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Stop New Fossil Fuel Projects!

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Started from early 20th century, there are two existing coal-fired power plants that being operated at full capacity of 100 and 270 Megawatts (MWs) respectively. The first plant was built by Cambodia Energy Ltd, a local subsidiary of Malaysia’s Leader Universal Ltd, which was launched in 2014. Second plant was constructed by a joint-venture between Cambodia International Investment Development Group (CIIDG) and the Chinese-based Erdos Hongiun Electric Power Co., Ltd. This second coal power station came online in 2015 and is being developed to a larger capacity of electric generation worth millions of USD that is enough to produce 700 MWs of electric energy to sustain local electricity consumption. The possibility of this enlargement depends solely on the availability of the imported coal from Indonesia, the main coal exporter to Cambodia and one of the major coal producers in the world.

This is not over yet as demand for electricity consumption rises, so supply has to be made available. To not depend solely on importing electricity from bordering countries, domestic production has to be expanded. On top of the existing two coal-fired power plants; currently, Royal Government of Cambodia is planning for another third coal-fired power plant to be constructed at the same area. It will be marked as the third approved coal-based energy generation facility in the in the Kingdom located at the southern coastal area of Sihanoukville. The whole projected was handed to the Japanese firm, Toshiba Plant System and Service Cooperation (TPSC), a wholly owned subsidiary of Japanese electronics manufacturing giant Toshiba, will build the turnkey power plant for Cambodian Energy II Co Ltd (CEL2), the plant will operate at 150 MW full capacity once completed. The construction will be carried out under full collaboration with TPSC Engineering Malaysia and TPSC from Thailand. The contract has been awarded by Cambodia Energy II Company Limited,), a subsidiary of Malaysia’s Leader Universal Holdings that operates the existing first coal-fired power plant as mentioned. The electricity output will be purchased by Electricité du Cambodge (Electricity of Cambodia), a state-owned enterprise operated under full direct supervision of Ministry of Economics and Finance, the revenue and profit manager; and Ministry of Mines and Energy, the energy and electricity policy designer, of the Royal Government of Cambodia. TPSC and its group companies will be responsible for the overall project, including engineering, equipment supply, construction work, installation, testing and adjustment. TPSC will manage the entire project and engineering, its Malaysian subsidiary will be responsible for procurement of equipment, and its Thai subsidiary will handle construction. On another development site, Pöyry, a Finish engineering company, was granted a contract to provide assistance for the review of pant design, supervise the location, assurance and quality control services, project management and commissioning of the power plant.

There has been controversial global debate on stopping the continuous trend of fossil fuels projects. That is, the use of fossil fuels for energy production should be abolished at all cost to preserve the well-being of the environment. The real question that got me thinking is that “Why the third-approved coal-fired power station should be stopped?” when it is important to Cambodia’s energy sector. To give comprehensive answer to these questions, one should identify the real costs of burning coal for energy production, basically in the form of electricity. Advantages of burning fossil fuel like coal to the country economic can be seen less that its disadvantages posed on environment and ecology are elaborated as follows:

First, coal dusts contribute to heart and lung disease so does posing danger to aquatic lives and reduce water quality once coal leaks out of the storage tank. It seem worse when the coal transporting ship completely sank into the water. Other means of coal transportation on land can also be dangerous to humankind, land animals and plants when improperly transport.

Second, coal is known as the unrenewable and unsustainable source of energy production with limited availability of total global coal reserves that is only last for 134 years of present consumption rate, and could emit almost 2000 Gt of CO2 emissions if all used. Coal has been recognized as the deadliest electricity source on earth that kills up to 280,000 people per 1000 terawatt hours of electricity generated giving the fact that the burning of coal alone is responsible for 46% of CO2 gas emissions worldwide and accounts for 72% of total greenhouse gas emissions from the energy sector. CO2, once released to the sky, traps heat from the sun in the Earth’s atmosphere, causing temperatures to rise overtime.

