January 28, 2010

Short Sale Magic

A few years ago, few people had ever heard of a short sale. Nowadays, short sales are common real estate lingo. The total number of short-sale transactions has skyrocketed in the past couple of years. The news media throws out all sorts of statistics. For example, one in five real estate transactions now involves a short sale, and in some areas, up to 50 percent of the real estate transactions are short sales. Who knows what the true numbers are but one can say without hesitation that in most parts of the country there are a lot of short sales going on!

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January 18, 2010

Goal Setting for the Procrastinator

According to various studies, somewhere between 40 and 80 percent of American adults make New Year’s resolutions. Some resolve to eat healthier, exercise more, make more money, spend more time with family, do more to help others, find a better job, quit smoking or another bad habit, find “the one,” and go back to school.

Despite all the best intentions, few people achieve their lofty goals. In fact, some studies suggest that fewer than 30 percent of New Year’s resolutions are kept! Most goal setting experts believe this is due to ignorance concerning how to set goals properly. So what can you do to minimize your chances of failure and maximize your chances of success to achieve your resolutions for 2010?

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January 15, 2010

Secrets to Being a Super Landlord

Owning rental real estate can be very rewarding, but it can also be very frustrating, especially if you decide to manage your own properties. Rental real estate is really the perfect investment…that is, until you put tenants into the equation. Tenants – you may love them or you may hate them, but you can’t do without them. There is simply no way around it – you must learn how to effectively deal with tenants and become a super landlord.

Before you have to deal with tenants, you must first purchase rental property. The first, and most important thing you need to do when getting involved in rental real estate is to buy right. If you don’t buy right, then you may be doomed to failure no matter how good a landlord you might be.

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November 24, 2009

The Ultimate Garage Sale – Sell Your Home on eBay

In today's real estate market, one of the most challenging aspects of investing is selling a property. In most parts of the country, it is a buyer's market. Homes are selling, but many homes are on the market for months before a buyer comes along who is willing to make an offer and who can actually qualify for a loan.

In order to sell properties, sellers are making concessions, such as lowering the asking price, providing home warranties, paying the buyer's closing costs, and offering seller financing. In this buyer's market, investors need to develop a clear exit strategy before they buy a property. To sell a property quickly, they need to sell it at a large discount, meaning that they must buy at an even bigger discount.

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November 13, 2009

Investing in Tax Liens

We have all seen the late-night infomercials touting houses for sale for pennies on the dollar. The infomercial tells us that if we simply pay the back taxes on a property, we too can be proud owners of new homes. It sounds easy, almost too easy. The question is, can you really get possession of a home by just paying the past due taxes of a few hundred to a few thousand dollars? The answer is yes, you can. However, as you probably suspected, getting title to a property just by paying the back taxes is not quite as easy or risk free as the infomercials make it sound. Just like any other area of real estate investing, you must be educated and know what you are doing in order to be successful. You must understand the rules and the risks of the game before you can play and expect to win.

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November 11, 2009

I’m starting to learn more about option pricing. Can you elaborate on the difference between intrinsic and extrinsic value?

The price you pay for buying (or receive for selling) an option is often referred to as the “premium.” The premium of an option can be divided into two parts: intrinsic and extrinsic value.

Intrinsic Value:

Intrinsic value or IV can be defined as the amount an option is in-the-money. The deeper in-the-money the option, the more IV it possesses. For a call option, the formula to calculate IV is: stock price minus strike price. For a put option, the formula is: strike price minus stock price. Let’s practice calculating IV on stock XYZ, currently trading at $50. Suppose the 45 calls are trading at $7.50. To calculate how much IV is in this call option, we would plug the stock price (50) and strike price (45) into the aforementioned formula: 50-45= 5. Thus the 45 strike call has $5 of intrinsic value. This should be quite intuitive as the option is indeed $5 in-the-money. Now let’s look at a put option by calculating the amount of IV in the 60-strike put, currently trading at $11.75. Once again just plug the stock price (50) and the strike price (60) into the put IV formula: 60-50 =10. There is $10 of intrinsic value in the 60 put because it is $10 in-the-money.

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November 09, 2009

Selling Products on ebay

It doesn’t matter if you are making your debut in the world of entrepreneurship or already own a successful brick-and-mortar or home-based business, there are numerous advantages to running an eBay business.

The overhead of running an eBay business is extremely low. Since eBay is a wildly popular site, you will not need to do too much to market yourself, at least not in the way of traditional advertising. Customers are already drawn to the site; therefore, you can just focus on catching their eye once they stumble across your listings. Additionally, with all the tools available to eBay sellers, you will likely be able to effectively run a profitable business without needing to hire employees, at least in the early stages.

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