Buying Real Estate Resale: The Resale Buying Guide

 

 

The resale purchase is a real estate transaction allowing you to generate an advantageous added value at the time of the resale of your property. It is true that renting a property can generate large revenues over the long term. However, in terms of generating a big gain in a short period of time, the resale purchase is more efficient.

The ideal strategy for second-time home buyers is usually to quickly sell real estate and finance the purchase of another property. The resale purchase is a solution that allows them to proceed quite differently. Discover in this article 7 mistakes to avoid during a resale purchase operation.

Buy Resale: What is it?

 

Buy resale – Features

The resale purchase is an alternative loan relay. It makes it possible to finance the purchase of a new real estate while reselling its current good. Thus, the bank buys your current credit and the assistant to your new loan.

1. Definition and principle of resale purchase

Definition and principle of resale purchase

The resale purchase credit allows you to borrow and consolidate all your loans into one. As a result, the bank will adjust the monthly payments of your bank loan to those of your other loans so that you build a constant schedule. This, for a maximum period of two years. This time is the time you have to find a buyer and sell. Once the property is sold, you must pay a portion of your loan. This will be done without you having to pay a prepayment penalty. Thereafter, the maturity will be readjusted according to the capital remaining due.

To do this, banks usually have a real estate expert own. The role of the latter is to estimate the fair value of the property object of the operation. Indeed, an estimate made by an external expert has no value in this case.

In addition, it may happen that a bank decides to include all the costs related to the purchase resale in the monthly payment. It is precisely the notary, agency and guarantee fees.

Principle of the loan purchase resale

The resale purchase is similar to the bridge loan in that it also allows you to buy a new property without having to wait for the old one to be sold. The major difference is that instead of 2 monthly payments, you will only have one to pay with a resale purchase. In addition, you benefit from interest at preferential rates.

The monthly repayment of the resale purchase loan generally includes:

  • Remaining capital on the loan contracted to finance your previous property
  • Credit that finances the purchase of your new property
  • Notary fees
  • Warranty Fee
  • Remaining capital of a loan contracted in another setting.

Note that in the bridging loan, it is the resale of your old property that pays the loan. In contrast, for a resale purchase, the sale of the old property only reimburses part of your resale purchase loan. So after reselling, you will continue to pay off the resale purchase credit. This credit is the balance of your new acquisition.

2. When to make the purchase resale

There is not a particular moment to make the purchase resale. You have to sniff the bargain when it comes to you. One way to do this is to regularly check the real estate listings. You can find a house, an apartment or a building plot that meets your expectations. To avoid being over-indebted, you can bring in a resale purchase loan. This will allow you to buy a new home directly.

Contracts this resale purchase loan will allow you to finance your new home well before selling the old one. To do this, the lending institution will buy back your current loan and associate it with the second loan. So that you do not exceed the threshold of 33% of indebtedness an advance of 70% of the estimated amount of your property will be given to you by the bank.

Consider that your new home costs 250,000 euros and your current property is 200,000 euros, for a salary 4,000 euros. You will be entitled to an advance equal to: (200,000 x 70) / 100 = 140,000 euros. If the remaining capital of your first loan is 70,000 euros, the amount of your new credit will be: 250,000 + 70,000 = 320,000 euros. Assuming that your reimbursement benefits amount to 1 500 euros, with your advance of 140 000 euros. The exact total amount of your new credit will be 320,000 + 1,500 – 140,000 = 181,500 euros net.

For the future, you can negotiate a favorable interest rate. In this way, you will be able to respect the threshold limit of 33% of indebtedness

4. Purchase resale: Taxation

Real estate gains are subject to a flat tax of 19%. At this rate is added that of social security contributions which is 17.2%. Adding both, you get a rate of 36.2%. Which is the maximum you will pay. In fact, this rate may benefit from a larger rebate depending on the duration of ownership of the property. This is to encourage detentions of more than 6 years. Thus, the longer the holding period, the less you will be taxed on the gain in case of sale.

Buy resale in real estate: 7 mistakes to avoid

Buy resale in real estate – 7 mistakes to avoid

The resale purchase involves some risks. These are particularly due to the difficulty of placing your old home. Indeed, you must follow certain steps in order to attract potential sellers. To do this, work must be done to increase the value of your property.

Here are the important steps you need to take in order to achieve a significant increase in value.

Step 1: Estimate the value of the property to buy

It is important not to overestimate the value of a good when you buy it. To make a good profit when reselling, you must first make a good deal with the purchase. However, the selling price depends on the quality of the real estate and the market.

Here are some parameters to consider when buying your property:

  • Find an owner in a hurry to sell: A seller in the emergency is more inclined to lower its price. This is usually the case for people who find themselves in a situation where they must quickly get rid of the good. It can be a bad investment, a divorce, a transfer, etc.
  • Finding a house that has been on sale for a long time: The more the sale lags, the more the owner is inclined to negotiate the price. Your job is to find the reason why good has dragged on the market. You can then capitalize on this information if it does not go against your investment objectives.
  • A home that requires major renovations: This type of investment generally discourages potential buyers. As a result, there will be much less competitor for the purchase of the property. In addition, you will also benefit from the possibility of adapting the accommodation to your liking. By adapting it to the market offer, you can increase its value. You can also argue the costs of the renovation to get a better price.