Third, coal, when burned, generates CO2 the most among many other poisonous gases such as, Nitrogen Oxide (NO) and Sulfur Dioxide (SO2), which all are harmful to the healthiness and freshness of the air. Nitrogen Oxide released by an amount of burned coal, together with SO2, cause acid rain when both gases touch with rainwater. The effects of acid rain on ecosystem can be found on fish and wildlife are most clearly seen in aquatic environment. Acid rain also release aluminum once it flows through the soil going into lakes, and other watering systems. Plants and animal, some types, are toxic with acid, they are acid-sensitive, this sensitivity causes danger to their lives as some species living in the water including fish and frog can live under a specific level of pH. When acid rain damages to the pH level in water, though some type of species are acid-resistant, that does not mean the other animals or plants they eat are one. Other effect of acid rain on trees and plants can be seen with the death trees and plants. Acid rain removes nutrients and minerals from the soil causing the death of the plants and trees that rely most on those elements for the evolution of their lives. Rain that contains acid element destroy the sustainability of infrastructure and building in a long period. This problem can be seen in Cambodia as a country with glorious civilization left since the ancient time, thousands of Buddhist and Hindus temples were built thousands of years ago up until today, many temples are seen under very bad condition, and some others have been totally collapsed. Acid rain is one of the major causes of this architectural destruction without mentioning about human activities and natural disasters. All these are just some of effects among many others that can be easily captured.

Fourth, despite causing acid rain, Nitrogen Oxide together with Carbone Dioxides and Carbone Monoxide trap smoke in the atmosphere in the forms of smog and haze. Breathing poisonous air effects to human health, mainly causing deadly breath diseases such as, asthma, exacerbate (worsen) a previously-existing respiratory illness, and provoke development or progression of chronic illnesses including lung cancer, chronic obstructive pulmonary disease, and emphysema. Coal is a major contributor to air pollution that kills around 7 million people a year, and both the mining, preparation, transport and combustion of coal are extremely polluting, according to World Health Organization (WHO). When it comes to air pollution and environmental destruction, coal is the worst fossil fuel among others. CO2 and Carbone Monoxide (CO) that are released by a particular amount of fully and not fully burned coal respectively, once released to the atmosphere, weaken the ozone layer and trap the sunlight on the earth’s atmosphere which results in global warming. Thus, the more greenhouse gas emission is released to the sky, the hotter the world will be. As long as ozone layer is not fully operated, the earth will be hotter attracting more ultraviolet light that causes sunburn. At one point when global warming reaches its peak causing drought that is when crops and plants will face difficult seasonal condition to grow, results in cutting food supply in opposition to the increasing food demand.

Fifth, another major consequence as what the world is currently experiencing is the rise in sea level. Those of icebergs floating on Arctic Ocean surface and probably the whole North Pole will sequentially melt as the temperature keeps on going up to the maximum point. The same phenomena applies to big icebergs on Antarctica continent that consists of South Pole. These major global natural disasters will then be causing devastating flood that kills hundred thousands of lives on land.

Sixth, environmental sustainability is worsen under forest clearance for land concession and coal-fired plant construction. Deforestation destroys Oxygen (O2) best producer and CO2 absorber, while leaving many families under displacement. Peoples are forced to move away in the form of migration to urban area result in overwhelm urban population leads to the process of urbanization that later on causes social insecurity and instability. With that said, coal is harmful to all living things on earth, ranking from animal, human and plant. Healthiness will be reduced and well-being of the people will then be cut down with more and more coal being used.

Seventh, coal-fired plant stations indirectly affect tourist destination. Since almost all of the coal plant are based at the coastal area of Sihanoukville, the coastal tourist attraction area is devastatingly polluted by coal plants that reduce air quality causing local and international visitor to reconsider changing their tour destination. The Kingdom’s financial revenue earning from tourism sector will then be cut. Local resident is also affected with the polluted air they breathe every day.

Eighth, moreover, coal importation, like Cambodian case, leave the country being overdependence on foreign exporter. This political economy consequence leads the home country to rely heavily onto the availability and accessibility to consume coal, if not, the country would fall into deep energy problem.

With that all said, coal is a good use for energy and is economically profitable; however, it is extremely bad for environment and lives on the earth planet. Therefore, countries should reconsider granting license on any coal related project in the forms of exploration, production, importation and consumption, and shift to rely more on renewable and sustainable sources of energy production.

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Learning The Advantages And Disadvantages Of Ordering Food And Other Items Online

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Lots of people have seen the benefits of ordering stuff online. This also includes ordering food and getting them delivered straight to your home. Most fast food chains now incorporate online ordering into their services and even restaurants are getting into the act. Perhaps you have even experienced doing this at one point. So perhaps, you may also be aware of the advantages that come with ordering your food online which also goes the same for other non-food items. For one, the virtual realm doesn’t sleep, unlike the actual marketplace. Hence, you can place your order at any time, although there are some stores that probably won’t delivery 24/7.

