Real Estate

How to hire and work with a car accident attorney

When driving a car, your number one priority should be your safety and the safety of passengers sitting in the back seats. If you have recently been in a car accident and believe the other party is at fault, you may want to seek compensation. However, if you do the process yourself, you may have to wait much longer. Therefore, we suggest that you work with an experienced car accident attorney. These professionals are trained to deal with these types of matters. Below are some tips for hiring and working with an attorney.

1 schedule free consultations

The good thing is that most car accident attorneys offer free consultations. Therefore, we suggest that you schedule meetings with at least 4-5 attorneys to find one with whom you can work comfortably.

Since you are going to work with this professional for several weeks or months, we suggest you take your time and hire the one that most interests you.

2 Discuss your rates

Most car accident attorneys only charge you when they have won the case for you. Therefore, it is better that you hire the services of a professional who does not force you to pay the expenses out of your own pocket. Once you have won the case, the attorney will get a percentage of the settlement amount.

3 Request a service contract

It is better that you ask about the service fee before signing the contract. Typically, most attorneys get a specific percentage of the settled amount after the case is over. Make sure you know this amount before you sign the contract.

4 Provide the Attorney with the Required Documents

Make sure your attorney has all the information about the car accident. For this purpose, you may want to provide them with your hospital bills, medical records, health insurance policy, and auto insurance policy documents. This also includes the contact information of the other party.

These documents will help the professional handle your case in a much better position. Therefore, you may want to collect these documents as soon as possible.

5 The settlement process can take time

If you think that the settlement will be done in a few days, you should think again. Depending on the circumstances of the accident, you may have to wait a few months before receiving compensation.

6 Be communicative

Be sure to stay in contact with your attorney throughout the process. You must organize all the documents and give them to your professional whenever he needs them. Aside from this, you may want to return your attorney’s phone calls or emails in a timely manner. This is important if you want to win the case as soon as possible.

In short, following these steps will help you get the compensation you deserve from the other party. Hopefully, these tips will help you hire the best attorney.

Real Estate

What newbies need to know about investment property financing

Basics for financing an investment property

You have big dreams of owning real estate and retiring young people. You just don’t have the funds to go out and buy the properties in cash (most of us don’t either). This leads you down the path of financing with your local bank. Perhaps you already own your own home and have gone through the mortgage approval and signing process. This should be easy then, right? Wrong, investment property loans are not like your traditional home loan.

Lenders are stricter with the underwriting of an investment property than they are with the mortgage on a personal home. You may be wondering, but why? It’s simple when you own an investment property and a personal residence and then lose your job or things start going south financially, you’ll pay off your personal mortgage before anything else at worst. You won’t want to default on your mortgage, because that’s where you live!

Interest rate

The interest rate is going to be higher than your home mortgage, it just is. Add 1-3 percentage points more than the owner-occupied loan rate. That means if a lender charges 4.00% interest on homeowner loans, you’ll likely pay 5-7% interest on investment loans. That’s how it works folks. Loans are riskier, so banks want more for them.

credit score

As with any type of loan, your credit is important. It shows the bank a history of your past credit experiences and basically tells you why you should get a loan or why you shouldn’t get a loan. Working to make sure your credit is top notch is something you should do long before you get into the real estate game.

With investment properties, your credit score doesn’t have as big of an impact as it does with home mortgages. You’ll still have options if your credit isn’t perfect. If your score is below 740, you should expect to pay more in interest rate, lender fees, and lower LTVs. This doesn’t mean you shouldn’t invest with a credit score below 740, it simply indicates what to expect.

Lowest LTV

20% learn it, love it, live it. That’s the number the bank will want from you as a down payment on your investment property. Of course, there are exceptions to the 20% down payment, however, that is what most banks require.

20% is a lot of money, right? Yes, I know, but the good news is that you won’t have to pay for mortgage insurance! Nobody likes mortgage insurance. The bad news is that that’s the only good news. Also, 20% down is the best case scenario, if you have bad credit expect the bank to wait longer or not even look at your offer. As a final note, plan on needing at least three months’ payments as a liquid cash reserve. The cash reserve is important, yes you may have finally saved that 20%, but if you don’t have more than 20% in working capital by the time the furnace goes out in the first month, then the bank will question again if you grant a loan. .

