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Auto Blog System X Review

Posted by admin on September 2nd, 2010 | No Comments »

The Truth About Auto Blog System X
So Auto Blog System X has just launched and there’s uproar in the industry already…

What Is This Secret $100m Loophole?
Well, I was lucky enough to secure an early copy of the system so I could test it out and give it an honest review. I must say it’s unlike anything else on the market. The site, although it seems like hype is honest and true… This system really does work on autopilot and the earnings are REAL!

I can confirm I’ve seen proof of this pulling in $221,555 last month. You can see some proof yourself at the site now it’s live: Click here >

So here’s what to expect…
The ebook is 60 pages long and isn’t full of fluff or filler… It gets direct to the point and the step-by-step process to setting up your own profitable auto blogs. It’s easy to follow so even someone new would be fine following along.

Now the exciting news…
I’ve been testing it for the 6 days since I got my hands on it.

The Results…
Well I’m hontestly amazed… I’ve actually made $1,749 this week I was shocked at how you can start earning money in the first 48 hours after going live. I didn’t expect this but I can honestly say this is the one product I’d recommend 100% if you need money fast and don’t want to wait months for results. Rob really isn’t been hypey when he says this site will be the most important you visit all year.

Opening Your Own Swiss Bank Account

Posted by admin on September 2nd, 2010 | No Comments »

Finally, a DUMMIES APPROACH to Opening Your Own SWISS BANK ACCOUNT

“Learn how to open your own Swiss Bank Account, and use it in stealth mode to Safeguard Your Assets!”

Are you like thousands of others looking for ways to safeguard your hard earned funds? Well now there is a way. Learn how to open a Swiss Bank Account to bullet-proof your wealth from financial threat before it’s too late.

The sad reality is that it’s much easier to get $1,000,000 LEGALLY by making a frivolous lawsuit against some poor unsuspecting person, than winning the lottery on a Monday night!

In today’s highly litigious society, there has never been a better time to protect your assets against financial threat. Avoid lawyers, lawsuits and hassles from those who want to put YOUR wealth in THEIR pockets. Achieve a lifetime of security and tax savings. Welcome to the Swiss Doctrine!

We have been the pioneer in providing individuals and companies with Swiss Bank Accounts for some time now. Good news is that we are are now offering this information in a simple to follow eBook. Stop paying those high fees to have your Swiss account opened. Learn how to do it yourself today with the Swiss Doctrine!

A Swiss Bank Account is the PREFERRED DESTINATION for many international clients when parking their money offshore.

Unemployment insurance extension and the effect on the unemployment rate

Posted by SKirk on August 30th, 2010 | 1 Comment »

I just finished reading this article “The Folly of Subsidizing Unemployment” on unemployment and the extension of unemployment benefits – more specifically the effect extending unemployment benefits to 99 weeks. As one can imagine, the effect is that it has added to the rise, or continuation, of the unemployment rate.

I have personally experienced discussions with people who are unemployed who have not searched for a new job because they make more money from unemployment than they would make getting a job in their chosen field. To then further or enable this inactivity by the supposed job seeker by extending unemployment benefits to almost 2 years is ludicrous and harmful to our economy.

While it is understandable that there is a certain percentage of the population that, by the nature of the types of jobs they do, have a typical unemployment period that outlast the typical 26 weeks of normal unemployment insurance coverage it is definitely not the norm for the average person.

Therefore any extension of unemployment benefits should have, at the very least, a requirement of job-retraining to provide skills to the worker so that they would posses a skill-set that is more widely in demand. In addition there should be strict reporting requirements showing ardent job seeking by those receiving the unemployment insurance assistance in order to eliminate fraud – the fraud being people not looking for work.

Perhaps we should do a simple test here: If you are unemployed please make a post with the type of job you are looking for.

If you are employed and are in the position to do so please post job listings here so that visitors can see them.

Who knows maybe we will take a few people off the unemployment rolls and get them earning their living so they can be more productive to our society and feel better about themselves too.

Filed under Uncategorized | Tags: Education, extension, Finance, fraud, insurance, jobs, subsidizing, unemployment, work

Is this an investment opportunity?: Cuts by chip makers now hurting smartphone manufacturers :: Editor’s Blog at Local Tech Wire

Posted by SKirk on August 23rd, 2010 | No Comments »

With news of chip and parts shortages and the potential of rising prices it may stand to reason that investments in chip makers could see high returns. If you are a stock market investor perhaps you should investigate these opportunities.

Here is a link to a blog post that shows how manufacturers are being affected:

Cuts by chip makers now hurting smartphone manufacturers :: Editor’s Blog at Local Tech Wire.

There is other information indicating that these parts shortages are not only in the smartphone market but are affecting worldwide production of other devices and products as well. Due to the recession many manufacturers have reduced or eliminated their on-shelf inventories and cut production lines (and eliminated workers). This means that when parts or raw materials are needed that are not on the shelf they have to be made and this takes time.

Further complications are added when the raw materials are not in stock that are required to make a part or component. Those raw materials now have to be ordered and the supplying companies may be in the same position of having reduced inventories, lowered production, etc.

This cycle will have to be broken in order to catch up. There are several ways to break the cycle and one of those is to raise prices to customers. This will either lead to increased profits or lost orders. Orders are lost as the customer decides it is no longer affordable and has to either reduce the quantity needed or go without entirely. This of course means less manufacturing is needed and supply lines have a chance to slowly catch up. It also means slower growth.