Second, nothing beats the comfort of doing your shopping online, especially your groceries. Lots of housewives have switched to doing this because it allows them time to do their other chores. Instead of wasting time rushing off to the supermarket and waiting long lines, you can just load up your online shopping cart, checkout the items, and wait for them to delivered straight to your doorstep. Third, you get to score lots of great discounts and possibly get your food items at way cheaper prices than in the supermarket. It’s especially true if you’re diligent in scouring the virtual marketplace for discount coupons, promo codes, and other hot deal. Plus, if you’re a first-time customer, lots of online stores love to give complimentary discounts as well.

However, as much as there are lots of benefits, there are also a few drawbacks. We cannot help having them because this is the virtual world after all. In other words, these risks come with the territory. One, you cannot really see the items in actual. When it comes to groceries, this can sometimes be a bit vital. You cannot check the labels for expiry dates, ingredients, and such. So to remedy the situation, stick with those online stores that actually provide complete product descriptions. It’s also highly recommended to do your shopping in general with trustworthy sites. The risk is even greater if you’re trying out a new product, so it’s good to check out sites giving away free samples first. Two, you cannot transact with actual cash. This can present a bit of an inconvenience, especially if you’re trying to refrain from using your credit card.

Nonetheless, a lot of food chains and restaurants allow cash-on-delivery orders. Some online stores selling groceries do as well. But these would usually apply to those stores which are within your neighborhood. This means that if you are going to order non-perishable food items, like maybe canned goods or candies and chocolates and they have to be shipped from outside your area, then you definitely cannot pay with cash. Lastly, even with today’s sophisticated technology, there are still glitches when it comes to paying for your food items online. Errors in billing are pretty common, even when seemingly secured channels are being used. Of course, established online stores will refund you, but you still have to go through some steps. So, just exercise the necessary caution needed when ordering anything online.

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How To Slim Down Your Fat Wallet

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Trends and styles keep on changing. From big fat wallets, the style has now changed to slim and smart wallets, for both men and women. If you are one of those who keeps on saying, “I hate big fat wallets”, then you need not to worry, as now you have many good options that can help in getting rid of your big fat wallet and can make you look smarter.

You can get rid of your fat wallet if you avoid keeping all the needless items that have made their way into your overflowing wallet. These unwanted items can include restaurant bills, old photographs, storage cards and a collection of visiting cards. Use a separate card-holder and maintain it at home. To store your important contacts, you can use gadgets and your cell phone. Most of the new phones these days come with practically unlimited storage for saving your contacts.

Cut down the thickness of your wallet by using plastic money instead of hard cash. Apart from curtailing the size of your wallet, plastic money provides the safest way to carry your money anywhere. It is advised not to carry more than two credit/debit cards. You can keep your identification card and a few dollars; and that too if necessary, otherwise credit cards will do the job.

Slim wallets are more preferred for men because a big fat wallet affects the flow of dress shirts, way of sitting and can even cause back pains because of the improper body structure when sitting with a fat wallet in your back pocket. Most companies are introducing much slimmer and fashionable wallets, available in different colors (like gold, silver), materials (like original leather and nylon) and trendy styles. One such style is bi-fold or tri-folding wallets. These wallets provide the required space. Some can even hold up to 15 cards and can easily be placed in your front pocket. Such wallets come with a magnetic money clip while some provide a strong and secure clutch. Money/Card Clip Holder is another type of wallet that is light on your back pocket, and these can also be placed in the front pocket. By using a clip, all the cards can be placed one over another, while the money has to be rolled back to let the clip make it hold.

What makes your wallet big and fat, is its untidiness and improper maintenance. People usually keep on filling it till it starts coming out of their pockets. Even women who often clean and maintain their pouches and purses, do not clean their wallets leaving all kinds of chits, paper reminders and visiting cards in their wallets. This results in the hassle of searching the wallet for the right thing when required.

Once you have removed all the unwanted items and follow the aforementioned tips and suggestions, you would no longer be saying, ” I hate big fat wallets ” and can save yourself from the frustration of carrying a bulky and disorganized wallet.

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Why You Should Never Settle Your Credit Card Debt

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Most people believe credit is a good thing, but the truth is credit is a tool being used against many consumers. The problem is the majority of the American population is broke and depends on credit for survival. Credit is managing debt and most people do not understand how to manage debt. The school system in the United States spend so much time teaching students how to live their lives in robotic fashion, that they forget lessons in money management. Everything from employment, renting a car, to booking a hotel depends on some form of credit. Credit is for poor people who do not have cash in abundance. This is a problem rich people do not have to worry about.

