounts are sold or forgiven or sent away to collection.
A charge off does not mean you do not owe the money any longer, rather it just goes into another form of collection . The term charge off is an internal indicator of what happens to the account . On the outside looking in , this is devastating for your credit report and you should promise the lender everything you can to prevent this. Do not to let this happen. Why? Because it will take you 7 years to remove it from your credit file.
Once an account is in this category you lose your power to negotiate with the lender. Sure, you can try to cut a deal with the collection agency or the outside lawyers, but the credit report remark and status will not be changed. If you want to know how to repair bad credit, this is where you start because every question I get like, “tell me how to increase my credit score” starts here.
Do not let the lender charge off your account.
When the lender decides they are finished trying to collect from you, you are sunk . Now, you are going to be dealing with people who buy bad debt . Outside collectors work on commission and these people are aggressive .
They are also very restricted as to what they are able to accomplish as far as your work in credit report repair because the account is already affected by the banks decision to charge it off.
How do you prevent this?
If you instruct your bank or lender not to contact you except through mail , then you are cutting off communication with your credit card company. This is good and it is also bad. Good because you don’t have to field their nightly calls , but bad because you have no idea when they are considering your account for charge off.
You have to call them starting at 90 days.
At this point they have no idea you will be a charge off, but when the account is delinquent 120 days, they start to get itchy. This is when you make them an offer for creditcard forgiveness. You do this right before they charge off the account as not able to collect.
Jun
17
Our country currently is attempting to get over the significant backlashes created by this nasty credit crunch. Many people have found themselves with out a job; quite a few have found themselves without even a property to reside in. To add insult to injury many folks are up to their neck in consumer debt and this is starting to become a bigger and bigger difficulty by the day. Luckily there are several credit card debt relief methods to people who find themselves fighting and must discover a means out at the earliest opportunity.
I would prefer to quickly go over some of these available opportunities to help indebted consumers really feel more motivated on what they might do to help repair this awful financial predicament. There are a number of readily available approaches to remove consumer credit card debt, having said that a number of people will likely be restricted in what they can do according to their present predicament.
Among the first solutions lots of people look at is to secure a debt consolidation loan; this is something I entirely don’t agree with for a few key reasons. The very first is that for many people this option won’t even be in the cards. Since with the present credit crunch only a few banks will offer loans unless of course they are guaranteed by something valuable, usually a house. Even then it might still be genuinely hard to get a loan. Yet if you can get a loan against your house I continue to say do not undertake it. The reason being is that in case you failure to pay on this mortgage you will lose your property, and lots of individuals get stuck right back in unsecured debt inside of 5 years and then they must be concerned now about two home loans before paying down their new unsecured credit card debt; pressing many people into personal bankruptcy or foreclosures.
A lot of people attempt to find whether they can swing a credit counseling program, then again once they understand the payments happen to be really excessive and in some instances more than whatever they are paying out towards monthly minimums they will rapidly look in other places. Additionally in a consumer credit counseling program in case you neglect just one single payment you can get kicked off and lose some great benefits of a minimal rate of interest and one payment per month. The unfortunate truth is that many folks are way too far indebted and do not make more than enough cash to control this program for what could be up to 5 years.
I personally believe at this time provided the present fiscal situations possibly the greatest credit card debt relief option offered is always to go the path of debt settlement companies. This kind of a program is one suited to truly help men and women get themselves away from an extremely awful credit card debt circumstance rapidly. Most of the time men and women will find themselves to be debt free in only a matter of a couple of years, plus they will save a lot of money along the way. Like I stated above a lot of people merely do not have the resources to really swing any other products.
Whatever you do you have to get an easy method out of debt if you are caught in it. Absolutely nothing is worse economically then getting caught and overwhelmed with volumes of unsecured credit card debt.