If the customer decided to leave the order in pace the manufacturing begins with a longer lead time than normal and with the increased profit margin a manufacturer may decide to use some of those profits to increase the workforce and/or production capacity to supply the order faster. This is a good alternative as more people return to work and manufacturing pace is improved leading to higher economic growth.

*** Please note that 123moneyabc.com is not encouraging anyone to invest money without first doing the proper research and contacting licensed professionals when necessary. Any risk of loss from any investment made based on any information provided on this site is your risk alone. 123moneyabc.com merely publishes information for entertainment and educational purposes only. Any decision taken based on this information, especially financial decisions or decisions where there is risk of loss are taken by the readers of this information at their sole discretion. In other words, we will not be asking you to share any rofits made if you use this information and make some money and therefore you should not come to ask us for any money for any losses either.

Filed under Uncategorized | Tags: inventory, investment, manufacturing, opportunity, smartphone, tech, Technology

You’ve got a plan: How do you get the permits? :: Editor’s Blog at Local Tech Wire

Posted by SKirk on August 18th, 2010 | No Comments »

Here is a good read if you are planning to open a business or relocate your existing business:

You’ve got a plan: How do you get the permits? :: Editor’s Blog at Local Tech Wire.

Filed under Uncategorized | Tags: Development, Planning, Politics, Real Estate, TechLaw

How do Corporate Taxes Affect the Average American?

Posted by SKirk on August 16th, 2010 | 5 Comments »

There seem to be a great number of American’s that do not understand how corporate or business taxes affect their daily lives. In order to raise awareness this article will present some basic economic principles and show exactly how taxes on businesses are really a tax on the people of the country as a whole and the affects that high corporate taxes are having on the American society.

First some definitions:
Let’s define “business” as any corporation, sole proprietorship, partnership, LLC or professional services company, etc.
Let’s define “product(s)” in this article to mean any good or service that a company offers to its customers.
Let’s define customer as either another company, the government, or a public citizen that purchases products from a business.

OK, now let’s look at how a business of any size brings a product or service to market (that is to offer to consumers). A business that decides to offer a product for sale must first determine the market size for its product(s). If the market potential is appealing to the business they move ahead with development and manufacture of the product. Now the business can look at setting the price for the product it is going to offer to fit a particular need.

In order to determine price the business must take into account all costs to offer the product. the cost of the product includes everything that the company must pay in order to bring the product to market. Typical costs include research and development (R&D) costs (R&D costs are often spread over the expected number of units to be sold); marketing costs; labor costs; a portion of the business overhead costs (rent, utilities, etc.); miscellaneous costs; a certain percentage added for a profit margin; and of course TAXES.

What? Taxes? Yes, taxes. The cost of taxes is included in the cost of the product that the business offers. Most people don’t seem to realize they are paying the taxes. In fact, most people when asked about this subject would tell you that businesses just pay the taxes from profits and that whenever the tax rate is increased on these businesses the business just takes less profit.

This is exactly what the politicians that promote higher tax rates on businesses, commonly called the corporate tax rate, want them to believe. These politicians do not want the vast majority of the American public to understand how businesses operate. They do not want the vast majority of Americans to find out that they are the ones who wind up paying those taxes! The business is merely an unpaid tax collector.

The business collects the taxes for the various governments (Federal, State, Local – city and county) agencies that are levying those taxes on them. They collect the tax in the price of the product that the customer purchases. That means the customers pay the tax! the business has added it to the price. They are not going to just take a cut in profits.

So you may be asking why doesn’t a business just take it from profits? Well, in the US we are able to own and operate a business (this is still a right we have). The reason anyone risks their money to open a business is the chance to earn profits. think of this as the pay or reward that a business owner receives for offering products that customers want. Without profits businesses can’t continue to operate. If a business decided to pay taxes out of profits instead of adding them to the cost of the product then those businesses either will have no profits or will have reduced profits. No profits means no business and reduced profits make a business less viable and less attractive to its’ owners. Those owners will not want to continue risking capital when the gain is not worth the risk.

The average American is affected by corporate taxes in that they are paying more for the product(s) they are purchasing. These corporate taxes are also driving companies to move jobs to countries that have better tax structures that allow them remain competitve.

These taxes are limiting job opportunities here in the US. Many people believe that when a company “ships jobs overseas” that the companies are seeking lower labor costs. While this may be true for some companies it is not true for all companies. As modern automated manufacturing processes have evolved they have greatly reduced the labor costs involved in the manufacturing phase. In many cases the labor costs become small enough to be practically irrelevant. What is very relevant is the high-tax structure placed on businesses, so high that many of them open operations overseas so that they can shift money to lower their tax burden.

This is highlighted by a proposal made in Feb. of 2010 by 2 US Senators, Senators Wyden and Senator Greg, who stated in part “A key element to this proposal is a flat 24 percent corporate tax rate to ensure our competiveness in the global market and create jobs in America.” Further, an article By DUANJIE CHEN AND JACK MINTZ published May 14, 2010 in The Wall Street Journal, titled “U.S. Effective Corporate Tax Rate on New Investments: Highest in the OECD” and whose first paragraph includes this statement: “The statutory corporate income tax rate is one of the highest in the world at about 40 percent, which harms the economy and encourages companies to shift investment and profits abroad to lower-tax jurisdictions.”

