An excellent website to research the real estate market

As a real estate investor, it's crucial to gather
information about the city to decide whether the market you're interested to invest is in growing, declining or stable phase. The fundamental data include: population growth, the job growth, unemployment rate, cost of living, cost of housing, household income, demographic data, crime rate, climate, education level, property tax rate, percentage home rented vs home vacant, on and on... Basically, the more data you 're able to collect, the more educated you become about the market, and more intelligent decision you could make about your potential real estate investment. These data could usually be found in library or in the city's website. However, most of these data are not layout in a easy-to-read format. You might end up spending a lot of time to gather the information together from different sources, and process could be very tedious. Tonight, I found a excellent site provide these important data for most cities in U.S in a very easy to read and search format. WWW.BESTPLACES.NET It's very easy to search information about the cities and you can even compare it with national average data. The membership is FREE. Check out this site whenever you need any data about the city you're interested investing. It will definitely help you make a better decision about your investment.

Subprime mess and what can you do.

Three years ago, when mortgage interest were at historically low (~4%), many people take advantage of this incredibly low rate and refinance their home with a fixed period of low interest rate. Many choose the 3 year or 5 year fixed program and because of the lower monthly payment, they could afford the house otherwise wouldn't qualify. Now after 3 years, many of these short term fixed rate program become expired, and mortgage rate has increased to 2-3% higher. Many people are experiencing a payment shock! A 2% increase in interest for a 400,000 home could means as much as 1000 dollar increase in the mortgage payment. This is a big burden and lot of people just couldn't afford it. Many end up losing their house in foreclosure. This is what you should do if your loan program is about to expire and you know that you will not be able to afford the payment increase: CALL YOUR LENDER to negotiate a solution. Many people have payment behind too long (3-4 months) and the bank couldn't do much to save you. It's too late! But if you call your lender before you have any late payment, and explain to them your situation, many banks will try their best to work with you to help you continue to make payment. It's bank's interest to reduce the default property. Ex:the bank can extend the current interest rate for one more year, or the bank can gradually increase the payment such that you have more time to adjust and save for payment. Foreclsoure can be avoided! Dig into your statement and call the 1-800 to initiate the talk with bank. Give the bank time to come up a solution. If you waited and you have late payment already, the bank most likely cannot help you but foreclosure your property.Do this tonight if your mortage progam is expireing soon. Don't wait!

I don't need life insurance!?.. Really?

Tonight, I want to talk on the subject life insurance. Many people said " I don't need life insurance now, I'm single, I 'll wait few years until I have family" I don't agree with this point. In fact, I believe buying life insurance is the first fundamental step to take in order to build wealth tonight. It's more important than your retirement account. You should get one as soon as you get out from college and start a job. Let me tell you why. First, from the cost point of view, the younger you're, the cheaper the premium it is. The premium is calculated based on three factors: 1)Age, 2)Health 3)Policy amount. As you can imagine, you're usually healthier when you're young than when you're old. That's another factor to drive the cost down (save you money) when you buy early. Also, it is possible insurance company deny applicant because of health problem. Once it rejected, a person may never be able to be covered for his/her whole life. Go get it when you're young and healthy. Second, from a emotion point of view, isn't it one of your ultimate reason to make a lot of money, build a lot of wealth, is to share all the joy and wealth with your family, your parents, your brother, sister, your spouse, children, etc.. What if (touch wood) you leave the world too early? Wouldn't it be nice that you know at least you're leaving something behind to your loved one? At least your parents spend tons of money to raise you up! It just make sense to 529pm you should get coverage as soon as possible. Don't worry the cost! I've seen policy that is as cheap as 10 buck per month for 100,000 coverage. Your insurance agent should be able to help you.

Buy high sell higher

The old folks saying " Buy low sell high" just don't quite work for me, especially when it comes to stock investing. The biggest problem is when you buy low, you really don't know if the price has hit the bottom or still going down even more. Nobody knows. Even if the stock price is not going any lower after you bought, the second problem is when the stock going high again? Will it be next week, next month, next year or in some extreme case, never? So, "Buy low sell high" is a pretty risky method for me. Instead, I follow the method "Buy high sell higher" A things in motion tends to stay in motion. When a stock is at the 52 week high, it tends to keep getting higher and higher. Then, I use (the system ) to sell portion of my holding one at a time to capture the gain and continue enjoy the ride. Of course, nothing is guarantee in stock market. We just have to use the method that has higher chance to win than to lose. Buy high sell higher works out great for me.

