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Did you know there are few companies, including your mortgage lender, that have programs that will help you minimize the interest being calculated on your loan, thus reducing your mortgage balance and shaving 6-10 years off your mortgage.

Benefits:

1. Cash Flow:  Allows you to pay the same monthly payment, however you can split it into 2 payments and pay bi-weekly, just like your check comes from your employer.

2. Save $$$: Eliminate years off your mortgage! Pay your mortgage bi-weekly (26 bi weekly payments) 13 monthly payments a year.

3. Budgeting: Budgeting becomes easier because a smaller amount can be taken from each pay period.

4. Add Extra to your payment: Add just a little extra to your bi-weekly payments to take full advantage of the program and turn your 30 year mortgage into 20 by just paying bi-weekly and kicking in just little extra money each payment.

5. Increases 1st year equity: Your home equity increases faster with this bi-weekly payment process.

Your loan will not change with your current lender, nor with your interest rates or terms of your loan. You can even re-finance down the line and keep the program in place.

This program doesn’t require a company or your lender to actually do it. Just requires good discipline. Having a agency facilitate the payments for a nominal fee makes sure you stick to the program and give you one less thing to do. The program is quite simple, it makes it easy for you to make 1 extra payment per year, and also reduces the interest off your loan.

An extra payment a year makes a big difference. For example, someone who borrows $100,000 at 6 percent interest for 30 years would pay a shade under $600 a month principal and interest. Let’s say taxes and insurance bring the monthly payment to $1,000. By making an extra $1,000 payment every year, a borrower would pay off the mortgage in 22 years, 2 months, knocking almost eight years off the loan and saving about $34,000 interest.

So if your a disciplined person, you might consider handling this yourself. For those that aren’t, there are a few companies that will help you.

HOW DO I GET STARTED:

Visit some companies we have found, or call your mortgage lender and see if they participate in the this process. These companies are not endorsed by “Pink Blue”  agents, merely our research found a few companies that practice the system. Please do your due diligence when selecting a provider to facilitate your payments. Most companies do have a set up fee and a payment processing fee which can add up.  So check with your bank, lender to see if they have a system in place before contacting a third party.

http://www.nbabiweekly.com/

http://www.bwma.com/client/index.php

http://www.myequitycorp.com/

http://www.mdrpadvisors.com/

Wanna know more, Im happy to talk with you, here is my cell. 612.889.2020 – Brenton Hayden CEO of Pink Blue.

1. Do not get emotional about house flipping. It is after all a business. If the numbers do not work, proceed to the next property. Some investors commit the mistake of being too attached to the flip that they sell at a high price and end up holding the flip longer thus reducing profit.

2. First impressions count. Pay attention not just to the inside of the house but the outside as well. You cannot show off all the upgrades done inside the house if potential buyers are turned off by the outside appearance of the house and its surroundings.

3. Personal tastes are a no-no in a flipped property. Your flip needs to be attractive to buyers, not you. You should define who your target buyer is and what is his/her preferences. Color is a vital part of flipping houses. Stick to neutral colors especially when it comes to painting and laying the carpet.

4. Spruce up the kitchens and the bathrooms. They will noticeably increase the price of a house. But be sure that fixtures and appliances match the target price range. If the kitchen and bathrooms look clean, sleek and updated, the house will sell faster and for a higher profit.

5. In house flipping, time is money. After making a detailed list of renovations to be done, come up with a time line. A time line is an important way to let contractors know when the next group of workers needs to be in a specific part of the house. One rule of thumb is to work from top to bottom and tackle the big work projects first.

6. Hire a good contractor. You cannot be at the job site all the time. This is where the contractor comes in handy. He can keep a close watch on your time line and also the part of the budget that is his responsibility. He can keep track of problems and readily find solutions. The easiest way to find a good contractor is through referrals.

