We’ve all been there, or at least I have.  You think you’re ok, then you’re hit with an unexpected (or larger than expected) expense and you have to find some extra money.  If you have good credit, you have more possibilities.  If your credit is s struggle, you might feel hopeless.  Fear not  – we all have options!

There are several basic types of loans.  Depending on your credit score and timeline, some options will be more attractive.  Unfortunately I have gotten into a financial pinch once or twice, so I have done my homework and found some ways to get the money quickly and safely.

Secured vs. Unsecured Unsecured loans are based on your ability to repay the loan and your financial stability, and the bank doesn’t require any material items be attached.  Secured loans require collateral to ensure that you will repay the loan – a car payment uses the automobile as collateral, so if you don’t repay the loan, the bank will repossess your car.

Line of Credit     Lines of credit are different than a conventional loan because they will allow you to tap into it as you have a need instead of giving you a lump sum up front.  Your choice will depend on your plans and need, as well as your ability to manage cash flow and repay debt.

Open-Ended versus Close-Ended

Open-ended loans are also called revolving credit.  The borrower is able to make payments and take out additional money within the terms of the agreement.  Close-ended are for a specific amount and terms set at the beginning of the term, and they don’t change.

Conventional

Conventional loans are determined at the onset and specific terms are set for repayment.  Basically you borrow a specific amount and repay a fixed amount over a period of time.

Payday Loans

Payday loans are small, short-term loans, secured by the borrower’s next paycheck.  They are typically used to cover emergency financial situations aren’t advised otherwise.  They carry significant risk for the lender, therefore carry higher rates and penalties.  Be very careful with Payday Loans.  They can turn into a nightmare faster than my family at the holidays!

How can you get the loan you need?  There are a few factors you need to consider when deciding which loan is best, and steps to take to secure it quickly.

• Credit score
• Repayment period
• Financial need / Amount of expense

When taking all of this into consideration, you will make the best decision to ensure you maximize your loan potential while minimizing the overall cost.

Day 1 – Get Your Credit Score

If you don’t know what your credit score is, you should get a report.  CreditKarma.com is a free online resource and valuable tool.  I subscribe to it, and I get email alerts if the status of my credit changes or anyone makes an inquiry.  And while it’s always good to check on it yourself, I like knowing that they will tell me if anything comes up.  Did I mention it’s FREE?!

The higher your credit score, the more money you will potentially be able to borrow and at the lowest rate.  If your score is less than perfect (over 650 is preferable), don’t worry.  There are ways you can fix it and regain control of your finances.

• Get a credit card if you don’t have one.  Credit scores are based on your loan repayment history.  Get a card.  Make some charges.  And pay the bill on time.
• Add an installment loan, like a car payment.  Again, on-time payment is essential.  Once I paid off my car, my credit score jumped up 20 points!
• Pay down your existing cards.  High balances on revolving credit are a red flag to creditors that you are not able to afford your spending.  Pay down high balances.  Try not to let your balance be more than 30% of your overall credit limit.
• Check your limits and make sure you are being offered all of the credit you’re due.  Having higher limits doesn’t mean you have to spend more.  It shows that you are a good risk.
• Use your old cards with longer credit histories instead of just relying on new cards.  History matters and showing a long-term relationship with a creditor is a good thing.
• When reviewing your credit report, dispute any old negatives and make sure you correct any significant errors.  Take the time to make sure your report is right.

Want a surefire way to get out of debt and have great credit?  Pay your bills!  Do it now!  Fixing your credit can take some time.  But if you’re already in good financial shape, your next steps to getting the loan you need are relatively easy.

Also, did you know that your insurance rates are tied to your credit score?  I found this out the hard way.  After some frivolous (but so much fun at the time) spending during my college days, my credit score tanked and my car insurance rates doubled.  That’s a lesson I wish I wouldn’t have needed, but I pulled up my big girl panties and made some changes and got my credit in check.

Day 2 – Join a Credit Union

Now that you know your credit score, you have negotiating power with the lender.   I would suggest getting your loan through a Credit Union.  They are similar to a bank, but instead of being a customer you’re a member.  Credit Unions answer to the members.  Banks answer to profitability.

Not a member of a Credit Union?  Signing up is easy.  And since you have already checked your credit score and corrected any errors, you should have no problem opening an account.

1. Credit Unions base membership on a commonality – such as where you live or work.  Find the CU that you are eligible to join.
2. Ask for an application and get started.  You will need your identification and a small initial deposit.  Mine was only $5 to join … really.
3. Start using your account.

Once you sign up you are eligible to utilize all of the member services.  One of my favorites is the no-charge ATM.  I can use any Credit Union (not just my own) ATM and there is no service charge.  ATM fees can add up in a hurry, so this is awesome!

Credit Unions are competitive and offer great rates on auto (mine was 2.99%), student, home equity, and personal loans.  They typically offer online bill pay options as well, so once you get the loan you can set up repayments on auto-pilot.  If you haven’t started paying your bills online, try it out.  It will change your life!

The Visa card I have through my CU only charges 9.5% interest.  The only condition for the fantastic rate is that I pay online.  PLUS I get 1% cash back every year.  It’s automatically deposited onto my card every January – yay!  Pretty appealing and the only requirement for membership is that I live or work in a particular county.

You know your credit score.  You’ve enrolled in a Credit Union.  You’re well on your way to getting that loan.  Can you really have the extra $10,000 that you need tomorrow?  Yes!

Day 3 – Apply for a Personal Loan

Credit Unions offer a variety of loan programs, so do your homework and figure out which one is best for you and your needs.  But if you need extra money for an unexpected expense, home improvement project, or maybe just an escape to someplace warm (I live in the Pacific Northwest)  a personal loan is a great way to go.

They are typically non-collateralized (no security or equity needed), so they are great for someone who doesn’t want to tie up, or doesn’t have, the equity in their home.  I bought my house a little over a year ago, and since values haven’t increased I can’t get a Home Equity Line of Credit.  I think a lot of people are in the same position.

Personal loans have a defined repayment period, and it is often up to 4 years with a minimum payment required.  However, there is no pre-payment penalty so you can pay it off as quickly as you want or are able to.

Interest rates on Personal Loans at my CU start at 10.99%, so it makes a lot more sense than using your credit card for the expense.

More often than not, the Credit Union will be able to approve your Personal Loan application the same day, so you will be able to access the funds immediately.

Don’t believe me?  I did it, and so can you.  I wanted to consolidate debt from higher-rate credit cards, and I went to my Credit Union for a loan.  Before I walked out the door the money was in my checking account.  Since I was already a member and they had access to my credit score, I got $10,000 in under an hour.

Don’t Risk Your Money

I know there may be quicker ways to get $10,000 … but three days is pretty fast, and you could actually do it in less time (like me in under an hour).

In our economic times, people are turning to risky loans because they think they are the only alternative.  While the fast money might seem attractive, the risks can outweigh the rewards in a hurry.  According to a credit industry survey, Payday Advance Loans average 300% APR.

This is one step away from a Loan Shark (or my grandma)!  Maybe they won’t break your legs if you don’t pay, but they might as well.  300% is insane!  Especially when you consider you can get a Personal Loan from a Credit Union is the same amount of time for as low as 10%.

Advances on your credit card may seem attractive because of their convenience, but they are expensive.  And it’s some of the highest risk money when you are using your credit card like an ATM.  They usually offer an initial low “teaser” rate, but then quickly jump up from 1-7% higher than the interest rate on the credit card.

Convenience is a dark mistress and usually costs you dearly.  And no one wants to borrow money from their family members (have I mentioned my family holidays?!).  So take some time and get the right loan at the right rate.  You can still have your money quickly, and it will save you in the long run.  And paying less for more always sounds good!

Easy as 1-2-3

I think we all have three days (or less) to get a $10,000 loan.  Remember the simple steps:

1. Get your credit score
2. Join a Credit Union
3. Apply for a Personal Loan

Securing a loan in under a week may seem beyond possibility, but it’s not.  I’ve done it and so can you!

