Category Archives: Finance

Have the Best of Both Worlds With a 1031 TIC Exchange

Lease AgreementWhile lucrative, managing a rental property can be a tad too demanding for most folks, especially when you become older. Dealing with some troublesome clients can suck the joy right out of the process. On the flip side, the monies that roll in every month are good for your financial outlook.

If you are keen to enjoy the benefits but escape the hassle, then you’re the perfect candidate for a 1031 TIC exchange. Some firms such as 1031 Exchange Place can help you get started with this.

Surprisingly, you can have the best of both worlds with a little help from an unlikely source – the government.

 

Escape the taxman

Okay, escaping the taxman while looking towards the government for help might seem controversial but no this case. See, to encourage people to reinvest their capital gain in the real estate sector, the IRS lets you defer the tax on gains.

Under the section 1031, you get to keep all your capital gains but only if you reinvest the entire amount into a commercial property. While the process is a tad complex and requires you to retain expert helps, the benefits are truly worthwhile.

The lowdown of it is that you need to sell your current property and buy up to three other properties of equal or greater value.

 

Escape managing tenants

If your interest is to have a comfortable retirement without the responsibilities that come with property management, then you’re in luck. Instead of going for new properties, you only need to choose the tenants-in-common option.

Under this provision, you channel your sales proceeds into buying a portion of a larger property. For instance, if you raise a $1million from the sale, you can use the money to purchase a million’s worth of share in a multi-million shopping mall.

Under the tenants-in-common provision, you have no active management in the property, but you get a share of the profits each month.

 

If you’re looking to give up active management in the real estate sector without giving up the money, the government offers you a way out. Signing up for a 1031 TIC exchange lets you have the best of both worlds.

3 Important Questions You Need to Ask When Selling Your Business

woman handing cash to a man

woman handing cash to a manEvery entrepreneur has a vision when starting a business. However, sometimes things do not turn out as planned and many find themselves looking at a venture that is going down the drain or something that someone else can save.

Perhaps the business has gotten bigger than they have planned and they are now more interested in pursuing other projects and feel that a new owner would be able to continue running it. Here are a few questions you need to ask yourself before selling your business:

1. Why are you selling?

This is the first and most important question that you need to answer, and this is the question prospective buyers will ask. The next owner should be able to see that the business is still profitable or is worth their investment.

Many entrepreneurs seek the assistance of business experts such as Utah Business Consultants to know more about how to sell a business in salt lake city.

2. How much can you sell it for?

Most business owners would consider the cost involved in putting up the business to come up with their price point. But what some may fail to consider are the liabilities that come with the business. Are there any existing loans and payables that the new owner will need to know of?

How profitable is the business at the time you are selling it? These are some of the things you need to know when thinking about how much you can sell a business. You might need to hire an accountant, broker, or even a lawyer for this matter.

3. How about your employees?

Most buyers keep the employees once they take over a business. However, this isn’t always the case. Make sure to talk to the prospective new owner about this and be firm should you decide for them to retain the employees.

If not, you will need to check with a lawyer about separation pay and other benefits that your employees are entitled to.

Selling your business is a huge decision, so it’s essential to plan and list your priorities. There will be non-negotiable things and those that you can negotiate. As the business owner, you are the best person to decide on these.

Increase Your Chances of Qualifying For a Home Mortgage

Approved mortgage formMany people struggle to qualify for a mortgage when looking to buy a home and it shatters their dreams. In most cases, they fail to realize the connection between their money habits and their creditworthiness.

Financial challenges come in many forms and they all have bearing on your ability to make major decisions, such as buying a home. It could be carrying too much debt, a dismal income, or the lack of savings. In addition to making your life stressful, having financial problems can dash your hopes of qualifying for a mortgage in Jackson, TN.

In their quest to lower the financial risks, lenders often put your finances through a magnifying glass. They will only approve your application if they like what they see in your financial history. Luckily, you can take steps to improve your creditworthiness.

