Beginner Investing » Investing

Just Starting in Real Estate Investing

joanne — Tue, 05 Jul 2011 17:49:23 +0000

Just because you may have bought a home it doesn’t mean you’re an experience real estate investor. When someone purchases a home they worry about how their couch will fit in the odd room or how close it is to their favorite park. When you are investing in real estate you need to worry about cash flow, appreciation, and liquidity. Not nearly as romantic, but hopefully profitable.

Why Invest in Real Estate?

Real estate is a great alternative to the stock market and cash investments. The market is not necessarily tied with equity or commodities and you have a lot more influence on the profitability. Most people think real estate investing means being a land lord, but there are other alternatives also. Some investors purchase land and harvest trees off the land until the prices appreciates to their target. Others buy homes where there is enough land for two houses, build another house, and then sell them both off. You can also buy commercial property and lease to businesses with a share of their sales as part of the income stream. Be creative, most investments don’t give you the option.

Important Concerns in Real Estate

The number one killer of the real estate investor is cash flow. Often when you purchase your property you rent won’t cover the mortgage and expenses. The investments are called cash flow negative, or they cost you money every month. However, you’re banking that the property will be worth more in the future to cover the costs plus the tenant is paying the majority of the mortgage for you. Make sure you can stomach the extra monthly payments plus all the hidden costs that come with real estate like unexpected repairs and periods without a tenant.

The next concern is liquidity. If you need money now and you own stocks you simply sell some stocks, get your money and you’re on your way. However, with property investments it can take months or even years if the market is bad to get your equity out of the property. If your credit is good and you’re not too leveraged than you should be able to get home loans to cover a real emergency.

The last concern for this article is tenant screening. This is the single most important step! Do not take the first tenant that walks through the door. Do all of your due diligences or you will get burned. Bad tenants will do damage, are hard to evict, and will suck the passion out of real estate investing which is needed to find that big win.

So You’ve Decided To Become A Real Estate Investor

Sun, 14 Nov 2010 01:54:53 +0000

So you’ve decided to start investing and real estate is the way you want to go. You have realized however that there are a million types of real estate investments and you have no clue where to begin. The whole process seems overwhelming but a few tips can help to sort things out.

You have already done one of the hardest things in real estate investing and that is to make a decision that you are going to do it. So many talk of starting and so little actually take action, so pat yourself on the back for that at least.

The first step to getting started is to figure out how you want to make your money. Choosing which types of property investments is much easier when you begin with the end in mind. The three main ways to make money are Cash flow, appreciation, and profits from sales. If you like cash flow you are most likely going to buy rental properties. If you like to make the money when you sell then your best bet is probably going to be fixer uppers. If you love the idea of appreciation then long term buy and hold is the way to go.

Once you have decided how you want to make your money, start scouring the investment properties for sale in your local newspaper and online. Another great place to find deals and network is your local real estate investment club. Start getting a feel for what is out there.

The next step is to choose your area of expertise. You don’t want to spread yourself too thin so choose one or two areas that you will become very familiar with in which you would like to do your deals. Don’t forget to put your name out there. Put up signs, get to know your local real estate agents and start making some initial offers.

Have your agent run comps in the neighborhood to give you and idea of what homes in the area are going for and begin to make offers on homes you see potential in. This is where practice and a little knowledge come into play. Hopefully, you will have learned from your investment group and your local agents enough to give you the savvy you need. Start small in the beginning and allow yourself to make some mistakes, everyone does, this is how you learn. Don’t be afraid, go out there and make some offers and begin building your real estate empire.

Profiting From A Copper ETF

Billy — Fri, 22 Oct 2010 04:47:51 +0000

The copper ETF is an investment option that has great potential for all who are interested and have the money to put in to it. Copper is used in almost all electrical appliances, wiring of buildings as well as for piping with several other uses. There is therefore a huge demand for copper especially as the world recovers from the recent recession and anyone investing in copper is likely to profit greatly. As long as you do your research and make an effort to invest properly, you should come out ahead with copper (or other metal) investing.

There are economies that are consuming huge amounts of copper with an example of China which has a population of over one billion and the amount of copper required for their industries and construction needs. The United States and Canada is also a big market for copper and its products and this makes investing in copper now a prudent move. You could also consider the many infrastructure projects all over the world that require copper as well as the electrical and electronics products that are produced using copper. This great demand for copper means a rise in it’s price and thus higher profits for investors.

Before committing your money in copper ETF it is necessary to do some research and make sure you know what you are getting into with this commodity type of investment. The internet is a good place to begin research on the companies involved in copper investing. You should also talk to investment professionals who can give you advice on how to go about it. Another source of information is actually the relatives and friends who are already investing in copper ETF. They will have first hand experience and their advice can help you avoid mistakes that are made by first time investors. But of course take their advice with a grain of salt.