7. Be ready for paperwork. There are loads of paperwork that accompany house flipping. The most important paperwork you will have to attend to are permits. It takes time to obtain permits so you need to apply for them before work begins. Not having the necessary permits can cause work stoppage and this cost money. Contracts and receipts are doubly important. Be sure to keep them. You also need to obtain insurance coverage not only on the property but the workers as well.
8. Keep track of your progress. Throughout the entire house flipping process, you have to constantly monitor your progress. That way, you will know at any given time where you stand on the project. This will help you keep focused. Time is of the essence in house flipping.

9. Start small or simply, and then work your way up. Your first house flipping project should only entail cosmetic work. You may not get a huge return on your investment but you will surely learn valuable lessons and develop experience.

10. As with any business venture, expect the unexpected. You will certainly encounter something that you simply did not expect. It may be a problem that appears hours before the transfer of ownership. You will almost always run at least a little over budget or hold the flip a little longer than expected.

GOLDEN RULE: If you receive an offer on your property and it results in a profit, TAKE IT! Don’t be greedy!

Want to flip a house. Me and my partners and clients have flipped nearly 200 homes. Ask me to help you find the your next flip.  Call 612.889.2020 – Brenton Hayden CEO of Pink Blue.

Typically 5% or less cap rate is poor. 8% or above is good. 10% or better is considerably better.

What is a cap rate right? And How does it apply?

Capitalization rate (or “cap rate”) is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value.

In other words divide purchase price by net income produced on a income producing property and you will determine your rate of return on your investment. When buying multi family, this is something you should strongly understand and use it daily to find hot deals.

For example, if a building is purchased for $1,000,000 sale price and it produces $100,000 in positive net operating income (the amount left over after fixed costs and variable costs are subtracted from gross lease income) during one year, then:

• $100,000 / $1,000,000 = 0.10 = 10%

The asset’s capitalization rate is ten percent.

If the owner bought the building twenty years ago for $200,000, his cap rate is

• $100,000 / $200,000 = 0.50 = 50%.

Or is it? The investor has to take into account the opportunity cost of keeping his money tied up in this investment. By keeping this building, he is losing the opportunity of investing $1,000,000 (by selling the building at its market value and investing the proceeds). As shown above, if a building worth a million dollars brings in a net of one hundred thousand dollars a year, then the cap rate is ten percent. His real cap rate is ten percent, not fifty percent, and he has a million dollars invested, not two hundred thousand. Ergo, it is the current value of the investment, not the actual initial investment, that should be used in the cap rate calculation.

As another example of why the current value should be used, consider the case of a building that is given away (as an inheritance or charitable gift). The new owner divides his annual net income by his initial cost, say,

• $100,000 (income)/ 0 (cost) = UNDEFINED

Anybody who invests any amount of money at an undefined rate of return very quickly has an undefined percent return on his investment.

From this, we see that as the value of an asset increases, the amount of income it produces should also increase (at the same rate), in order to maintain the cap rate.

Capitalization rates are an indirect measure of how fast an investment will pay for itself. In the example above, the purchased building will be fully capitalized (pay for itself) after ten years (100% divided by 10%). If the capitalization rate were 5%, the payback period would be twenty years. Note that a real estate appraisal in the U.S. uses net operating income. Cash flow equals net operating income minus debt service. Where sufficiently detailed information is not available, the capitalization rate will be derived or estimated from net operating income to determine cost, value or required annual income. An investor views his money as a “capital asset”. As such, he expects his money to produce more money. Taking into account risk and how much interest is available on investments in other assets, an investor arrives at a personal rate of return he expects from his money. This is the cap rate he expects. If an apartment building is offered to him for $100,000, and he expects to make at least 8 percent on his real estate investments, then he would multiply the $100,000 investment by 8% and determine that if the apartments will generate $8000, or more, a year, after operating expenses, then the apartment building is a viable investment to pursue.

I love talking cap rate, wanna call me direct, do so at 612.889.2020- Brenton Hayden CEO of Pink Blue.

These are some great tools that will give you quick insight to determine whether or not renting is in fact a good option or whether the property is a good buy.

http://www.forbes.com/fdc/rentorsell.shtml – flash version (ok version)

http://www.forbes.com/tools/calculator/caprate_rent_vs_sell_house.jhtml – non flash version (better)