The United States is the richest country on the planet, but has the widest gap between the rich and poor. The CEO of Wal-Mart makes about $7,000 an hour as opposed to cashiers and other Wal-Mart employees who barely make $300 dollars a week. How can anyone manage debt and live a comfortable life earning that type of salary. Most people are taught to negotiate their credit card debt for a settlement and improve their credit. This is the biggest mistake any consumer can make. Consumer are unaware that anytime a credit card company settles a debt for $600 less than their delinquent balance, by law the card company has to report that to the IRS. This is critical for the consumer to know because the IRS will eventually 1099C the consumer. The consumer will have to pay taxes on the credit charged off by the credit card company. This is capitalism and unfair at the same time. However, what can a person who is already struggling to pay their bills do to protect themselves? They can let the creditor charge the debts off as a tax lose. When this happens the debt can no longer be collected by the creditor.

Many credit card companies will still sell their charged off accounts to collection agencies for pennies on the dollar. The collection agencies will convince many consumers that, if they do not pay this debt, that it will ruin their credit. Many consumers are unaware that paying a delinquent or collection account will not improve their credit score significantly enough to help them acquire more credit. Consumers should always request a validation of debt from collection agencies with full documentation. Most collection agencies cannot provide this information and will send the consumer a screen shot of balance acquired from the original creditor. They will sometimes send the consumer an Affidavit of Destroyed Instrument. This simply means they do not have the original paperwork. The consumer should always respond with a Sworn Affidavit of Denial and file a complaint with the Better Business Bureaus forcing the collection agency to produce the original contract, which in most cases they cannot.

The reality of our credit driven society is that cash is king. Credit is the whip used for modern day slavery and social economic control. Until people demand a change within our political, educational and credit system, they will be force to live their life as intellectual and labor prostitutes for rich men as well as the corporations they lead.

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4 Smart Steps to Earn Money From Home

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If you wish to earn money from home, it is possible provided you take certain steps beforehand. Remember – there are numerous strategies and opportunities to earn. However, you need to make adjustments in your life in different arenas. This is very crucial as each strategy or opportunity has its unique approach.

Mentioned below are 4 smart steps to be successful in your endeavor:

Fix Your Schedule Appropriately

Yes, it is true that you are leading a hectic lifestyle. Nevertheless, opportunities just come once. If you fail to make the most of it, you end up earning nothing. To earn money from home you do not have to dedicate more than a few hours. Mere one or two hours of work is enough. Remember – you need to show dedication and sincerity. For instance, if you decide to earn from affiliate marketing, it is better to exhibit true professionalism. Similarly, if you wish to work as an online article writer, ensure to keep your commitment. It is only then that you can expect to have a list of happy clients.

Organize Your Space And Other Needed Items

You can work right from the sofa in your house and earn thousands. If you are working as a freelance copywriter, you will need things like a laptop/computer and an internet connection. Make sure your device is at right order before you start to work. Depending on the type of work and strategy you adopt, the kind of space needed will keep varying.

Develop Short Term And Long Term Goals

Answer this question – what do you wish to accomplish? These can broadly be classified as short term and long term goals. Depending up on your goals, the strategies needed keep changing. Ideally, you ought to have mile markers as these keep you motivated. Here, the main question is not what your ability to do when it comes to your idea. More than that, it is what you yearn to achieve during your attempt. Evaluating your strategies at regular intervals to identify what is really working or simply figure out what’s not working. In this way you can ditch or modify the later altogether.

Institute Your Own Reward System

Irrespective of how small or big your goals are, make sure to reward yourself when you actually achieve something you have been striving for. The reward does not necessarily have to be expensive in nature. For instance, you can give a visit to your preferred shop at the mall. This small effort will keep you motivated to accomplish your next goal to earn money from home. At times your reward in the form of paycheck reaches you in months. Similarly, it takes less time at other times. The entire journey remains flooded with obstacles. Therefore, rewarding yourself gives you a pleasurable experience.

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Earn Money at Home – Quit Your Job

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I worked in the corporate world for many years. One day I was laid off from my job. I didn’t know what I was going to do. I had always lived from paycheck to paycheck. However, since I received a compensation of 4 months when I was laid off, I decided I would use this time and severance pay to find out what I really wanted to do.

I soon decided I never wanted to go back to a 9 to 5 full time job in the corporate world, even though I was making good money. I wanted to earn money at home, and get out of the rat race of going to the office 5 days a week, working for other people, and doing jobs that really did not interest me or fulfill me.

So in order to earn money at home I entered the world of internet marketing. Now, even though I worked in a legal firm and did use a computer for many years, I was not a computer wiz by any means. But I knew the basics of using a computer. That was all I needed to start.

