Carl Agard's Real Money Real Issues Blog

Balling on a Budget

2008-11-23T16:11:00.000-08:00

Balling on a Budget

We all like to live the lifestyles of the rich and famous. We see images everyday on TV of people living the good life. After you look at your bank account and reality sets in, you realize that you have to get more out of life while making less than you like.

In today’s economy in which money is tight, you have to be creative with your budget. Here are some tips on doing that while having fun while doing it:

Shop at outlets/Buy off season – I am a shopaholic myself. I used to spend up to $5,000 a month in clothes. I had so many clothes that I would find shirts with tags still on them three years after I bought them. This is why I am talking about this first.

Outlet malls are great for savings. After the season is up and the new line comes in for that fashion designer, the label sends the clothes to their outlet shop. You can get luxury designer clothing for 50% to 80% off.

It may be a season behind but who cares. You don’t bump into the fashion editor of Vogue Magazine everyday anyway.

Most clothing designers have an outlet store. You can go online to find the closest store. Outlets are especially good for buying your children’s clothes. Kids outgrow clothes really fast, so it doesn’t make sense to buy them at full price all of the time.

Buy clothes when they are about to change seasons. When the summer is over and Macy’s, for example, want to make room for the Fall/Winter line, they will mark down the remaining summer clothes at a deep discount.

I used to buy Polo clothes the minute they came out at full price to be the first one with it. I would go back three months later to see it on sale for half off.

Sell your junk on E-Bay – I heard a money expert on TV the other day say that every household has at least $100 worth of junk that they can sell. I started looking around my house and found $500 worth.

We all have some items in the closet, attic, or in storage that we don’t need. We tend to keep them around for sentimental reasons. In tough economic times the junk got to get going.

Look for clothing items, furniture, paintings, or even your ex boyfriend or girlfriend stuff you can sell on E-Bay. It is easy and very cheap to set up an account. Take good pictures of the items and don’t overprice. I posted a painting that I didn’t need anymore on E-Bay and end up making a profit!!

You can also set up a garage sale on the weekends. Post an advertisement on http://www.craigslist.com/ or put up signs around your area. You will be surprised how many bargain shoppers are out looking for steals.

Add the money you make from selling your junk into your “pay yourself first” retirement fund.
Drive wise, not fast – The higher gas prices go, the less we have to enjoy for ourselves. You have to learn small tips of driving that can make you car fuel efficient.

Stop drag racing down the block. Take it easy when you drive. Sudden acceleration eats up a lot of gas. Also you lessen the chance of getting a speeding ticket you cannot afford.

Keep your tires inflated properly. Low tires cause you to burn gas as well. The better you maintain your car, the less likely you will have to bring it in for costly repairs. So keep up your dates for tune-ups and oil changes.

If you have a co-worker that lives by you, try to car pool. This will save both of everybody gas and mileage on your cars. Take mass transportation sometimes as well. In New York City, I used to spend $20 a day just to park down the block from my real estate office. Recently I tried taking the train and sometimes walk on a sunny day. I saved $320 in one month and also lost some weight.

Use grocery store coupons – We get the circulars in the mail or in the Sunday papers. Most of the time they end up in the garbage can. Upon further inspection, we are literally throwing away money.

In a tough economy it is smart to find ways of stretching your dollar. Stores are doing everything they can to get people to purchase from them. They are doing more promos than ever to get you in the door.

I used to laugh at the old lady that would hold the shopping line up as she goes through all of her coupons.

Who’s laughing now?

Now I am like the old lady.

Look through the circulars for discounts and coupons on items that you use everyday. Office Depot sends me coupons to get printer cartridge at 20% off. Over a year, that saves me $50.

Many food products will give you half off or buy one get one free coupons. If the food product that you eat does not offer any specials, maybe you need to try their competitor that do. Using coupons on a regular basis can save you 10-20% off of your monthly food expenses.

A lot of large food chains like Kroger’s, Pathmark, and Tom Thumb’s have a shopping rewards club that you can join. When you buy a selected item, the savings will be automatically deducted at the register. While you are shopping you will see labels on the counter on which items are having savings. You can buy $100 worth of food to have it reduced to $89 after they swipe your rewards club at the register.

Department stores like Macy’s and Dillard’s have coupons as well in your Sunday paper. Selected items by brand name designers will be discounted from 25% to 50% off. This is helpful for back to school shopping. There are certain days that specials are done, like one day shopping specials. These are done on a slow day like Tuesday to get traffic to come to the store. If you do not look through the circular, you may miss when the one day special is. You will buy a pair of jeans on Wednesday for $75 that you could have gotten for $50 the day before.

Many sit down restaurants and fast food franchises are using coupons also. With tight competition and people eating out less, they are promoting more specials for you to come by and eat. If you do not know about the specials, they will not tell you when you get your bill.

So clip out your coupons, calculate your savings, and make sure you pay attention to the expiration date of the coupon so you don’t miss the boat.

Buy Bulk – Now that we are on the subject of saving money when you shop for food, the next step for you to do is to get a club card from Costco and Sam’s Club.

One thing I know is for sure is that you will always eventually run out of tissue. Instead of running to the store to buy two rolls, why not buy 50 rolls?

That is the concept of buying bulk. You can stock up on items that are necessities like paper towels, water, and condiments. You will save more over the long term because you have bought the items in larger quantities at a wholesale price.

You can also buy other items at Costco and Sam’s Club like electronic equipment, hardware, and even tires.

Because they buy large quantities from vendors, they are able to pass the saving on to you, the consumer.