Everyone needs money to fulfill immediate needs…

…state and local governments are no different as they are responsible for providing services, law enforcement, etc for their residents.  And a large portion of this revenue is generated through property taxes.  Budgets are created based on the constant income, and they fall short when people fail to pay.

So how does the government cover the shortage?  Some counties sell Tax Lien Certificates (TLC).  Various county governments will auction TLC to cover the deficit.  They offer a guaranteed rate of return and are secured with real property.

Although this is not a new concept, it’s not well-known or understood.  However, banks and savvy investors have been buying TLC for over 100 years, and they are often seen as one of the investment world’s best kept secrets.  Rich Dad Poor Dad author, Robert Kiyosaki, discusses the benefits of TLC in his books.

How is this possible?  When people are behind in paying property taxes, they are hit with high interest rates and fines to “encourage” timely payments.  In addition to high interest rates and fines, they must repay within a set timeframe or the property will be foreclosed upon.

What does this mean to you?

• You can purchase the government-backed, real-property-secured, guaranteed-interest-rate certificates at auction (in effect paying the property taxes for the owner).
• The County gets the tax revenue, and you hold a tax lien on the property.
• The interest rate is set and guaranteed by the government (and is the responsibility of the property owner), and they can range anywhere from 8-50% depending on the area.
• Once the back-taxes are paid, you get your initial investment plus the interest!

What are the drawbacks?  8-50% guaranteed interest sounds too good to be true.  As with any financial decision, you need to know the risks.  While the likelihood of you losing money is extremely low, there are some things to consider.

• Your money isn’t liquid.  Until the tax payer comes current on the property taxes with penalties and fees, you don’t have access to your money.  This can be anywhere from 6 months to 4 years, much like a CD.
• You could own hard to sell property.  If the taxes are not repaid and the property forecloses, you as the tax lien holder could acquire the property through the foreclosure.

I have read stories of people quitting their day jobs after learning how to generate income buying Tax Lien Certificates.  Maybe they are too good to be true, or maybe they have a larger amount for their initial investments and have a greater capacity for risk.  Regardless, I believe if you are willing to take some time and do your homework you can make money (and if you really invest time and effort, A LOT OF MONEY!).

If this has you wanting to learn more, now is your chance.  With a few simple steps and some due diligence, you can be on your way to making money and securing your financial future.  According to Warren Buffett “The rich invest time.  The poor invest money.”

Take your time, and you can do this right!

So…want to get started?

I have had my real estate license for the past 7+ years, so I am well-versed in real property, liens, foreclosures, and real estate law.  Even with my background and knowledge of title reports and legal descriptions, I invest in TLC only after doing my homework.

After reading this, you will be well on your way to understanding the system and have a solid knowledge base to start researching possible investments.

To begin the process, you will need to answer these questions:

1. What is my target market?
2. When and where are the auctions held?
3. Where can I get a list of the properties and their descriptions?  Are there any unsold certificates available from the previous sale?
4. What are the rules of the sale?
5. What is the interest rate and how is it calculated?

1. Identify Your Target Market

Some of the hardest hit real estate markets are in Arizona and Florida, and they happen to be two of the states (plus the District of Columbia) that allow the purchase of Tax Lien Certificates.

Maricopa County in Arizona (including Phoenix, Scottsdale, Mesa, and Tempe) has one of the highest delinquency rates of property taxes, and sells a high volume of Tax Lien Certificates at an interest rate starting at 16%.  As of March 9, 2012 they have over 30,000 properties on the list.  As a first-time investor of TLC, this is where I would start.

 2.  Auction Basics

Find out where and when the auction is being held for the County you’re interested in.  The Maricopa County Treasurers Office held their annual online auction on February 6, and a number of the certificates were left unsold.  You may be able to purchase the certificates directly from the Treasurers office.

3. Property List

Wherever you want to invest, you will need to get a list of the current properties from the County Treasurers Office.  Some are available online and others through the mail.   Many times there is a nominal fee to receive a copy of the list.

Once you get the list, you will need to narrow it down.  There will be residential, commercial, and raw land listings included.  So depending on your comfort level and understanding of real estate, this is a great place to start.  In the off-chance the property goes into foreclosure and you become the owner, it is best to know what you are getting and if it would be something you could liquidate or use.

Another way to select target properties is looking at the “Amount Owed” versus the “Assessed Value”.  Ideally you can identify properties with little owed and a high value.  An owner is more-likely to repay the taxes quickly, so you would get a return on your investment without a long wait.

If the property does end up going into foreclosure, a higher assessed value can mean more money for you down the road.  Make sure to view some comparable properties to help you determine that actual value if you were to sell it in the future.

You are responsible for doing the necessary due diligence and educating yourself on the properties.  The worst case scenario would be ending up with raw land in the middle of the desert that you can’t sell and are now responsible for taxes on, or acquiring a property that needs large amounts of additional money to get into sellable condition.

Research shows that 98% of tax lien certificate holders receive payments to the value of their investments within two years.

You will need to put in the time to research the properties and make determinations on the risk versus the reward.  The initial investment of your time could prove the most valuable in securing your future.

4. The Rules of the Game

Every auction has rules you need to know before going in.  In some markets, the auctions are based on the interest rate.  The auction will start at a set percentage and go down until they have a bidder that is willing to take the lowest interest rate.

By committing to your target area, you will always know the rules.  Until you are either comfortable with the process or have a large sum for your initial investment, you are much better off purchasing within a specific area.

You may be required to register as a bidder with the Treasurers office.  Once registered you are given a bidder number and password so you can login to the bid site and bid on certificates you are interested in.  The auction will “close” on a specific date or time and you can make entries up until that point.

Cash is king at an auction, and you must either bring cash or a cashier’s check to finalize the sale of the certificate.  Personal checks are not accepted.  Some require the money on the spot, and others give you up to 72 hours and will allow an auto-withdrawl from your account.  Know this before you go in so you are prepared.

5. Finding Out the Return on Investment

Every state and county sets their interest rate and determines how it is calculated.  To use my example of Maricopa County, the base rate is 16%.  Depending on the number of active bidders on a property, the interest rate can go down to zero.

You must know your tolerance for risk before going into any auction.  If your tolerance is high, you may be able to take a lower interest rate in hopes that you will end up owning the property in a foreclosure.  You could potentially own a home worth $70,000 for a $2,000 investment – that’s a huge return on your investment!

If you have a lower tolerance level, it would be wise to set your “floor” interest rate and stick to it.  Even if you end up at 8%, that is much better than investing in a CD, leaving your money in a savings account, or investing in a volatile stock market.

In Iowa, the interest rate is 2% per month, so if the taxes are delinquent for a year your return on investment is 24% – which is fantastic.  Every state and every county calculate interest differently and have a different base rate.  In going back to the first step of knowing your target area, you will have a solid understanding of your possible ROI.

Security in Uncertain Times 

The economy has taken a toll over the past few years, and very few have been fortunate enough to avoid financial fallout.  But there is hope and there are options for creating wealth if you are willing to look for opportunities and put in the time.

I know that Tax Lien Certificates are a way to do help achieve financial freedom.  There is little risk involved and the rewards can be great.  As with anything worthwhile, you have to be willing to invest time and energy.  But with the possible upsides, it is definitely worth considering.

You now have a solid understanding of what Tax Lien Certificates are, what they can mean to you, and how you can purchase them.  So what’s stopping you?  Where else can you find low-risk investments typically achieving 15-50% annual returns?  Put in the time, do the work, reap the rewards.  It all sounds simple and in honesty, it is.

A few recommendations -

If you read my article in detail, you’re not only HOT for learning more about how to cash in on one of the safest and most profitable REAL business models out there but you probably want start right now! And why not…thousands of people out there have created a passive stream of income with tax lien certificates (and others, REAL wealth!).

So…without further a due, two great reads you got to get your hands on:

1. Melford & Concetta Bibens’s  “Tax Liens Made Easy” (taxliensmadeeasy.com). Great course full of top notch WORKING strategies on how to make it big time with tax lien certificates. Melford and Concetta have truly done an outstanding job in teaching people with zero experience and little cash to make it big in this business. Worth every penny!