There is hope on the horizon. As more people become educated and realize the path we are on it is making the politicians take notice. In fact South Carolina Gubernatorial Candidate Nikki Haley is proposing to eliminate corporate taxes as part of her platform she is running on for election this fall as seen from this excerpt from Ms. Haley’s website:
“Prioritize the elimination of business income taxes, starting with eliminating the corporate income tax

Annually, South Carolina collects just over $260 million in corporate income taxes, representing only about 4.5% of the General Fund. Our tax system has been band-aided to saddle some business with a greater burden than others. By leaving a quarter of a billion dollars in the private sector, we will enable South Carolina’s businesses to grow, and we will create an economic development tool that will help us recruit good, quality companies to South Carolina that brings new jobs and benefits the businesses already here.”

The 40% tax rate is killing American jobs, increasing the costs that Americans are paying for products and making America less competitive in the world. If the average American does not get educated to this fact there will be a lot more Americans whose jobs are going to disappear and we will keep having corporate tax rate increases that drive the costs of products even higher stretching our already overburdened budgets.

Filed under Uncategorized | Tags: business, Corporate, Education, Finance, Taxes

7 Power Habits to Guarantee Financial Independence

Posted by admin on July 30th, 2010 | 2 Comments »

by: Daegan Smith
Are you always running short of your funds? Do you still have to borrow money sometimes to at least live comfortably? Do you get to pay your bills on time? If you answered mostly yes, then you are in danger of being financially unstable. You cannot afford the things you want and sometimes, even the things you need. Don’t go sulking out there! You better move your body. If such is the case, better tell yourself that you cannot afford to be that way always. You have to be financially independent.

What is financial independence? Financial independence is the capability to determine and support yourself through your own endeavors. There are 7 ways or habits for you to follow to gain financial independence. With the right attitude and the proper goal in mind, you might just find yourself beaming with pride because of your achievement.

1. Keep a focused vision

Start with a vision. What is your vision for your life? Where are you definitely heading? You want financial independence. You want to be able to stand on your own and have a more stable and secured life, for yourself and for your family. Keep that vision in mind. Hold on to it as you start to realize that vision. The choices and decisions you will make in the future will have to head to the direction of your goal. Return to that vision when things get doubtful or tough.

2. Invest your money wisely

Generate income. Your income will be the financial foundation of your vision. This will basically come from your job’s income, but don’t settle with that. Aim to increase your income. Invest your time, money and effort into a beneficial enterprise. Start a business that you feel passionately about and make sure it will work. Think carefully of every detail in your enterprise and work on it. Do not settle with good enough results. Aim for excellence, quality and integrity to succeed.

3. Save up

Start a fund for your future. Allot a percentage of your present income to savings. Do this at the start of each month, before you go ahead. This will avoid the enticement to buy, buy, buy. It will also teach you how to properly budget your money for necessary expenses. Money in the bank could also earn interest. Although it is not considerable compared to a good investment, it is still a good way to keep money for your future. Just make sure you maintain the money in your savings account. Avoid touching it unless it is really necessary.

Give value also to your coins. Every single cent matters. All of those scattered coins you have there could comprise a few dollars. Even if it is considerably small amount, it will still find some use for that.

4. Spend wisely

Don’t spend all your earnings. As they say, don’t earn to spend. Buy only things that you really need. Tighten those belts for now as you bank for a more secured future. Choose to live simply. Forget the need to show off on other people that you can afford. If you want achieve financial independence, you must hold on to your money as much as possible.

Avoid incurring debts as much as possible. Take control of your finances as much as possible. Credit cards for example could hold you locked in a desperate state. You could be getting what you want now through that credit card, but imagine yourself giving the bulk of your income for interest payments! Make ends meet in the meantime for later on in life, you will surely afford to be leisurely.

5. Keep contingency plans

You must plan ahead for events in the future. Have contingencies. Make certain that your financial assets are secured. At this phase, it is a good option to get an insurance policy. Insure your life, health and property, even your loved ones. Protect your interests whenever you enter into any engagement. Make sure that your endeavor is legal, that you are financially capable, and that it is feasible within your means. This way, you will have optimal performance and desirable results. You could prevent harmful losses in the long run.

6. Take care of yourself

Health is wealth. The only way for you to achieve your dreams and be able to stand on your own is when you are physically and psychologically able to do so. Have regular check ups with your physician. Have a healthy diet. Exercise Regularly. Health will be your asset to achieve financial independence. Only a good physical standing would allow you to enjoy the fruits of your toils today.

7. Be Unstoppable

You must keep yourself focused to achieve the goal of being financially independent. Do not let yourself be distracted by whimsical desires. Do not spray. Do not procrastinate. Every cent and every minute counts as what you do today will have a lot to say on what you will have in the future. Take advantage of every opportunity that will come your way. Keep yourself confident.

Tell yourself, you will not be a loser in this game. You have to make it!

Filed under Uncategorized | Tags: financial Independence, Power Habits

11 Rules for Selling to a Skeptic

Posted by admin on July 30th, 2010 | No Comments »

by: Vicky Therese Davis, William R. Patterson, D. Marq
Let’s face it: the greatest accomplishment for a member of the sales community is closing a deal with a skeptic. Many who are proficient at this art agree that it is far more gratifying to convince someone who initially felt your product was not necessary that it indeed is, than to complete what the industry terms an “easy sell.” Lucky for us all, plenty of doubters buy products and services everyday. Let us examine eleven of the fundamental techniques used by those who succeed in persuading the worst of cynics.