Evaluate your money habits

It’s probably one of the most difficult and painful truths about improving your money habits. You must delve into your financial history and take note of your weaknesses. After all, you need to know the source of all your money woes before you can implement an effective solution.

Determine all your expenses and list them in categories. The results might be surprising and informative. For instance, you might realize that you spend too much money on the wrong things.

Act on your shortcomings

Once you have identified the root cause of your financial problems, it’s time to embark on the most important part: acting on them. If your income is not enough, then it’s time to seek a remedy. You can pick an extra shift, get a part-time job, or look for ways to turn a hobby into a business.

Whatever you do, don’t quit your current job without another one lined up. If your spending habits are to blame, then you need to identify them and find ways to counter them. For best results, you need to detach yourself from the need to buy unnecessary stuff.

To realize the dream of owning a house through a loan, you need to have better control over your finances. Luckily, you can master skills one at a time to improve your financial situation.

4 Tips to Save on Office Cleaning

People in the office

People in the officeAn office is a place where employees are spending at least eight hours a day. With the long hours of work, it’s important for every workstation to be clean. Cleaning the office, however, can drag the company’s finances. It can result in expenses of at least $200 a month, which can be heavy especially for those that are starting out. The following are some tips to have lesser expenses related to cleaning:

Outsource janitorial services

If you can no longer afford to have in-house janitors, a cheaper alternative would be to outsource your cleaning services. It can save you a lot of money, as you no longer need to pay additional perks for a maintenance staff. The great thing about office cleaning services in San Diego (or anywhere else for that matter) is you can be sure that you’ll be getting the service you wanted, thanks to the expertise and experience of their cleaners.

Promote a culture of cleanliness

Have a culture of cleanliness in the workplace. This way, everyone is accountable for how neat or messy the place is. Employees can clean their space themselves, as well. Having this culture can do a lot in keeping the entire work area clean, even when it’s not the scheduled time for janitorial services yet.

Invest in garbage bins

It’s almost unbelievable how many people neglect to clean out their spaces because there’s not a garbage bin in sight. Invest in garbage bins, so there will be no more excuses. In fact, why not have one bin per workstation.

Maintaining a clean office should be a priority for any company. It does not have to cost too much. All it takes is a culture of neatness and a regular schedule of cleaning.

What Your Startup Needs to Succeed

The office of a startup businessChamath Palihapitiya, founder, and CEO of Social Capita said that it is in starting businesses that people create many interesting things. It is with starting businesses that innovations arise — things we did not know of before now exist.

The idea behind his latest venture is to provide funding for startups without knowing their age, race, gender, or other social biases. You’ll never run out of options when looking for funding for your startup. All you have to do is come up with the following:

A Business Plan

What’s a business idea without a plan for action? This is the proof you show lenders when applying for online startup business loans to convince them that you know where you want your startup to go. It’s not just about dreaming; it’s about making things happen. Just ask TAB Bank.

A Unique Approach

Starting a business can be scary, but the one thing you shouldn’t do is be a copy-cat of another business. Come up with a unique approach to selling your products or marketing them. Be a little more creative, but remember to address pain points of your consumers.

Understand them through surveys to know what they’re looking for. Be accessible to them and show them you have their best interests at heart. These days, tackling a social problem while selling a product seems to do wonders.

An Alternative

Your original business plan is not showing the results you expected? Don’t give up just yet. There should be a plan B — something that steers your startup in a different direction and uses the resources you already have to start something new. For instance, that product can be used to address a different need than what you originally intended it for.

There’s no guarantee that your startup will succeed on the first try. But if you work hard and use your funds wisely, you’ll go far.

4 Loan Terms for the Lone Millennial

Loan on the monitor of a macbookNow that you are a grownup, here are the kinds of loans you might want to note. First off, let us understand what a loan means. It means you ask someone to lend you money so that you can buy something you originally could not, like a house.