2. Larry Loftis’s book “Profit by Investing in Real Estate Tax Liens: Earn Safe, Secured, and Fixed Returns Every Time” is in my opinion one of the leading books on the subject. Fresh, unique, out-of-the-box strategies, all well explained in much detail and based on REAL life  experience.

Larry walks the talk so to speak! The guy manages a tax lien pool of over $12 Million and knows every trick and strategy out there. He has been cited as a tax lien expert in The Wall Street Journal, Entrepreneur magazine, Wealth magazine, Msn.Money, TheStreet.com and more. You can grab a copy of his book at Amazon.com.

Save yourself the $399 and don’t buy the program.  What they don’t necessarily tell you in the infomercial is that there are ways to buy without spending your own money (a tricky use of semantics), but you will still need cash at closing.  And if that sounds good to you, I’ll tell you about the options.

But I’m a realist, and I like to give you practical choices.  So while I will let you in on the “secrets”, I will also tell you about programs you can take advantage of that actually offer zero down.

What the infomercials will sell you:

• “Subject To” – You buy houses “subject to” the existing financing.  So you leverage other people’s credit and take ownership of the property with the original terms of the note with the initial lender.
• Lease Option – In a nutshell the buyer rents the property for an extended period of time, and has an option to buy it for a specified amount.  The rent paid goes towards the down payment.
• Buy to Let – In this scenario the buyer is required to rent out the property and the future rental income is used as collateral.  The buyer needs to present a business plan as well as applications from potential tenants.
• Seller Refinance – The seller refinances the home and gets the cash from the proceeds, and the buyer gives the seller a promissory note for the balance of the equity.
• Government Loan Programs – This is the most viable option in my opinion, so I will discuss it in further detail.
• Borrow money from you family or friends for your down payment
• Borrow against your life insurance policy
• Use other property as collateral
• Home equity loan (if you have other property)
• Trade – The buyer trades the seller for something he needs in lieu of a down payment
• Investor – Again … it’s not your money that is being used as a down payment.

Some of these opportunities are more realistic than others.  And as I mentioned, several don’t require you to use YOUR money as a down payment, but still require cash to close.

I come from a family of martyrs, so I don’t like to owe anyone anything.  The thought of asking a family member or friend for money makes my skin crawl and sends me running towards the bar.  I would rather stand on my own two feet and get a loan myself.

I have worked in the real estate industry for nearly 8 years, and I have seen the market highs and lows.  I have seen amazing mortgage “deals” come and go.  The most reliable programs I have seen come from the US Government.  Shocking, I know!

There are two zero-down loan programs offered by the government – VA and USDA.  Both have low interest rates.  You can qualify for a VA Loan if you meet any of the following criteria:

• Veteran
• Active duty personnel
• National Guard / Reservist
• Surviving spouse

For those of us who have not served, there is another government-guaranteed, zero-down loan program that we may be eligible for and it is worth checking out – USDA Rural Housing Loans.  This program was created to improve the life in rural areas, by providing loans and grants for housing and community facilities.  The process is quite simple, and is broken down into a few steps.

1. Find out if you quality
2. Find out if the property qualifies
3. Purchase the home

Do I Qualify?

As with any government program, there are requirements for eligibility.  For USDA Rural Housing Loans, as with any loan, you must have good credit, the monthly housing costs can’t exceed 29% of your income, your income can’t exceed 115% of the median income for the area, and the property must be owner-occupied.

Know Your Score

Knowing your credit score is always important.  Better credit can get you lower interest rates, saving you money in the long run.

If you don’t know your credit score, check out CreditKarma.com.  It is a FREE online credit report, and it’s very easy to use (I promise they don’t pay me to say that).  CreditKarma also notifies you automatically if there has been a change in your score or someone has accessed your information.

For a USDA loan, the minimum required FICO score is 620.  You also must have an established credit history of at least 24 months.

Know the Ratios

You know your credit score – great!  There is another set of numbers you need to be familiar with as well, your debt-to-income ratio.  Standards for USDA loans are 29/41, which simply means that the housing costs (mortgage, insurance, and taxes) can’t exceed 29% of your monthly income, and your overall monthly debt costs can’t exceed 41% of your monthly income.

Higher ratios may be considered if you have good credit (660+), stable employment history, potential for increased earnings, and proven ability to save.  The 29/41 rule is smart to live by so you don’t get in over your head financially, but it can be stretched in special cases.

Know Your Debt

Now that you know what the requirements are for debt-to-income ratio, you need to know your debt load.  That is easy to determine, but can be hard to accept when it’s laid out in front of you.

Don’t be afraid of your debt.  Fear will hold you back from facing it head on and making progress to get rid of it.  I always say this – knowledge is power.  If you have debt, understand where it came from and how you can avoid taking it on in the future.

List out all of your monthly expenses.  I use an Excel spreadsheet so I have a visual reminder of everything I regularly spend money on.  This list may include car payments, student loans, utilities, groceries, credit card debt, etc.

Once you have your total monthly expenses, you will know how much you can spend on housing.  Make sure it doesn’t exceed 41% of your total monthly income.

Verify Your Income

Depending on your employment, verifying your income will have different requirements.  It can be as easy as submitting a written Verification of Income and a current paystub, or as involved as submitting two years of Federal Tax Returns.

You must report all of your income, which may include alimony, child support, disability, or social security benefits.  Also if you have a non-purchasing spouse, his/her income must be verified as well to make sure your income does not exceed the limits of the program.

There are applicable deductions to reach your adjusted income, which should be discussed and verified with your lender.  They include minor children, disable or handicapped dependents, full-time students, elderly dependents, medical expenses, and childcare expenses.

Once you reach your adjusted income, you need to confirm that it does not exceed 115% of the median household income for your area.  Again, this is something you need to review with your lender to make sure you are eligible.

Verify Owner-Occupancy

This is probably the easiest step in the eligibility process – establishing that you will be occupying the home.  To qualify for a USDA loan you can’t own another primary residence.

QUALIFIED!!!  Once you have proven that you are eligible for the program, you can start looking for properties.

Does the Property Qualify?

Since this loan program was introduced to increase livability in rural areas, you must find a home that fits the guidelines.  Rural areas include places with lower populations, and certain towns and cities.

Types of Properties

While they do require that the property is owner-occupied, there is flexibility as to what you can purchase.  The property can be a single-family home, condo, planned unit development, or manufactured home.

The rural housing program has recently been updated.  According to a Mortgage Officer from Wells Fargo Home Mortgage, there is no limit on lot size, but the land can’t account for over 30% of the value of the property unless it’s typical for the area.  Also, farm properties are not eligible – they don’t want buyers making money off of the land.

Verify the Location

There are also location guidelines, and are specific to your area.  If you are interested in purchasing a home through the rural housing program, ask your local lender for a map.  You can also verify eligibility online at http://eligibility.sc.egov.usda.gov.

Thankfully in many cases, the definition of rural is loose.  As long as you don’t want to live downtown, your options might be far greater than you imagine.

Make the Deal

Once you and the property qualify for a USDA loan, all you have left to do is buy it!  USDA loans have lots of benefits to buyers as well as the community.

They require no down payment, and there are no prepayment penalties for rural housing loans.  They have low monthly mortgage insurance, and offer 30-year fixed interest rates.  Closing costs can even be financed into the loan if the appraised value is higher than the purchase price.

ZERO-DOWN REAL ESTATE IS A REALITY

Being the practical person that I am, I always want to give people honest, real-life advice and options.  Government-backed loans like USDA or VA are solid opportunities to purchase real estate with no money down.  When I say zero down, I mean zero down!

There are riskier choices available that don’t require you to spend your own money, but they do require a financial investment from someone upfront.  I don’t discount any of the alternatives – they work.  If they didn’t, no one would buy the programs you see on television in the middle of the night.

Next time you find yourself awake in the middle of the night cruising through the channels, skip the ones enticing you with promises of real estate riches.  You now have a solid information base to research the choices AND a healthy dose of reality!