1. Know your product/service
Know it inside and out, backwards and forwards. You should know its strengths, weaknesses, and any proprietary features. Also understand the factors that influence its supply and demand. All of these will strengthen your presentation and help the skeptic make a more informed purchasing decision. There should be nothing that anyone can tell you about what you solicit. You will definitely be asked questions, so be prepared to demonstrate all aspects of your product/service in response.

2. Know your prospect
Along with knowing your product comes knowing your prospect. Strive to know all you can about your target demographic and potential clients. Make sure you deal with the decision maker. You should know their purchasing habits, what motivation determines their choice, and how long a buying decision takes. You must understand how your product fits into their overall purchasing strategy. When you know the buying habits of your prospect, you can use it to develop a longer-term sales plan—that means repeat business. Put yourself in the most favorable position to get a “yes” by focusing on what most concerns your prospect.

3. Believe in your own words
You will never be effective selling something you do not believe in, particularly to someone who is already skeptical. Your lack of enthusiasm will be an obvious as you attempt to convince your potential buyer. When you emanate passion and confidence, you break down the wall of doubt the cynic has built. To not be a pillar of strength during your presentation is a sure-fire ticket to an abrupt “no.” If you are lucky enough to sell a product you do not believe in, you still lose because you risk killing referral business and losing the trust of your customer.

4. Be transparent
Too often, we give strong pitches with lots of hype and little information. We will say, “If you want these benefits, buy my product.” This is done with the hope that a prospect’s curiosity about your bold claims will be enough to convince them to purchase. The idea that if you divulge too much information, you could dissuade your prospect is a far too common falsehood. Be prepared to give as much information as needed to convince the potential buyer to make a purchase. Transparency builds trust. Things people do not understand will always be greeted with “no.” The more information available when making a purchasing decision, the more likely they are to say “yes.” Another benefit of being transparent is the more resources you divulge free of charge, the more likely you are to generate interest in your product/service.

5. Gain trust by associating yourself with things they respect
By offering endorsements and testimonials, especially from well-known sources that your target market respects, you strike the chord of “trust.” Many a skeptic has purchased based on the recommendations of individuals they respect. Secure associations along these lines and look to align yourself with trusted agencies through strategic partnerships. Major endorsements mean less resistance and lots of sales.

6. Offer a free trial, incentive, bargain, or guarantee
The structure of your offer can play a key role in building trust and enticing your prospect to buy. There are many variations of each, but incentives and guarantees are great ways to gain your potential buyer’s confidence. Guarantees and free trails allow the skeptic to try the product/service before determining if your offer is a good fit. Incentives and discounts are also valuable tactics as they make the cynic feel they are getting a value. People always love the feeling of getting something for free and buying when it is a low/no-risk transaction. By guaranteeing the quality of your product/service, you disarm the skeptic and encourage them to buy. You also communicate an important message that you are confident in what you sell.

7. Compare and differentiate yourself from your competitors
Know the nature of your business. Is it commodity based, where the low price bidder wins? Is the strength of your brand a factor? Is there something unique about your offer? You must understand your competitors and their advantages and disadvantages. Once you have both the knowledge of your competitors and an understanding of the skeptic’s needs, you can choose the most effective marketing angle. We offer such phrases as:

“The lowest cost”…you play to the desire for value
“The official”…you validate for authenticity
“The best”…you show superiority
“The only”…you offer exclusivity

If possible, demonstrate the differences that make your product/service unique or superior.

8. Sell the relationship, not the product
Contrary to popular belief, the best salespeople not only close deals, they foster relationships. Relationships are more valuable to both you and the prospect than a one-time transaction. For the salesperson, relationships bring repeat business and the ability to cross-market your offerings; increased referrals because you gain access to the prospect’s network base, and the ability to charge a premium because of the higher perceived value of your relationship. For the skeptic, relationships help build trust. These bonds let them know they will not be abandoned after the transaction is finished. Ultimately, they are buying a relationship with you and your firm, not the product/service, so approach selling that way.

9. Focus on benefits offered and value delivered
Self-interest is the skeptic’s primary concern, so focus on how your product/service solves their problem, fulfills their need, or satisfies their desire. If your prospect is solely bottom-line focused, your presentation should be centered on how your product or service will make or save them money. If your product satisfies a desire, focus on how it fills an emotional void. Emotional selling differs from bottom-line selling because it focuses on feelings rather than metrics. Remember to focus on the benefits that concern your potential buyer; anything else will make a skeptic lose interest and you lose the sale.

10. Isolate their objection
In life and business, two of the greatest challenges are making intelligent decisions and properly following through on them. One of your fundamental goals as a salesperson is to help people make informed decisions. To do so, ask two types of questions: those to better understand your potential buyer and his/her needs, and questions designed to lead your prospect to buy. A series of well-placed questions will allow you to isolate any objections. You should brainstorm every possible reason a skeptic will not buy from you and comprise an effective solution or rebuttal for each. Any other question should be crafted in a way that allows for only one reasonable answer, and that answer should compel your prospect to agree with you.

11. Don’t seem desperate!
Your emotional state will be apparent to a skeptic. Never appear as though you “need” a sale. Everyone avoids a hard-pressed individual. Often we are conditioned to give to and buy from those who do not need our money. It is the same principle that makes us more likely give a rich man fifty-cents to make phone call because he has no change, than to a homeless man in need who makes the same request. Therefore, it is imperative that you operate from a mindset of abundance. Understand there is always a bigger sale out there, so you need not be pressed for this one. Your confidence will put the cynic at ease and make them more likely to buy from you.

