Archive for 'Investor'

A lot of us start out investing in different Mutual Funds for retirement because we feel that we need to be more aggressive in building up our portfolio.  Now that retirement is just around the corner or maybe it’s already arrived, it may be time to move that portfolio into something more stable.  Here’s a couple ideas to do that .

In a previous article, I discussed various ways that investors can accumulate their nest egg. One strategy includes putting a portion in one or a few attractively valued dividend growth stocks every single month and reinvesting dividends selectively. The other strategy involved investing in index funds, using tax advantaged accounts such as 401(k) for example.

Traditional vehicles for saving such as index funds and target-date funds work well when you accumulate your nest egg, but could present a challenge if you try to live off them. Many retirees prefer to have a stable and growing source of income, which maintains purchasing power over time, and is not dependent on the manic-depressive swings in stock prices. Therefore, investing in dividend growth stocks is the ideal way to generate income from your nest egg in retirement, due to the stability of dividend income. Therefore, if someone were to accumulate their nest egg in other items such as index funds, but wanted to convert to dividend investing, there are two ways that they can achieve that.

The strategies outlined in this article also work for situations where you have a lump sum amount, and you are thinking of investing it.

The first strategy involves selling all funds in your portfolio, and using the proceeds immediately to create a diversified portfolio of quality dividend-paying stocks.

This strategy is quick and easy to achieve, as it involves just a few steps. If you want to make the conversion all at once and not have to worry about how to invest the amounts for months, this is likely the best deal for you. If you could find 20-30 quality dividend-paying companies, which are also attractively valued, and your money is spread in several sectors, you could be done with this exercise in one day. After that, the only thing to worry about would be to monitor the investments, decide what to do with dividend income, and enjoy life.

 

Read more on Dividend investing

Sound Business Plan is Crucial to Success-Video

Business Plan

 

All the experts will all tell you that a sound business plan is an absolute must if you’re going to make it in the business world. Forget about the info-commercials and ads that show you the mansions, expensive cars and suitcases full of money. All of that is just a sales pitch to get you to buy into a program that promises that you’ll be filthy stinking rich almost overnight with very little work.  Unfortunately the real world just doesn’t work that way. As they say, if it was that easy then everybody would be doing it and it wouldn’t have any value. To get on the right track to a real and successful business, watch the video below.

 

 

 

Bank of America Tiptoes into Landlording Business

Foreclosure properties

Foreclosure properties. (Photo credit: Wikipedia)

 

It seems like it was only yesterday that when an investor wanted to purchase a property through the short sale process, two things that the Banks demanded were that the homeowner was not to receive any cash and that they were not allowed to stay in the property after the sale. All of that has now been turned on it’s head. Some banks are now offering cash to homeowners for the keys to the property and now BoA will allow some owners to stay on as tenants. The idea is to eventually sell the properties off to investors. Good news for investors and it’s been a long time coming.

Bank of America Corp. has tentatively joined a nascent housing industry movement in which homes in or near foreclosure are sold to investors as rental properties.

The bank on Friday began a test program for 1,000 homeowners headed into foreclosure in Nevada, Arizona and upstate New York — borrowers it has been unable to help with loan modifications but hopes to keep on as renters. If successful, the program could be tried in California and rolled out nationally.

Consumer advocates maintain it often would be better for homeowners, communities and the banks themselves to keep troubled borrowers on as renters rather than kick them out. Seizing and selling empty homes creates neighborhood blight and accelerates downdrafts in housing prices, they contend.

Bank of America doesn’t plan to become a longtime landlord for borrowers turned tenants. In the pilot, it hopes to take possession of homes for no more than three months before selling them to investors making a bet on the recovering housing markets. If the program becomes established, the goal would be for the investors to take over as soon as the occupants relinquish ownership and pay the first month’s rent.

Whether this scheme can work is to be determined by the pilot, the first such test announced by any major mortgage company. The bank wants to find out whether getting a loan off its books with a quick sale at a deep discount is a better deal financially than the foreclosure process, which can drag on for months or even years in highly regulated states such as New York.

“This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support,” said Bank of America’s Ron Sturzenegger, who oversees about 1 million troubled loans inherited from aggressive mortgage giant Countrywide Financial Corp., which Bank of America purchased in 2008.

Homeowners can’t apply for the program themselves, a bank spokesman said.

The trial is limited to a tiny slice of the 1 million loans that Bank of America owns outright. It is not testing any of the additional 8 million home loans on which it provides customer service but which are owned by investors in mortgage bonds.

Bank of America executives said the 1,000 homeowners selected are all at least 60 days late on their loans and are not qualified for or not willing to accept other alternatives to foreclosure.