Other tips on Balling on a Budget

- Never buy a luxury car new
- Buy floor model furniture and tv’s
- Use travel sites
- Go to lounges instead of clubs
- Eat out less per month, bring your lunch to work
- Shop around, compare costs
- Go to less movies and sporting events, go to more free places like parks, museums, and libraries
- Cancel memberships and subscriptions that you don’t use
- Combine your phone, cable and internet bills into one/use less features
- Avoid paying bank fees
- Don’t buy the latest fad!!

Excerpt from Getting the Real out of Improving your Credit by Carl Agard. You can order you copy online at:
http://www.carlagard.com/
http://www.adelphipublishinggroup.com/
http://www.amazon.com/
http://www.target.com/

Also available at select Borders, Barnes & Nobles, and independent bookstores nationally.

2008-10-09T13:56:00.000-07:00

Top 5 Mistakes to Avoid When Starting a Business
By Carl Agard

article in Sept/Oct 2008 Upscale Magazine

Even in a bad economy, now is a good time to start a business if you are a budding entrepreneur. Uncertainty in the workforce and cuts in salary is making it an easier decision to become your own boss. Nothing is more appealing than the financial independence that you gain by owning your own business.

Everyone has dreams of creating their own money making business. Your earning potential is limitless and you have the flexibility to spend more time on things you like; like traveling and being with your family. But starting your own business is not always easy. Lack of knowledge, preparation, and even mentorship causes many new businesses to fail. As a lifelong entrepreneur since the age of 16, I have witnessed many common mistakes that new business owners make; some I have made personally.

Before you leap into fulfilling your dreams, take note of some common business mistakes that owners make. Preparing yourself properly will save you time and money.

1. Not using the right entity for the business: This is a common mistake that I see all of the time. Most new business owners do not take the time, or spend the money to incorporate their business the right way. By incorporating your business as a Corporation, Limited Liability Corporation (LLC), or Partnership, you will be able to take advantages of many tax breaks, plus also shield yourself personally from any liability from the company. Your company will be registered with the state that you operate in, and your company will gain instant credibility. You can incorporate your business through your accountant, lawyer, or an online service like http://www.incorporatetime.com/ .

2. Insufficient funding to start business: Many successful entrepreneurs started their business by begging and borrowing. Without the right resources, you will not be able to get your business off of the ground. You have to establish a budget for rent, equipment, products, marketing, staff, and advertising. By not budgeting in the beginning, you may fall short of your goals. Besides your own initial startup capital, research other options to get funding like the Small Business Administration (SBA) and your local business banker. In your budget, plan for unforeseen expenses like an emergency or change in the market.

3. Not developing the right marketing plan: Even though you may have a great idea for a business, you still have to beat out your competitors to get to the consumer. Find out what your niche market is, and target your marketing plan towards them. Some businesses fail by targeting a broad marketing audience. You end up spending more money and wasting time on unnecessary leads. When I expanded my real estate company to Atlanta from New York, I targeted a niche market of New Yorkers relocating to Atlanta so I would not have to compete with an already saturated real estate market.

4. Hiring the wrong employees: This is a very common mistake that is easy to a make. Of course when you start your business, you want to include your family and friends; the people that you trust. But this is not always the best decision. They may not have the experience to perform the task that you need. They might not respect your position as their boss; imagine telling your Auntie that babysat you that she has to do a double shift at your restaurant!! Hire the best employees that will come in and share in the vision for the success of your company.

5. Not having a proper business plan: It is very important to develop a good business plan. By having your business plan, you are able to set your short term and long term goals to achieve. You can plan your budget so you can see your potential for profits and expenses that may occur. You will also establish the vision for the company and why you created the business in the first place. Many lenders require a business plan before they consider making a loan. There are many online courses that will teach you how to put together an effective business plan.

Real Estate Broker and Author Carl Agard has created over ten successful business ventures from the age of 16. From owning a hot dog stand as a teenager, to now operating real estate and publishing companies, Carl has a wealth of knowledge in entrepreneurship. He is the author of Getting the Real out of Starting a Business(Adelphi Publishing & Media Group) which teaches business owners on how to build wealth through entrepreneurship. For more information, check out his website http://www.carlagard.com/ .

RECESSION PROOF REAL ESTATE MARKETS

2008-10-08T17:27:00.000-07:00

RECESSION PROOF REAL ESTATE MARKETS
WORDS BY CARL AGARD

excerpt from Moves Magazine Summer 2008

Everyday, you hear more bad news about the real estate market. Record highs in foreclosures throughout the country and depreciating values in many markets are causing many consumers to be concerned with the outlook of the housing segment. There are many factors ranging from the sub prime mortgage implosion, to the resulting credit crunch by lenders, to overheated housing markets correcting themselves. This housing “bubble” affected almost every aspect of real estate for the negative; however, there is one segment of real estate that continues to go strong….the ultra luxury high end market.

Ultra luxury homes such as a 30,000 square foot home in Beverly Hills for $50 million, or a $70 million penthouse in Manhattan with a 360 degree panoramic view of New York City has not felt the bust of the market. These are just some of the recently sold ultra luxury homes sold within the past few months.

According to a research by NPR.org, the high end of the real estate market is also the hot end. Sales of properties in lower cost communities have plummeted, while those in the middle are struggling. But the market for luxury properties, those defined as worth $10 million or more, is booming. In almost every large U.S. residential market, the number of sales of houses priced in the highest top 5% has either stayed level or even increased, while the rest of the market has tailed off considerably.

The Florida real estate market is one of the hardest hit in the country with record number of foreclosures and large drops in property values. This was one of the hottest real estate markets in the country with the great weather and many speculators buying vacation homes and condos left and right. With many Florida home owners now feeling the pinch of the housing bubble, Palm Beach is still enjoying record home sales.