I soon discovered a whole new world, which actually fascinated me. I realized there was a lot to learn, and I dove right into it. One of the first things that I learned was the different kinds of marketing online.

Writing articles and submitting them to article directories and article distribution sites is one of the best ways of advertising for free. You always have your link in the article pointing to your website or product. Article marketing is a great way to spread your content all over the internet. This is content that stays on the internet. The more articles you have out there, the more you are spreading your name and links virally. Other people may use your articles with your name and post them on their websites, as well, which gives you free exposure.

There are many forums on the Internet pertaining to the different niches. When you join these forums, you start interacting with people in your same business and building relationships. You want to build relationships because these are the people you will be working with and promoting products with. You contribute to these forums by answering any questions and helping others. You support each other and build joint ventures that can be very beneficial.

To earn money at home it is also a good idea to sign up to different internet marketing courses which help you to learn different skills and strategies. For example, you can learn how to make your own products by customizing PLR products. PLR products give you the right to edit them and put your name on them, as if you had created them. Then you can sell them to your customers and keep 100 percent of the sale. This way you have your own product.

You can also sell affiliate products. Internet marketers usually have an affiliate program whereby they pay you about a 50 percent commission to promote and sell their products. So it is very easy to promote other people’s products and make a commission, without having to go through all the trouble of creating the product yourself.

Another important thing to do is create your own blog, and post articles and have promotions on your blog. There are banner ads which you can obtain through the promotional tools of the sellers. Keep your blog updated constantly. You can also have copies of your blog posts automatically fed to Twitter and Facebook so this way you are constantly providing content to Twitter and Facebook. This creates a lot of exposure and builds up your following by providing good information. When these people read your articles, they can click on your links and see your offers.

You need to build up a list of subscribers through different offers and promotions. It is important to communicate with your list on a constant basis, about every 2 or 3 days. You set up an autoresponder system through Aweber or any other autoresponder service. You usually set up sequences of emails that they send for you at specific time intervals. So then you can email your list with content and promotions. Promote to them any new and exciting product that you find, as well as your own products, and send them copies of your articles and blogposts. They will appreciate getting good content.

A good idea is to also start a newsletter to have a better rapport with your list. Your list of subscribers is your most important asset, as these are the people that you will promote to. So it is very important to build a relationship of trust with them.

Go to webinars and read about internet marketing. Learn from good teachers that are going to teach you solid internet marketing strategies. When you are new in internet marketing you need guidance from someone who is successful and can teach you how to get there. Otherwise, you will probably end up wasting a lot of time and resources.

In short, my idea to earn money at home has sprouted into a great and wonderful career which I never expected. I love internet marketing, and find it extremely stimulating. Even though it takes a lot of work and determination, it is absolutely rewarding and profitable. It is a great way to earn money at home.

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Learn How to Purchase Real Estate in Any Market With None of Your Own Money

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Introduction

Successful Real Estate Investors understand the need to have capital available in order to pursue investments that will allow for their continued business growth. However, this capital does not have to come from their own personal or business funds. The savvy Investor will use every method possible in order to get the most creative financing terms that will benefit them. Some of following methods will actually allow you purchase a property with little or no money down.

Warning

Due to the nature of putting creative deals together that may not conform to traditional lending procedures, it is strongly recommended to have your Attorney review any agreements or contracts in advance of you signing them. This will ensure your best interests are being protected.

Don’t Be Afraid To Ask!

The following information will provide an overview on ways to generate creative financing to provide funding for your real estate investments. One thing to keep in mind with regards to getting a seller to agree to creative terms is that if you do not ask for it you will never really know what could have happened. If you provide compelling reasons why your request for creative financing is a Win/Win situation, you just may convince them to look outside their normal comfort zone and do the deal.

Cash is King

When it comes to having a strong negotiating position with a seller, nothing compares to telling them that you are willing to pay them cash immediately. Cash is a powerful tool and it is one way to set you apart from the many investors that may be after the same deal. There are a number of ways to ensure that you will always have the capital available to negotiate your cash deals with motivated sellers. The following sections will provide a number of possibilities.

Borrowing from Friends, Family, and Professionals

Although at first you may have concerns about approaching people you know or who are family members to discuss borrowing money from them, keep in mind you are approaching them with a business opportunity, not a handout from them. Your success in achieving the desired results with these people will depend completely on how you present your opportunity. If you sit down with them not properly prepared without having any of the obvious issues or questions worked out, you will probably walk away without the cash. However, if you put together a project plan that will include an overview and most importantly a viable exit strategy (so they know how they will get paid back) there is a good chance you will be successful.

