When investors were leaving the stock market in droves, they turned to investing in real estate.
And real estate is an excellent choice compared to stocks. The tax deductions and potential for price appreciation
are enough reasons for burned out stock market investors to make the switch.

But real estate is a wide open field, where should you focus your time and money?

Many people might believe that residential property investing is the best way to go. Just look at all the television
programs that are now on the air, such as “Flip This House” on A&E and “Property Ladder” on TLC. They focus on buying
residential properties as investments. But I think the better solution is investing in commercial properties. Here are 3
reasons to leave residential investing and start investing in commercial properties.

#1 No More Qualifying For Loans

With commercial properties, the properties qualify the loan…not the borrower. Commercial lenders concentrate primarily on the income produced by the property to determine the financing risks. So with a few financial calculations, you can determine if the property will qualify the loan amount requested.

#2 No More Personally Guaranteeing Loans

There is a term that is never heard of in residential financing…non-recourse. Non-recourse financing is a type
of debt in which the borrower is not personally liable. If you default on a non-recourse loan, the lender must recover the amount you owe by foreclosing on the property by which the loan is secured. This won’t affect your personal credit score.

#3 Deal With Professional Tenants

Investing in residential property, you will eventually find yourself in the world of tenant hell. Where excuses and non-payment go hand in hand. And government entitlement programs, such as Section 8 can cause you to lose your mind with bureacracy.

But with commercial property tenants, you will find them to be more professional. They are in a business and treat their leases as such. With commercial leases, they can be long term (5, 10, 15 years) and the they can be written so that
the tenant pays for maintenance, taxes and insurance.

Most investors want to invest in commercial properties but let fear of the unknown stop them. But with proper training
and education, buying commercial properties is not that difficult.

Patti Porter is Commercial Financing Consultant specializing in Apartments/Multi-family and other income-producing commercial properties. If you need financing or help in determining property value, visit http://www.profunders.com.

Do you want to learn more about training on buying
commercial properties? Then visit http://www.broker-commercial-mortgages.com.

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Anyone can lose their home to foreclosure, even you!

The loss of a job; divorce, illness or some other “trigger event” could start the ball rolling. According to the American Banker’s Association, most people have less than 3 month’s worth of cash in reserve.

You may not realize that foreclosure can be the first step in the destruction of your family’s financial future.

The foreclosure of your house can lead to the bank seizing anything you own; property, cars, stocks, your kid’s college savings! Even the IRS can get involved, perhaps garnishing your salary. Could you imagine that?

Get ready. There is a foreclosure Tsunami coming!

If you purchased your house or refinanced in the last 4 years, you are vulnerable. The National Association of Mortgage Banker’s (NAMB) records show that more mortgages go into foreclosure 3-5 years after issue than at any other time.

A recent report by the Federal Reserve Board showed that historically, interest rate rises of 3% or more, started a housing market slump. Their increase last month brought the total rate increase since last year to 3 percent.

Also, you may have been among the 40% of mortgagors that took an adjustable mortgage recently. Those “teaser” rates of 5% or less are set to explode your mortgage payments by 25-33% or higher when they adjust. In 2006, over $300 Billion dollars worth of mortgages will adjust with $1 Trillion more in 2007, according to Freddie Mac, the secondary mortgage lender.

The last piece of this looming disaster is the tiny amount of equity the average homeowner has in his property, less than 25%, according to NAMB.

What if you were laid off and fell behind on your bills 2-3 months, including the $180,000 mortgage on the house you bought for zero down a couple of years ago, worth $200,000 today?

How hard would you fight to keep your home with prices falling and similar properties renting for less than your ballooning mortgage payment?

You might be very tempted to send the keys to the bank and walk away.

DON’T!

You must not let the bank take your house under any circumstances!

Banks generally send out Notices of Default or foreclosure notices when you miss 3 payments. This starts the countdown to the sale of your home on the courthouse steps.

In some states, this is a matter of weeks, in others it may take months. In the interim, you watch helplessly as the unpaid mortgage payments, bank’s fees, late fees, legal fees, inspection fees, etc. blow up your indebtedness like a hot air balloon.