Professionals will also help you with tax advantages available for those investing in copper. This is especially important as you could easily watch a huge amount of your profit go to the government as tax if you do not structure your investment well. It is also important to know that there is no guaranteed investment and each will be a risk. The key therefore is to identify investments that pose a lower risk but have potential for great financial profitability. Copper ETF is one such investment that you should consider.

Technical Vs Fundametal Data

joanne — Mon, 18 Oct 2010 13:00:30 +0000

If you ask someone who buys and sells stocks about rules to pick stocks to buy, he probably will give you one of two different approaches: The technical analysis one, based on the study of the past moves of the price of a given stock, and the fundamentalist approach, structured on the analysis of the real economic value of the corporation. As usual, none of those two mentioned approaches is enough, but probably the technical analysis is the best one.

Typically, if something wrong or good is happening to a corporation, that will be reflected in the price of its stock (ex. the boom in Apple’s stock because of all its sales). Therefore, if the price is falling, probably you will see that the profits of the stock are shrinking. Moreover, it is very hard for someone that is not an expert to adopt the fundamentalist methodology: it is difficult to apprehend the real value of a corporation, in order to be able to divide that value by the number of shares and see if the value is higher than the price of the share.

The technical analyst just looks to the past moves of the stock in order to guess future moves. For that end, he uses trends lines, support and resistance lines, median lines, some technical indicators (ex. RSI, stochastic, etc.) and some chart patterns. He traces lines of support between the lower prices (using charts software, like Metastock), in order to find a value where in the past the price of the stock stopped falling and started going up. If a stock just fell to a price that is on a support line, that can be a good moment to buy the stock. On the other hand, if the price has been going up and hits a value that matches a resistance line (price at which, in the past, the selling pressure made the price go down), it will be time to sell. Accordingly, the first technical rule is: buy stocks on its support lines and sell them when they hit a resistance line.

If the stock is in a bullish trend, you probably will see it hit the resistance line, go down a little, go up again against the resistance line and, after some hesitation, to break it. On that moment, the past resistance line is converted on a support line. Even if the stock, after going up, starts coming down, it probably will not go under the value of the former resistance line, present support line. If that happens, we are in front of a false break-up of the resistance line. Usually, you have to wait at least 48 hours to be sure that the resistance line was broken. The fact that the movement up was based on a very high volume of shares bought/sold is a good signal. Another rule is to pick the bullish stocks, the ones that are breaking resistance lines, and avoid the ones (bearish stocks) that are breaking support lines. Do not think that these are cheap stocks, good to buy.

In the stock market, a stock is always cheap when its price is going up and expensive when it is going down. In the first case, you will make a profit (so it was cheap); in the second, you will loose money, therefore, the stock was expensive. Similar rules apply to chart patterns (ex. heads and shoulders; double bottom; flags and pennants; triangles, etc.). You have to identify the pattern (search for them and never buy a stock before studying the basic ones) and respect its rules.

Tips For Investing In The Best Stocks

Fri, 08 Oct 2010 00:15:49 +0000

The key for a person to make a killing in the stock market is for them to know what is the best method to identify the best stocks for them to invest in. The stock market is a very volatile place as we all know and choosing the best stocks for us to invest in is quite a tough job for each of us.

Everyone would agree that investing in the stock market is not child’s play. For a person to make a consistent as well as a sizable profit in the market would requires a person to have years of stock picking experience to be able to feel right about their stock selections.

The reasons why some people are making bad choices of choosing a stock, is because of bad timing and of-course bad luck. But, it would take them some consistently messed up thinking an an approach that would lead into picking a stock broker who recommends stocks which end up suffering bankruptcy. The reason for these stock brokers in losing their money is mostly because of the lack of stock research when they are investing in a company’s stock. Another reason for this is that their investing is based on a totally baseless speculation.

Even after the years of worldwide economics research as well as thousands of books that are being written as to how to they could identify the best stocks for them to invest in, we are none the wiser and there appears to be few people who have the perfect formula to be able to select the best stocks for a person to invest in.

The reason for this is that to perform a good job in stock picking, you need to be willing to think outside of the box. You need to be able to determine those stocks which have opportunities to rise in value before anyone else does. This means doing some homework and being willing to take some risks. The risks are not unfounded gambling but are based on true research into what makes a winning stock and then finding it.

Investing 101: Learn the Basics For Gold

Wed, 06 Oct 2010 19:22:54 +0000

Many people are interested in gold investing, but they don’t know where to start. If you find yourself to be one of these people, your in luck. Because the following paragraphs, we will share a few basic tips that will help you get started in the right direction. Yes, it will take some time, but the end results will be well worth the effort.