House Hacking to start

The idea behind home hacking is to simply lower or minimize your own expenses and use the margin (money you are saving) to invest in purchasing rental properties. Living in a nice house with an indoor pool and a movie theater is great and all, but that house isn’t generating you monthly cash flow, it’s costing you monthly cash flow.

The basic idea behind this “house hack” mentality is to simply rent part of your house to someone else, or co-exist with someone else as a roommate in your own house. It can also mean selling your primary residence now and buying a multi-family property and living in one of the units while renting out the rest. Basically, when all is said and done, you are renting out what you already live in, to lower your monthly expense and save capital for your dreams of real estate glory!

If you have yet to buy your first home, or want to sell your home now to get into real estate, a multi-unit property might be the right option for you. By purchasing a multi-family home, you can live in one of the units and have your tenants pay all of your expenses. This is generally more appealing to most people than having someone live in their home.

For example, if you buy a 4 unit, live in one unit, and rent each of the other units for $600 per month, that would mean you are earning $1800 per month in rents. If your loan, escrow (taxes + insurance), utilities, and other expenses come to just $1600, you could be paid $200/month just for living in the house. Even better when it’s time to move into your future home, you can rent out that fourth unit for even more income. Sounds like a great idea, right?

Main point:

Investment properties have higher interest rates

Lenders are a bit more lenient on credit scores

You will need 20% for the initial payment (there are exceptions)

Try house hacking to get started in real estate

America’s Favorite,

The little time investor

Real Estate

Staging(r) Your Home For Sale: A Superior Real Estate Marketing Technique: Part 1

Every real estate agent KNOWS that a home needs to be displayed in the best light to help sell it faster and for more money! We also know that, well done, it is much more than putting fragrant cakes, breads or cookies in the oven, opening the curtains and turning on all the lights; although even that helps a lot.

Setting the stage to get the highest value, faster, for a home has recently become a real estate specialty that can be very profitable for the seller and help the buyer overcome the immense emotional stress of making a decision about which one to buy. , among many similar properties. , for sale. For a few hundred or a few thousand dollars; a seller can increase speed considerably and add several percentage points to the selling price at the same time!

For the buyer, buying a home is a daunting emotional progression. First, the buyer determines the price range, then probably a list of must-haves, must-haves, and hopefully including: features, perks, benefits, and of course potential locations. However, when they see a preview of a house that really blows their minds aesthetically, that list and priorities can instantly and dramatically rearrange in their minds! I call it the WOW factor! Few houses have it, those that do, sell for much more money and much faster.

The biggest difficulty for any seller, myself included, is that we tend to romanticize our own homes: seeing the big parts of our own home and not noticing the clutter, shortcomings, clutter, needed repairs, and inconsistencies. We can call it eclectic, but to a buyer it’s often just a mess.

In any communication we must highlight, prioritize, observe and promote more than anything else: what and how the recipient perceives our communication! Our opinion about our communication must be subordinate to the opinion of the person or persons we want to convince! We as Realtors and we as sellers must convince the buyer or the house will not be sold. This is an often difficult but always required priority in all parts of the marketing, promotion, advertising and sale of a property.

Staging elevates marketing and promotion. A well-staged house looks much better in marketing and advertising images, predisposing a potential buyer to at least take a look at it. Once the buyer is in the house, the staging of the entire house, every nook and cranny, becomes part of the emotional database, often subliminally installed, to get buyers to buy the property well staged. on stage instead of others on the market.

Most of us look beyond our usual surroundings, into all parts of life. We notice changes and differences, but rarely the similarity. We, as real estate agents, always give advice to our sellers, hoping that they will better prepare, pose and present the house for sale. However, our all-consuming job is not rearranging furniture and moving pictures or storing things, disassembling and cleaning the garage, and our advice is usually not fully followed. Our hours are best spent marketing, promoting and responding to inquiries about the property. Quality staging can take hours and days.

Clutter is killer! There are now reputable staging professionals who get specialized training to recognize the importance, the meanings, and the small changes that put your property at its best and most flattering. I call it similar to a lady getting dressed for a big dance: the best dress, the best hair, the best makeup, the best behavior and wonderful poise! All designed to hide any flaws and accentuate all the best!

Staging is an art, a science, a marketing philosophy, and an applied sales and promotional tool of excellence and value beyond most other real estate and home selling tools and techniques. There are reputable staging professionals who are trained and proven to recognize and handle the little changes and modifications that allow your home to shine its best in the eyes of potential buyers and the real estate agents who can bring them in.