Sales prices of single family luxury homes in Palm Beach, Florida rose by nearly 16% to $5.3 million according to the Realty Times. The most notable to date is the 62,000 square foot estate that Donald Trump just sold for $100 million. Donald Trump bought the property at a bankruptcy auction for $41 million with the intentions of turning it into a hotel. He poured $25 million in renovations and upgrades into it, and listed the estate for sale for $125 million making it the highest priced home on the U.S. residential market. Even though he dropped the sales price upon sale to a Russian buyer, the sale of the estate still broke records.

Just down the block from the Donald Trump mansion, retailer and philanthropist Sidney Kimmel just sold his estate to former Goldman and Sachs CEO John Thornton for $75 million. The listing price did not scare off many prospective buyers for there were numerous bidders on the oceanfront property ranging from a Saudi prince to sports team owners to according to a Palm Beach realtor.

Besides the Palm Beach market, other areas for the affluent such as the Bel Air section of Los Angeles, the Central Park side of Manhattan, and Greenwich, Connecticut, are still experiencing record high sales. Manhattan co-op apartments achieved a record average sales price of $1.4 million up from $1.2 million last year. The supply of Manhattan apartments cannot keep up with the demand from prospective buyers.

A surprise market is the Mclean, Virginia area. Home to many members of the U.S. Congress and Senate, Mclean is desirable because of its close proximity to Washington D.C. Last year the median price of luxury homes sales were $1.3 million, now it is up to $1.5 million. Sellers that were getting 91% of their asking price are now getting 95% of what they are listing.

What are some of the factors driving the heated ultra luxury real estate market?

Market was not saturated: The luxury high end market was not oversaturated with inventory like other markets. This created a good balance between supply and demand. With many wealthy buyers entering the market from all over the world, this drives up the demand, and the price, of the most sought after addresses.

Cash rules: The luxury market does not depend on mortgages to close the deals. Most buyers in this market use all cash to fund their transactions. Therefore, this market did not get affected by the sub prime mortgage collapse.

Foreign buyers: With the U.S. dollar weakening, foreign buyers from Japan, United Kingdom, and Dubai are using their stronger dollar to find “bargains” in the U.S. luxury market. In New York City, real estate brokers are gearing marketing campaigns towards foreign buyers. They are even recruiting multi language speaking realtors to help with the sales of these homes.

The rich got richer: The wealth of the top 5% of income earners is growing steadily at a rapid pace. The gap between the high income and the middle class is getting wider and wider every year. According to Census data, middle income families saw their wealth increase just 7% in the last 15 years. The richest 5% of the population saw their wealth grow by 40% over the same period.

Price is no option to the ultra wealthy. They will continue to buy what they want when they want to. The luxury real estate market continues to see no boundaries.

Carl Agard is a licensed real estate broker in New York and Georgia. He is the author of Getting the Real out of Real Estate (Adelphi Publishing & Media Group). http://www.carlagard.com/

CREDIT BOOK BY CARL AGARD IN STORES SOON!!!

2008-10-08T17:21:00.000-07:00

GETTING THE REAL OUT OF IMPROVING YOUR CREDIT
BY CARL AGARD
WITH BILL GREENWOOD
ADELPHI PUBLISHING & MEDIA GROUP
AVAILABLE NOVEMBER 2008

Learn how to improve your credit score overnight!!! Carl and his credit experts will show you how to read your credit report, how to delete inaccuracies yourself, and how to settle with derogatory accounts. Why pay thousands of dollars to a credit repair company when you can do it yourself. This book will teach you how to stay out of debt forever!!!

-10 ways of building wealth by eliminating debt

-How to avoid the pitfalls set up by credit card companies to keep you in debt forever

-How to dispute and remove items off of your credit report

-Understanding your credit report

-How to eliminate tax liens and judgments

-How to use business credit instead of personal credit

Adelphi Publishing & Media Group
Tel: 404-627-4193 ATL
347-605-9099 NYC
Website: http://www.adelphipublishinggroup.com/

http://www.carlagard.com/

IDENTIFYING RISKY INVESTMENT SCAMS

2008-10-08T17:01:00.000-07:00

Identifying Risky Investment Scams
Words by Carl Agard
excerpt from Moves Magazine Summer 2008

It can happen to anybody. The lure of making a big return on the money you invested, an opportunity too good to be true, and you must get in now!! It can come from a stranger, or someone you know. It can be a real estate deal, investing in stocks, or partnering in a business venture…but you don’t want to miss out on a potential windfall.

You take your chance and jump in with both feet. You have your doubts, but you are a risk taker and no one wins big without taking risks. You can relax and wait for your money to work for you.

Time passes, and the return on your investment is not coming in. Your phone calls are not answered, and you are getting nothing but voicemails. You dig a little deeper to get more information on the opportunity that you invested in, and the people behind it. Then comes the shocker, it was nothing but a scam to fleece you out of your money.

Sad but true, millions of Americans are scammed and defrauded out of billions of dollars every year. Athletes are no different…they are targeted even more. There are many horror stories of professional athletes, former and current, who were the target of various investment scams.

Most recently, Kirk Wright CEO and founder of the hedge fund, International Management Associates, was arrested by the FBI in May of 2006 for bilking over 500 investors, made up of athletes and doctors, of over $100 million. He hired former NFL Player Steve Atwater to serve as an investment advisor. This gained him access to investors in his fund such as Terrell Davis and Rod Smith. These players are currently in a lawsuit to regain their money.