Gold Investing: Getting Started
One of the first things that you will notice in the world of gold, is the many different options of investment options that there are. They range form mining stocks, to gold ETF, and assets. If you are a first time investor, then we highly recommend that you start out with investing in hard assets. There are many reasons why, so we will explain further.

For starters, hard assets such as gold coins, and gold bars are tangible assets that you can feel, and touch. Meaning you would have full control over your investment, without having to rely on anyone else. Also, these investments are one of the safest optoins as gold is held in high regard by people around the world, and it has yet to lose its value or popularity.

Gold Investing: More Tips To Consider
Also, another great aspect to hard assets, is the fact you can find them at many different locations. A few places to consider would be flea markets, and antique shops. Another great place to look would be pawn shops. We highly recommend that you check your local jewelry store as well. And last but not least, shop online for assets, where you can often get great prices.

Your life may be changed in such a great way, that you will want to share with other your knowledge regarding gold. This may open up a new and exciting career option for you, and your family. To start out, you will need to find a cosigner, and consider getting a business partner as well. Once the cosigner is in place, you will be well on your way to the start of a new and exciting career option.

Gold Investing: Conclusion
You now have the basis needed for getting started in a world of gold investing. You will love it, and enjoy the many benefits.

Learn to Invest, Not to Gamble

Billy — Sun, 03 Oct 2010 18:01:58 +0000

If you want to make money investing, learn how to tell the difference between good investments and bad investments. You have to increase your financial intelligence and avoid risk. Investing is not risky itself, but being uneducated is. If you don’t know what you’re doing and you randomly throw money at the stock market or real estate, you are essentially gambling. Buying stocks low and selling high without analyzing the market and just praying are horrible ways to make money. If you’re going to do that, you may as well pay a lottery ticket. At least that way, you have a bigger payout when you win.

Do you know what investment is? What makes an investment good? First, you have to clearly define investment. It means different things for different people. Investing is when you use a resource in the attempt to get a return over time. You use your time or money right now in order to get more later, is the basic story. In order to tell the difference, research as much as you can into the art of investing. Keep your emotions under control, because logic will help you make money whereas using fear and panic will not.

Do not simply follow the actions of other investors, because oftentimes by the time you hear of a good investment or a hot tip, the good deal is already gone. Once everyone starts to make money doing something, it no longer becomes useful. Like leading the lambs to the slaughter, your money will simply disappear if you follow like a sheep to other’s investment advice. Only you can tell the market trends and find out for yourself what you need to find.

Some examples of questions to ask yourself are “How much experience do the runners of the company have? How long has the company been in business? Can their product provide a service to people? What is the company’s mission plan? Does the company care more about their shareholders or about pleasing the customers?” These are only a few examples but the more you can find out about a company, the more likely it is to stand the test of time. If the company focuses only on money or is run by incompetant and inexperienced people, don’t invest in the company. It will be a dud. It may be worth lots of money now but the prices will fall very shortly once the company catches up. If you focus too hard on the dollars, you may not be able to see what your brain and logic is telling you. Don’t be a gambler, be an intelligence investor. Increase your financial intelligence, learn to invest, and it will pay off for you in spades.

Growth Investing Tactics and Strategies

Billy — Fri, 01 Oct 2010 21:08:53 +0000

I think it is assumed that all investors are looking for growth. But when we talk about growth investing in particular, we are talking about an aggressive growth stock investment strategy that involves a little more risk but better than average potential returns.

Growth Investing Defined

When we talk about growth, we are not just talking about any positive % return. The reason why 2-3% return doesn’t work, even though it is a positive number and technically your money is growing, is because of inflation. If there is 2-3% inflation every year, than you aren’t making much money. So even for nominal growth in your investment portfolio, you need more than a 4% growth to make it ‘grow’.

Growth is often paired agains value investing on the other side. This investing style looks for fundamentally good companies with good business models and financials. It looks for growth, but in solid companies that are undervalued by the market.

Small Cap Stocks

One of the best ways to get good growth is investing in small cap stocks. Small caps have room to grow unlike large cap companies like GE or Wal-mart. Think of small caps as getting in on the ground floor of an investment opportunity.

Small cap stocks are companies that have a market cap of between $300 million and $2 billion. The market cap is calculated by taking the number of outstanding shares and the share price and multiplying them together.

Small Cap Funds

If you don’t want to go out and look for these individual stocks, you can invest in small cap funds that use this strategy. If you go the ETF route like investing in the iShares Russell 2000 index fund ETF, it will be relatively cheap compared to a mutual fund and you won’t have to do the stock picking yourself.