Some things are hard to beat in today’s market; the hardest to beat are the sub-9 foot ceilings and limited windows. Another set of business killers are outdated colors, dark, messy and unfinished looks.

A well staged home in our area can easily bring in another 15% above what it will bring in without proper staging. Some people can even make money by buying a bare metal house and while under contract, have it professionally and extensively fitted, then sell their contract and make up to a 10% net profit…might be easier in some cases. I have worked in

The series of mental decisions that become a purchase decision is made up of a series of first impressions from the outside of the house to a series of impressions as the prospective buyer walks through the house.

Most importantly, sellers need to know that the first sale is to real estate agents who will bring prospective buyers to your home, and your home is where the purchase decision is made.

Copyright 2004; By Jody Hudson, real estate agent. http://www.kate-jody.com

The entire staging article is:

[http://www.kate-jody.com/Staging.html]

Dozens of other articles from Jody:

http://www.kate-jody.com/essays/index.html [http://www.kate-jody.com/essays/index.html%20%0D%0A]

Real Estate

Top 5 Due Diligence Mistakes Made in Commercial Real Estate

It is really a long and complicated process to find an ideal commercial space for your business, and if not pursued in the proper way, it can cost you a lot of money and also end up in a contrary place. So when it comes to renting office space or any other commercial space for your business, it is very important that you have a strategy and make sure that you are making a good decision based on the needs of your business. Listed below are some of the most common due diligence mistakes tenants should watch out for.

  1. Bad property value: One of the most common mistakes tenants make when leasing commercial space is that they do not value the property correctly. This could lead to many misunderstandings that would ultimately end in a wrong deal. So just make sure you are really conservative when it comes to signing a deal. Consult for sale competitors and other properties available in the market by contacting the most active commercial agents.
  2. Not understanding the lender’s underwriting requirements: Before you spend your valuable time, money, and energy doing due diligence, make sure you have a prior discussion with lenders about how much loan they would put on your property. Because, these days, lenders have been very conservative and consider many things like physical condition, intended use, comparable sale and lease, environmental issues, etc. So check with lenders before taking it too far.
  3. Not checking if the Property Complies: These days, it is not uncommon for a buyer to learn that the property does not meet the building requirements after purchasing it. Buyers usually find out when the city inspector comes to check for any heart attacks associated with the property. Therefore, it is always a good idea to have an architect, planner or contractor inspect the property and discuss any compliance issues during the due diligence period.
  4. Assuming there are no problems: Usually buyers or renters who are in a hurry to get into a property make this mistake. They just want to settle in a space that makes them assume there are no problems. But sometimes leases can have pitfalls such as contract clauses, cancellation clauses, fixed option rents, etc. As a tenant, you should be aware of these provisions as it can put you in a bind and devalue the property. So if you are not familiar with commercial real estate leasing, it is good to have an attorney who can help you read the lease.
  5. Not spending time on the property: When you are about to buy a property or lease it, it is not enough if you look at it with disdain, as it is something that strongly impacts your business. Be sure to take a comprehensive tour by going there at different times of the day; this gives you a better idea of ​​what is going on there on the property. Sometimes you can also change your mind and decision to buy the property. You will not only know what will be hidden; it may be mold or fire issues in some apartments to name a few. Spend enough time in the property and make sure that it is ideal for you.

Many commercial real estate investors are unaware of things they are unaware of! The points mentioned above will surely give you a brief idea and you will also know the things that you need to follow while looking for a commercial space to establish your business.

Real Estate

Hype or hope? Eric Medemar Review – HyperResults System 2.0 Advanced Wholesaler

Until an accidental meeting in 2006 at the REI Summit, I had only heard rumors about Eric’s unique training philosophy. I was told by a few other top coaches in the industry that I would either love Eric or hate him. There was simply no middle ground with him. Looking back, it’s clear that her no-nonsense approach to wholesale real estate coupled with his sharp tongue had earned her some enemies.

That meeting coupled with serious demands from my blog subscribers prompted me to contact Eric so he could do a comprehensive review of his Advanced Wholesale System. So, with his permission, I’d like to start now.

