Investment Articles

Investment Articles for Investors and Investing

Choose an Investment Article to read from the list below:

Common Mistakes Associated With
Land Development / Entitlements

Investment Article

1) Sales & Marketability - We buy land at 30 to 40 cents on the dollar of current market value and sell it at 70 cents on the dollar of current market value (not sales prices from 6 months ago). There is always a market for a good deal. The key is to make sure you are actually getting a good deal which is an integral part of EQ’s Due Diligence Process. 2) Financing - Debt Service & End of Term Refinancing - EQ eliminates this altogether by structuring projects that do not require financing at all.

3) Due Diligence - Developer Mistakes - Unfortunately good intentions do not equate to good investments. The EQ’s team 6-9 months of Due Diligence per project is then re-worked again by an outside Engineering firm including marketability, highest and best use of land and expected project costs in the form of a Feasibility Study. This outside firm will then confirm or deny the project as a viable option to proceed on. EQ always has multiple projects in the pipeline so our company is never under pressure to begin work on a project that does not pass muster. If a project is not absolutely perfect in all areas that need to be addressed to eliminate the areas of risk above, we move on to the next one. Every problem that a project runs into will fall into one of the three areas above and some fall into multiple areas. If you can work with a firm like EQ that can systematically and strategically eliminate those three areas of risk, then you are working with a firm that will consistently follow through on investor payouts and will lead to a long and mutually beneficial relationship. To discuss in detail how EQ addresses the areas of risk listed above please contact us for actual project examples.

Resolution Trust Corporation

Investment Article

The fall and rise of Wall Street the last several days has brought up the topic of the Resolution Trust Corporation. Some have questioned if this was a panic move. The Resolution Trust Corporation was a US Government owned asset management company charged with liquidating assets that had been assets of savings and loan associations declared insolvent by the Office of Thrift Supervision during the Savings and Loan crisis of the 1980's.

It also took over the insurance functions of the former Federal Home Loan Bank Board. It was created by the Financial Institutions Reform Recovery and Enforcement Act known as FIRREA in 1989. In 1995 the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation took over those actions.

Between 1989 and 1995, the Resolution Trust Corporation closed or otherwise resolved 747 thrifts with total assets of $394 billion. They pioneered the use of "equity partnerships" to help liquidate real estate and financial assets which it inherited from insolvent thrift institutions.

They used equity partnerships to achieve a superior execution through maintaining upside participation in the portfolios. Prior to introducing the equity partnership program, they had engaged in "bulk sales" of asset portfolios. The pricing on certain types of assets often proved to be low because the purchasers discounted heavily for "unknowns" regarding the assets, and to reflect uncertainty at the time regarding the real estate market. By retaining an interest in asset portfolios, they were able to participate in the extremely strong returns being realized by portfolio investors. Additionally, the equity partnerships enabled them to benefit by the management and liquidation efforts of their private sector partners, and the structure helped assure an alignment of incentives superior to that which typically exists in a principal / contractor relationship.

What To Consider Before Buying Land

Investment Article

Who hasn’t dreamed of building their own home? Imagine a custom-built home to your specifications. The further away from the city, the cheaper it is to buy acreage. That is why land costs drop in the country (outskirts of town). Sounds appealing, doesn’t it…more space, less people, cleaner air.

Of course, there are always drawbacks. The further out you are, the harder it is to find skilled craftsmen. Sometimes they don’t show up as scheduled and their rates might be higher to compensate for travel expenses. Delivery of building materials and related costs will probably be higher than if you were to build in the city.

There is also the concern of logistics. How far will you have to travel for groceries, gas, school, church, shopping mall?

If you’ve never lived in the country, you may want to rent before buying land and beginning construction on a new home. Meeting your neighbors and becoming familiar with the community might be a real eye-opener for you. You may fit right in and love your new environment, or you may want to reconsider. In any case, nothing is final and you will have options.

A final consideration concerning buying land as an investment…resale value in the country is often softer because the prospect of potential buyers is smaller. Demand is often low and supply high. However, if you are looking to retire and a country setting is what you’ve always dreamed of, go for it!

Real Estate Wealth

Investment Article

Owning real estate property is a good way to build wealth. Being a landlord may not be for everyone, but for those of you considering the idea, finding a profitable rental property takes time, connections and lots of research.

You must first have a game plan. How long do you plan to own rental property? Remember, ownership of property entails maintenance, repairs, improvements and keeping your rental property occupied. You must have the funds available to maintain your properties.

If you plan to own your rental property for the short-term, you’ll want to keep your maintenance costs and improvements to a minimum to maximize your return in profit. However, if you plan to keep your rental property for say 20 years, you will need to consider major repairs, (roof replacement, perhaps new appliances, possibly plumbing repairs). Be prepared for the unexpected.

It’s a good idea to keep your eyes and ears open when beginning your search for rental property. Veteran landlords may be looking for foreclosures. Your connections can be of great value, for example, bank employees sometimes know which properties are about to go on the market. Real estate agents keep their eyes open for possible buys and you can always search the newspaper and internet ads for investment property.

Another option to help build your real estate wealth would be to join a local landlord or property owner’s association to meet new contacts. You can also go online and search the National Real Estate Investor’s Association for possible networking.

And, for those of you who like to go for a Sunday drive…cruise the neighborhood for “rental signs”. Start in your own neighborhood where you are familiar with the market and also any neighborhoods of friends or family where you can get input on home sales, rentals, etc.