And on that subject…

If you want to learn more (well, MUCH more!) about how to make a full time living in the real-estate market I suggest you get Joe Crump’s real estate investing course at realestatemoneymaker.com. Why? Simple…

First, Joe KNOWS his stuff like probably no other real-estate investor knows. From finding sellers who will sell you their home with zero down payment and no credit check, to maximizing your profit potential once you sell the property…and how to systematize your business so you can repeat this process every single day.

Second and most important…his course provides you with more “out of the box” strategies, systematical approaches, exploitable loopholes,  and experience based advice (that REALLY WORKS!) than most real-estate products priced 10 to 100 times more!

The need for mobility has and always will, involve the buying and selling of ‘modes’!

Have you ever contemplated how many cars there are on the roads?

A “Mega-gaggle!”  (That’s a WHOLE bunch!)

And at some point, each and every last one of them has been bought and sold! 

So, just who is selling all these cars that seem to always be in our way?

EVERYBODY… sooner or later!

There are car sales people who make a living at it (and some who don’t!);

There are car restorers who either do it for a living or as a sideline;

And of course, my ol’ friend, John Q. Public!  (That’s us!)

In a car deal, no different than any other deal, there are two sides to the negotiation; a buyer and a seller.

This article is tailored for the seller.  The buyer, for the purposes of this conversation, is the opposition!

All of the information contained in this article is from interviews with people who are actually in the business of selling cars…

…managers and successful, well seasoned car salesmen!

There’s a little bit of my personal experience and insight, also.

“A B C…it’s easy as 1 2 3!”

Everybody sing along! 

When getting rid of a car, if you just want to get rid of it, give it away!

Done deal!

If putting a few bucks in your pocket in the process sounds appealing, read on!

First Verse:

A – As appropriate as ‘ADVERTISE’ would be for step ‘A’…it isn’t.

We could say it was ‘APPEARANCE’, but that would only be a part of it.

It is PREPARATION.  Or, getting the car ready to sell!

Put yourself in the shoes of the buyer for a moment.  Would you be excited about paying top dollar for a car that was in less than top condition?

Of course not!

The first logical step then would be to make the car just as close to like new as possible.  (The key concept here is ‘as possible’.)

The quality of the silk purse is directly proportionate to the quality of the sow’s ear from which it was made!

…hence, as close as possible!

1. All of those little idiosyncrasies and mechanical quirks that you have learned to live with must now be considered and dealt with.

But it’s normal for a car this age to have some quirks, right?

Absolutely!

And a normal car brings a normal price…or less!

(You might wanna recheck the title of this article!)

Once you (and likely a mechanic and perhaps even a paint & body shop) have completely ironed out the wrinkles, the visible ones and the ones under the hood;

Start a tally sheet and write down exactly what you spent for the repairs.

(Keep the tally sheet handy through-out the process, we’ll add to it!)

2. POP-QUIZ:  If you want to buy, let’s say, a used refrigerator…Just a spare to keep in the garage…nothing fancy.

John up the street has one he’ll let go for cheap.  It’s only a couple years old and   it seems to work just fine!

Never mind the grime around the handle, the ‘beer plaster’ in the bottom, the dent in the door from when Mary threw an iron frying pan at him (and missed) and its missing a shelf!

Across town, you’ve spotted one that is 9 years old and dang if it isn’t the same model as John’s!

But, it’s in as perfect condition as can reasonably be expected…and it’s three times the price of John’s ‘El Cheapo’!

Which will you choose?

You like John’s for the money?

“Then as bad and nasty as that one is, it’s probably perfect for you!”

NEXT!

(A car salesman shared that as his sarcastic comeback to someone wouldn’t hook up on his much nicer model!)

Car dealers go to great lengths to make automobiles look like new!

Well, actually  the dealers have a detailer create the silk purse for them!

They want to present each vehicle as something a prospect would want to own! Inside and out!

Be it a clunker or a show piece, before it hits the lot, it has been ‘renewed’ to its maximum, reasonable potential! Mechanically and appearance-wise!

3. If you prefer to detail it yourself, go for it!  If you don’t own a pressure washer; I highly recommend you invest 50’ish bucks and rent one for the day.

Using a pressure washer is kind of like eating a potato chip… 

“Betcha can’t eat just one!”

Once you fire up a pressure washer, you’ll become a pressure washing ANIMAL!

The under- carriage, the wheels and wheel wells, under the hood, the driveway, the eves of the house…

Run Fido…RUN!

After you’ve done all you can to make the car as pristine as possible, take it to a detailer;

…if for no other reason than to have him envy your work!

If you’re willing to let someone else have all the fun, drop the car off at a professional detailer for a day and plan on spending $50 to $75’ish.

Relax, Fido.

And by the way, for this step, jot down $250 on the tally sheet!

Here’s a neat little trick I picked up from a used car salesman; while you’re out & about, pick up the cheapest vinyl garden hose you can find…

Cut a couple of eight foot sections to coil up and put under each front seat for that‘new car smell!’

That’s worth at least $50 on the tally sheet!

Before pricing the vehicle (which we’ll get to) it needs to look its absolute best!

Did I mention…

A normal car brings a normal price…or less!  ??

Well, guess what…

Your car is no longer normal!

Second Verse: 

‘B’ – Be generous to yourself!

If you still want to sell it…(she’s looking pretty good about now, huh?)

1. Let’s price ‘er out, while at the same time, keeping it reasonably real!

Despite seeming ‘new-like’ she is a year or few old!

First, go to Kelly Blue Book (www.kbb.com) and find the blue book value of your specific car.

The chances are astronomical that an informed buyer will check!

2. Remember the tally sheet?  It’s time to add it all up!

Now DOUBLE it …every dime …and tack it onto the bluebook!

“IS THIS GUY CRAZY?”

Perhaps, but that’s beside the point!  We’re selling a car here!

Crazy is good!  I hear some of the old horse traders were certifiable!

3. Should you expect to get every penny of your price at the time of sale?

Absolutely!  You are FEARLESS!

Will you get every cent?  Probably not, but you have to start somewhere, right?

Here’s a quick, and true story that may ease your mind:

I remember an encounter at a dealership as a kid.  I was with my dad while he was shopping for a new pick-up truck.

As a salesman approached with a smile and an extended hand, Dad, a very matter-of-fact fellow, asked,

“How much?”

The salesman offered some completely outrageous figure and Dad asked gruffly,

“Do I look stupid?”

The salesman was cucumber cool when he laughed and replied,

“No sir, absolutely not…but in case you were, I didn’t wanna miss you!”

Three hours later, we had a new truck!

The salesman had cleverly established a starting point with gracious headroom!

Bump that price! You just might meet a dummy…or at least, you’ve left yourself some wiggle room!

Third Verse:

‘C’ – Cash in!

Everything to this point has all been prerequisite.

It is brass tacks (or brass something!) time now!

1. Advertise! Finally!

Are you sure you still want to let it go?  Okay, if you’re sure…it’s game on!

Post an ad in whatever medium you choose…or several!

Craigslist, Auto Trader, what have you.

———————————————

REGRETFULLY FOR SALE!  

2004, Yada Yada. 

Impeccably maintained!  (It now looks the part…right?)

Average miles!  (up to 15,000 a year is reasonable) 

(List features and accessories)

I MUST SELL and YOU MUST SEE!  (It’s good if they think you’re desperate to sell!) 

BEST OFFER! 

Available at 1234 My Street,  

Hindenburg, My State 

(123) 456-7899

———————————————

The purpose of your add is to do one thing and one thing only! To get a potential buyer on site to look at your car!

You will not sell it over the phone! 

2. Handling the phone ‘inquisitions’…How do pros do it at a dealership?

Give as little info as possible on the phone and set the appointment!

“You’ve GOT to come see this one!” 

“It may well be exactly what you’re looking for!”

“Need directions?”

“Well how much IS the darn thing?”

(If they don’t ask, (yeah right!)…don’t offer!)