By the time of the auction, the balance of your mortgage could have expanded by $20-$30,000 or more. The softening housing market and the flood of foreclosures means your home would probably sell at a discount at the auction.

If the proceeds of the sale do not cover the bloated total you owe the bank, you are in trouble.

In most states, the bank can get a “deficiency judgment” against you for the balance. They can seize anything you own, as we noted before.

If the bank cannot recoup their deficiency from you, or your state will not allow a deficiency judgment, they will write the deficiency off on their taxes.

The IRS now comes into the picture. They consider money you owed and did not pay, your mortgage deficiency; to be income to you!

They will add it to your annual income and expect you to pay taxes on the total amount, in cash with your next return.

If you cannot pay, the IRS can come after everything you own, including your paycheck.

Don’t let your family’s financial future be destroyed. If you are facing foreclosure, seek professional help as quickly as possible.

Copyright 2005 Bill Young. Bill is a former bank loan officer. He is currently a personal financial consultant and offers assistance to those facing foreclosure. For more information, visit his website at http://SaveMyHomeLLC.com

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On BBC1 on Thursday, 05 January 2006, a young couple were interviewed on how they had managed to pay off their mortgage in 2 years. There are lessons we can all learn from their efforts whether we have a mortgage or not.

They had set themselves the goal of paying off their mortgage early so that they would be free to give up their jobs and move to the continent of Europe. They achieved their goal by both saving and making money.

They had shown real discipline in making savings. The man had given up his season ticket to Coventry City Football Club. One could argue that this was no great sacrifice as Coventry are not doing especially well this season! However, a true soccer fan will want to support his team whatever the results.

The woman had given up her cigarettes. This saved about twenty pounds a week. They had also cut down on wine and takeaways and had endured some miserable nights as a result.

This would not have been enough to pay off their mortgage on its own. They also had to bring in extra money. They showed determination and enterprise in making this extra money.

The man, for example, taught NLP lessons for pay and they both used NLP visualisation techniques to help achieve their goal.

They concentrated on visualising their goal all day long by putting up pictures of their dream house and car on several visible areas like the fridge. They had even placed a picture of the house on their computer as a screensaver.

Their two year goal plan had thus been kept in the forefront of their minds.

They thought daily about freedom, a house and a car. Eventually they achieved the extraordinary goal of paying off their mortgage in 2 years. It took me about 20 years.

It is also worth keeping your DAILY goals in the front of your mind.

Alan Lakein, the well known time management expert, advises the following:

“One of the secrets of getting more done is to make a TO DO List every day, keep it visible, and use it as a guide to action as you go through the day.”

Some experts suggest making your daily list the night before so that your subconscious mind can work on it during the night. Either way, the key thing is to actually make a list.

The number six has been suggested as a viable number of things to do. Some prefer a smaller number like three. Any number will do.

Start on the most important task and finish it. Then go on to the next job. If you don’t finish your list, you will at least have achieved the most important tasks for the day. This is far more than most people manage.

My first most important job today is writing this article. I am focusing on it with determination in spite of several interruptions by Lizzie, the cat, who likes to wander round the house in a crazed manner at this time of the morning.

She also loves to meaow loudly for no apparent reason. I can hear her now in the distance. The vet is giving her monthly injections of steroids to keep her going as she is nearly 22 years old. The steroids are clearly working well!

There will always be obstacles to achieving any goal. I expect the couple above were told by their friends that there was no way they could pay off their mortgage in two years.

They obviously ignored advice and focused on their goal and their big reason for wanting to achieve their goal - freedom to leave their jobs and home and find their dream life abroad.

They showed huge belief in their ability to achieve this goal. Strong belief is usually a major cause of success.

There is no good reason why the rest of us should not achieve our dream goals. I, for one, have completed my first goal of the day by finishing this article in spite of the fact that the cat is now meaowing non stop as she sits on my bed.

To be fair to her, she is now quiet and dozing peacefully as I check and submit this article to the article directory!

About the author

John Watson is an award winning teacher and fifth degree black belt martial arts instructor. He has recently written several books about achieving your goals and dreams.

They can be found on his website http://www.motivationtoday.com along with a motivational message and books by other authors

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