If you want to go even further, there are mutual funds and ETFs that have an explicitly aggressive growth investment strategy. These funds will be very volatile so you need to be willing to stay for the long haul to smooth out it’s dips.

Emerging Markets

If you want to go even further than that, you can invest in small caps in the emerging markets. This sector of the global economy is growing at a faster rate than the developing world’s economies. That makes it a tide that is raising all ships. Likewise, small caps will have more potential for faster and more growth than large cap stocks in this sector.

How to Buy Certified Gold Coins

Wed, 29 Sep 2010 14:31:03 +0000

The rich golden shimmer of these coins makes eyes glimmer and imaginations soar. The visions of sitting in the corner of a vault sifting sparkling coins of gold through the fingers like grains of sand at the beach make hearts beat faster and creates feelings of wealth. This is the reason average people invest in these precious metals. Since rare coins, including gold coins, are the most counterfeited objects in the world, certified gold coins make a safe investment for people desiring these precious items. Smart buyers protect themselves by purchasing only quality products from experienced, honest investment companies.

The value of coins is determined by the condition; coins the same age and size will have different values based on eye appeal, condition of the rim, scratches, luster, tone and level of detail. The American Numismatic Association has established a numeric system of rating points numbered from 1 to 70. A 70 rating is perfect. Two prominent companies qualified to assess these are Numismatic Guaranty Corporation and Professional Coin Grading Services. These companies guarantee the authenticity of the coin and place each evaluated coin in a sonically sealed, hard plastic tamper-proof holder with the grading information. This is the only way to purchase coins and know their true worth.

People in all lines of work living anywhere are investing in gold. For the last 6000 years aristocrats and countries have kept part of their wealth in this valued commodity to protect themselves in times of economic distress. With the current problems facing nations today, citizens are turning to a safe known commodity. Investing gold coins is a hedge against financial uncertainty in the near future, a way to make money and to diversify an investment portfolio with the hopes of potential profits in the future.

Many people buy gold coins online. Choosing an experienced gold coin dealer to guide this exciting purchase requires caution and research. The dealer should offer education to novice investors, a variety of products in different price ranges and offer to buy back the certified gold coins in the future when the investor is ready to sell. Quality businesses have been in existence for a long time, are licensed and insured in the area they are doing business and have a rating with the Better Business Bureau.

Investing in certified gold coins is a wonderful way to protect oneself in times of financial or economic uncertainty. Using a qualified, certified gold coin dealer protects this investment, by gold online from the Christian based precious metal dealer: gold coins wholesale.

Forex Option Trading: A Different Way to Invest

Tue, 28 Sep 2010 14:47:57 +0000

Forex trading can be confusing and overwhelming for the beginner. Even after he is comfortable with the basics of Forex, there is still a lot to learn. There are many different kinds of trading and just trading the different currencies in real time is barely the tip of the iceberg. Forex option trading can help traders lower their risk and increase their investment options. Knowing about options can improve trading for anyone who isn’t currently using them.

How Is Option Trading Different

Option trading, whether it be for Forex, gold, or stock, is all built around the same principle. Instead of buying _____ today, a person can purchase a no obligation option to buy _______ at today’s price at some point in the future. Forex option trading is options applied to Forex, and can be used most practically to fix an exchange rate for a future transaction. For example, let’s consider the sale of some European property to an American. The price will be set in Euros, and a wise American will buy a Forex option as soon as the price is set. He now knows the maximum amount in USD he will have to pay, but may be able to save thousands of dollars if the exchange rate moves favorably. Best of all, if he can get a better exchange rate, he is completely free to do so without concerning himself anymore with the option he purchased.

Investing with Options

Forex option trading can be a great help when it comes to diversifying your Forex investment or eliminating risk. Any trader can use a Forex option to invest in a currency pair for a set fee (a fully known amount of risk), and choose to only follow through on the trade if it goes in his favor. He could also use options to effectively invest the same money in several different trades. He would just have to buy several options, choose to exercise and cash in on only the one that is most profitable by trading on his option, then immediately trading back at the better rate. For example, if the USD to GBP rate seems somewhat high (say 2 USD per GBP), Trader Tom will buy an option to trade pounds for USD next week. Next week the rate has dropped to 1.8 and Tom can exercise his option to trade 1,000 pounds for 2,000 dollars. He will immediately trade his 2,000 dollars for pounds at the new exchange rate (1.8) and get back 1,111 pounds. Thus he has made 111 pounds minus the cost of the option in the first place. Which brings up the most important point in Forex option trading, the cost of options can diminish or completely negate your profits. In order for the option to be truly profitable you must receive more from a trade than you spend for the option.

Beginner Investing » Investing

Just Starting in Real Estate Investing

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