Once you have exhibited your ability to complete these real estate transactions with the anticipated results, you will have people coming to you as an investment option.

Bring in a Money Partner as a Joint Venture “Equity Sharing” arrangement

Another approach to locate capital is to add a money partner and do a Joint Venture with them. This technique is different than a traditional Hard Money loan because they may take on a more active role in the project and perhaps instead of a straight loan percentage they may take a piece of the profits. In addition, they are typically added as owners any mortgage notes and Deeds. Usually in this arrangement, there is a split of the investment profit and loss as well as tax benefits. Although the split is typically 50/50, it does not have to be and could be determined based on the amount of capital or other skills the partners are bringing into the deal.

Keep in mind that a Joint Venture relationship is usually put together with a specific project in mind. Once the project has been completed, the Joint Venture relationship may end. The specific terms of the joint venture are outlined in a Joint Venture Agreement, which will legally bind the partners to the project.

The Joint Venture approach is a great way to “Test the Waters” with the Partners in order to assess the viability of continuing this relationship on another project or to elevate the relationship to another business level like forming a entity (LLC, S-Corporation, etc,) with them. If you are going to find out that you have selected the wrong partners, it will be much cleaner to find this out when your relationship is only based on the one project.

Partner with the Owners

As another approach to shared equity, you may come across a situation where a seller is looking to sell a property that is in need of rehabilitation and also may be behind on their personal expenses. You could come in and bring the property up to market value by completing any rehabilitation it may require. In return, you would get a percentage or flat return on your investment once the property has been sold. Make sure you have a beneficial interest in the property either by being added to the deed or by issuing a note back to the seller.

This technique can be very advantageous for owners who are unable to pay the monthly expenses.

Buying Low and Refinancing High

Buying low and refinancing high is great way for you to “create” and utilize equity.

This technique works very well on properties that can be acquired far below market value or due to the current poor condition of the property. There is an ability to add value in the form of improvements. By purchasing the property and refinance with a cash out, you can recoup the capital you gave the seller and repeat the process on the next property. This is a great way to leverage the same funds over and over again. In some cases, you may be able to allow the seller to hold the mortgage until you can refinance. One word of caution using this method, make sure you fully understand your ability to get a loan based on the property and your credit qualification. Keep in mind that banks have LTV (Loan to Value) limits on how much they will loan based on the appraised value of the property.

This is a True Story!

On one of our rental properties we purchased we had some very motivated sellers that had a property that would not qualify for traditional financing due to its condition. We were able to negotiate a deal where they would hold a mortgage while we rehabilitated the property. At the end of the mortgage period, we were able to refinance and pay off the owner financing creating a win/win situation.

Sale-Lease Back

Another twist to owner financing is a Sale Lease back. With this technique, the seller will provide financing for the sale and you will lease back the property to the seller. You can give either full or partial credit towards the fair market rental value. This arrangement could be a great win/win strategy. The seller’s benefits are highlighted as follows:

* Eliminate the need to maintain the property, this could be very helpful if they are elderly or have an illness.

* The seller will receive an income stream to help pay for their expenses.

* Allows the seller to stay in the home, which can have powerful emotional benefits.

* The seller may benefit from a lump sum of cash from the down payment.

Doing a “Subject To”

The concept of a “Subject To” deal is that you will take title on a property subject to the existing mortgage remaining in place. This technique is different than assuming the loan because with an assumption, the loan is “transferred” to the new buyer. With a Subject To, you will pay the mortgage on behalf of the current owner. A Subject To deal is usually applicable when the property is not a candidate for a Short Sale. On a Subject To property there usually is significant equity in the property as apposed to a Short Sale that may not have any or negative equity.

Home Equity Line Of Credit (HELOC)

A HELOC is a great resource to have when you need capital to fund your next acquisition. How this type of loan product works is fairly straightforward. If you currently own property that has equitity (the difference between the market value and the total amount of all mortgages), you can use that equity to secure a line of credit. A line of credit is a perpetual loan meaning as you use the line and pay it back, you can borrow it again. A HELOC usually comes with check writing capabilities so you can fund deals as soon as you locate them. Lenders will have underwriting guidelines that will limit the amount of equity they will allow you to pull from the secured property.

You should exercise when considering using this type of loan product. Remember, if your project fails and you can no longer make loan payments, the bank will foreclose on the property that held the security and it may be your home.