If you remember, in October 2009 we did our first conference call with Eric Medemar and I went right out and asked him if he was planning to present any new material. He only hinted that there might be something in the works, but at the time it didn’t seem like anything concrete. That’s why I was so excited when I saw that he was launching this new system.

I’ll be right up front, there was a part of me that didn’t think I could get much better with your Ultimate Wholesale System. After all, his ultimate wholesale system was not only cheap, it also worked. A kind of difficult combination to improve.

That’s why I wasn’t at all surprised to learn that instead of improving his system, it seemed more like he was expanding it. Do you know that sometimes you can’t know what you don’t know, until you learn something new and only then do you realize that something big was missing? Well, that’s what happened when I started checking out their new system.

Module #1 Mental Acceleration Module– In this module, for example, I learned the fascinating reason why many of us get stuck in “Paralysis by Analysis”. This seems to be something that sets the Eric system apart from many of the other systems I have reviewed. Eric not only teaches you “what to do” he teaches you “how to do it”.

Module #2 The Buyer Blitz module- Anyone who has purchased the Ultimate Wholesale system will remember Eric’s reverse MLS method and his HUD bloodhound method. How could those two methods be improved? Personally, I didn’t think I could do it. He did! In his new buyers module, he shares 21 more ways to find buyers and about 10 of them are as innovative as his HUD hound method and his Reverse MLS method.

Module #3 The Marketing Crisis Module- This was like getting an abbreviated MBA in marketing, which is one of those areas where I didn’t know how much I was missing or how much it would help me, until I actually listened to the module.

Module #4 The Real Estate Agent Reality Check Module- For many of you, this might be your favorite because in this one, Eric touches on an area of ​​investing that no other course seems to teach, which is how to handle dealing with real estate agents. Those of you who know me know that I’ve been a real estate agent for 15 years and Eric teaches you things about me that he certainly wouldn’t want you to know.

Module #5 The Seller Slam Module– As Eric says, “Buyers and sellers are about 90% of the wholesale equation” which is why he goes into so much detail giving specific and exact instructions on how to find motivated sellers in almost every market .

Module #6 Website Warfare Module– If you somehow missed the boat and weren’t impressed with the previous 5 modules, this one will blow your mind, because Eric takes you behind the scenes of his guru business and gives you a flood of new insights on how he leverages the internet to earn even more money, with much less effort.

Because so many of you asked, I thought I’d post the first half of my review because there are 6 more modules to go after this one. No, I’m not officially done with this review, but I will say that in these first 6 modules alone I’ve gotten 10 TIMES my money’s worth.

Real Estate

8 Things to Consider When Choosing a Strata Manager

Our inside tips on questions to ask your potential Strata Manager.

Good or bad, most people judge an entire strata agency by the working relationship they have with their strata manager.

We have prepared this short list of questions to ask yourself before making the decision to appoint a new Strata agent.

How many buildings does the proposed new Strata Manager already handle?

Your entire strata experience hinges on this one simple question. Most agents handle large portfolios, to the point where they may spend most of their time putting out fires instead of giving you the proactive service you’re looking for.

What is included in the monthly management fee

Most agencies charge a monthly management fee that covers agreed services. Works performed outside of the agreed services are charged as an additional fee. You can negotiate with an agency to have fixed price disbursements to give you a clearer understanding of how much your plan will pay each year.

Ratings

The Stratum Manager who will manage your building must have at least a Certificate 4 in Stratum Title Management. Ideally, this would have been obtained through a Tafe course. It is possible to obtain a Certificate 4 in Strata Management by paying to do a 2-week course. It’s also a good idea to ask how long they’ve been with the agency.

Experience

When approaching a potential new agent, it’s a good question to ask how experienced the strata manager who will actually be managing your building is and, in case things go wrong, how experienced is he/she in attending mediation and court hearings.

Reports

How often are financial reports generated and given by the treasurer alone to the entire committee? Ideally, this will be available on a monthly basis.

Service Level Agreements

Strata management is customer service. Your new agent should be able to provide you with timeframes when your applications will be processed, emails answered, and phone calls returned.

Your money, your ticket

It’s your building and you don’t necessarily want the Strata manager to do everything, so it’s important to clarify how much input you’ll have to approve creditor payments and what level of input the committee will have when the agent is preparing the proposed budget.

terms of agreement

When appointing a new agent, most will try to lock him up for a maximum period of 3 years. If the services do not meet your expectations, you will be locked out for the term of the contract, unless your scheme decides to pay for the remaining term of the contract. It is a better option to sign a one-year contract and see how things go.