“I’m looking for the best offer I can get!  I’ll tell you this much, I’ve turned down (quote barebones bluebook price)”

“Are you looking for an awesome car or a cheap car?

…because this car is IMMACULATE!” 

(And by now, it dang well better be! Though all’s fair in love, war and horse trading…NEVER misrepresent!)

“Would 6 pm or 7 be better for you to come check it out?”

“Um, hem, haw, uh…I was looking to be in a lower price range.”

“This one might change your mind if you saw it! Can you make it by around 6…or would 7 work better?”

“Naw, it’s out of my price range.”

“Well, I do understand. Thanks for the call and have a nice day.”

NEXT!

NOTE:  At a car dealership, mishandling a sales call can be grounds for reprimand!

3. Okay…here you are, finally face to face with, at least, a semi-serious tire kicker!

Don’t lose the deal over a few bucks, you have ample wiggle room! But don’t give the car away!  You worked too hard getting it ready!

“So, how much you gonna knock off for those parking lot dings on the door?”

“I took that into consideration when I priced the car and held back about $100 for that very reason!”

Point – Counter point!  This is horse trading, y’all! 

And you are FEARLESS, remember?

The prospect wants to work you down and you want to hold as firm to your price as you can!

If it comes to an undeniable stalemate, don’t be afraid to say,

“Thanks for coming by!”  We are in this for profit, right? 

NEXT!  

Let the person walk. There will be others!

Unless you’re working for a dealership!

“Where’s your customer?”

“Oh, he was just a tire kicker.”

“Well, how bout you go find that tire kicker and bring him back so I can talk to him? …and don’t come back without him!”

Those guys play hardball!

On ‘holding profit’:

An acquaintance/sales manager at a dealership told me;

“If a salesman brings a bare bones, give-away deal to my desk for approval, he had better duck because it’s coming right back at him…wadded up!” 

(Whew! Thank goodness for paper!  Back in the days of chariot sales, did they write deals on stone tablets?  Yikes!!)

Dealerships must make a profit!

Why shouldn’t you?

Holy Cow!  You finally found a real buyer and held a good profit!

CONGRATULATIONS! You’ve earned it!

Was it worth it? Sure it was!

VERY IMPORTANT!

Now that you’ve closed the deal, leave NO loose ends…

You’ve been paid, the buyer has the car, the paperwork is squared away…

You’re ready to pay off the loan (if applicable in your case),

And, he is entitled to the pink slip…

TIDY ALL THAT STUFF UP ASAP!

Done deal!

A B C … 1 2 3!

Have soaring gas prices driven you to the point of desperation?

Are you incredulous watching those numbers go up as you patiently pump that black gold stuff into your gas tank? Are you convinced that renting a horse and wagon to commute back and forth from work would be cheaper than using your own car?

Well, you are not alone, even though that won’t help or lighten your expenses in any way.

The painful reality is that this year gas prices are soaring out of control and nearing in some places $5 per gallon. To fill the average gas tank by these standards can roll up to $60 and $70 bucks per vehicle and even higher sometimes. That’s a lot of green stuff for that black stuff and the situation is not likely to improve in the near future.

Are you looking at the vehicle parked in your driveway and crying, why are you doing this to my family and me?  Well, why not is one answer, or at the very least, part of one. Why not convert the car you have into one that is both more economical and truly sustainable?

In 1996 there were only 3,280 electric vehicles in the entire United States.

By 2007, there were more than 55,000!

President Obama has established a national goal for the year 2015 as one marked by one million all-electric vehicles on American highways.

What are the costs and real benefits of an electric conversion?

The cost of an electric car conversion involves a broad range of issues, which include: the specific vehicle being converted, the quantity and technology of the batteries and the drive system.

Many experts estimate the costs between $8,000 and $11,000, although Les Oke from Convert 2 Ev (convert-to-ev.com) claims many of those implementing his unique method have done it for $500 and less!

A typical conversion, if using all new parts, costs between $5,000 and $10,000, but this is excluding the cost of the donor vehicle and labor. If you are planning to hire a company to do it, the cost may fall anywhere between $12,000 and $18,000, including all the necessary parts and labor.

The cost of replacing the car’s battery pack is the only drawback. Lead-acid batteries are the most common type used and they are known to last approximately two to five years.

These figures can also be adversely affected by ambient temperature, air moisture, terrain and the way a driver operates the vehicle. Depending on the number of batteries needed, replacements costs could be as high as between $2,000 and $5,000.

Again, these are just industry estimates (it can be done for MUCH less) and like with everything else in life, those that know the tricks and secrets of the game are the ones to learn from!

Anyway, back to industry standards…

Before you pass out, consider what is involved and what you are getting for your money. The entire internal combustion engine from a vehicle must be removed and replaced by an electric motor. This takes time, and time as we all know, is money. If you make sure that all cables are tight and secure, your converted vehicle will become a zero-emissions vehicle that will require little or no maintenance, have a range of 60-80 miles, a top speed of 50-90 MPH, and above average acceleration capabilities.

Operational costs are lower with electrical vehicles as gas- powered cars cost the owner on average about $1,800 per year for fuel, not to mention, the added expense of engine maintenance and oil changes. Electric cars resell better as well, and are more reliable due to the fact that they have fewer parts that can fail.

The engine of an electric car has an infinite lifespan, which most humans would die for (forgive the pun). It usually takes about 6-12 hours to completely recharge the car. All of the above factors will vary, based on the weight of the car you convert, and the type of engine and batteries you install.

Any four-cylinder manual transmission can work, but common sense dictates that the best choice for a donor car is a model that has been converted successfully many times before.

Michael Brown, author of Convert It, recommends a car that is light and roomy if economics and efficiency are your primary priorities. The best options include a small affordable car, like a Chevy Aveo, Geo Metro, or Honda Civic.

If maximum driving range is your goal, a small pickup such as a Chevy S10 or Ford Ranger that can accommodate all the batteries are workable choices.

How do you begin to convert your car from gas to electric? 

Handymen and backyard mechanics perform most electric car conversions, but don’t panic if you are not a mechanic (hey, that rhymes). You do need, however, to have a lot of patience and some basic skills and knowledge (or a qualified next-door neighbor who is always available for consultation. An insomniac is best, as there’s no disturbing such a person ever.)

A basic knowledge of wiring and electricity is necessary. How many projects earnestly started have ended with the fatal question: what’s that switch for? Even if you can team up with someone who has more skills than you do, it behooves you to do some research to increase your knowledge about electric car conversion.

There are many web sites that discuss techniques and where to get parts; check out EValbum.com.

There are two options when it comes to motors. You can use either an AC or a DC motor, but the latter is preferable. You might even be able to find one in a scrap yard. 

Avoid Electric Car Conversion Kits 

According to experts, the problem with most of these kits is that while they come equipped with most of the essential components, they are rarely complete and comprehensive. They do not contain step-by- step instructions and most of them do not include batteries or chargers. In the long run, it’s a lot cheaper to buy the components yourself.

Let the conversion begin 

To begin the process, you will need: a donor car, a dry secure location to work, as the process may take many months depending on the amount of time you can dedicate to the project and a wide assortment of different sized band-aids and hand tools (but not necessarily in that order).

A typical conversion uses a DC controller and a DC motor and the typical voltage utilized is anything between 96 volts and 192 volts. This is an important decision as this choice controls the number of batteries required and the type of motor controller the car will eventually use. Usually, the electric forklift industry is the source of the motors and controllers used in these conversions.

Proceed without passing go or collecting $200

1. The first thing to do is remove the engine from the vehicle as well as the gas tank, clutch, exhaust system and radiator.

2. Using custom mounting brackets mount the motor and attach an adapter plate to the transmission.

3. Create a gear reduction by pinning the existing manual transmission in first or second gear. This is vital for an electric motor as it allows for maximum efficiency.

4. Mount the controller.

5. Install the batteries and build brackets that will safely store all the batteries in reserve. Batteries that are sealed are very versatile in terms of storage as they can be turned on their sides and fitted into many unexpected corners.

