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God’s Word Regarding Real Estate Debt from Walter Sanford

Great information, so I wanted to share:
God’s Word Regarding Real Estate Debt
 
PROVERBS 22:7 – The rich ruleth over the poor, and the borrower servant to the lender.
If only I had been a student of God’s word sooner…. The pain I could have avoided and the good I could have done! Now, in a position to coach some of the top agents and make presentations all over the world, I’m careful in what I endorse.
Here are 15 changes that I would have made early in my career had I been a better student of the Bible:
 

  1. Lose the “big hat, no cattle syndrome.” I went into debt for big houses in multiple areas, fancy cars like a Rolls Royce under the false teaching of “fake it till you make it.” People respect your hard work and goodness, not your car.

 

  1. The real estate industry is still pushing for lower down payments and loans open to more people. When they cannot afford the payments, people find themselves being a slave to the lender.

 

  1. Keeping what you own and not risking your holdings on more leverage can be a little boring, but, in the end, it is the smartest financial move. Worrying about making payments lessens your availability for other important matters.

 

  1. Do you have enough money to tithe? You need to have better systems in real estate and less debt, if you do not.

 

  1. From now on, don’t bet on the market. Bet on the income. Sure, flippers make it when it’s good, but investors make it always. You can buy to flip, but it better have a long term cash flow just in case.

 

  1. Being positive after taxes is a misnomer. If you don’t have taxes to pay because of a bad year, then that means it is negative (negative cash flow.)

 

  1. Don’t borrow short on long term assets. You might own things longer, or their completion may take longer. Always go for the fully amortized loan.

 

  1. Before going into debt for the fancy office, assistants, third-party lead generators, and buyer’s assistants — learn how to generate leads by yourself and for yourself.

 

  1. The old ways are the best. Save for taxes, pay your insurance, and have a rainy day fund before you invest.

 

  1. Make it a goal to have no interest rate higher than the loan on your cash flow piece of real estate. Miss a payment at Lowes and it is 20.4%.

 

  1. Did you know the expense factor on a piece of free and clear real estate can approach 50% of its gross income? Know how to figure net cash flow on real estate.

 

  1. Make sure your weekly “perfect week” reflects your core principals of how you want to live your life. Is there enough time blocked for faith and family?

 

  1. What good are you doing with your money? After the income starts rolling in, let’s invest in God’s work rather than adding more feathers to our nest.

 

  1. Can you afford to give that good tenant a break this month?

 

  1. When you do get rich from this great business, do you give God the glory?

 
The funny thing is–I have always had all the breaks, the training, and the backing. I have been blessed in real estate and life. The only times that I have felt pain in my life is when ignored God’s word. Following the rules become easier after accepting Christ and allowing the Holy Spirit to coach you.
I can give you the real estate systems through books, software, speaking events, and coaching. What you do with your success and to whom you give the glory will be a matter of how good a student you are.

5 Biggest Mistakes Home Buyers Make

5 Biggest Mistakes Home Buyers Make

Some home buyers fall for common pitfalls when purchasing a home. Credit.com recently featured some of the biggest mistakes home buyers often make. Their list included:
1. Trying to fix credit scores before buying a home.
Home buyers may do more harm than good if they don’t consult a financial expert first. “Even paying down credit card balances, which is a good thing as far as your credit scores and debt ratios are concerned, could be a problem if it leaves you short the cash you need to qualify to get the loan,” says Gerri Detweiler, Credit.com’s personal finance expert.
2. Not considering the future enough in their purchase.
Buyers should consider what they want out of a house not just for today but also five or 10 years down the road. Do they plan to expand their family? If so, they may need a bigger home and want a different location. Also, how long do they plan on staying at the home? That can help determine the type of mortgage that makes the most sense for them too.
3. Failing to research financing enough.
First comes the home and then the financing? Not in today’s market. Home shoppers should get prequalified for a mortgage before they start shopping for a home so they know what they can afford. “The time to make decisions about your mortgage needs is not during this 10-day window [after you sign a contract]; at most, this is time to shop for rates and fees and such,” says Keith Gumbinger, vice president of HSH.com. “Evaluating your credit, deciding on a product you prefer, how much down payment you feel comfortable making, whether you want to pay fees or points [and, if so, how much] and even shopping for a lender [getting preapproved] should happen well in advance of even wandering through the market looking at houses.”
4. Making the assumption that the Good Faith Estimate is always what you pay at closing.
The form lenders provide that estimates closing costs is not set in stone. Closing costs may actually be more, so buyers need to be prepared. Closing costs generally are about 3 percent to 5 percent of the loan amount. “Shop around and compare the Good Faith Estimate provided by the lender with that of two or three other lenders,” suggests Ryan Himmel, a CPA and founder of BIDaWIZ, a tax advice resource. “If there is a significant disparity in estimates, then request an explanation from the lender to determine if you would like to move forward.”
5. Failing to budget for home expenses.
Budgeting to purchase the home isn’t all new home owners should be squeezing in their budget. They’d be wise to not forget to budget for maintaining the home too. New home owners should budget for an increase in utility bills as well as for future maintenance and repair costs, such as repairing a furnace or roof.
Daily Real Estate News |      Wednesday, June 20, 2012