They will be offered one final deal: hand their property titles to the bank, which would cancel their mortgages in what’s known as a deed in lieu of foreclosure, and sign contracts agreeing to rent the home for up to three years at or below market rates.

Source

Hopefully this program works out for all parties and the foreclosure backlog starts moving again.

Multifamily Utility Company reports an untapped revenue stream that will increase multifamily cash flow and increase property value by allocating utility costs back to tenants through utility billing.

Over the past few years, apartment investors and property managers have had a plethora of issues. Downward pressures on rents, increased vacancies, persistent competition and decreased property values have impacted the multifamily market. Even more so, the soaring costs of utilities that continue to spike year after year. The EPA forewarn that the investment in U.S. drinking water infrastructure improvements from 2007-2027 are estimated to be $334 billion. Multifamily investors are looking towards ancillary income in defense against these rising costs and also increase their net cash flows. According to Brian Stone, President of Multifamily Utility Company, there is an untapped revenue stream many multifamily investors are turning to. That is, by allocating utility costs back to the tenants through utility billing.

Increasing multifamily cash flows can be as simple as increasing the property’s net operating income (NOI). For example, take a multifamily asset of 150 units with at value of $5 million with estimated monthly water/sewer bill of $5000, electric/gas bill of $7000 and a monthly trash bill of $1000. After removing the common area deduction (CAD) of 15%, the rest of the costs can then be reallocated to the tenants. Utilizing a resident utility billing service (RUBS) will increase the net operating income (NOI) by approximately $132,600 per year and $663,000 over 5 years.

The ancillary income from utility reimbursement can be added to the gross scheduled income (GSI); therefore increasing the net operating income (NOI), which in turn will increase the asset’s overall cash flows.

Mr. Stone recommends that a Ratio Utility Billing System(RUBS) is for situations where the constraints of space and/or construction do not allow a property to be submetered, and can be utilized for almost all utilities including water, wastewater, electric, gas and trash. It requires no initial capital investment and is based on a pre-calculated formula. The formula is determined based on several variables including the number of occupants and square footage of the unit. He also suggests that different variables may be used for different utilities and are typically determined by state and local regulations.

Increasing the NOI will also increase the overall Capitalization Rate (Cap rate). Let’s look at the difference before and after initiating a ratio utility billing service (RUBS) shown in the above diagram.

Property owners are always looking to reduce expenses, and utilities are one of the largest and fastest growing expense categories. The goal of RUBS is to help control the growth of utility expenses. A RUBS program provides investors the opportunity to control rising utility expenses. Once utility expenses are under control, apartment communities operate more efficiently. By making the residents responsible for their own level of consumption, they will conserve. Water consumption is typically reduced by up to 20%, as seen in some studies. RUBS can be initiated in as little as 30 days, providing an instant boost to your bottom line.

Multifamily Utility Company is an industry leader specializing in submetering and allocation of water, gas and electric utilities throughout the United States.

To Learn More about Increasing your Multifamily Cash Flow visit http://www.multifamilyutility.com or contact Tiffany Mittal at 1-800-266-0968 x721 for more information.

Buying Investment Properties in Australia

Buying Investment Properties in Australia-Image via Wikipedia

Buying an investment property in Australia is a fairly simple exchange provided that you know precisely what’s concerned and what your legal rights and needs are. Australian property possession laws are very different from the US laws, and plenty of the investment strategies used in the USA aren’t directly pertinent to the Australian market. Before you ever invest your money in Australian real estate, you need to invest some time and money in your own education.

Speak with Agents, Developers and Barristers

One system to learn as much as you can about the Australian property marketplace is generally to speak to industry leaders like real-estate agents, property developers and lawyers. Local real-estate agents can tell you about property values, fluctuations in the property market, and how to construct an offer to purchase the property. Dependent on what sort of property you’re looking for, property developers can tell you about the method of purchasing off the plan and will keep you up to date withnew properties under development.

Your lawyer will be able to answer any specific legal questions that you have relating to the preparation and exchange of contracts, title searches, zoning of the property and anything more legally required or regulation. If you’re wanting to use a less typical investment technique that you have learned about in a convention or book, your lawyer will counsel you about how that strategy can successfully be applied in the Australian market place.

Property Investment Seminars

Another technique to learn about the process of making an investment in property in Australia is to go to a property investment workshop. These types of workshop are held by the larger property companies and are often run on a regular timetable in the most capital towns and larger regional areas around Australia. This type of convention can be invaluable as they discuss the key points of the method of buying property, tell you about Australian property hotspots, and introduce investment concepts such as positive cash flow property, negative gearing, tax benefits, borrowing for your next property, using your equity and more.