6. Use #00 gauge welding cable to wire the batteries and motor to the controller.

7. You will need to wire up and mount an electric motor for the power steering pump if the car has power steering.

8. Unless you really like to drip sweat and swelter in the summer heat without air conditioning, you will also need to wire up and mount an electric motor for the A/C compressor.

9. For heating purposes (whenever you are not dripping and/or sweating) you can install either a small electric water heater and plumb it into the existing heater core, or a small ceramic electric space heater.

10. If the car has power brakes, you will have to install a vacuum pump in order to properly operate the brake booster. 

11. Install a charging system.

12. In order to power the accessory battery, you will need to install a DC-to-DC converter.

13. Instead of a gas gauge, install a volt meter in your new conversion. This is necessary because it will enable you to detect alterations in the battery pack.

14. Install potentiometers (like a joystick) by hooking to the accelerator pedal and connecting to the controller.

15. Depending on whether you use an AC or DC motor for your conversion, you may need to install some sort of reverse switch and wire to the controller.

The majority of home conversions using DC motors utilize the reverse gear which is built into the transmission, while AC motors with advanced controllers run the motor in reverse and require only a simple switch that sends a reverse message to the controller.

16. The car’s battery pack must have the ability to connect and disconnect from the controller, which is accomplished by installing a large relay (also known as a contactor).

This relay acts as an ignition as it turns the car to on mode when you are ready to drive it. It must be able to transport hundreds of amps and break without holding an arc 96 to 300 volts DC.

17. The ignition switch has to be rewired, as it must be able to turn on all the new equipment, including the contactor.

The new electric car is ready even if you aren’t, once everything is installed and tested.

The most obvious reason to convert a car to electric is to save money. But there are other secret, inner victories as well. You will find yourself feeing as if you are a part of the coolest, greenest, most sustainable household on the block. And there’s more.

Now you will be able to grasp the unique power of driving past gas stations with your tongue sticking out just as far as the law will allow. This is also of primary significance, as some things (triumph and revenge for example) are far more important and satisfying than saving money.

Before I end, I mentioned this earlier: there are FAR easier and cheaper ways to convert your car to electric with magnificent results. Les Oke from Convert 2 Ev (convert-to-ev.com) shows you one of them (plus a cool video of an actor you would never imagine uses this method!).

The bad news is in order to accomplish this goal, you need more than luck on your side; the good news is you can sell yours and gain with a little preparation and planning according to NUMEROUS studies.

First impressions will make or break the deal!

Step 1

Separate yourself from your home. This may sound rather odd but in reality many people become attached to their homes, and in order to successfully sell your home you need to disassociate yourself completely from the home.

• The first thing you need to do is “let go” of all emotions you have toward the home. You do not need to forget about memories that were made in the home; instead you need to start thinking about the home as a stranger.
• Make a note and tape it to your refrigerator and bathroom mirrors saying “This is only a house, it is a not a person. Homes are meant to be bought and sold. I am moving towards my future!”

Step 2 

Rent a storage unit. Over time, people collect a ton of stuff – from books and magazine to furniture. You will need a storage unit to de-clutter and organize your home. It’s been proven with numerous studies that homes sell better when they have less furniture.

Remove furniture from the home that blocks walkways and place it in the storage unit.

Now is a good time to remove furniture from each room the home and place it in storage as well – leave just enough furniture in each room to highlight the room’s purpose while providing plenty of space.

If you have a leaf in your dining room table, remove it. You will be making a few trips to your storage unit as you continue to prep your home for sale.

Step 3 

De-Personalize the home. It’s time to pack up all personal photographs and heirlooms you are displaying in the home and bring them to your storage unit.

One of the worst mistakes homeowners do when they are selling their home is to leave out their family photographs for potential buyers to see.

Potential buyers should walk into your home and be able to visualize they live in the home.

Step 4 

De-clutter, de-clutter, and de-clutter! This is the point where you really start to look at all the items (and junk) that you and/or your family have collected over the years.

• Items that you have not used in over year you may want to consider donating to your local charity, or packing them and hauling them to your storage unit.
• Remove all books, DVD’s, CD’s and games from shelving and pack away.
• Pack ALL knickknacks in the house. Remember buyers need to visualize them living in the home, not you!
• Remove EVERYTHING from your kitchen counters. Empty kitchen counters make the room appear larger.
• Organize toys in small boxes and keep them in the closets.
• Remove ALL items from the bathroom countertops; it’s important to keep countertops as clean as possible.
• Give every member in the home a small box or bin to pack their essential daily items in, and designate an area in a closet or under beds for the boxes or bins.

Step 5

Rearrange ALL closets and cabinets. It’s no secret that potential buyers love to snoop; they open closet doors and peek in cabinets. Heck, I’m willing to bet you have done this too!

The good news is you already know that potential buyers will be snooping. Have you ever opened a closet door and everything came flying out at you?

Avoid this when trying to sell your home. A home that has clean and organized closets and cabinets instantly says that it was taken care of.

• Hang clothing together – short-sleeved shirts, long-sleeved shirts, pants, jeans, etc. Make sure the buttons face the same direction.
• Organize shoes in pairs and make sure they all face the same direction.
• Remove ANY item that you do not need within the next week in the closets.
• Organized canned goods according to type – green vegetables, yellow vegetables, soups, etc. Make sure the labels all face the front the cabinet.
• Stack ALL dishes neatly, making sure they all face the same direction.
• All coffee cup handles should face the same way.
• Organize spices either by alphabetizing them or from largest container to smallest.

Step 6

If potential buyers can’t see it, then they can’t want it! Remove and replace ALL favorite items in the home.

ANY item, which you want to take with you when your home sells, needs to be removed, and replaced.

Consider your window treatments, light fixtures, area rugs — basically ALL items you have in the home that mean something to you and you simply could not let go of for the sale of the home. Replace these items!

If a potential buyer see’s an item in your home he or she wants but you are unwilling to sell, that could break the deal! Avoid this by simply replacing these items with a replacement you have not attachment to.

Step 7

Make repairs now! You don’t want a potential buyer to walk into your home and immediately be turned off because there are scuff marks on a wall, or the bathroom faucet has an annoying drip.

• Patch ALL holes in walls.
• If your walls have scuff marks, it’s time to touch up the paint. Chances are you probably already have the paint in either your shed or garage.
• If your walls are a bright color (or one that is NOT neutral) consider repainting the walls a neutral color. Neutral colors allow buyers to visualize their belongings in the home, and create an open, airy atmosphere.
• Replace cracked flooring.
• Replace cracked countertop tiles.
• Replace burned-out light bulbs. There is nothing worse than a person turning on a light to see a room in your home and the light not working; this instantly sends the message you did not take care of the home.
• If bedding or curtains are old and worn-out, consider replacing them.

Step 8

Clean and finalize the inside of the home. So far you have disassociated yourself with the home, you have packed and brought belongings to storage, you have made minor repairs, you have organized, and so what is left?

It’s time to clean and finalize the inside of the home!

• Clean ALL (stove, refrigerator, dish washer and microwave) appliances inside and out.
• Clean your fireplace if your home is lucky enough to have one.
• Wash ALL windows inside and out until they sparkle.
• Apply fresh caulking to the bathtub, shower and sinks.
• Vacuum the entire home daily.
• Wax and/or mop all floors daily.
• Replace old, dirty, worn rugs with new, clean ones.
• Hang freshly laundered towels in the bathroom(s).
• Dust all furniture.
• Dust all light fixtures including ceiling fans.
• Clean and remove any and all cobwebs from corners.
• Polish ALL chrome faucets and mirrors until they shine!
• Consider having carpets professional cleaned.
• Decorate your dining room table with an elegant centerpiece.
• It’s important to eliminate all odors in the house. Place potpourri and/or scented candles in all bathrooms. Air freshener and commercial deodorizer works to eliminate pet or smoke odor.
• Add a fresh bouquet of flowers in any and/or all rooms in the house as final touch.

Step 9

Create curb appeal! Creating curb appeal is equally important to staging and prepping a home for sale.

If potential buyers drive past your home because they don’t like what they see on the outside, you will never sell your home and gain — sad but true!