In a Security and Exchange Commission complaint filed in 2006 around the time of Wright’s arrest, Atwater invested $2.8 million of his own money, and helped to raise $15 million from his NFL friends. This money served to support the lavish lifestyle of Wright who owned several luxury cars and homes, those of which were auctioned off last year to help pay back investors. This auction only raised $2 million, while hundreds of millions of dollars are still unaccounted for.

“Athletes are paid to get superior, extraordinary results on the field or on the court. When it comes to investing their money, they want the similar, extraordinary results,” says Marc Isenberg, Author of Money Players: A Guide to Success in Sports, Business & Life for Current and Future Pro Athletes. Isenberg dedicated a chapter to the Kirk Wright saga in his book.
“When non athletes become millionaires in most cases they have the financial and business attributes that lead to their fortune. For an athlete making millions of dollars, there is not a necessary correlation to becoming a millionaire and understanding the management of financial wealth both short term and long term.”

Potential scammers can get creative in getting someone hooked into their scheme. In some cases, they can come referred by a friend or family member. “A lot of times guys come at you indirectly through somebody you know,” says former NBA star Derrick Coleman “you got to have a great support system of people you can trust from growing up and who you went to college with.” Derrick states that young ballplayers should learn to say no and do a lot of research before jumping into any kind of investment. “You cannot try to please everybody.”

Erick Strickland, former NBA veteran of nine years states that taking time to do your own research can go a long way towards saving your money and headaches. “I wish I took just a little bit more time before I invested in a land deal, but I was pressured to act now.” Erick invested in purchasing nine acres of land in an up and coming area of Atlanta five years ago to develop. After an appraisal of the land was conducted, only half of it was developable. Erick found out that the person who got him involved in the deal had forged a lot of documents and even had a lawyer in on the scheme.

Fortunately, Erick was able to sell off the developable part of the land and break even. “Athletes need to use their Players Association to conduct background checks on individuals before you write a check to invest in a business venture.”

Education is the best way to stay ahead of potential scammers. “The more educated a professional athlete is, the more likely he is to avoid bad investments,” says Dr. Lynn Lashbrook, President and Founder of Sports Management World Wide. Dr. Lashbrook has been in the sports management industry for over 35 years, and his company is one of the first online sports management company that educates future sports executives.

Dr. Lashbrook and Marc Isenberg have conducted seminars and workshops in the past educating athletes on how to recognize potential investment scams. They state that asking probing questions and putting claims in writing can help to ward off unscrupulous suitors. “This is often the signal to scammers that they are barking up the wrong tree.” They said.

Some tips to protect yourself:

· Don’t believe claims that there is no risk. There is always risks in investments, know the risk before you invest.
· Beware of promises that you will make big profits fast. No one can predict how good an investment will do, or how quick.
· Get details in writing. Legitimate companies will gladly give you all the information you need.
· Don’t agree to anything on the spot. Pressure to act immediately is a sure sign of fraud.
· Take the time to check out the investment. Do your research and background check on the company or the individual.

Real Estate Broker/Author Carl Agard has represented such notable clients such as NFL Player Kalimba Edwards, Former NBA Star Derrick Coleman, and Harlem Globetrotter Legend Jumpin’ Jackie Jackson. He published Getting the Real out of Starting a Business to teach business owners on how to build wealth through Entrepreneurship.
For more information about Getting the Real out of Starting a Business, you can go on his website http://www.carlagard.com/ .

Contact Info: e-mail carlagardbooks@gmail.com

FRANCHISING OPPORTUNITIES IN AN ECONOMIC DOWNTURN

2008-10-08T16:00:00.000-07:00

FRANCHISING OPPORTUNITIES
By Carl Agard

excerpt from Moves Magazine 2008 Super Bowl Issue

Franchising is a huge and growing part of our nation’s economy. More than 350,000 small businesses are operating as a franchise providing hundreds of thousands of jobs and making trillions of dollars every year. We all know the popular franchises like McDonald’s and Burger King. A famous entrepreneur like Magic Johnson earns millions of dollars per year through his franchised operations such as Starbucks and TGI Fridays.

Franchising has more varieties for an entrepreneur than your usual fast food chain. There are a lot of industries that use franchising as a method to expand their business nationally. There are franchising opportunities in:

Fitness Centers (Curves)
Weight Loss Centers (LA Weight Loss)
Tax Services (Jackson Hewitt)
Daycare Centers (Childtime)
Day Spas (MedSpa)
Postal Centers (UPSstore)
Real Estate Company (REMAX)
Commercial Building Cleaning Services
Residential Maid Services (Merry Maid)
Exterminators (Bugoff)
Shredding Companies (ShredPro)

These are a small sample of hundreds of different industries that are franchised. Franchising works positively both ways for the entrepreneur and the corporate company.
What is franchising?

A franchise is an agreement or license between two parties which gives a person or group of persons (franchisee) the rights to market a product or provide a service using the trademark and proven methods of another business (franchisor). This is done for an upfront fee from the franchisee to the franchisor, and a percentage of the royalties. In return for the fee and the royalties, the franchisor will provide to the franchisee the support, product knowledge, and training needed for the success of the business.

Both sides have a vested interest in the joint success of the business. The franchisor wants to keep the brand name strong and visible in the market, the franchisee wants the financial opportunity of working with an already established enterprise. Franchises offer the franchisee the advantage of starting up a new business quickly based on a proven trademark and formula of doing business, as opposed to having to build a new business and brand from scratch.

The three most popular forms of franchising are the Business Format Franchise, Product/Trade Name Franchise, and Distributorship.