Learn from the Gurus

Many Australian investors discover they learn many basic and advanced property investment strategies at workshops run by other property investors- the so-called ‘Property Investment Experts’. Such gurus are plentiful in nations like the US and many Australian Property Investors first get interested in property as a result of listening to a US-based Property Expert. Fortuitously there also are many wonderful Australian Property Investment Mavens, all of who will have their specific systems and specialities, and who will teach methods which will definitely work in Australia. A number of these gurus offer free or very inexpensive introductory workshops, and many have great content-rich web sites and books that provide a lot of information to folk fascinated by property.

Printed Media

Your learning will not be complete without newspapers and magazines. Subscribing to one or more of the many monthly property investment mags available will not just keep you up to date with current trends but also offer tips on mortgage lenders, current rates, expansion areas and new developments in major centers. Newspapers permit you to check the costs in your local marketplace, and to see what’s available for sale.

Invest in Your Own Education

The most outstanding property investors spend some time and some money making an investment in their own education- they are going to have their favorite books, subscribe to certain magazines and will follow an Expert or two. Why not copy success and do the same?

Real Estate Express is real-estate investing software that is a superb tool developed by John Bone to help Australian Property Investors when buying investment property.

The Editorial Advisory and Securities Review Committee of BetterInvesting Magazine today announced Thoratec Corporation (NDQ: THOR) as its October 2011 “Stock to Study” and Praxair, Inc. (NYSE: PX) as its October 2011 “Undervalued Stock” for investors’ informational and educational use.

“The committee chose Thoratec because of its historical high growth, strong current fundamentals and continued opportunities for its medical devices for circulatory support,” said Adam Ritt, editor of BetterInvesting Magazine. “For the Undervalued selection, the committee cited Praxair’s attractive business model, which relies on long-term contracts with its industrial-gas customers, and opportunities in emerging markets.” Check BetterInvesting Magazine’s October issue for more details about these selections.

Committee members are Robert M. Bilkie, Jr., CFA; Daniel J. Boyle, CFA; Philip S. Dano, CFA; Donald E. Danko, CFA; Maury Elvekrog, CFA; Walter J. Kirchberger, CFA; Marisa Lenhard, CFA; and Paul McVey, CFA.

As stated, the BetterInvesting committee’s Stock to Study and Undervalued Stock choices are for the informational and educational uses of investors and are not intended as investment recommendations. BetterInvesting urges investors to educate themselves about the stock market so they can make informed decisions about stock purchases. For more information about investment education tools available to individual investors and investment clubs visit www.betterinvesting.org.

BetterInvesting Magazine is published monthly by BetterInvesting.
BetterInvesting is the brand identity of the National Association of Investors Corporation, a national, nonprofit association with members consisting of individual investors and investment clubs. Founded in 1951 and with headquarters in Madison Heights, Mich., BetterInvesting is considered the voice of the individual investor, as well as the pioneer of the modern investment club movement. BetterInvesting is dedicated to providing a sound program of investment education and information to help its members become successful long-term, lifetime investors. For more information about BetterInvesting, visit its website at www.betterinvesting.org or call toll free (877) 275-6242. For additional BetterInvesting data and news releases, visit the Media Center at www.betterinvesting.org/mediacenter.

http://www.betterinvesting.org

Memphis Real Estate Becomes Global Hot Spot

Memphis Investment Properties‘ First-Half 2011 Sales Point to Record Year for 30-Year-Old Company

Quote startWith high demand and the steady arrival of potential new tenants, we anticipate that we will sell 250 houses by year-end.Quote end

On track for a banner year in the company’s 30-year history, Memphis Investment Properties sold 49 homes during the first quarter and 51 during the second quarter for a total of 100 homes in the first-half of 2011. The majority of these sales have been to out-of-town real estate investors, as MIP has continued to sell Memphis real estate properties to investors around the country and the world.

“Interest in Memphis property from foreign investors throughout the world continues to increase at a rapid clip,” said Jim Reedy, company president.

In 2010, the company began to receive calls from investors in Australia and New Zealand. Since that time, investors from the Netherlands, Italy, as well as China, Thailand, and other countries in the Far East have emerged interested in purchasing Memphis properties for investment purposes.

Investors from Australia and other countries sometime surprise Reedy, by just popping in the office, having made the trip to Memphis to make impromptu tours of the city in search of investment property, because Memphis has proven to provide consistent returns on investment for foreign and domestic investors alike.

Now managing more than 1,000 homes for investors with its turn-key service, Memphis Investment Properties continues to be a leader in providing top-quality property management.