After all, you want them walking into your home and whipping out their checkbooks. Right?

• Spray down sidewalks and the exterior of the home with pressure washer. If you don’t own a pressure washer, you can rent one.
• Relocate all outside toys, bicycles, etc. away from the house. You may want to consider placing these items in your storage unit.
• Trim all bushes.
• Mow the lawn once a week.
• Apply a fresh coat of paint to the window trim.
• Apply a fresh coat of paint to front door of the home.
• Make repairs to gutters if needed, and apply a fresh coat of paint.
• Install a new doorknob and lock.
• Verify that the street numerals are visible from the street.
• Place a large potted plant next to the front door to add visual appeal.

When it comes to preparing your home to sell and gain, it’s important to remember that common sense goes a long way.

Potential buyers do not want to see how you lived in the home; instead they want to visualize themselves living in the home. <<<—– read that sentence again and again, it’s KEY!

The trick is to create an empty, yet appealing palette anyone can visualize themselves decorating.

Foreclosure rates are steadily increasing, and one-time homeowners are turning back into renters.  According to forecasts, the real estate market is due for a flood of new foreclosure properties MEANING renters.  Industry estimates state that only 40% of foreclosed properties are listed on the market for sale.

What does that mean to you as an investor?  O-p-p-o-r-t-u-n-i-t-y! 

Monica Main  from apartmentbuildingcashflow.com,  who has made millions in real-estate and develops highly profitable real estate wealth building systems, sums it up nicely.

“Now is the BEST TIME to get started in real estate investing.  All of the real estate multi-millionaires have gotten started in the “bad times” when they got DEALS GALORE.  All of the real estate investors who lost their shirts got started in the “good times” when the prices were TOO HIGH!”

Matthew A. Martinez, author of several books including “Investing in Apartment Buildings: Create a Reliable Stream of Income and Build Long-Term Wealth,” is an accomplished real estate investor and principal of the Beacon Hill Property Group.  After two years of investing, he was making more money from his rentals than his 9 to 5 job.  His books are excellent resources for anyone wanting a more in-depth look at investing in apartment buildings.

I have had my real estate license for over seven years, and have worked with some of the most successful agents in my area.  They personally invest in rental properties, and advise their clients and families to capitalize on the opportunities as well.

Because you’re dealing with short-term leases, you are able to keep up with inflation.  As the market rises, you can raise your rents/income.  Real estate values are going to increase over the long-term, so you will also have equity appreciation.

Interested?  Let’s take a closer look!

Where to begin?!

As with any financial investment, there are certain steps you need to take to ensure your success.

• Find a qualified real estate agent
• Select a property with positive cash flow
• Do your homework

Get the right help

The first step in your search is finding a qualified commercial real estate broker.  You want someone who knows local investors and laws, can read and interpret financial statements and determine return on investment, and can help you establish a fair price.

In your daily travel, you most likely see signs for commercial and multi-family properties.  Notice the agent’s name.  If she has several signs on well-kept buildings, it is an indication that she has garnered the respect of investors.

Call your board of realtors for a background check.  This call will only take a few minutes, and can provide you with valuable information.  You can find out if there have been any complaints or violations filed against the agent.  You can also easily gauge whether or not the agent is respected by his/her peers by the response you get to your inquiry.  Realtor boards are well-versed in handling these calls and hold all members to a strict code of ethics.

Talk to other investors.  You can easily find property ownership information through the Assessor’s Office – most have searchable, online records.  Ask them who they trust and work with.  Most people are happy to share opinions if you ask.

Once you have an idea of the reputable agents, conduct some interviews.  Make sure your values and style are in line with the agent’s.  Trust your instinct – if something seems “off” find someone else to work with.

Congratulations!  You have found your agent … now on to the fun part.

Finding the right building

The best case scenario is to find an apartment building that already has positive cash flow and seems physically sound.  With so many properties going into foreclosure and interest rates incredibly low, now is the time to get a great deal.  There is huge demand for rental housing now as well.

Once you and your agent identify potential buildings, take a look at the financials.  The current owner or property manager will provide you with profit and loss statements for the past few years as well as current leases.

Identify the overall operating expenses and income.  Ideally the income will cover the expenses (including maintenance) and management costs AND cash flow.  One of the benefits of an apartment complex versus a single-family home is that you will have multiple streams of income.

Take your time and look at the available options.  I live in a relatively small community – about 110,000 residents – and there are currently over 40 multi-family properties listed.  With that kind of inventory, you are able to be selective.

Time to make the offer!  Your agent will find comparable properties to help you arrive at a purchase price so you will go in armed with information.

Do your homework

You have found the agent and the property.  You’ve made an offer … now the real work begins.  In your offer, there should be a Feasibility Contingency (I would suggest no less than 30 days) so you have time to research the property.

I can’t stress enough the importance of due diligence.  If you do your homework, there isn’t much that is unforeseeable.  Knowledge is power.

• Physical inspection of the property
• Analyze the financial information
• Consult an attorney for landlord-tenant laws
• Research mortgage options for best rates and terms
• Determine if you will self-manage or use property management services

Physical inspection – Hire a professional inspector with commercial experience to conduct a thorough investigation of the building for any issues.  An inspector that typically deals with single-family homes may not have the expertise needed for a multi-family property.  Make sure the inspector is licensed, bonded, and certified.  Check the ASHI website for recommended inspectors in your area.

The inspection will identify any deferred maintenance, plumbing/electrical problems, as well as any small items that should be addressed and corrected.  He should cover the entire exterior and interior of the building including each apartment unit, and provide you with a written report of the findings.

Get cost estimates for any issues that come up in the inspection.  You will be able to use these findings for negotiation.  It is possible that the Seller will fix the problems (and provide you with the records) or lower the purchase price and have you correct the problems.  Also if you find that the building is in bad condition overall, you have the ability to walk away from the deal and get your earnest money back.

Analyze financial records – The Seller should provide you with all financial records as well as lease agreements and rental history.  If you aren’t comfortable reading profit and loss statements or legal documents, take them to a professional.

Most investors make purchase decisions based on the CAP Rate, which is the net operating income (income less expenses) divided by the purchase price.  CAP Rates vary by location and property type.  Your agent will tell you what a fair rate is in your area.

You also want to look at the leases and rental history.  Does the building have high turnover and vacancy, or is it in high demand?  Are there long-term tenants with a history of paying rent on time?  When was the last time rents were increased?

Once all of the data checks out, you will be able to meet with mortgage lenders to determine the best loan for you.

Getting a loan – Commercial lenders look at the overall financial health of the property and the prospective borrower, YOU.  They will also let you know what kind of cash flow you will need to cover the debt.

30% is a typical down payment for a commercial loan.  Rates on investment properties are around 5.25%, which is higher than owner-occupied single-family, but still incredible.  Shop around for rates and terms and make sure there is no prepayment penalty. 

Self-management versus outsourcing – The easiest way to decide if you can handle the task of property management is to ask yourself this question … “What is my time worth?”  Do you have the time to deal with tenant issues, or would it be better to have someone else handle them?

Here is a rule of thumb for property management:

• 20+ units should support a professional, live-in manager
• Between 10 – 20 is managed by an off-site professional manager
• 10 or less is best to manage yourself

If you hire a professional manager, you can expect to pay 8-10% of the rent as the management fee.  A property manager will collect rents (and any late fees if needed), post notices of delinquencies and inspections, fill vacancies and execute leases, deal with any repairs, and generally handle any communication with tenants.

On the road to financial freedom!!  Investing in an apartment building is a smart financial move as long as you minimize your risk upfront.  You will benefit from multiple streams of income and own property that will build equity for the rest of your life.

By following some simple steps, you can invest with confidence.  Surround yourself with the right people.  Find the right property.  Capitalize on the opportunity.

One of the best gifts we can give ourselves is freedom from financial burden.  We all want to be independent and create wealth.  We all want to make sound financial moves.  You’ve got this – it’s your chance and you can make it happen!!!