Once internalized, these 11 points will mesh into an effective sales strategy. You will begin to think of them not as individual points to be mastered, but one comprehensive selling technique. They are designed to compliment each other and give you a thorough footing for selling to those who are naturally doubtful about you and your service. Master them and win!

Filed under Uncategorized | Tags: selling, Selling to a Skeptic

15 Construction Loan “Inside Secrets” To Building Your New Home

Posted by admin on July 30th, 2010 | 45 Comments »

by: Rick Gomez

1. Which construction loans are available and which one should you apply for?
Home loan banking and the internet has changed the mortgage and construction loan industry forever. Today’s construction loan choices include the 30 year fixed, 15 year fixed, 1 year ARM, 3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM and don’t forget the popular interest only loans. The construction loan of the past was a short term 1 year loan that the customer would have to refinance into a new loan once the construction was completed.

This two time process cost the customer two sets of closing costs and you would have to re-qualify for the new loan once the home was completed. The most popular construction loan today is the “One Time Close” but not all are created equal. Just like any product there are the best loans, good loans and downright bad loans. With today’s technology you now have the ability to obtain a construction loan from the best banks in the country and sign your loan documents at your local title company or escrow office. This benefit allows you to have the most competitive construction loan available. The loan that you should apply for is simple; ask for the lowest rate, one time close for a specific period of time that you think you’ll be living there.

2. Which lenders/banks have the best construction loans and what do you need to apply?
There are plenty of banks willing to lend money for mortgages, refinancing, home equity loans and every other type of loan. But if you’re planning on building a new home, where do you get the best construction loan with the most competitive pricing?

More importantly what is a good construction loan? A typical construction loan nowadays is a construction to permanent loan that may or may not allow you to lock-in today’s low interest rates until the home is completed. If you choose a loan that does not allow you to lock in upfront, the interest rate may end up higher along with your monthly payment. The most important thing when searching for a good construction loan is to find an experienced construction loan specialist that knows which banks are the best. The best banks can offer you a low rate now, upfront, before you start building your new home.

3. Should you go directly to your local bank or to a loan broker for your loan?
Most banks offer loans, and going to them is like shopping at a Ford dealer. The only thing you can get at the Ford dealer is a Ford. But what if you want choices? One way to get different choices is to go shopping to every bank in town. Or you can call an experienced construction loan broker who has done all of the homework for you and has direct access to hundreds of banks nationwide.

A broker is a representative for hundreds of banks. Although the broker serves as middle-man, his or her services will not cost you anything extra. That’s because brokers get loans at wholesale rates, and pass them along to their clients at retail prices, just like any other business. The difference between wholesale and retail is how brokers make money. Therefore, you get the same rate from a broker as if you went directly to the lender yourself.

In Fact, because or their volume, many brokers are able to offer their clients better deals than you can get by talking to the banks on you own. With an experienced construction loan broker you can shop dozens of the most competitive banks nationwide, work with wholesale pricing and can negotiate on rates and pricing.

4. Should you lock in your construction loan before you start building or let the interest rate float?
If the rates are heading upward, lock. If the rates are stable, relax. If the rates are headed downward, float. Right now interest rates are at an all time low and can only go up in the near future so make sure your construction loan is locked into today’s best interest rates with the ability to float downward. Inexperienced loan officers will offer their customers an enticing low adjustable rate during construction without an upfront lock-in and the customer may end up having to lock into higher interest rates when the home is completed.

Or the customer is sold on a higher rate during construction with a float down option after the home is built. Again, the rate could be much higher when the home is completed.
Meanwhile the loan officer has been paid and has moved on to the next loan. The only time you want this type of loan is if it’s the only loan you qualify for. Most loan officers do not explain this to their customers until it’s too late (Closing). Always ask. Is the construction loan rate locked upfront or floating during the construction loan period? Then ask, is the rate during the construction loan the same rate when the loan converts into the mortgage period.

5. What experience does your construction loan officer have and does it matter?
When it comes to money its amazing how fast any loan officer becomes an instant expert at construction loans. You must keep in mind that all loan officers are salespeople. Yes, I know they have fancy titles like loan officer or vice president but the title is nothing but a fancy name for loan salesperson. Loan salespeople usually have one main goal in mind when helping you with your loan request and that is the commission. By the way, the fancy name for commission in the loan business is called a loan fee, points or yield spread premium (YSP).

Now don’t get me wrong, there are a lot of good honest sales people (loan officers) that work very hard at providing you the best service and rates. What’s important is distinguishing the good from the bad.

The following questions allow you to quickly find out if your loan officer is experienced at construction loans.

How long have you been doing construction loans? 5 years or more is best.
What is the loan to cost (LTC) required for construction loans? This is cash equity such as down payment on land. This can range from 5 to 20%.
What is better? The voucher or draw disbursement system and why? Draw is now the most popular because the customer has the control of the money.

If the loan officer (sales person) can answer these questions with no problem then they have passed a pretty good litmus test. If you really want to throw a curve at them, ask the loan officer if they have ever built a home themselves and what type of construction loan did they get. If you find a loan officer that has gone through the experience of building a home themselves then the odds are you have found an experienced loan officer.

6. Qualifying for your construction loan, exactly how is it done?
The first thing your loan officer wants to see is your completed loan application. The loan application called the (1003) will tell a story of your financial picture.