Business Format Franchise – This is the most popular form of franchise. The franchisee purchases the rights to operate a business model from the franchisor for an upfront fee and annual royalties. An example of a business format franchise is fast food restaurants such as Wendy’s and Arby’s. This format is used by other industries such as Real Estate companies, automotive services and temp agencies just to name a few.

The franchisor will provide the franchisee the usage of logos and trademarks as well as a complete system of doing business. They will assist the franchisee with site selection, interior layout and design, hiring and training, advertising and marketing, product supply and more.
The franchisee will sell the products or provide the services of the franchise in a manner to satisfy the franchisors standard of quality. The franchisor will give the franchisee significant assistance in meeting these criterias.

Upfront fees for this type of franchise can range from $25,000 up to $500,000. This depends on the type of company and what they provide. Also, an established history and proven track record of the franchise is a determining factor in the price of the upfront fee. The purchase of real estate may be required to house the business.

Product/Trade Name Franchise – This gives the franchisee the right to use the name or brand of the parent company in association with the operation of their business. Here, a product or service is franchised or licensed, not the business. An example of this is a sporting goods store that has the exclusive rights to sell Addidas apparel. A beverage store that has the rights to distribute Pepsi products is another example.

Distributorship – The franchisee is granted the right to sell the products of the parent company. A great example of this is car dealerships. The franchisee may have to pay an initial upfront fee to get the right to use the name, but not as much as a business format franchisee. In a distributorship, the profits are split by a percentage agreed by the two parties.

Network marketing companies use this model. You pay small fee to become a distributor of that company. You are able to use their logos and trademarks in the marketing of the products. Upon sales, profits are split by you and the parent company. The franchisee has access to product information and sales support, the franchisor gets to expand their network very quickly and penetrate the market nationally.

Pros & Cons of Franchising
There are advantages to starting a franchise as well as disadvantages. Do a lot of research to find out the best franchising opportunities out there. Speak to current owners of franchises and ask their opinion. You probably walk into a different franchise operation everyday and do not realize it. The franchise owner will tell you the costs involved, the marketing assistance that they get from the franchisor, and they may even tell you if they will do it again.

Pro’s of Franchising
Turnkey Operation – You will be following a proven model of a successful business with a track record. A lot of risk and mistakes that are made by independent business owners are eliminated here. The franchisor will provide you all the support and training you will need to succeed. You’re in business for yourself, but not by yourself.

Brand Name – This is one of the biggest advantages of buying a franchise. You will get the strength of brand name recognition and a loyal customer base. It will take you years to build up a brand name for your business as an independent owner. As a franchise owner, you get instant recognition. The more established the franchise, the more recognition you will get.

Financial Assistance – Some franchises provide in house lenders or locate preferred lenders to help new franchisees startup. Conventional lenders are more comfortable lending to a franchise than an independent business. A franchisee can obtain an SBA backed loan to acquire the franchise and even the real estate in which the business will be in.

Con’s of Franchising
High Startup Fees & Ongoing Royalties – Buying an established franchise brand name is very costly for an entrepreneur. Franchise fees can range from $25,000 up to $250,000. This discourages a lot of entrepreneurs who want to get into franchising. Even though the risk of failure is lower with a franchise as opposed to an independent business, the risk of never recouping your initial outlay is greater.

Besides the startup fee, you also have your ongoing royalties that you have to pay to the franchisor. Royalties can be from 4% to 10% annually. If your overhead is high and your revenues are low, you can end up being “a glorified store manager”.

Loss of Independence – As a franchisee, you are associated very closely to the brand of the company. This can be good or bad. If the company is doing well, you will profit from the positive exposure. However, if the company is having a downturn, it will affect your company as well. If a franchise in another part of the country has a problem, that problem is yours as well since the consumer does not differentiate franchises from location to location.

Buying a franchise works best for individuals who work well in a team environment and have limited business and industry background. For others, the road to "true" entrepreneurship could represent the ideal path to business ownership. Take the time to consider your options. Buying a franchise may be right for you.

Real Estate Broker/Author Carl Agard has created over ten successful business ventures from the age of 15. From owning a hot dog stand as a teenager, to now operating real estate and publishing companies, Carl has a wealth of knowledge in entrepreneurship. He has represented such notable clients such as NFL Player Kalimba Edwards, Former NBA Player Derrick Coleman, and Harlem Globetrotter Legend Jumpin’ Jackie Jackson. He published Getting the Real out of Starting a Business to teach business owners on how to build wealth through Entrepreneurship.
For more information about Getting the Real out of Starting a Business, you can go on his website http://www.carlagard.com/ .
Contact Info: e-mail carlagardbooks@gmail.com

FINDING GEMS IN THE LUXURY REAL ESTATE MARKET

2008-10-08T15:51:00.000-07:00

FINDING GEMS IN THE LUXURY RESIDENTIAL
REAL ESTATE MARKET
by Carl Agard

article in Moves Magazine Winter 2007 Edition

It has been a great run for over a decade, but the real estate market has just changed. The sub prime mortgage collapse has lenders tightening their criteria more than ever. Many areas across the nation are experiencing record highs in foreclosures. What was a frenzied seller’s market has quickly changed into a buyer’s market. The high-end residential real estate market is no different. As interest rates rise, mortgage rates will also, especially those that have an adjustable interest rate. This increase in monthly payment will put pressure on financially exhausted homeowners that are barely making ends meet already. Some will see their monthly payment double.

A high-end property foreclosure can happen to the best of people, in the best neighborhood, in any price range. Many people have been taking out loans that are more than they can afford. Some people simply just fell on hard times ranging from a job layoff, sickness, or divorce. A high-end foreclosure can include such properties as a mansion, high rise condo, or a luxury townhouse. It can be anywhere from the beaches in Orange County California to the Towers of Trump Plaza.

