Finance Blogs | Dentrodelcoctel.info

Lease Option Technique

Why do people sell properties using lease options? There is a reason that some of the most successful real estate investors use the lease option technique.

No Down Payment: I know what you’re thinking, “I would never offer such a thing!” You don’t have to. As a real estate investor rich in tools to find motivated sellers, you could get your next home using this lease option technique with no money down. You don’t have to tell the seller that an option fee may be customary!

Principle Pay Down: If an option is accompanied by a lease the possibilities are greater for increased equity build up. By applying a portion of the monthly lease payment amount to the purchase price of the property one has the opportunity to widen the gap between the market value and the loan amount. Depending on whether the monthly rent amount is inline with market rates…this is free money! A 30-year amortized, $100,000 loan at 7% begins at approximately $82 per month of principle payments. A $100 per month rent credit beats that, dollar for dollar, every month for almost 3 years!

No New Loan: Possibly the most noteworthy advantage of using a lease option in the residential market is that when the optionee begins the purchase process no “new loan” is required. The prerequisite for this may be working with the right and informed mortgage broker but is usually easily accomplished through a refinance. This can mean no additional out-of-pocket money for closing.

Appreciation: One of the typical advantages of controlling a property using an option is that the buyer retains the right to capture some, if not all, appreciation during the term. The longer the term, the greater the appreciation can be. In the single-family arena, where terms are usually 12-24 months, even moderate amounts of property appreciation can add up. For the buyer, especially, every percentage point of appreciation counts. And, if you’re nice enough to offer (or get) a 24-month term in a market increasing at 3% annually, $6,000 on a $100,000 property is significant.

It is better to use your own strategy against you, if you are in the market for new home.

Dancing With A Gorilla for Better Trades

This is reported to be an actual radio conversation of a US naval ship with Canadian authorities off the coast of Newfoundland in October 1995. Radio conversation released by the chief of naval operations, 10-10-95.

(Please Note: This story is an example of why it is important to listen and blend with the market. It is not meant as a political statement of any kind.)

CANADIANS: Please divert your course 15 degrees to the south to avoid a collision.

AMERICANS: Negative, Recommend you divert your course 15 degrees to the north to avoid a collision.

CANADIANS: Negative Sir. You will have to divert your course 15 degrees to the south to avoid a collision.

AMERICANS: This is the captain of a US Navy ship. I say again, divert YOUR course.

CANADIANS: No Sir, I say again, please you divert YOUR course.

AMERICANS: This is the Aircraft Carrier US LINCOLN, the second largest ship in the United States Atlantic Fleet. We are accompanied by three Destroyers, three Cruisers and numerous support vessels. I DEMAND that you change your course 15 degrees north. I say again, that’s one-five degrees north, or counter-measures will be undertaken to ensure the safety of this ship.

CANADIANS: Uh, Captain, This is a lighthouse. Your call.

The market, like a lighthouse, will send signals and it is incumbent on us to listen and to blend with the market. In a collision, the lighthouse (market) always wins.

Markets Maxims

One of my maxims says… “The stock will never listen to you, but, it will speak to you if you learn to listen”. Another one says, ” If you dance with a gorilla, don’t try to lead”. Folks, you must learn to listen (read charts and interpret news) and you must bend and blend with the market to avoid being crushed by it. This is not natural to our independent and proud natures. While we may be on the verge of a market upswing, every market upswing for 3 years has been met by a lower lows. Each upswing was seized upon by hopeful enthusiasm and dashed with the next roll over.

This has been a wonderful market for traders who trade both ways. It has been frustrating and devastating to one directional traders hoping for the return of a bull market. Trading is more than jumping in and holding on. It is dynamic and fluid and bidirectional. You must be trained in dynamic and tactical trading to flow with the market. You can and you must learn to do this. The following thought may help put this into perspective. It is paraphrased, as I cannot recall the author.

“The learners will inherit the earth while the learned will find themselves perfectly prepared and suited for a reality that no longer exists”.

Workshop Update

Boy what a week, we have just finished two great days of filming new materials for you in Phoenix and a “Two Days of Tradin’” boot camp in Denver. I was exhausted after the events but very pleased with the results. Both events were a success and the students loved the classes.

“The 1st day was a new course called Power Spreads. It will open you eyes very wide to understanding the power of using spreads to minimize risk and neutralize volatility. We also learned a great deal about option pricing and how to read volatility to select the most appropriate strategies. We used the X-Factor options graphing tool to historically trade QLGC and IBM and we saw price manipulation and how the options you may think is a good choice can be a real disappointment and why. I and sure you will enjoy the class when it is ready for purchase.

The second day we taped the new Market ‘Mind’ Fields. The class response was powerful. Some said it was like a mirror being held up to show them things they did not want to see but desperately needed to deal with. Almost all of us have land mines planted ion our minds. Market ‘Mind’ Fields will enlighten you to the reasons why trading is such a difficult challenge for folks and how to gain the mental disciple needed to survive and then thrive in the markets.

Friday and Saturday I was in Denver with a great bunch (mostly locals and mostly women) of students for my “Two Days of Tradin’” boot camp. What a fun time. I worked them pretty hard and they loved it. There were several who were very new and a little nervous but as the first day wore on they got into the swing of Bracket Trading™ and did very well. We traded several stocks on Friday just learning to go long and short at the right times. Back trading is a fantastic way to learn and train your train skills.

Saturday we added options to the mix by using the X Factor Options Graph to back trade several companies. We tracked several option strategies over run ups and sell offs to see which positions performed the best. Not all bullish strategies performed the same over the run ups and downs. It was very instructive to see the effect that different expiration months had on profitability. The students all realized that option trading is a lot more complicated than most people think. Picking the right strike, right month and whether to buy or sell premium can be critical. It is very possible to have two separate bullish option strategies at the same time and the one makes money while the other one loses.