The completed loan application will tell the loan officer many things including,
1. What type of loan you want.
2. How much money you need.
3. Your social security number.
4. Your current employers.
5. A list of all you assets (money) and liabilities (bills).
6. How much money you make.
7. How much real estate you own.

Once the loan officer has your loan application in hand they can determine whether you can qualify for a loan. One of the first items pulled is your credit report. The credit report is going to tell 3 main important things.

1. Show your current credit score. The credit score can range from 500 to 800.
2. Show a complete list of all your monthly liabilities (bills).
3. Show all past credit problems including bankruptcies, foreclosures and late payments.

With this information the loan officer will do an analysis to determine if you can qualify for the loan amount that you’re looking for. This analysis determines a ratio called the (income to debt ratio) and depending on the banks underwriting guidelines this ratio will usually range from 36% to 45%. The income to debt ratio is the percentage of monthly debt payments (including your new mortgage payment, taxes and insurance). This ratio should not exceed 36% to 45% of your monthly income.

Some banks will allow you to exceed this ratio if you have an excellent credit history and excellent credit score. The current and the most popular method of qualifying for a loan today is the stated income loan. Stated income allows you to qualify without verifying your income on your tax returns, W 2′s or pay stubs. The only thing the bank verifies when applying for a stated income loan is your credit score, liquid assets and that you’re employed.

7. How not to be taken by the oldest trick in the book “Bait and Switch”?
The mortgage lending business is notorious for baiting and switching. Baiting and Switching is when a loan officer or advertisement offers you one thing and then tries to sells you something else. Typical signs of baiting and switching are obvious, some basic examples are:

1. Over the phone, you are offered a much lower rate than any other quote and once you’ve sent in your application the rate you were quoted has all of a sudden vanished.
2. You are offered a construction loan with no points and no loan fee’s. What you are not told is that you are paying for it with a higher interest rate and the costs are built into the loan.
3. You are told that you will not have any payments while you’re building. What you’re not told is that all construction loans have this option and it’s called “interest reserves” and the payments are added to the loan amount.

Remember three important facts and you will always be in good shape.

1. If it sounds too good to be true there’s usually a reason.
2. Always get your quote in writing, (ask for a good faith estimate).
3. If you are satisfied with the rate and construction loan program that you are quoted, ask to lock it in upfront.
On the flipside, it is very important to realize that most loan products typically go hand in hand with banking guidelines. These guidelines are provided to loan officers to coincide with the customer’s qualifications.

For example, if you have a very high (FICO) credit score with land free and clear, you have more loan options than the person with a very low (FICO) score and no land equity.

8. Now for the biggest secret of all, ready?
All banks have access to the same rates and the only reason everyone ends up with a different rate is directly related to how much your loan officer and bank is going to profit from you. You should probably read that one again.

Your loan officer gets paid like all sales people either by:
1. Salary plus commission
2. Commission only.
It doesn’t matter if you walk directly into a bank or work with a broker, basically everyone gets paid the same.
If you walk directly into a bank the loan officer most likely gets a basic salary and a percentage of the loan origination fee (points and yield spread premiums). If you work with a broker the broker usually works on a straight commission (points and yield spread premiums).

Becoming a broker allows the loan officer the ability to offer their customers the best loans with the most options. It always amazes me when I see TV commercials or hear radio commercials advertising $395, zero closing costs. I always wonder if people understand how they can do that. Ok, here is how it is done.

The inside secret is that in exchange for these low or zero closing costs the lenders will make their profits and cover the costs of the loan by charging you a higher interest rate.
This higher interest rate pays what they call in our industry a (YSP) yield spread premium. By charging you a higher interest rate over the life of the loan the bank can easily afford the commercials, commissions, payroll, and cover the costs of the loan while still making a profit. Also the service is usually very poor and impersonal. So the next time you see advertising with no closing costs you will know exactly how they are doing it.

So please remember that there is no such thing as a free lunch in any business. Business wouldn’t be business if there were no profits. The most important thing is that you want the best loan available at a fair price with an experienced loan officer.

9. What are interest reserves and contingency funds doing in your closing costs?

The two things most customers do not factor into the cost of the building their new home are interest reserves and contingency funds. Interest reserves are added to your loan amount to make the monthly payment on your loan. Yes, you read that correctly, you will not have to make a monthly construction loan payment while your home is being built. The payments are made from this interest reserve account and no, it’s not free. This reserve is added to your construction loan amount.

Interest reserves were designed for the benefit of the customer. Most people building a new home are either paying rent or have an existing mortgage payment while their home is being built. The last thing a customer needs is another monthly payment while building. So, banks created the interest reserve account by adding up the estimated interest payments over a 12 month period and add this to the loan amount. If you do not want interest reserves added to your construction loan amount you can ask to make your own monthly construction loan payment. Contingency funds are added to the loan amount just in case you need more money to build your new home.

With all good intentions construction loans tend to have cost over runs. The bank adds 5% to 10% of the cost breakdown and adds this amount to the loan amount just in case you have cost over runs or need better appliances. If you don’t need or use this extra contingency fund then it will not be added to your mortgage upon completion of your new home. So when you apply for a construction loan ask your loan officer to provide you a copy of the estimated construction loan budget. The budget is created from your costs and includes every cost within the loan including land balances, closing costs, interest reserves, contingency and bank fees.

10. What is loan to value (LTV) and loan to cost (LTC)?
Why it’s probably the most important factor in getting approved for a construction loan besides your income and credit. Initially most banks are concerned with loan to appraised value (LTV) but banks are really more concerned with how much cash you have in the project (LTC). If you were buying a home instead of building you would normally have to put 20% of the purchase price as a down payment.