If you are really serious in making some serious money with apartments, I strongly recommend you check out Monica Main’s real-state wealth building system at apartmentbuildingcashflow.com.

Monica’s system is designed around one objective – getting you from zero to a solid monthly cash flow (over $30k) the quickest and cheapest!

If so, you might have checked out your prospects on NASDAQ and ran away crying because of the dollar signs you saw next to the ticker tags.

“Google is selling at $600? I could get an Ipad for that.”

That’s truly a long-term investment, and unless you have an extra $30,000, it’s probably not going to mean much for your wallet. But what about a simple way to invest with a quick turnaround and the ability to buy in bulk?

Fortunately, they have that.

It’s a nice little package called penny stocks. Penny stocks, as you might imagine, are called so because they are cheap. As a rule of thumb, they are shares which sell for less than a dollar. Some actually even go for pennies (hence the buy in bulk).

When my friend, Ryan, brought this different way of investing up to me, I was skeptical. It sounded a little sketchy and a little more untrue. But when I watched him turn his diligence into a string of profits, I had to take another look.

That’s when I realized: If NASDAQ and other markets are an eight-mile stretch of bumper-to-bumper traffic, then penny stocks are the autobahns. They’re a fast-moving, energetic way to turn profits in days.

I was sold. I picked Ryan’s brain for all he knew, and lo and behold, it was a cinch to understand.

And when you understand them, profiting on penny stocks can be easy.

So I’ve got you covered on the understanding part, you just strap in for the ride.

Here are the dos and don’ts for maxing out your profits on this lesser-known market.

Understand the risk

First and foremost, realize that penny stocks are the most volatile on the market. That’s because they aren’t traded often. So when they are, it can spell titanic changes for the stock price.

And because there are fewer transactions, at times it can be hard to sell a stock. While you might not realize it, demand does play its part. You could have a summer home in France, but if you can’t get rid of it when you have to, it might as well be nicely-painted firewood (a little extreme, but you get the point).

On top of this, penny stocks aren’t traded on the big markets. They are sold on sites such as Over the Counter Black Board and Pink Sheets. Companies get onto these markets with fewer regulations than on other markets like NASDAQ.

With less regulation, it is far easier for companies to make up false gains and fool possible shareholders.

But realizing these pitfalls is 75% of avoiding them. Follow through on your research, and you will stay way ahead of the curve.

Cover your basics

No good money-making plan comes without due diligence, and if you are starting from scratch you’ll need to know three fundamentals skills for doing it. Within days, you should be able to master balance sheets, income statements and cash flow statements.

It sounds boring, but often times you only need the most important information from them. TIP: Don’t trade before you learn this.

Here’s a fast guide on how to use these sheets:

• Balance sheets give you the basics about how much a company is worth (aka assets).
• Income statements show a business’s recent earnings. A company pulling in significant income would be your stud, while a company managing little profit might be stale.
• Cash flow statements show how much money is going into and out of a business. Are they actively bringing in sales and clients while investing money for growth? Or are they throwing their cash around like a six-year-old at an ice cream truck?

Investopedia is a straightforward site that will tell you anything you need to know about these sheets in the simplest terms possible.

Look for prospects

Finding the companies to invest in is the fun part. Sure, you can pay for tips, but provided I have the time to do research, I always choose the free route.

Newsletters and forums are easily the best way to find investments. But when searching for “Penny stock forums,” you might find your search a little overwhelming. The market is full of people trying to give advice on these fast-moving stocks. If that doesn’t tell you it’s worth it, I don’t know what will.

At first, I had trouble deciphering up from down with all the options I had. “That’s why you let others do it for you,” Ryan told me right before he gave me an airtight time-saving tip. Imagine all those tips condensed into one searchable site.

On a little piece of paper, he wrote Stockreads.com.

Look closer

Finding good companies is like an interview process: Take it one step at a time. Essentially, the two are one in the same. At the heart of it, you’re looking for someone to make you money.

So dig a little deeper. Get a hold of the financial records (balance sheet, etc.) and ask some questions.

• On the income statement, check if they are bringing in money consistently each quarter. Skip this step and you could end up buying an ice cream shop in Ohio in the middle of winter.
• While looking at the balance sheet, compare the company’s debt to its assets. A healthy company should have less than half the amount of debt in relation to its assets. In other words, if they have $2 million in assets and $1.5 million in debt, it’s a red flag.

Once you are well-versed on your sheets, this won’t take you more than five minutes.

Review the industry

These aren’t your Grandpa’s stocks. Whereas looking three years into a company’s history might work for well-entrenched stocks like Google, many penny stock companies haven’t been around that long.

So look at similar companies, also known as sector analysis.

Check out how other businesses in the same industry are faring. Have they been in the news? “No” is usually a good thing. Besides googling the name of your company, check out their competitors and the industry in general.

TIP: This is the stage to be wary of something fishy happening (like companies falsely ballooning their shares). The best way to avoid this is to keep high standards. Stay away from the “iffy” companies, and you’ll never get burned.  

Read the warnings from regulators

Once it’s narrowed down to a handful of companies, move one step further. You’ve searched the company’s name, but find its officers. If you can’t find the names of a company’s officials, discard them like yesterday’s news. Once you do find them, read up.

• Have they or the company had any money problems?
• Was anyone the subject of illegal trading or some other scandal?
• Are any of the officers former employees of Enron?

If so, you get the idea.

The Securities and Exchange Commission (SEC.gov) easily lets you find this information on companies using either the company name or ticker.

Check how much information is available about the company

As mentioned before, these stocks are subject to less regulation. This could mean they aren’t registered correctly, or not all company information is available to investors.

The way I figure out if a company has enough information to make me comfortable is the web site OTCMarkets.com (Don’t thank me, thank Ryan).

Listed companies are broken into three tiers based on how much information they provide to you. The top tier, OTC QB offers the most information, whereas OTC Pink offers the least.

For you own comfort, remember: The more information you find, the better.

Be sure you’ve found the best

Considering it’s your money, this should go without saying. Always double check your decisions.

• Rehash what makes you think this stock will do well
• Take another quick look at the industry.
• Make sure having a cool logo isn’t part of the logic behind your choice.

Staring at the computer screen for an extra hour will often yield more confidence in a company or even a better deal. If it does, it made all the difference.

Have an entry and exit plan and stick to it

Know what you want from a stock when you buy it, and you’ll avoid floating in a sea of less return.

For example, let’s say you buy a stock at $0.05. How long should you hold onto said stock? As a rule, set a (close) ceiling and a floor for how far you’re willing to go.  If the stock makes it up to $0.07, sell it. Don’t get comfortable and tempt fate. This is stock trading, not a poorly made horror film.

On the flip side, if the stock goes down to $0.03, get out and don’t look back.

DON’TS of trading Penny stocks

• Don’t invest money you can’t stand to lose. This is the fundamental rule of trading, and money in general.
• Don’t put all your fuel on the same fire.  The safest way to see returns (and to gain experience) is to put your money into different stocks. Two or three is the best number to avoid stretching yourself too thin.
• Don’t buy stock in industries you don’t like or understand well. Take your industry into consideration. If you’re in IT, you’ll have a lot better idea about the market for wireless routers than an underwater welder. While that might not put you ahead, at least you aren’t behind.
• Don’t invest in companies that aren’t traded in volume (aka a lot and often). Search the amount of daily transactions made with a company’s stock. Look for companies with a lot of trades day in and day out. This will ensure all the transactions are not just from one investor. It will also help you make sure once you do turn a profit, you can turn that into cash.
• Don’t be too trusting. When researching a company, ALWAYS be wary if you can’t find all the information to make an informed decision. Sure this could be a fluke, but they could also be hiding something.

Follow this plan and you’ll see results. When it comes to this game of quick return, you are only limited by the knowledge you can absorb.

[Editors Note: If you want a "hold me by the hand" solution to cashing in on one of the greatest opportunities out there for mushrooming  small amounts of cash to monumental wealth,  you might want to consider grabbing what  James Connelly, A.K.A "The Penny Stock Prophet" has  in store for you on his website.]