New classes are being added to the calendar for March through May so check out which times and locations may fit your plans. You need to be in the trading simulator workshops. Two Days of Tradin’, will hone your trading skills like nothing else can.

Please join our Web shops and please consider coming to a Two Day Trading camp with me. I will work you … but you will come out a better trader.

Ryan with Better Trades

Americans Without Health Insurance Have New, Affordable Options

More and more Americans are going without health insurance because they can’t afford it. But there is a solution. New health insurance portfolios are available that are specially designed to help meet the national need for affordable coverage for individuals and employees of small businesses.

This is good news for many Americans who often cannot afford to purchase health insurance for themselves or whose employers do not offer insurance. This includes individuals who are self-employed; those who are employed by a small business or who run a small business; and individuals in other circumstances that require them to buy their own health insurance.

“More than 45 million Americans fall into one of these categories. Many of these people are uninsured or are struggling to afford the traditional plans that insurance companies typically offer,” says Melissa Crawford, senior vice president, Physicians Mutual.

The company bundles together existing and new products to provide an Integrated Health Portfolio (IHP) with a variety of choices and price points.

The IHP offers a choice of benefits, including coverage for:

• Doctor’s office visits

• Preventive care

• Hospital stays

• Surgeries

• Catastrophic major medical

• Outpatient treatment.

“This portfolio of products is designed for middle-income Americans for whom the only choice has been major medical plans with high deductibles-$5,000, for example. That’s too much for them to absorb out of pocket,” Crawford says. “They’re looking for a plan that pays a portion of everyday health care costs such as doctor’s visits, childhood immunizations, and screenings like mammograms and prostate cancer tests. They also need prescription drug and vision discounts.

“We have options with no deductible to meet, so policyowners receive benefits the first time they have a covered medical expense,” Crawford says. “There are also no lifetime maximums on this type of policy.”

Crawford points out that individuals and small-business owners usually do not have benefits managers who can talk them through their insurance options. The health portfolio offers a needs assessment to help customers determine which insurance products are right for them.

Physicians Mutual Insurance Company and Physicians Life Insurance Company, a member of the Physicians Mutual family, provide a full portfolio of health and life insurance products, as well as financial products. Both companies consistently receive high grades from independent insurance analysts.

Getting the Best Return on Investment for your Fundraiser

Return On Investment (ROI) is a fundamental business concept. Its also something that every fundraiser needs to take into consideration.

A business investment consists of working capital, physical assets, and peoples time.

ROI is the net gain that results from a business spending money and utilizing physical assets, along with the expenditure of employees’ time, in an effort to produce tangible profits.

So, the investment in a fundraiser consists of: any up-front expenditures that are required the costs associated with the assets that are utilized the value of people’s time spent fundraising

Some key points about ROI in fundraising:

1- Analyze your up-front expenditures vs. your net gain
2- Lowering costs boosts your ROI, but maybe not your net
3- Always consider the hourly value of each volunteers time

Put an ROI value on upfront expenditures
The most important point is to analyze all of your up-front spending versus the net gain from each expenditure. Obviously, don’t spend money if nothing is actually gained.

One example would be evaluating advertising expenses for a capital campaign. Before you commit to it, run a small series of test ads to determine the response rate.

If you don’t get the desired response, either revise your ad campaign or consider not spending any more money on advertising.

Look for areas where the returns are greatly magnified for every dollar spent. This generally includes effective publicity, quality communication, targeted prospect lists, and timely reminder campaigns.

Put an ROI value on cost reduction vs. net profits
Lowering costs boosts your ROI measurement, but your net can be impacted by the lack of investment. If there is an area where money spent in the past produced excellent results, then be sure that this year’s plan provides additional investment capital for that effort.

A good example involves possibly cutting the funding for your capital campaign mailing. Sure, you can cut your expenses by not mailing to anyone that didn’t respond last year.

However, the law of large numbers will catch up to you. Less people contacted means less money contributed.

Remember, it doesn’t always take money to make money, but not spending money where it is really needed can seriously impact your results.

Put an ROI value on your fundraising volunteers time Another important ROI point to remember is the value of each volunteer’s time. Each volunteer-hour worked to raise money for your fundraiser should at least be equivalent to minimum wage. Otherwise, your group is wasting their time by not working smart.

An example would be spending a total of 1,000 volunteer hours coordinating an auction event that only raised $5,000. Chances are that many groups would be happy with the $5,000 net, but the ROI on everyone’s time was marginal.

Put an ROI value on your merchant partners
In this instance, you want to maximize the value of everyones time by giving them specific tasks and full instructions. Don’t take a scattershot approach by going all the area merchants and asking for donations of merchandise.

Instead, develop rapport with those merchants by providing value for them all year long before you ask them for a large donation.

Ways to improve your fundraising ROI
Focus your efforts where you’ll get positive responses and avoid wasting your time on unproductive endeavors.

Each person who helps out in a fundraiser is offering their time in exchange for something that benefits everyone.

Give them specific assignments that focus on maximum results. Don’t waste people’s time or you will discourage future participation.

Why your fundraising ROI is important
Watch your ROI. It’s a good indicator of the health of your non-profit organization. If the number is too low, your group will be constantly recruiting people to replace those who aren’t interested anymore.

Your donors and volunteers won’t return because their time wasn’t valued, they saw their money being wasted, and they also saw penny-pinching where open purse strings would have been a better solution.

Design your organization to maximize your fundraising ROI and you’ll position your group for success for many years to come.