Since you’re building a home your cash equity usually comes in the form of how much cash you put down on your land. Cash equity is king when applying for a construction loan. For example, if you bought a $200,000 piece of land and the land is owned free and clear you have a lot of cash equity. With this much cash equity you will most likely not have to bring in any additional cash.

Or if you bought a piece of land over 12 months ago for $100,000 and its now worth $200,000 the bank will use the current value because you bought it over 12 months ago.
In both cases you have brought $200,000 cash equity to the table. Now if you just bought a piece of land for $200,000 and you only put down $20,000 most banks will want to see 10% to 20% cash into the total project. Other qualifying cash equity that can be counted are any pre-paid’s such as plans, grading, permits etc. These pre-paid’s can be used for cash equity or you can be reimbursed from the construction loan at closing.

11. Should you hire a builder or be an owner builder?
Do you really want to be an owner-builder? The goal of being an owner builder is mainly to save money. Some people can save quite a bit of money if done correctly.
Some people are not meant to be owner builder. Possible problems when acting as owner builder are:

1. Construction cost over runs.
2. The best banks with the best rates require a builder or supervisor.
3. Managing contractors to finish on time or to show up for work.
4. Depleting your personal savings.
5. The need to borrow more money.
6. Loan extension penalties.
7. Being taken by unscrupulous contractors.
8. The need to refinance your construction loan.
9. Foreclosure.

I could go on and on about the horror stories I hear from Owner Builders that did not get a construction loan and acted as their owner builder. If you have never built a home before and absolutely need to act as owner builder please take my advice and hire a reputable builder to supervise you and the building of your new home, for a much smaller fee than their normal fee. The builder/supervisor will help you with the cost breakdown and manage the subcontracting on an as needed basis. If one of your contractors gets out of hand or you need help of any kind, you can call the supervisor for assistance.

Your job is to make sure you are hiring the right people to complete your home. It can make the difference between happiness and misery. For those of you that have experience at building homes but do not have a license ask about our owner builder program. To qualify you will need a resume showing your experience. If you decide on hiring a builder to do everything make sure you hire a reputable builder or supervisor with a good reputation and plenty of references.

Ask your friends if they know a good builder and when you start to hear the same name over and over you know you’ve found a good one. Ask the building inspector for a list of reputable builders. The most important point is shop around until you find a builder with the most reputable and honest background. If you pay a little more for an honest and reputable builder or supervisor you will be very thankful before, during and after your home is completed

12. How does your builder determine how much your home will cost to build?
The Estimated Cost Breakdown of your home is probably one of the most important forms in the construction loan package. This is the breakdown of each particular cost of construction of the home. The foundation, lumber, framing, plumbing, heating, electrical, painting, and builder’s profit, etc. The builder usually completes this form to show you exactly what it will cost to build your new home. The most important thing to remember here is that you do not want to underbid any line item and you do not want to overbid any line item. You want accurate numbers from real bids (not guesses) and a 5% contingency for cost overruns.

Good builders will send out the house plans to their contractors for specific bidding on each main item or can estimate the home themselves. The builder will send one set of plans to the foundation contractor, one set of plans to the framer, one set of plans to the plumber, etc, etc. When all the numbers come in, the builder will fill out the cost breakdown and come up with a total cost to build your new home. Bad builders will use the WAG method of estimating the cost of building your new home. The WAG method stands for “Wild Ass Guesses”. This method is the most dangerous since it can lead to under and over bidding.

The last method of bidding is simply to over inflate every single line item on the cost breakdown. This is the most profitable method for the builder and the most expensive to the customer. This is why you want to find an honest, reputable builder with a good reputation in your community. Once the cost breakdown is completed and you plan on hiring this builder to build you new home you will need to type up a contract. The contract needs to equal the added total of the cost breakdown. Most builders will provide the contract but make sure you read it carefully and that you add your requirements as well. There are two types of contracts

1. Fixed Contract: This contract is simple and straightforward. Take the total of the cost breakdown and put that fixed number into the contract. The builder will provide a list of responsibilities.
2. Cost plus Contract. This type of contract is usually for large construction loan projects.
A. The customer wants to make a lot of changes to their home as its being built.
B. The construction loan period to build the home is 18 months so construction costs can change drastically. The builder prefers this contract to protect the costs and profits.

13. How does your builder get paid while your home is being built?
There are two methods that banks use to make sure your builder gets paid while building your home. The Voucher Reimbursement system has been around for quite a while. As usual you’ll have some builders that are very familiar with this method of payment and do not like change. Most builders are really only concerned with how fast they can be paid and how often they can be paid.

Most banks find that the voucher system is simply too much paperwork to deal with anymore. The builder is given a big book of vouchers that looks like a check book and when they want to get paid or need to pay a contractor they need to fill out a voucher form. This voucher form is a request for payment and as long as the contractor has signed the lien release the bank will pay the amount requested.

The bank will also request an inspection throughout the construction loan to make sure that the work is completed. The Draw Reimbursement system is becoming the standard for construction loan funding for most banks.

The main difference is that the bank puts the accounting responsibility on you or your contractor. The bank uses your cost breakdown as the guide for the draws. Some banks use specific schedules of 4 to 7 draws based on completed construction milestones, such as foundation or framing. The draw systems also allow the choice of taking draws on a monthly basis, collecting partial payment for work and material items that have been completed. I personally prefer the draw reimbursement system because:

1. It requires less work.
2. Provides more control for both the customer and the builder.
3. The funds are wired directly into your bank account.
3. It’s easier to use than the voucher system.
4. Some banks now have online draw requests.