With nearly half of residents in Memphis renting their housing, the demand for rental property remains high. Companies such as Mitsubishi and Electrolux moving into Memphis, is bringing with them a pool of potential tenants with high incomes.

“With high demand and the steady arrival of potential new tenants, we anticipate that we will sell 250 houses by year-end,” Reedy said.

For more information about Memphis Investment Properties, visit http://www.MemphisInvestmentProperties.net, or call 1.888.INVEST3 (468-3783)

The Editorial Advisory and Securities Review Committee of BetterInvesting Magazine today announced V.F. Corporation (NYSE: VFC) as its September 2011 “Stock to Study” and JPMorgan Chase & Co. (NYSE: JPM) as its September 2011 “Undervalued Stock” for investors’ informational and educational use.

“The committee chose V.F. Corporation for its well-diversified apparel lines and growth potential internationally and in the direct-to-consumer market,” said Adam Ritt, editor of BetterInvesting Magazine. “For the Undervalued selection, the committee expects JPMorgan Chase to be one of the primary beneficiaries of eventual improvements in the industry environment.” Check BetterInvesting Magazine’s September issue for more details about these selections.

Committee members are Robert M. Bilkie, Jr., CFA; Daniel J. Boyle, CFA; Philip S. Dano, CFA; Donald E. Danko, CFA; Maury Elvekrog, CFA; Walter J. Kirchberger, CFA; Marisa Lenhard, CFA; and Paul McVey, CFA.

As stated, the BetterInvesting committee’s Stock to Study and Undervalued Stock choices are for the informational and educational uses of investors and are not intended as investment recommendations. BetterInvesting urges investors to educate themselves about the stock market so they can make informed decisions about stock purchases. For more information about investment education tools available to individual investors and investment clubs visit www.betterinvesting.org.

BetterInvesting Magazine is published monthly by BetterInvesting.
BetterInvesting is the brand identity of the National Association of Investors Corporation, a national, nonprofit association with members consisting of individual investors and investment clubs. Founded in 1951 and with headquarters in Madison Heights, Mich., BetterInvesting is considered the voice of the individual investor, as well as the pioneer of the modern investment club movement. BetterInvesting is dedicated to providing a sound program of investment education and information to help its members become successful long-term, lifetime investors. For more information about BetterInvesting, visit its website at www.betterinvesting.org or call toll free (877) 275-6242. For additional BetterInvesting data and news releases, visit the Media Center at www.betterinvesting.org/mediacenter.

http://www.betterinvesting.org

ETFs: Warnings From SEC

Certain ETFs May Not be Appropriate for Long-term Investors

Exchange-traded funds (ETFs) have grown increasingly popular with retail investors during the last decade. Securities regulators are concerned that investors may not understand how these complex investment products work or the potential risks they may face.

The Pennsylvania Securities Commission (PSC) today cautioned investors to make sure they understand ETFs before they invest and consider whether these investments are right for them. The PSC’s ETF advisory is available at www.psc.state.pa.us.

“As with any investment, investors should know what they are investing in. They should understand the risks, costs and tax consequences before investing in ETFs. Check under the hood,” said Chairman Robert Lam.

Exchange-traded funds are baskets of investments such as stocks, bonds, commodities, currencies, options, swaps, futures contracts and other derivative instruments that are created to mimic the performance of an underlying index or sector.

While ETFs are often compared to mutual funds and marketed to investors seeking safe, stable investments, not all ETFs are the same. The PSC’s advisory notes that some traditional ETFs may be appropriate for long-term holders, but others, including exotic leveraged and inverse ETFs, may require daily monitoring.

Two years ago, the association of state securities regulators, the North American Securities Administrators Association (NASAA), identified unsuitable ETF sales as a top threat to Main Street investors. “We continue to actively scrutinize a variety of issues related to ETF sales practices, such as point of sale disclosures, and the suitability of these products, particularly inverse and leveraged ETFs for long-term investors,” Commissioner Tom Michlovic said.

The ETF advisory outlines several risks associated with ETFs, including:

  • Liquidation. The number of ETFs that are shut down or liquidated, while previously a rare occurrence, is on the rise, up 500 percent in each of the last three years over 2007 levels (which equates to one ETF each week).
  • Fees. Leveraged and inverse ETFs must be traded all the time, therefore incurring substantial brokerage fees and commissions.
  • Tax Consequences. Leveraged and inverse ETFs may be less tax efficient due to daily resets that can result in significant short-term capital gains that may not be offset by a loss.

 

“Before you invest, you should contact the PSC to determine if the ETF and the person recommending the investment are properly registered with Pennsylvania,” Commissioner Steven Irwin said. Contact the PSC at 1-800-600-0007.

http://www.psc.state.pa.us

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