Real Estate

Foreclosure Real Estate Purchase Agreement – What to Expect

A foreclosed home is one where the homeowner was unable to pay their mortgage loan, so the lender took over ownership of the home through the foreclosure process. These bank-owned properties are also known as REO (real estate ownership).

The process in Arizona is similar to other states and will be the basis of this article. When you work with a real estate agent, they will draft your purchase offer with you in a standardized contract that was developed by the Arizona Association of Realtors. The contract allows the agent to customize the contract for your particular purchase and has many built-in protections for both the buyer and the seller.

When you bid on a repossessed property, you can expect to receive an addendum to the contract from the seller (the bank that currently owns the property). These addendums are essentially a counteroffer that the buyer must accept if they want to purchase the property. In some cases, the seller will negotiate these terms with the buyer, but most sellers expect the buyer to agree to their terms. We have seen a wide variety of addendums in the last year as we work with buyers. In all of them, many of the protections for the buyer in the standard contract are eliminated or modified. These are some of the things we are seeing.

inspection period

In the standard contract, the inspection period lasts ten days from the date of signature of the contract by both parties. We’ve seen addendums change that to ten days from verbal acceptance of the contract and even seen a five-day inspection period that must be completed before the buyer signs and accepts addendums.

Title/Trust Company

The seller will generally require the buyer to use the escrow company of their choice. Generally, using this company helps facilitate the timeliness of the transaction because the escrow company is familiar with the seller’s requirements.

AS/IS and Disclosures

When you buy an owner-occupied property, you’ll typically get a Seller’s Disclosure Statement. This will provide information about the property and a history of any repairs made. When you buy a foreclosed property, the seller has not occupied the property and generally will not provide a disclosure statement. In addition, the buyer is generally required to purchase the property in its current “as is” condition and the seller will not make any repairs. If something is missing, like a kitchen appliance or garage door openers, the seller won’t provide it. What you see is what you get. Please read the appendix carefully to understand what the seller will be responsible for if the property is damaged during the escrow period. The escrow period covers the time from when both parties agree to the contract until the sale is recorded (closing of escrow).

Escrow Closing Extension Fee

Most of these addendums have a per day charge if you need to extend the escrow closing beyond the original contract date. The most common reason buyers need to request a closing date extension is that the lender did not complete loan processing and deliver the title loan documents several days before closing to allow time for both the seller and the buyer sign. We have seen costs ranging from $40 to $100 per day.

loan approval

The Arizona contract allows for the return of money deposited by the buyer if after a good faith attempt to obtain a loan at prevailing market rates to purchase the property, the buyer is unable to do so. Some riders limit the buyer’s time to obtain loan approval to a certain number of days from contract acceptance, for example, 25 days. If the buyer does not notify the seller of his inability to obtain a loan within that time, he will forfeit his security deposit to the seller. This is true even if the inability to obtain the loan had nothing to do with the buyer’s financial qualifications. We have seen loans rejected in recent months for condo purchases because the community had too low a percentage of owner-occupied units or the HOA was not financially sound or in some cases both.

Tenants or other occupants

Most of these properties will be vacant; however, if you see evidence that someone lives in the property when you are viewing it and before you write an offer, you should ask questions. Who lives in the property? If the property has been rented, what are the terms of the lease? We have seen an addendum stating that the seller will not evict any occupants of the property and that it will be the responsibility of the buyer once he has purchased the property. You should also keep in mind that tenants have rights too. Be very careful when writing an offer for a foreclosed property that is occupied.

What should the buyer do?

It is very important that the buyer read the entire addendum provided by the seller before signing. If you have questions about the addendum, you should see your real estate agent for clarification. You should also verify that your real estate agent has read the entire appendix and noted key dates.

Real Estate

Your journey from unemployed to self-employed

Internet marketing may be the new American Dream, instead of ‘Get a good education, get a good job with a good retirement plan, retire’. Then spend your golden years wishing you were young and energetic enough to enjoy the things he couldn’t do in his youth.

With internet marketing you can get a good education of a different kind, work hard and dedicate yourself to your new online business and actually have enough disposable income, what you don’t need for food and shelter, to go on vacation whenever you want. . please work from your computer and laptops go wherever you go.