14. What type of construction loan insurance is required and who is required to get it?
The reality of construction loan insurance. There are three types of insurance needed to build. All banks require the first two insurances, course of construction and general liability. Workman’s compensation is only required if your builder has employees.

1. Course of Construction Insurance. This policy is an all risk policy to include, fire, extended coverage, builder’s risk, replacement cost, vandalism and malicious mischief insurance coverage.
2. General Liability Insurance. You or your builder can provide this policy. This policy is a comprehensive general policy or a broad form liability endorsement. The minimum amount of $300,000 for each occurrence is required. If the builder provides the insurance a general policy of $1,000,000 or a broad form liability endorsement is required.
3. Workman’s Compensation Insurance. If your builder owns his own company and has employees that are helping to build your home, workman’s compensation is required.

If the builder simply subcontracts out the work and does not have employees per se, they will need to write a letter acknowledging that they do not have employees and are not required to have WCI.

15. Has your loan officer structured your construction loan properly and why it’s so important?
I get loans all the time from customers that went to another lender or broker and were either turned down or were offered a below average construction loan. The reason was because the loan was not structured properly before it was sent into the bank. Structuring a loan properly is simply making sure that you match the customer’s loan request to the banks underwriting guidelines.

Recently I received a construction loan request from a customer that was turned down by a large national bank. The loan officer had calculated the income incorrectly and submitted the loan as full documentation. The customer owned his own business and had a lot of tax deductions on his tax returns. The way banks qualify customers as full documentation is very conservative and the loan was turned down. We took the loan, found the problems upfront and submitted the loan as stated income. The customer was approved and built a beautiful home in Rancho Santa Fe CA.

Structuring construction loans for approval is vitally important and is the last thing on most customers’ minds. Each and every time I receive a loan from a customer with a bad loan experience it is always because the loan officer did not specialize in construction loans and did not structure the loan accordingly.

Other common mis-structured loan scenarios include:
1. Low cash equity.
2. Improperly completed appraisal.
3. Unexplained credit derogatory.
4. Income incorrectly calculated.
5. Mismatch of customer loan request to the correct lender.
6. Plain and simple incompetence

The old saying “you get what you pay for” is especially true when obtaining financing in building your new home.

About the author: Rick Gomez specializes in construction loans in the state of California. You can download a complete construction loan application package and a list of the best banks at http://www.californiaconstructionloans.com

Filed under Uncategorized | Tags: building a home, construction loans

20 Small Business Tips, For Success

Posted by admin on July 30th, 2010 | No Comments »

by: Dave Ryan
These are just some general tips to keep in mind as you design/operate your small business:

1. Take the time out to explore and understand whether or not you are compatible with running our own business. Some people are just plain happier and better off financially on the other end of the paycheck.

2.Get your personal finances in order. Before you jump into the entrepreneurship world, get your own money matters squared away.

3. Pick your niche. Many small business owners succeed in businesses that are hardly unique or innovative. Take stock of your skills, interests, and employment history to select the business that is best suited for you.

4. Benefit from your business plan. The exercise of creating a business plan is what pays the dividends. Answer the tough questions now before the meter starts running.

5. Do not think you need bankers and investors at the outset of your business. The vast majority of small businesses are bootstrapped.

6. Acquire the proper background. In the early months and years of your business, you will have to acquire many skills. Gain the background you need to oversee all facets of your business well, but determine what tasks you should outsource or hire employees.

7. Remember that nothing happens until a sale is made – How many good products go nowhere because they do not reach the shelves? Sales drive your business. You will need a good marketing plan to sell your product or service.

8. You have to see a customer to know one. N o matter how busy you are, spend at least 25% of your time with customers. You cannot make the proper business decision without understanding their viewpoint.

9. Solve your customers’ problems. The best way to satisfy your customers is not by selling them products but by giving solutions to their problems. There is a big difference.

10.Quality takes minutes to lose but years to regain. Quality is not a destination, it is a never ending journey. After you have strayed from quality’s path, your journey maybe sidetracked forever.

11. Put profitability first, rewards seconds. In small businesses, profitability must come first. Find out how to measure your cash flow and understand key financial ratios.

12. Hire supporters. If you intend to create a growing business, your number one duty is to assemble a great team of employees.

13. Do not do it alone. Find such help from small business peers, a mentor, even trade associations. They can help take some of the trial and error of beginning your business.

14. Vendors are partners too! Treat your vendors like customers and watch your partnership grow.

15. Make use of benefits. Understand how to provide insurance and other benefits for your employees and cut your tax bill at the same time.

16. Ignore regulatory issues at your peril. Federal, state, and local governments require licenses, registrations, and permits. Obey them or face losing your business.

17. Know the tax laws. Invest in understanding tax issues that affect your small business.

18. It’s the people! Whatever happens to a small business happens at the hands of the people who work for it. The evolution of the business is a result of their efforts.

19. Fast, good, cheap. Pick any two. Serious trouble awaits those who attempt to be all three in the market place. Stick with what you do best.

20. Develop a passion for learning. As your business grows, you need to change and grow along with it. One common denominator can be found in all successful business owners and that is a passion for learning.

Filed under Uncategorized | Tags: business tips, small business, small business tips

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