After you buy a house, the lender expects you to repay the money you borrowed.

HARP Loan

HARP stands for Home Affordable Refinance Program. It is basically for homeowners who need a stable and more affordable loan. Studies also show that HARP loans have helped people who owe more than their home is now worth.

If you are an aspiring homeowner, let a home loan company grant HARP to you.

VA Loan

This kind of loan is meant to be used by those in active duty Military Service, veterans, and eligible surviving spouses. You can say it is a thank you to these people for their service to the country. Like your usual home loan, you can use the VA loan to buy, build, and maintain a house.

FHA Loan

An FHA home is like the HARP Loan since they designed it for everyone. The difference is that it has backing from the Federal Housing Administration (hence the FHA initials) and that it actually does not loan money.

What FHA loans do is provide lenders insurance against a borrower in case the latter does not pay the money they borrowed.

Reverse Mortgages

This is useful for senior citizens because they can get money without selling their homes. Reverse mortgages are all about assessing the value of a home. If you have a well-maintained house in a great location, you will probably get to borrow a considerable amount of money.

While these loans are different in design and target users, they all share one thing in common: to help people secure a home. This is helpful for young professionals who want to settle down and find a new place they can come home to.

What Are the Costs Covered by Construction Loans?

Piggy bank and paper house and coins stack for mortgage loans conceptA construction loan is a short-term loan given to a borrower to foot the costs of building a home. Most construction loans have very strict rules for eligibility. Lenders typically require a qualified contractor. They are part of the construction team and detailed building specifications.

A majority of creditors ask for 20–25% in down payment for a construction loan in Utah, according to American Loans. This protects the creditor from loan defaulting. In most construction projects, the capital budget is normally divided into various cost components. These costs vary depending on specific projects. Here are the most common elements.

Hard Costs

These are the costs of equipment, labor, and materials needed for construction. Hard costs sometimes also include communication costs, decoration, and fixtures. A borrower’s equity often funds any hard costs not covered under a loan contract.

Site Costs

These include the cost of buying land, legal fees, taxes, brokerage commissions and insurance costs. Some construction loan lenders assume that borrowers have already paid the cost of land purchase before the loan closing. They will, however, reimburse your funds depending on the loan agreement. Land improvements such as sewers, utilities, and water are also part of these costs.

Soft Costs

These include engineering and architectural fees, taxes, permits, construction site security and various ongoing fees. The debtor incurs these costs in addition to the construction’s hard cost. The borrower pays some of these costs before the loan approval. Local councils should approve house plans, for instance, before a lender can give you a loan.

Loan closing costs also form part of your construction budget. These include appraisal fees, underwriting fees, title fees and administration costs. Construction loans do not work like conventional ones where money is advanced at closing. You first submit a draw request and other supporting documents to your creditor. They then issue reimbursement payments for completed constructions.

Why and How You Should Save For Your Retirement

ing with a river as a backgroundEveryone grows old, and at some point, will reach retirement age and will have to quit their jobs. The good news is that they can continue working if they want to. The bad news is that if they did not take care of their retirement money, they really have to work after retiring.

There are many resources online about mutual funds and other trust products, including those from ambankqc.com. However, if you really want to keep a tight rein on your retirement fund, you can do the following:

Know how money is managed

There are other things you want to know about investing your money besides the charges. Specifically, you should know if your investment choice has a low return or not. You should also try to learn how much you are paying the investment company to manage your funds. This should be reasonable, like 3%. Anything above 3% for managing your money can be a cause for alarm.

There are always risks

Any investment comes with risks. You should understand that sometimes, the trust fund takes a hit and the growth slows down. This is normal and sometimes, it takes a slowdown in order for your funds to earn more money.

Nevertheless, if you want a higher return on your investment, you should be prepared for a wild ride on high-risk investments. Lower returns are the result of a conservative investment approach. You have to decide how safe you want your investments to take.