Now is the time for a savvy real estate investor or a homebuyer to get into the market and find bargain deals. Inventory on homes for sale are at an all time high. Sellers are sitting on properties for sale longer, and have to make huge cuts in prices to get a sale. Lending criteria are a lot tougher now. Banks are requiring prospective buyers to fully document income and assets. Credit scores have to be at a higher level than before to get the best rates. A lot of prospective buyers are eliminated from the market, so gone are the days of bidding with several people for a home.

In the high-end market, sellers are giving huge concessions such as paying all closing costs and paying a year worth of home association fees. Builders in the high-end market are giving deep discounts on prices of new homes so as not to sit on inventory. Custom mansions are being sold with well over $100,000 in equity. Some builders in some areas are offering free upgrades in kitchen and bathrooms, free installation of pools and customized home theaters.

In the high end foreclosure market, the discounted deals are even more lucrative. Foreclosures make up to 2-3% of all loans, according to the Mortgage Bankers Association. Over 110,000 homes for over a million came into the foreclosure market this year. That is a 40% increase over the previous year, and it is projected to get worse. There are many ways to purchase a foreclosed property.

Pre-foreclosure Home
Before the actual foreclosure procedure begins the homeowner is notified by the lender/bank and is given a time period to rectify the situation, usually after a period of two to three months of consecutive non-payments. Depending on the state you live in it can take a bank from three months to a year to fully foreclose on a property. As a buyer, you have to be ready to make an offer and close quickly. When buying a pre-foreclosure, you are on the clock since the bank is looking to foreclose on that seller. You can get a steal purchasing a high-end foreclosure because you have a motivated seller who is trying to save their credit and avoid defaulting on a huge mortgage.

Auction
You can get a steal at the auction. Before a bank includes a property in its bank-owned portfolio, it will put the property up for public auction at the local courthouse steps. You can check with your local municipality to find out where and when the next foreclosure property auction will take place. The banks also list public notices of properties for sale in local newspapers and public records. Some auctions can be a madhouse, but if you do your research before you bid, you can come away with a steal.

Make sure you check out the value of the property you want to bid on and compare it to the price that the bank is asking. You don’t want to overpay for a property. Next, check out the condition of the property. In some cases you may be unable to see the property prior to purchase because the owner may still occupy the home. So allow your bid to make room for some repairs. You must be able to close within 30 days. Most banks will take 10% of purchase price in certified funds the day of the auction. But you still have to close with the remaining balance by the end of the month. If you do not close in this time period, the bank keeps the property and will lose your 10% deposit. Make sure you are prepared to buy a property on the courthouse steps. Have your financing in place in advance.

Finally, make sure that you do some sort of title search on the property. You can access the public records on the property to make sure there are no tax or mechanic liens, violations, or outside claims against the property. These things can be a nightmare to clear, and can give you problems transferring title to a future buyer.

REO (Real Estate Owned properties)
These are properties that were considered in default when the home owner failed to pay the mortgage loan or note after a designated period of time, usually within a three months to a year period. The lender goes through a legal process to repossess the property. They first move to vacate the property if anyone is still living there. After the bank goes through their legal process to repossess the property, the bank announces a sale to the public and buyers can bid on the property at an auction. The bank determines the price they want for the property which is usually to cover the cost of the mortgage note, or as close to market value as possible, whichever is higher. Whoever wins the bid on the property has up to 30 days to close on the house, or the property goes back up for auction. If not, the property becomes a Real Estate-owned property (REO) of the bank. The bank then lists the house with a real estate service or management company to sell the property in order to recoup its losses.

These properties are usually listed at below market value because the bank is merely looking to recoup the loan amount originated by the person who took out the loan, not the market value of the house. For a person who is looking to buy these types of homes it is possible to find a steal in this market, with the proper research—knowing the value of the property, and the future outlook of the area in which the property is located.

Banks do not want to own or manage properties. Mortgage companies are in the business of making loans and collecting payments, not collecting rents. The banks do not want to deal with this headache. Therefore they are also very motivated to sell at huge discounted prices.

Besides residential real estate, there are also bargains in the commercial real estate market as well. Depressed owners are selling apartment complexes and strip malls below market value as well. Before you go shopping for your next piece of property, follow these tips.

· Get your finances in order first. Talk to a mortgage professional to find out the best option to use to purchase a home. Shop around for a lender that will give you the best rate. Any difference in interest rate in the million dollar range can cost you thousands of dollars over a long period of time. You also want to have your mortgage professional ready to close quickly when you find that killer deal because it may not last long. Cash is also king!! The more you put down in cash, the quicker you will get a contract accepted.
· Use a professional negotiator. Sellers and Banks hire listing agents to get them the highest offer. You, as the buyer, want to pay the least and get the most for your dollar. Work with a licensed Realtor that can represent you as the buyer’s agent. They will locate the best deal for you, do the necessary research, and help to negotiate the best terms in your contract.
· Do your own homework. Even though you may have a Mortgage and/or Real Estate Professional representing you, still do your own due diligence before closing a transaction or signing a sales contract. There are many websites that can give you public information on properties and market trends. Knowledge is key when navigating around the crazy world of Real Estate. But the more you empower yourself with information, the more lucrative it gets.

2008-10-08T15:07:00.000-07:00

Pros and Cons of being a Landlord
Pros:

This career does not require a real estate license. You can be a bona-fide landlord starting with just one rental property. You can hire a property management company to collect your rents and to maintain any repairs that are needed. A management company will usually charge up to 10% of the total rent collected.