The New American Dream Internet Marketing

Building a home based internet marketing business requires a somewhat different skill set than running a brick and mortar business or holding down a job, but there are similarities in all three.

You have to work hard and apply yourself if you want to get ahead.

Internet marketing needs to be approached like a business from the start, it can’t be ‘I’ll try’. When your goal is to earn a check, you can’t ‘try’, you have to do it.

When you start a new job, you don’t “try”, you do your job to the best of your ability and try to earn raises and/or promotions.

When you open a store in a mall, you don’t “try”, you advertise, you promote to your friends, anything you can think of to attract customers to your store. You’ll have someone in a funny suit on the street if he gets you clients.

To be successful in internet marketing, you have to apply yourself the same way, treat it like a second job if you have to, a job where you get paid only on commission, you don’t get paid for your time, you get paid for your results.

Startup

Most people who want to make money online start with a vague idea, have heard of it and want to check it out, but don’t know how or where to start.

You need a framework for how what you do online parallels business practices in the ‘real world’.

When building a brick and mortar business, what is the first thing you should have?

Something to sell or a place to sell it? Which first?

Both are important, but having something to sell isn’t much use if you don’t have a place for customers to buy it.

Start with a place of business, then work your way up to a product line or lines. You begin to generate a list of potential customers or clients. The basic steps are;

  1. Rent or buy a building or office space to do business.
  2. Stock your business with inventory.
  3. Generate a list of potential customers or clients.
  4. Open for business.

That’s simplified, but it’s the general idea. Now to compare it to successful internet marketing.

#1 Rent or buy a building or office space to do business.

In internet marketing this is a blog or website, blogs are much more versatile, easier to manage, much less expensive than websites to build and can be built in less than a day whereas traditional websites They can take weeks to build.

That said, some businesses still prefer a website to blogs, in both cases you need to get a hosting account and at least one domain name. A hosting account is how other people see your site online, your Internet storefront. Your domain name is what people type in the address bar to go to your site.

One hosting account can serve multiple domain names. Domain names cost around $12.00 a year for dotcoms, the best option for a US-based business.

You can get good hosting for less than ten dollars a month, just make sure they have CPanel, that’s a must if you want to build your blog quickly and easily.

#2 Stock your business with inventory

After you set up your Online Store, you need products to sell. There are many different ways to get products that you can market online, without having to buy them yourself first, a huge advantage in internet marketing.

The two best ways are affiliate marketing and network marketing, both business models give you immediate access to products that you can sell online.

Many affiliate marketing programs are free to join, as are most network marketing opportunities, however, to earn a monthly residual check in network marketing, you must have a monthly autoship, which varies from one opportunity to the next.

#3 Generate a list of potential customers or clients

Now that you have something to sell and a place to sell it from, you need leads, or prospects for short. When you have a physical store, put up ads and hand out flyers, online you build a list of names.

Internet marketing has a saying: ‘The money is in the list’, more specifically, in the opt-in list.

You need people to accept your marketing emails before you send them. To get this permission, you need what’s called an autoresponder and use it to create a signup form.

Place your signup form on a lead capture page, also called a squeeze page, or in a text widget on your blog.

Once a Prospect has signed up for your list, you can set up your autoresponder to deliver pre-written marketing emails without having to do anything else, after setting up your autoresponder, which may take some time.

Once set up correctly, your auto responder is like the autopilot of your business, once prospects sign up, everything is automatic.

You can get a one-month free trial at most Auto-Responder providers, after that they start at around ten dollars a month.

#4 Open for business

It’s time to earn some money, surprise, you’re already open. He opened the business the moment he put his Opt In Form live online.

Unlike a traditional store with internet marketing, you don’t have to advertise opening day for weeks to get people to come, once you start advertising you’re open for business.

The cost

  1. Hosting $6.95 a month at BlueHost.com
  2. Auto responder From $10.00 per month
  3. Domain name $12.00 year

Those are your basic costs for marketing online if you go for affiliate marketing, with network marketing you also have your monthly autoship which can be anywhere from under $100.00 to over a thousand dollars.

Can you seriously afford not to start internet marketing?

Real Estate

Keep track of your total net worth

Business owners and professional practices know that they cannot run their business effectively without understanding its financial position. In the same way, when it comes to making a comprehensive estate plan, you also need a framework to assess your overall financial status.