Make sure you retire with enough money

Depending on the inflation rate and the help of the onsite calculator, you can calculate how much you need in the bank before you start withdrawing money for your expenses. Typically, you would need 4% return on the principal. Once you have calculated the amount you need to invest, you have to calculate how much money you can withdraw annually. Planning involves a lot of calculations, and this may require help from a bank adviser.

You should start planning for your retirement while you’re still young. Setting aside a portion of your earnings for the future is always a wise move.

Here’s Why You Should Pay More Than 20% Down Payment on Your Ogden Home

A couple looking at their new homeNext to Salt Lake City, Ogden, Utah is one of the best places to set up a business or start a career. The historic city is also a transport hub, and with many universities around, it is teeming with new and young talent. Most of all, the cost of living is affordable, according to Sperling’s Best Places.

When it comes to housing, property prices are competitive with a median price of $180,000. Note, though, that appreciation has been strong over the past few years and that it may increase up to 4% by 2018. There’s no better time to buy a property there than today, but then how much should be your down payment?

Utah is no different from other states. It can vary from zero to 20%, and it depends on the lender. Some may allow you to pay as low as 3.5%. But if you want to save money, you should aim for something higher than 20%.

Avoid Private Mortgage Insurance

One of the reasons to increase your down payment is to avoid paying private mortgage insurance. Also known as PMI, it is a type of insurance policy that allows the lender to make a claim in case you default on your home loan. In other words, it protects the lenders, not you.

While PMI allows you to buy a house with a very small down payment, it also means additional costs. Although you can cancel it, you can do so only when your loan-to-value ratio is at least 78%. So you may end up paying this for months or a few years.

How to Avoid PMI

If you want to stop paying PMI, then you need to reduce your credit risks. There are two ways to do that. One, you can add improvements into your home to increase its value or equity. The second, and the easiest as what Wasatch Peaks Credit Union mentioned, is to ask for down payment assistance in Ogden. A credit union can provide you with the money you need not only to pay off the down payment but cover over 20% of the home loan.

Your life in Ogden doesn’t have to begin with a huge mortgage. You can make it more affordable by avoiding PMI and getting the assistance you need.

5 Money Matters to Consider When Buying a Franchise

Man stacking coins in increments as a concept of investment growingIf you are planning to invest in your own franchise, one of the vital steps you need to take is a thorough due diligence exam to make sure that you’re on the right path prior to signing an agreement. You’re probably confused and inundated with millions of questions, but the following are vital money matters you need answers to before taking the leap.

1. The Initial Investment

In general, initial franchise fees differ from several thousand dollars to a couple of million dollars. You will need to get a clear understanding of fees and how much you’ll need to get the franchise off the ground and earning.

2. The Liquid Capital

Apart from the startup costs, you’ll need sufficient operating capital for a couple of months until you break even. Knowing this magic number will help you prepare financially and determine when you’ll start reaping profits.

3. The Franchise Company’s Financial Capability

Knowing how financially strong the franchise company is could lend you an idea of how successful your franchise could be. Consider asking how they experienced consistent growth and their plans expansion plans if any. You will likewise want to find out if where they get the significant portion of their income, whether from selling franchises or royalties, or perhaps because they assign a sufficient amount of funding to their operations.

4. Your Potential Profit

While the franchisor can’t possibly forecast how successful your franchise will be, they must have an accurate idea of how much their franchisees make. Make certain to ask beyond the gross sales since this doesn’t operate expenses such as rent, labor, etc.

5. The Ongoing Fees, Marketing Fees and Royalties

You need to take a step back and understand how much you’re expected to pay the franchisor with regards to miscellaneous fees like royalties, marketing, etc. You need to determine how much this would cost, so you could set the right budget and accounting for royalties.

Before you invest in a franchise and sign on the dotted line, get clear answers to these crucial money matters. Once you do and you’re satisfied with the franchisor’s answers, you’ll feel more confident about investing in and running your very own franchise.