I recommend hiring a management company if you have rental property out of state, or several rental properties. You may not have the time or patience to deal with tenants face-to-face. I advise, however, that first-time landlords manage their first rental property to know the difference between a good management company and a bad one. Some management companies charge exorbitant fees and are not very effective in maintaining properties and filling up vacancies swiftly. You can also create your own management company, through incorporating or forming an LLC. (We spoke about this in earlier chapters). Forming a company to mange your property will protect you from any liabilities and/or lawsuits.

You will gain great monthly residual income. The more rental properties you own, the more money you put into your pocket. As long as you manage your properties effectively, you will turn a great profit from your properties monthly. Imagine ten rental units bringing in $1,120 per month each with a net income after expenses bringing you a total of $11,200 per month, $34,400 per year! With Section 8 income or high paying professional tenants you will be laughing all the way to the bank. And you can do this part time!

As a landlord you’ll receive excellent tax write-offs. You get to deduct everything you put into your property such as repairs, taxes, insurance, etc. Even though you are making a residual income every month, you get to deduct your expenses and depreciation of the property against your personal income. Make sure you keep good records and receipts and consult with a reputable accountant at tax time. You will see a noticeable difference in your tax returns for the better by having rental properties to write off. Even if a tenant does not pay you rent, you can still win by writing that off for a huge loss.

You can also deduct the phone calls you make to the tenants. Even the wear and tear and gas you put into your car to collect the rents is tax-deductible. It is still wise to form a corporation or LLC and put your investment properties into that entity to shield you from liabilities.

Note: All of your rental properties are continually building you a fortune in equity. Real estate will always appreciate. In some areas properties appreciate 4% yearly and in some hot areas, 25% yearly. Whether you hold on to your rental property for one year, or 25 years, you will be able to sell for a profit in the future. Imagine owning 10 rental properties with $25,000 in equity in each one. If you sold them today you would
have $250,000 in cash. Not only are you making a monthly profit in residual income with rent payments, you are banking a fortune that is building-up in equity. A 25% yearly return in equity is something you cannot get in the stock market or mutual funds.

Cons:

You must be capable of dealing with different types of personalities. Tenants can be a headache and a hassle, but that comes with the territory. Keep your relationships with your tenants professional and business like.

Your contractors and handyman can test your patience, as well. Set a payment schedule with your contractor and a timetable for completion. You do not want a simple repair job, such as a stopped-up toilet, for instance, inconvenience your tenant for a lengthy time period. Tenants get frustrated and will not want to pay the rent. Some tenants will even look for excuses to not pay the rent, and a delayed repair job can give them that excuse. When something needs repairing, have the work completed within 24 hours. If your contractor cannot accommodate you, look for another. Wasted time can cost you money.

Just as risky as real estate investing, a real estate investor is speculating for a positive turnover in the marketplace in order to maximize their profits. A real estate investor looks for short term turnover and a landlord looks for long term dollars. Buy wisely and you won’t get stuck in the end with a bad investment.

Choose your property wisely and account for all expenses so that the property does not surpass its income. Have your exit strategy in place for whenever you choose to sell and cash-out.

Note: You have to spend money to make more money, so be prepared to invest in your rental properties. Shortcuts never makes it in this business.

This is an excerpt from the national best selling book Getting the Real out of Real Estate by Carl Agard available online
http://www.carlagard.com/
http://www.adelphipublishinggroup.com/
http://www.amazon.com/
http://www.target.com/

WHAT IS A SHORT SALE??!!

2008-10-07T12:42:00.000-07:00

Short Sale
A Short Sale is a process during a pre-foreclosure procedure, whereby the bank will accept a lower percentage amount of the face of the loan, as well as deduct the interest and penalties, due to the financial hardship of the homeowner. These houses are generally owned by people who have purchased their home with little, or no money down, or own homes that are in areas that are very slow to appreciate. They are also homes that are distressed to the point of value depreciation, or cannot be compared to other homes in the area because of the disrepair.

This is the way it works: Upon request, the bank foreclosing on Bill’s home will send him an application to apply for a Short Sale. On this form, he will state his particular financial hardship. The bank will then, in most cases, send out an appraiser to determine the market value of the property. If the appraisal determines the value of the home is considerably less than the face of the mortgage note held by the bank, and after final review of the homeowner’s particular hardship, the bank will usually accept anywhere from 30 to 50 percent less than the amount of the face of the loan, and deduct any interest and penalties due.

Every mortgage bank offers this process with homeowner loans. The division of a mortgage bank is called loss mitigation. Each bank’s loss mitigation department works differently from state-to-state. But the one common thread country wide is that all banks want to recoup as much money as possible and avoid getting stuck with a bad loan.

For Example: Let’s go back and apply this process to Bill’s situation and get him out of his dilemma using the short sale procedure. Bill has not paid his mortgage in three months. He owes $2,970 in back mortgage payments, plus interest and penalties. His mortgage loan is $150,000; with no money down. It’s been about two years now and his house has not appreciated much, it still only values about the same $150,000.

We offered Bill’s bank $120,000 ( 20% less than the face value of the loan), plus forgiving the $2,970 in back payments. After review the bank accepted this offer with a contingency that we close the deal within a 30 to 45 day period, and Bill makes no profit from the sale. You would be surprised with how cooperative banks can be in this kind of situation. Because the bank stand to lose more money when taking the property all the way to foreclosure— with legal fees, nonpayment’s adding up, and putting the property up for foreclosure auction involves additional legal fees to evict Bill, clean and prep the house for resale while paying real estate commissions—it makes perfect sense.