7 things to consider before buying your first house

Tonight, I want to share the experience I gone through of buying the first real estate property as my own primary residence. There are things to consider before you jump into the market. Let me do my best to summarize below:
1) Emotionally be prepared. Buying a real estate is a long term commitment. There are sacrifices. Ex: Unlike living in apartment or renting a room, you can't move around every 3 to 6 months whenever you like. Make sure the property you're going to buy is really the place you want to live in for the next 3-5 years
2) Carefully calculating your budget. Before you consider to buy your own place, you should know very well the expense that incur about owning a real estate in your area. I blog on this subject few weeks earlier, check it out
3) Know what you want. After looking into the expense, you should have a brief idea how much the property you can afford. A qualified mortgage agent can help. Then you decide which area and which type of property you can afford and like to live in.
4) Consider a roommate to help out. I was a single when I bought my first condo. My idea is to rent out a room to get extra money to pay for my expense, so I can save more money for other investments
5) Select an agent that understand your needs. Interview with agents, check his/her background, ask him what is his speciality. If you're first time buyer, I strongly recommend you find an agent who has expertise working with first time buyer. Finding a right agent is crucial part of the whole process, spend time to select agent. Do not just go with an agent because he is your cousin or neighbour. Try to ask for referrals if possible.
6) Prepared to save down payment. The norm in today's market is 10%. Most banks require the source of down payment to be in your bank for at least 2 months history. If down payment is an issue, consider borrowing money from your friends or family members at a market return. Using the house as a collateral if needed. (Most private money lender charge + 10%) Create a deal such that both you and the borrower can benefits.
7) Stay clam. Find the right property, finding the right type of loan, working with the right agent, preparing the down payment, structuring an offer, negotiating with the seller, closing the transaction etc, ....are long and complicated process. Expect to run into problems. Don't let your emotion make decision, use your judgement. You're making the probably biggest purchase in your life. There are many things to learn in the process. Be positive and look for the bright side. After all, buying real estate is proofed to be one of the most rewarding and stable investment you can ever make.

Super lucky day!

Today is probably one of the most luckiest day in my stock trading experience. One of the stock I bought few months ago, PWI, skyrocketed return with over 30% gain in today's trading session. The reason is because it has entered an agreement to be acquired by United Arab company, with purchase price 26.75 per share. Stock immediately jump from 20.50 to 26.75 in today's opening. With this dramatic jump of the stock price, I sold the stock as soon as I see it in this moring to capture all the gain. I'd say this is not skill involved, it's just pure luck on this stock I own. It's feel good to be lucky $-)

Create Value in Real Estate

When I buy a stock, I ask myself "What can I do in this moment to increase the value of the stock I own?" Answer: Tell all my friends to buy the stock I own and hope my friends will tell his / her friends to do the same, and eventually, the stock's demand increase and it's price value increase. This is certainly not very practical if not impossible. Basically, the answer is NOTHING. One of the biggest advantage in investing real estate is the buyer can have many many ways to increase and create value of the property he / she already bought. It's only limited by imagination. Tonight, I want to share a few classical ways an investor can do to add value to the pieces of property already owned

• Add number of bedroom or bathroom. The more rooms your property has, usually the more it's worth
• Convert a open carport into a enclosed garage
• Remodel the kitchen and bathroom. If you have limited budget for remodel, always start with kitchen or bathroom first. These are the two places most buyers pay attention
• New paint, New Carpet, New fixtures, New lighting. A minor improvement detail could significantly add value to the property.
• If your property is rental or multi units, research into the rental market and consider increasing the rent whenever possible. Increase rent could increase the property's value dramatically. Vice verse, reducing your monthly expense will have a positive impact to the value as well.
• Consider an expansion, especially if you 've big lot. You must get permit to make it legal and recorded properly with the county to make it official approved. Careful budgeting is vital to monitor the anticipated value increased after expansion is more than the cost itself.

These are just few example I've considered to use. The goal is to THINK VALUE. It's only limited by our imagination. Let me know what have you done to increase the value of your property?

Full Doc vs Stated income

When I apply the loan for my investment property, my broker will ask me if I want to do full doc or stated income? Full doc require full job verification, income proof (W2), tax return in past 2 year, 2 months bank statement to verify source of down payment , etc to show the lender you're fully qualified for the loan. The interest rate is more advantageous when full doc is used. However, in some case, when the broker see that full doc is not possible. Stated income is used. This mean the income is merely stated and no proof required. The interest rate in Stated income is usually 0.5 pt to 1 pt higher than the Full doc, but the process is much simpler for borrower to get approved. Stated income is very popular during the last 2 year when market was HOT. However, due to recent sub prime market hit, many lenders has tighten the guideline and disallowed many stated income loan. The bank see the stated income loan are too high risk. I think this restrictions will further depress the already slow real estate market.

From dollar to a penny, Penny stock!

Tonight, I want to blog about the experience I had recently with one of this so called-" penny stock". Few months ago, one of my friend told me if I want to make big money in stock, I must own some potential penny stocks. The reasoning is that because they are cheap, usually ~1 dollar or less, I could own thousands of stocks and still very affordable. Plus, when stock move up a only few cent, my return is already skyrocketing. After listening to the reasoning, I said, "Sounds great, I will buy one to try!" So, I buy my first ever penny stock in June. This is the one I own.
Well, if you click on the link, you know my stock is not very pretty with this penny stock. I bought it at 1.40 and today's 0.36. That's 75% drop in 3 months! Average 25% drop in a month, scary! I don't remember I own a stock has such as terrible drop rate in my whole 5 year stock investing experience. Here are few things I learn about penny stock
1) Because of their extremely low volume trading, any single transaction could dramatically increase or decrease the price. The stock price therefore could get manipulated in speed of sec.
2) Market order is usually not allowed with penny stock. Only limit order is accepted
3) Because of their volatility, broker charge a higher commission cost compared to other normal stock
4) It's true that return could skyrocket in a matter of days, but the reverse could also happen. It's an extremely risky business
Well, my first ever owned penny stock just don't work out all that great for me. There are plenty of valuable stocks out there to choose, my recommendation to you: Consider other type of opportunity, you don't need penny stock to make money in stock. If you do have to buy penny stock for whatever your reason, do not put in 5% or more of your capital in it.