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Private Financing And How It Can Help You And Your Clients!

Private financing is a necessary tool in today’s business world and society. Especially when lending is as tight as it is right now. Even though private financing typically is more expensive than your traditional methods through the bank, it is usually more readily and easily available even to those who may have credit issues, or cannot verify all their income to someone. The flexibility and the speed to which you can obtain the money is what makes private financing a major key in today’s financial world.

With private financing you can quickly fund whatever it is you need the money for. Whether it’s to catch up on some bills, invest in another investment, start a business and so on. It can be made available very quickly and with much less red tape than with a traditional lender or a bank. Most private lenders will want some security to back up their loans and this is typically done through lending against equity you have built up in your home or other real estate you may own. Having equity in your home can be a great financial tool that you can put to work for you or to help dig you out of a hole.

The key and the power to having private funds at your disposal is huge and extremely powerful! Especially when money is needed quickly and you know nobody else can fund you as quickly as you need. Having that connection to private money can definitely save whatever it is you need the money for in a short amount of time. Some private lenders can fund deals in as quickly as 24 hours or less. That is completely unheard of with traditional lending institutions. All the applications and processing times usually takes at least a week or two until you finally get an answer if you have been approved or not? Sometimes a deal or an opportunity just cannot wait that long.

With private financing you have the flexibility and resources to obtain the money you need quick for whatever the reason is. Having a trustworthy, reliable and quick private lender in your network is a must for anyone who is in business for themselves or is an active investor. For the average person looking for a loan it can be a very powerful tool as well if for whatever reason you cannot qualify through a bank or other traditional methods. Don’t think because a bank or other traditional lender turned you down that you cannot get that loan that you may need. There are many other options out there and private lending is definitely one of them.

Committed to your success,

Derek Wilson

What is Vendor Finance and How As a Property Investor Can You Use it to Your Advantage?

When buying a residential property, most purchasers typically do not have sufficient funds to make an outright purchase. While a majority of purchasers will look towards banks and other conventional lending institutions to loan them the necessary funds, they can sometimes find their loan application rejected on several grounds.

This usually happens when the purchaser does not have the minimum required funds to make them eligible for the mortgage loan or if the purchaser has earlier defaulted on a previous loan. In such cases, the purchaser has another option for funding the purchase of his residential property and that is to take a loan from the vendor itself. This is called vendor finance.

How Vendor Financing Works

To help us understand how this transactions works, we will draw an analogy from a land owner or vendor who may want to sell their residential property to a potential purchaser. If the purchaser does not have the capacity to purchase the residential property outright, he or she may agree with the vendor that the purchase price will be “increased” based on a pre-determined set of terms and conditions.

Very often, the contract of sale will state that the title to the property will remain with the vendor and will only pass when full payment of the amount outstanding is paid by the purchaser.

Typically, purchasers can expect to get vendor financing of up to 80 percent of the purchase price. Similar in principle to lay-by transactions where repayments are made, the difference in vendor finance is that the purchaser can actually reside within the property while making the repayments.

Generally, an investor will buy the property at a lesser market value and negotiate with a home buyer who will purchase it at market rates and in accordance to the agreement arrived at with the vendor. The whole idea is that the investor will earn a little extra money from interest and the higher sell price.

These will “wrap” the expenditures of the investor. This can be compared to charges or mortgages as forms of securities used by banks. Discharge of these charges or reconveyance of these mortgages depends on the repayment of any outstanding loans. Just like in these two, the interests of the parties are protected by well laid out legal instruments including caveats and inhibitions and right to sue on covenant.

These will limit the transfer of the title to the property to the purchaser until the rights of the legitimate parties in the contracts have been catered for. In case of the purchaser breaching the contract the vendor financier has the right to commence legal proceedings against the purchaser and the contract will stand annulled. The contract also protects the purchaser by disallowing the vendor to further borrow against the property or to sell it without proper advance intimation to the purchaser.

Advantages of Vendor Finance for Property Investors

It is possible to deduce the following advantages of this scheme to investors from the above discussion and everyday practice as follows:

• It will allow property investors to tap into the large pool of home buyers
• Both the purchaser and buyer gain through the use of this instrument
• Long-term cash flow is guaranteed for the investor
• As the property investor, you do not need to maintain the property as this is the mandate of the purchaser
•It is possible to qualify for government grants as an investor

Personal Finances and How to Manage Them

They say money can’t buy you happiness, but it provides you comfort in life. Worries over financial matters in the family can increase tension. Managing your personal finances can save you and your family from a lot of trouble. Here are areas you have to bear in mind and why you should manage your personal finances:

  • Necessities of the family. You have to save money so that you can buy groceries and other personal necessities of yours and your family, and to be able to tend to other things such as water and electricity bills, maybe school tuition of your kid, school supplies, fixtures, fixture repairs and the like.
  • Unforeseen Casualties. One should be prepared when it comes to floods, accidents, death, failing health and the like. Acquire insurance for these. There are some cases in which these casualties are self-insurable; however most require that you sign an insurance contract.
  • Tax. Taxes are one of the expensive expenditures that occur in the household. When your income rises, you will have a much higher tax payment. The government may give incentives, like tax deduction, that may lessen tax burden.
  • Retirement Planning. How much expenditures would occur when one lives after retirement? Can the household income support it?

With these in mind, you cannot sleep peacefully or think clearly, can you? Here are ways on how to manage your finances:

  • Save. Allot a portion to your income as your savings. A large amount of savings will make you be prepared for any unforeseen events and casualties. Ten dollars a week seems a good start. If you can go any higher than that then it’s good. But don’t deprive yourself and your family of necessities.
  • Budget. Create a simple guide or a list as to what will you be spending and how much money you can afford to spend. Stick to it. Sticking to your budget will lessen your burden from other personal finances you may deal with later. When shopping or simply going to the grocery store, why not write a list or simply remind yourself that you should only max your expenses on a certain amount?
  • Set priorities. Carefully plan your finances. Prioritize what should be needed at first than settling on what you want. Choose: A new bag or paying the electricity bills? Setting priorities first can eliminate consequences that will tear your family apart. Overcome your splurging habit – this will make it easier for you and your family.
  • Don’t “play” with your credit card. Exceeding your card limit and paying it late will cost you an enormous sum. Credit Cards have limits. Control yourself and don’t be impulsive when it comes to buying.
  • Make yourself aware of the present interest rates. When borrowing money from financial institutions or having your jewelry pawned, pay attention to the payment terms and conditions. Pay before or within the deadline date and you will save yourself from any problems that will happen.
  • Deposit your money in the bank. Know your bank – whether they’re trustworthy or the bank is not that reliable. You can choose from a variety of accounts available – savings account, time deposits, etc. Savings accounts have rates that can raise your deposits a little higher.