If you have ever thought about investing in real estate, now is the time. You may be thinking that since the real estate market is in the tank at the moment and that it can’t possibly be a good time to get into this market. But you couldn’t be more wrong! There are more foreclosures than ever right now and that presents a ton of opportunity for us investors who have been waiting for prices like what we are now seeing. I know the media is out there saying the sky is falling. However, there are many successful investors quietly sitting back and laughing as they make money hand over fist. Let me let you in on a little secret that all successful investors know…The time to buy is now!
It’s the perfect time to get involved right now as a real estate investor. Lenders are currently finding themselves in situations where they have loans that are not getting paid, and home owners are being forced into foreclosure everywhere you turn. There are banks all over the place with so much inventory, they don’t know what to do with it. They simply cannot move it quickly enough. There are also thousands of incredibly motivated sellers just waiting for someone to come along and save them from foreclosure. That ‘someone’, could be you.
There are a few things that you should keep in mind before getting started:
1) Never pay too much for your investment property. There are plenty of homes available for very reasonable prices. You make your money when you buy! You should never pay more than 65% of the after repaired value of the home. Don’t forget that you will have other costs to pay, such as holding costs, closing costs, as well as any money that you spend on the rehab of the home to bring it up to rentable or saleable condition. Bottom line, you need to be able to still turn a profit.
A financial institution has as one of his duties the management of financial risk. They need to manage it well otherwise they will not be in business for long. Credit reports and collateral are some of the risk management instruments that consumers are familiar with. They can seem oppressive when applying for a loan but a few were the lender you would understand their importance and that a handshake deal or a gentleman’s agreement doesn’t do much in terms of offsetting risk.
Even the best forex trading doesn’t come without its share of risk. Liquidity risk is the risk that a financial institution will be unable to generate sufficient cash inflow to meet required cash outflows. Liquidity is critical to financial institutions such as banks and credit unions that need liquidity to meet deposit withdraws and pay off other liabilities as they come due such as pension funds which need liquidity to meet contractual pension payments and life insurance companies need liquidity to pay death benefits. The quiddity also means that an institution need not pass up a profitable loan or investment opportunity because of lack of cash. If a financial institution is unable to meet its short-term obligations because of inadequate liquidity than the firm will fail even though over the long run the firm may be profitable.
Foreign exchange risk is the fluctuation in the earnings or value of a financial institution that arises from tuition in exchange rates. Many financial institutions deal in foreign currencies either for their own accounts or the by or sell currencies for their customers who are acting on forex trading tips. There is considerable risk involved in dealing in foreign currencies and institution must offset then carefully as just the mere announcement of changes in interest rates can severely affect one’s position in the foreign exchange market.