If you are one of those who are looking for private money lenders, this could be an indication that you have just fallen into a financial emergency. This happens to almost anybody not only in the United States but all across the world. To date, the fact remains that there is a very small percentage of the society that does not run out of money but a big part of the population needs options just in case they do.
For some of us, borrowing money from family members is not an option so is borrowing through credit cards either because you have reached your credit limit or you have a bad credit. This is where private money lenders come in. Individuals who have gotten into an unexpected expense but do not have the cash at this moment are the most common borrowers of private money loans. Private money lenders offer short term loans to people who have had a hard time borrowing money from banks or other traditional lenders.
If you need to borrow financing from private money lenders, collect personal data that may be relevant to your search for lenders. Gather all important papers in advance. Oftentimes, you will need to present a proof of income and other financial documents including bank statements in advance. You can search for lenders online. You can find them listed in the investment bank section of your Yellow Pages. You may also look for names on the Internet. Asking contacts from banks or credit unions will also be helpful. These financial institutions will be able to assist you in finding lenders in your local area.
Once you find a private money lender, be prepared to explain you situation. Ask for a loan application form and fill it out. Be honest with any information that you put in your application. Lenders will have their ways of finding out whether or not you are telling the truth. Always ask for a timeline so that you will have an idea as to when to expect feedback.
If you are borrowing private money loans to finance your real estate investment, prepare exit strategies that you can use as fallback. For instance, you can sell the house after two years. You may also choose to apply for refinancing. Finding private money lenders is not as difficult as what most of us think. Maximize your resources and you are sure to find one who can help you with your needs. For a list of lenders in your area, go to www.rehabhardmoney.com.
Revisions in the service tax are expected to bring marginal relief to customers compared to the initial proposal
Siddharth Mehta and Priyajit Ghosh
The Union budget of the current year proposed to bring sale of property by a builder to a buyer within the ever-increasing service tax net. Recently, the Government got the proposal approved by the Lok Sabha with certain ‘relaxation’. So, one wonders what is this new tax apart from the existing stamp duty? When is this tax applicable? What is the new relaxation and whether the price of real-estate would further increase?
Initially, service tax was proposed to be imposed at the effective rate of 3.4 per cent on the sale price of the property in case any part of the price was received by the builder prior to issuance of ‘completion certificate’ by the concerned authorities. No service tax is proposed on sale of a completed property.
Apart from the service tax on basic construction price, various other charges such as preferential location charge or other development charges recovered by the builder were also proposed to be taxed at the general rate of 10.3 per cent.
While the proposals were pending approval of the Parliament , the builders realised various challenges, which were taken up with Finance Minister through their trade association.
The effective rate on the basic price was felt to be high since the amount on which the tax is proposed to be charged includes value of land on which no service tax should be applicable. The customers are already paying stamp duty ranging from 4 per cent to 12 per cent on the entire value of the property.
Further, divergent practices are followed in various states and authorities regarding the stage at which the ‘completion certificates’ are issued, posing challenges regarding uniformity of the levy.
The Finance Minister appears to have taken note of at least some of the issues.
Last week, while seeking approval of the budget pro- posals in the Lok Sabha, the effective tax rate on basic price was proposed to be lowered to 2.58 per cent by increasing the existing rate of deduction allowed for com- putation of service tax from 67 per cent to 75 per cent.
Complete waiver of service tax was proposed for certain low-cost housing projects for the urban poor. The finance minster also gave the assurance that procedural issues around the completion certificate would be simplified.
While this is a welcome step, a section of the real estate players still believe that there exists further room for reduction of the effective tax rate and sorting out other issues, for instance whether service tax would required to be paid in relation to the ongoing projects where at least a part of the sale price has been paid by the customers.
To conclude, while the final law is expected to bring some marginal relief to the customers over the initial proposal, the customers should be prepared to dig deeper into their pockets for their dream house.
Courtesy: HT Estate Dtd:-15-05-2010
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Finance can be defined as the branch of economics dealing with the management of money and other assets. The management of credit and banking and the commercial activities of providing funds and capital for investment also fall under the umbrella of finance.
The Effective Management of Assets
Finance is the pivotal feature of any business organization which has the utmost responsibility of raising funds for its corporation with practicing a stable balance between risk and profitability. Real Estate Finance can be defined as a branch of economics which deals with investing money or wealth acquisition in real estate. It is the allocation, generation, and use of monetary resources over time which is invested in the real estate business. Like any other aspect of finance, real estate finance also has risks associated with it –the effective management of assets, which will maintain or increase in value over time, will eventually result to a good investment yield of the project.
The Difference between Real Property and Personal Property
Real estate investment essentially means investing in immovable properties such as land and everything attached to it such as buildings, also known as properties. The difference between a real and personal property (called chattels) is the right for the transfer of title to the property in question in real property whereas the right to personal property or ownership to personal properties cannot be transferred.
Real Estate Can Be Used to Secure a Loan
Real estate investment can be viewed as a handsome business opportunity as real estate can be pledged as collateral to secure a loan for a business venture, to offset otherwise taxable income through cash savings on tax-deductible interest rate losses or rental income can also be derived from a real estate property. A common example of real estate financing occurs whenan individual owning multiple pieces of real estate and use one as his primary residence while others can be rented out. Profits, known as capital gains from real estate financing, can be reaped from real estate financing as a result of appreciation of real estate property prices .
Real estate financing is long term in nature and investment professionals have always maintained that at least 15%-20% of one”s investment portfolio should be devoted to real estate. Real estate financing can either be on residential or commercial properties, which have different tax implications. Real estate investment and financing decisions are inextricably linked and equity investors or borrowers treat real estate investment as much as a financing decision. The most recent development in the field of real estate finance has been the rise of real estate mortgaging business. A mortgage is defined as the conditional pledge of one”s property for the repayment of a debt obligation or a loan. The borrower is called the mortgagor and the lender, the mortgagee.
Another feature associated with real estate financing is the Real Estate Investment Trust (REIT). A real estate investment trust is a corporation investing in real estate that reduces or eliminates corporate income taxes. In return, REIT”s are required to distribute a majority of their taxable income to their shareholders. This proportion is fixed at 90% for the USA and 90% in case of the UK. India is yet to pass legislation on REIT”s and only a handful of Asian economies such as Japan, Malaysia and Singapore have REIT”s in place. REIT”s can be both privately and publicly held (they are listed in public stock exchanges).