In addition, banks are insured against this kind of loss, anyway. They are not documented as “bad loans” since it was a settlement case. And the bank does get to write the loss off on there accounting books. Money can be made with a short sale and gives the homeowner who is in a bad situation a second lease on life!

As an investor in this situation, you would acquire a new mortgage from a different bank, or buy the property outright with cash. Either way, you stand to make a
gross profit of $30,000 later on by selling the house or refinancing with an equity loan and pulling out the equity that you created.

AT A GLANCE
· Bill’s property market value $150,000
· Bill’s mortgage company payoff (negotiated short sale) 120,000
· Interest and penalties paid 00.00
· Profit Bill wants 00.00
· Your potential future profit $30,000

Note: You can represent the seller or homeowner in distressed situations like this one, as long as you are purchasing the property yourself. The main thing you need to do is ask yourself these questions.

How much does the person owe on their mortgage, including interest and penalties?

How much time is there before the house goes up for foreclosure sale of default?

How much is the house worth at market value after repairs, upgrades or renovations?

Does the person have additional liens on the property, such as a second mortgage, equity lines of credit, tax liens, or mechanic liens?

Does that person have a current bankruptcy, such as Chapter 13—all bankruptcies must be dismissed before ownership can transfer?

Are there any additional owners on title—all owners must participate in the Short Sale process.

And most importantly, ask yourself if the profit you will make is worth going through the Short Sale process?

This is an excerpt from the national best selling book Getting the Real out of Real Estate by Carl Agard
http://www.carlagard.com/
http://www.adelphipublishinggroup.com/
http://www.amazon.com/
http://www.target.com/

BUILDING BUSINESS CREDIT

2008-10-07T12:37:00.000-07:00

Craze Magazine 2009

SOME TIPS ON BUILDING BUSINESS CREDIT
By Carl Agard

You can get the perfect business credit score separated from your personal credit score in as little as 120 days. Millionaires are doing this every day. For each of your company, you can have trade lines with different creditors with none of it affecting your FICO score.

With business credit, you can apply and receive accounts for the following:
Store Credit Cards (Lowe’s, Home Depot, Staples, etc)

Vendor Lines of Credit
Computer Leases
Auto Leases
Business Equipment
Business Loans (SBA)
Business Lines of Credit

First, you would want to have a business entity that will allow the liability of the company separated from you individually such as an incorporation or LLC. A sole proprietorship will not allow that. Acquire a tax identification number for your company. When you apply for any type of business credit, the tax identification number will be used instead of your social security number.

For new businesses within two years, or existing businesses with very little credit, you will still need a personal guarantor to go on the application. The creditor will use the guarantor’s credit score to determine credit worthiness.

There are two business credit reporting agencies that lenders and financial institutions rely on for information to grant credit. The two credit agencies are D&B and Experian.

Over 70 million businesses are registered with D & B which uses the information provided by the owners and vendors. D & B will give a Paydex score based on the payment history of the company. D & B will also give a DUNS rating based on the financials of the company. A high risk score will hurt the borrowing ability of the company. With scores ranging from 0-100, anything over 75 is a good score for a company to have. You need at least 4-5 trade lines to report on D & B.

Another reporting agency is Experian who uses an Intelliscore. Experian is already one of the three main personal credit reporting agencies along with Equifax and Transunion. Over 14 million companies are registered with Experian. Their credit score ranges from 0-100 as well with anything over 75 as a good score. You need at least two trade lines to report to Experian.

It does not make sense to own a business and do not understand how to build your business credit and improve your Paydex and Intelliscore. It’s like buying a home or a car and not knowing your FICO score. Why use your personal credit to finance your business when you don’t need to.

Matter of fact, some business credit cards were easier to get than a personal credit card. So I suggest, after you get incorporated and get your tax identification number, start working to build your business credit by applying for credit. And don’t forget to register on D & B and Experian.

Carl Agard has created over ten successful business ventures from the age of 16. From owning a hot dog stand as a teenager, to now operating real estate and publishing companies, Carl has a wealth of knowledge in entrepreneurship. He published Getting the Real out of Starting a Business to teach business owners on how to build wealth through entrepreneurship.

For more information about Getting the Real out of Starting a Business, you can go on his website http://www.carlagard.com/

WE ARE ADDICTED TO CREDIT LIKE CRACK!!!

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With the economy in a tailspin and the 700 billion dollar bailout signed into effect, we are starting to see how our well being is very connected to credit from the average consumer, to large corporations like General Motors.

Credit drives the economy and our consumerism. Not everyone including myself agreed to the bailout signed last week, but if you understand the vital part that credit plays in our everyday lives, you had no chance but to go along with the plan.

How did we get here?

Simple supply and demand.

With a shortage of capital in our pockets, we have to supplement that with credit. In this era of over the top consumerism and trying to constantly keeping up with the joneses, we are all exposed to being a victim of the credit crisis. We need credit to purchase our homes, cars, and start our businesses. Unfortunately when it is snatched away, we are stuck in a hole.

Imagine your paycheck at the end of the week tied to your company's ability to borrow enough to make payroll. Scary isn't it. Just like the oil crisis earlier this year when we saw how much our lives are paralyzed by a slow down in energy, the same goes for credit and the availiblity of it in our economy.

This is a system that has to be fixed. The government and corporations need to create more jobs and opportunities so that we can have the capital available as opposed to solving every economic problem with a charge card. We all have to open our eyes to see that with out a change in our budgeting, we will be financially enslaved forever.

This topic will be discussed on my internet radio show http://www.realmoneyrealissuesradio.com/ this Tuesday 6-7pm EST, or listen to the podcast anytime.

Carl Agard
Author
http://www.carlagard.com/
http://www.adelphipublishinggroup.com/