Using Credit Cards

There may be instances where you may need quick cash for a short period of time. Don’t discount using your credit cards and requesting a cash advance. Although this option may cost you in terms of the high interest rate payments, it can be a viable approach to get you out of a jam with your cash flow or to raise capital for the acquisition of properties. If you have very good credit, I’m sure you are continuously bombarded with credit applications. Perhaps you should apply for a few of them and use the cash advance as another capital generation tool. Remember, most credit cards are free so if you do not use it, it will not cost you anything.

Assuming the Existing Mortgage

Assuming a mortgage is a great way to avoid dealing with all of the cost, time and underwriting criteria you may encounter when originating a new loan with your bank.

Basically, when you assume an existing mortgage, you are replacing the current borrower and stepping in and assuming all of the terms of the existing mortgage. Although at first this may seem like a great option, make sure you fully understand all of the terms and conditions of the loan. Many of these loans were originated when the interest rates were not as favorable as they are by today’s standards.

The following list will summarize the key points you need to review before agreeing to assume the loan:

* Interest rate and any adjustments that may occur

* Any balloon payments

* Prepayment penalties

* Assumption fee

* Term left on mortgage

* Assumption qualifications

Owner Holding a Mortgage

One of the most effective ways of doing creative financing is when the current owner is willing to hold a mortgage for you. This method is clearly a win/win situation. The following highlights will summarize the benefits of this approach:

* The seller could benefit from reducing their Capital Gains tax resulting from a traditional transaction. In addition, they will receive monthly payments that will generate an income stream at a good rate of return.

* With potentially reduced closing costs, the seller may attract more buyers

* Rates and terms are negotiable

* Since institutional banks are not involved, the transaction can close faster which could benefit the seller.

* Property condition is not a problem because you will not have a bank underwriting the loan with specific guidelines regarding the condition of the property.

* The seller may get a higher sales price because some buyers will be willing to pay a premium for this benefit, especially if they are not currently a good candidate for traditional financing

* If the subject property is commercial and not performing well due to poor management or vacancy issues, a lender may not write the loan. Lenders are very sensitive to the Debt Service Coverage Ratio (DSCR). See “Performing Financial Analysis on Investment Properties” handout for more information on this topic.

Once you have convinced the owner to hold a mortgage for you, your next objective is to work out the best terms of the loan. During the terms negotiating, there are a number of techniques you may want to consider to optimize the situation for you. The following will highlight some of the things you may want to negotiate with the seller:

* Defer the start of the payment cycle until you can generate income from the property.

* Have the interest rate on a sliding scale so that the early years have a lower rate than the later years. This could be beneficial in an appreciating rental market.

* Request interest only payments with a balloon payment due at some future point in time.

* Giving the seller a higher sales price in return for no or low interest rate.

Substitution of Collateral

A substitution of collateral basically means that you will use another property to secure a mortgage other than the property you are purchasing. For example, you can attach the mortgage to your primary home leaving the investment property you just purchased free of any liens. This technique will allow you to sell the investment property without having to satisfy the mortgage and leveraging the additional capital you will receive from the sale.

Options

Perhaps the most powerful technique in creating deals is using the concepts of Options. Basically, an option is a formal contract between a buyer and seller that states that the seller will agree to the sale of the property at some point in the future for a pre-determined price and the buyer has the option of moving forward with the sale. For the privilege of having the option to purchase, the buyer will usually be required to pay an option fee upfront and if they do not “exercise the option”, the fee will be surrendered to the seller. Typically, these option fees are held in escrow and will be managed in accordance with the options contract. Keep in mind that with these types of transactions, the seller is required to sell but the buyer has an option to purchase.

What the options technique allows you to accomplish is to have control over properties with very little money in the deal. Your only risk will be the loss of your option fee. During the option period, you will not be required to manage or provide capital for the underlying property including insurance or taxes.

A property owner usually retains the right to sell to someone else other than the purchaser of the option. However, the option will still survive the sale and just like a lease, the new owner must accept the terms and conditions of the option agreement.

Option Terms

Option terms are completely negotiable and usually no two deals look the same. The length of the option period can be anywhere from a few weeks to a number of years. Usually the shorter option periods are used when a buyer has determined that there is currently substantial equity and/or cash flow and need some time to either raise capital or locate another buyer to flip the deal to. Longer option periods are typically used when the buyer is anticipating future equity and/or cash flow. It is recommended that you consider having a provision in the contract that will allow you to extend the option period if it expires. This is referred to as a rolling option. Having the ability to extend the option period will usually cost additional option fees, but may be worth it if the property has the value you are anticipating.

