Archive for October, 2011
Financial Freedom
If anyone lacks wisdom, let him ask of God who gives liberally with no reproach. You are right, you have heard every sermon on financial freedom but your situation has not changed, it looks like it your situation even got worse. Do not give up, there is practical teaching that actually fill in the blanks that is left out in sermon. Wisdom and knowledge will be the stability of our times, wait do not give up until you find the truth which will change your life forever.
Most Christians are desperately broke and in some kind of financial trouble. Why? We serve of God who is able to supply our needs according to his riches in glory and it is his will that we prosper and be in good health even if our soul prospers. So we know that it is God’s will for us to live in abundance but why is that his will is not our reality? You have heard about having faith, trust God and God will supply and this is true but that alone is not what will put food on your table. The first step is having faith and renewing your mind about God’s will for you to prosper, but it does not stop there. Having faith does not mean that you will receive miracle checks in the mail or people will automatically give unto you pressed down and shaken together and running over. I wish it was that simple but the truth is, it is not. There are principles, there are legalities and there is what we need to do and what God will do.
Wisdom is the principle thing. Ask God to give you wisdom, wisdom for your job, ideas about your new business, wisdom to make good decisions, remember, God tells us to remember that he is the one who gives us power to create wealth. Wealth creation is God’s business so why try to run it without consulting him. King Solomon asked God for wisdom and as we all know he was the richest man that ever lived. We need God’s wisdom to create our business plan, wisdom to decide when to go into partnership, wisdom to decide when to buy or sell, wisdom to decide whether to work for someone or start your own business, wisdom for our daily walk with God. God gives us wisdom liberally without reproach so do not go another day not knowing what to do because God is able and willing to give us wisdom pertaining to anything we want to do.
It is time to stop praying for money and start praying for wisdom. You are not alone, a lot of people have been in the same situation until they had a revelation and walked through practical steps to achieving financial freedom. It is not too late, it is only late when you give up. It was never God’s will to live in financial bondage so why should that be your reality. May you discover the truth that will propel you into abundance and prosperity.
Join me and let us walk through this practical steps to achieving financial freedom on my blog, share your insights and also have the chance to learn from people with real life testimonies. Your life will take a different direction, a u-turn to the financial freedom street where there is no speed limit.
Tags: Business Wisdom, Having Faith, Renewing Your Mind
Virtual Offices Services Critical to Your Success
Renting a virtual office, you would get a list of virtual office services that you might use or might not use, and the discretion on your end is to find out just what kind of services you should be getting in the first place for you to ensure that you have ended up with a good virtual office solution of your own. Now since there are so many combinations of services around, we will be talking about the crucial ones that you have to pay attention to in the end of the day, because without them, you are basically getting short changed.
One of the most important things that you need to look out for when you are choosing a virtual office service is that you really need to be getting a mail forwarding service, because that is one of the more crucial things that you need to be looking out for. When you are in business, most of the letters or official documents that need to be mailed will be mailed to your office address, they will not be mailed to your house address, because for one it is not safe, and secondly, it is not professional of you to provide a home address as your business one.
One of the things that you need to know is that when you do this, what happens is that you will be able to get your mails secured by the officer that is there to help and handle your account, which is a really very useful thing when considering that you will not be there most of the time. The whole point of the virtual office is a stand in for you, a corporate entity and identity that people can relate to, while you move around or work from another location, ensuring the growth of your business.
In this way, you would be able to understand that the virtual office is critical to your success in the end, and in doing so, would be able to follow some logic on how you are going to be able to manage your time. Also, you need to look at the quality of the attached office that is given to you, and depending on the nature of your business, you would need someone who is competent in the industry to answer some general questions or forward them to you at least.
So, some virtual office companies do not offer this minimum, and that is a problem when you are trying to conduct a professional business. This is also what you need to do in order to understand that the whole concept of the virtual office services, and what you need to be getting to ensure that you are on the edge of the virtual world. In the end of the day, these are just some of the basics, there is much more you need to consider, and a whole slew of options when concerning these kind of services that you need that are critical to your success.
Tags: Office Address, Renting, Virtual Offices
How to Value Commercial Real Estate
One of the first questions you’ll ask yourself when you are looking at a new property to purchase is: What is this property worth? That is a different question then: How much can I pay? And it’s still different then: What can I get this property for? But all of those questions need answers before you put in an offer to purchase a new property.
How an investor chooses to value a property can depend on the size of the property or the sophistication of the purchaser. We rely on the simple methods, both because we are new to commercial investing, and because we’re looking at small properties. But, simple doesn’t mean less reliable or less accurate when it comes to commercial valuation.
Essentially, there are three ways to value a commercial property:
1. Direct Comparison Approach
2. Cost Approach
3. Income Approach (which includes the DCF method and the Capitalization Method).
The direct comparison approach uses the recent sale details of similar properties (similar in size, location and if possible, tenants) as comparables. This method is quite common, and is often used in combination with the Income Approach.
The cost approach, also called the replacement cost approach, is not as common. And it’s just what it sounds like, determining a value for what it would cost to replace the property.
The third, and most common way of valuing commercial real estate is using the income approach. There are two commonly used income approaches to value a property. The simpler way is the capitalization rate method. Capitalization Rate, more commonly called the “Cap Rate”, is a ratio, usually expressed in a percent, that is calculated by dividing the Net Operating Income into the Price of the Property. The cap rate method of valuing a property is where you determine what is a reasonable cap rate for the subject property (by looking at other property sales), then dividing that rate into the NOI for the property (NOI is The Net Operating Income. It’s equal to income minus vacancy minus operating expenses). Or, you could figure out the asking cap rate of the property by dividing the NOI by the asking price.
For example, if a property has leases in place that will bring in, after expenses (but not including financing) an NOI of $10,000 in the next year and comparable properties sell for cap rates of 6% then you can expect your property to be worth approximately $166,666 ($10,000/.06 = $166,666). Or, said another way, if the asking price of a property is $169,000, and it’s NOI is estimated at $10,000 for the next year, the asking cap rate is approximately 6%.
Where this gets tricky is when properties are vacant, or where the leases are set to expire in the upcoming year. This is often when you are forced to make some assumptions. (We’ll save how you deal with this for another day.)
The other income method is the DCF method, or the Discounted Cash Flow method. The DCF method is often used in valuing large properties like downtown office buildings or property portfolios. It’s not simple, and it’s a bit subjective. Multiple year cash flow projections, assumptions about lease rates and property improvements and expense projections are used to calculate what the property is worth today. Basically, you figure out all of the cash that will be paid out and all of the cash that will be brought in on a monthly basis over a specific period of time (usually the time you plan to hold the building for). Then you determine what those future cashflows are worth today. There are computer programs like Argus Software that help in these types of valuations because there are many variables and many calculations involved.
For the small investors, like us, using a combination of comparable property sales and income valuation using cap rates, will provide a reliable valuation. The real issue is convincing the seller that they should sell based on today’s income and today’s comparable properties. In the case of a mixed use commercial building we just tried to buy, the seller was pricing their property based on assumptions that leases will renew in the next 6 months at substantially higher rates and that the area of the property will continue to improve making the property more desirable. Unfortunately, we don’t buy properties hoping for appreciation. We buy properties today because the property will put more money in our pocket each month then it takes out, and the property fits within our investing goals.