A “balance of life”[1] provides a comprehensive view of the owner’s assets, liabilities, and net worth. Although similar to the more traditional balance sheet used to monitor your business, the Life Balance Sheet includes both real and implied assets and liabilities.

The left side of the sheet lists the owner’s assets and includes traditional financial assets (cash, stocks, bonds, alternative assets, etc.) and other tangible assets (real estate, precious metals, art collections, etc.). It also includes implied but expected assets.

Embedded assets are illiquid assets that are often not tradable but have value. In a previous article, this was called “Human Capital”. Although often overlooked, human capital represents the present value of the owner’s expected earnings.

The liabilities, on the right side of the sheet, should look the same. Mortgages, business loans, and other property-secured debt are explicit liabilities. In addition, business and practice owners should include their succession goals as a built-in liability and career professionals and non-business owners will include their estimated retirement costs.

For example, if you want to maintain a certain standard of living after you leave your business or retire from your career, you are creating an implicit liability that must be funded by the assets on the left side of the Life Balance Sheet. Aspirations to buy a vacation home, start another business, or fulfill a charitable commitment also represent implicit responsibilities.

Think of a balance sheet with assets listed on the left side and liabilities on the right side. The combined assets include a home, retirement plans, and the family business. Collectively, these are worth $2,000,000. To this we are going to add $800,000, the amount of money the owner expects to earn as income from the business. This increases the value of Total Assets to $2,800,000/

Under Liabilities, we’ll list three common assets including a mortgage, college expenses, and estimated retirement costs. These add up to $1,800,000. This leaves $1,000,000 as discretionary wealth; an amount that the person can use as they wish, but which will have a significant impact on their net worth, their retirement and even her legacy.

Using the life balance sheet helps homeowners, professionals, and others assign a value (present value) to their underlying assets (your projected earnings) as well as their underlying liabilities (retirement and other costs). This information should prompt owners to review all of their real, tangible assets, including the value of their business, to ensure they are on track to meet their long-term goals.

[1] Wilcox, Jarrod, Jeffrey E. Horvitz, and Dan diBartolomeo, 2006. Investment management for taxable private investorsCharlottesville, VA: CFA Institute Research Foundation.

Real Estate

Top 5 Questions to Ask Your Fence or Deck Contractor

If you’re considering hiring a professional fence or deck contractor, there are a few questions you’ll want to ask before you begin. Here are the top five questions to ask your contractor:

1) Ask if a deposit is required: Reputable fence and deck builders will never ask a client for a deposit to start work. A decent contractor must have the financial ability to purchase materials up front and the confidence to deliver the final project in order to be paid for the job when it is finished.

2) Ask about insurance and licenses: Hiring a “handyman” to build a fence or deck may cost a little less up front, but there are several risks if they don’t have the proper license or insurance. If someone gets hurt during construction, for example, you may be liable through your homeowners insurance. Fence builders usually don’t need to get building permits, but deck builders often do, so this will often be a problem for unlicensed deck contractors. Professional fence and deck contractors will always have adequate insurance and proper local business licenses.

3) Ask about additional charges: Sometimes you’ll get an “estimate” from a fence or decking company instead of a “quote.” Often a contractor will add additional charges down the road which may or may not be confirmed with the owner first. If you have already committed to the project with a particular fence or decking company, it may be more difficult to dispute any additional charges down the road. Fencing and decking projects typically have little or no cost changes along the way, so be sure to receive a written price “quote” that will represent the final invoice for the project as described.

4) Ask your deck or fence builder if they use screws or nails. Although most wood fencing and wood decking contractors today only use screws in their construction, some companies still use nails! Using nails is faster than screwing, but of course it’s common knowledge these days that nails will fail much sooner than screws in the same applications. Proper fence and deck builders will never consider the use of nails. You’ll want to make sure you hire a company that only uses exterior screws that are approved for use in the material being used (typically pressure-treated lumber).

5) Ask about the warranty: A reputable builder should offer a warranty on the workmanship of the completed project. Material collateral, if applicable, must also be passed to the owner and will vary in terms and duration. The workmanship warranty should be at least two years to allow full exposure to four seasons a couple of times; this will expose any labor issues that need to be addressed. Also consider that a guarantee for work done is only valuable if the company stays in business: a guarantee from a very small company is usually worth much less than a guarantee from a larger, reputable company.