Assignment of the Option

It is recommended that you add an assignment clause in the option contract that will allow someone else to walk into this contract. Consult your Attorney on the development of this document.

Lease Options

A variation to the option technique is a Lease-Option. This technique combines a typical lease with a purchase option. Unlike a straight option, the lease-option will shift the responsibility of property management to the leaseholder. With this technique, you will benefit from any cash flow and also tax advantages if this is a rental property.

Second Mortgages

Another technique to finance your acquisitions is to take a second mortgage out on a property you currently own. If you feel you will need these funds for an extended period of time, this could be a better solution than a HELOC loan because many of these loans are interest only and if you hold the property for an extended period of time, you would not be reducing the principle amount.

Using Signature Loans

If you have a good credit score, you may want to consider taking out a signature loan to help fund your acquisition Capital. This type of loan product is not secure by real estate and is based solely on your ability to pay. These types of loans can typically have a higher interest rate than a secured loan due to the higher risk levels the lender is accepting. In addition, there are limits that banks are willing to lend on an un-secured loan. A technique to provide a private lender more security on these types of loans is to take out a life insurance policy for the amount of the note and interest and make the lender the loss payee.

Tap Your Life Insurance Policy

There are some life insurance policies that will accumulate a cash value, this cash may be available to the policy owner in the form of a loan or cash value reduction. See your Insurance Broker for more details on this method.

Self -Directed IRA’S

You may want to consider using a Self-directed IRA to fund your investment capital needs. Self-Directed IRA’s have become extremely popular in recent years due to their flexibility with investment options. However, make sure you fully understand the specific rules and requirements of your plan with regards to the capital moving in and out of you account. There are limited custodians that offer the Self-directed IRA. See the workbook module “Reference Information List” handout for contact information.

Transactional Funding

Transactional funding can be an outstanding method for you to financing some of your deals without any of your own capital. A transactional lender will provide extremely short term financing in order to complete the sales transaction and the term of the loan is usually one to a few days. This type of financing is only suited for certain types of real estate transactions like Flipping where in the course of a day, you will close on the purchase side and re-sell it to your buyer. The fees associated with Transactional Funding can be high (2-4% of the loan amount) plus a few points or processing fee. However, when these costs are considered and the transaction is still viable, it can be a great way to complete another deal with other people’s money.

Using Your Company Sponsored Retirement Plan

Another technique to raise capital is to take a loan out on your retirement plan. For some, this can be a great way to leverage your money and earn even greater returns than you are currently receiving. The benefits of the approach are summarized below:

* Approval of the loan is usually very easy

* You are paying yourself back with interest instead of another bank or investor with hard money.

* Payments are usually made through payroll deductions making it very convenient.

* Interest rates are lower than hard money (be cautious with this method regarding your monthly payment because with the shorter loan terms typical of this product, you will be paying a higher monthly premium).

Other People’s Money (OPM)

When talking about creative financing techniques, you will hear many references to “OPM”. The concept of using other people’s money is a sure fire way for you to get into a deal with little or none of your own capital. The many different ways to use OPM is limited only by the creatively of the people putting the deal together. By definition, creative financing does not have any hard rules. The level of creativity is usually directly proportionate to the motivation of the parties involved.

As an investor, there are tremendous benefits to you using OPM. These benefits are summarized below:

* When you rely solely on your own capital to fund a project, you are limiting your acquisition plan due to your capital being tied up until your current deal completes the exit strategy. In addition, you will be limited on the scope of the project based on your available funds. However, when you leverage the use of OPM you are effectively creating an endless supply of required capital. This leverage will allow you to attain your financial goals in a more effective time frame.

* If you do not have any capital of your own to invest with, this method may be the only way you may be able to enter the real estate investment business.

* If you have poor credit, conventional financing may not be possible.

* Allow you to shift some of the financial risk to someone who will be benefiting by receiving a good return on his or her investment.

Using Personal Property as Down Payments or Collateral

In some cases, you may be able to offer your personal property as either a down payment or collateral. The seller for example may be willing to take ownership of your car as the down payment. This option offers many interesting possibilities.

Using Hard Money to fund your deal

Using Hard Money to fund your capital needs is a very common financing approach that should be considered. This method of financing is a great win/win strategy. As part of the development of your Success Team, you should have a number of Hard Money Lenders on-line ready to provide you the required capital. One of the benefits of using Hard Money Lenders over other ways of raising capital (like asking your family and friends) is that there is no emotional connection in the deal; either the deal makes sense or not. The criteria that Hard Money Lenders have are usually fixed with little room for negotiation.

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