There are so many conditions that can make the difference at the time of purchase.

Step 2: Buy, Renovate and Resell

Acheter, rénover et revendre

Buy, renovate and resell

In order to sell your property quickly, you must increase its value. Indeed, to quickly attract potential buyers, your property must be presented in the best way. This, so that customers can see the potential of the property. Thus, for the visits you can privilege the mornings where the parts are perfectly illuminated.

In addition, you can carry out renovations to refresh the house. To do this, you can opt for a home staging. The goal of a home staging is simply to make a staging of your home. It consists of highlighting each piece of your property. This requires the depersonalization of your home so that the buyer can project more. To do this, you can use a professional.

Step 3: Choose your partners

Whether it’s the real estate agent, the banker or the craftsman, choose people with whom you can establish a relationship of trust. It is also necessary that the seller is transparent in order to avoid surprises afterwards. It could for example fail to point out some flaws invisible at first glance.

When it comes to administrative procedures, always think about getting ahead of them. Make sure to sign the sales agreement before you start. As for artisans, choose who are reliable and competent. You can also have a craftsman recommended by someone you trust. Generally, reputation and seniority demonstrate the seriousness of it. Also remember to be present in the field, to control what is done there.

Step 4: Double your budget to cover your back

Doubling his budget to cover his back

This consists of doubling both your budget and the time needed to realize your project. Above all, do not underestimate the time and costs you will need to make in the resale purchase of your property. This is especially so if you are new to this type of investment. A double budget gives you a good margin of safety. Remember that you will have to pay monthly installments of the resale purchase even if the property is not sold yet. In addition, you can find a partner to support the expenses with you.

Step 5: Anticipate an alternative in case of deadlock

When making your resale purchase, do not expect to sell your home in the immediate future. That is why it is important to ensure in advance that similar properties have been sold in the area. Also estimate the average selling time. Preparing for the worst situation will allow you to anticipate problems.

To do this, the sale of your property should not be your only alternative. You must have a broad vision of your investment. In this case, you can consider extending your loan in case of an overflow of the works. Rental is also a good alternative if you are struggling to find a buyer. At least so, you can settle your monthly payment thanks to the rents.

Step 6: Well negotiate your resale purchase loan

When you negotiate your resale purchase loan, make sure it is to your advantage. The bank loan is a good idea for a real estate investment from the moment it is well contracted. So, beyond the rate, pay attention to the schedule. For a start, it is wise to start with a payment deadline at least 6 months after making the loan.

Whatever the case may be, take care to opt for the most flexible loan terms possible. This is useful in order to minimize the risks, because it is possible that the resale is late. This is what makes the total amount you will have to pay the most important item when trading.

However, there are other equally important clauses to consider. Among these are the penalty fees for early repayment. This is usually the case when buying resale. You can negotiate their deletion at the time of signing the loan.

 

Step 7: Finalize the purchase sale of your property

When it comes time to sell your property, you have the choice between using a real estate agent or you charge. If you opt for a real estate agent, this obviously has several advantages. Be aware that the latter may charge 4% to 8% of the selling price for his expenses. However, you can benefit from his expertise throughout the promotion of the property until its sale.

By deciding to sell your property yourself, you will have the opportunity to negotiate without intermediary. You will also be required to advertise your home. It is still you who will intervene for the visits. The good thing is that you will not be liable for any margin to anyone on the selling price. Apart from taxes, the rest of the surplus value will be returned to you entirely.

In the end, it is not always easy to achieve a good gain in a resale purchase transaction. However, by following the previous steps, you will be able to avoid any mistakes that may lead to failure.

 

 

Business Creation, the Obligations Relating To the Registered Office

 

At any given time, every business creator is required to determine the location of his head office. Indeed, without this, no registration is possible. There are many places to set up your headquarters, so the problem is not so much finding a suitable place as making the best decision about your business. Many entrepreneurs are reluctant, so I will detail the 4 possible locations to set your headquarters, presenting the advantages and disadvantages of each solution.

What is a head office?

When the stage of the drafting of the statutes comes, domiciliation of his company is obligatory. To do this, you must enter an “official” address that is more commonly known as the head office . It is, in a way, an administrative address that will appear on all your correspondence, your bills, your letters, etc. The head office of a company is also the place where all important and strategic decisions will be made.

In addition to these aspects, setting a head office is not a decision to be taken lightly; its place of establishment will determine, among other things, the nationality of the company as well as the court competent for the handling of disputes (at least for certain legal disputes). In addition, the choice of location has important tax consequences, particularly with regard to the CFE (business property assessment) due at the end of the year by companies. Indeed, being a local tax, its amount can vary significantly from one municipality to another .

Be aware, however, that if the company has only one head office, nothing prevents it from holding several institutions. In this sense, the place of management can quite well be isolated from the places where the activity of the company takes place. Of course, the opposite is equally conceivable; in this case, the store, office or business premises, depending on the nature of the activity, is also the head office of the company .

Define the seat of your business at home

Define the seat of your business at home

This is self-evident, but to set the headquarters of a company at home must necessarily be the leader: President of a SAS or SASU, manager of a SARL, a SNC, etc. This naturally excludes the non-managing partner of SARL, for example.

 

Above all, it should check with your landlord or your condominium association, that no regulatory or contractual provision prohibiting the establishment of the headquarters in your domicil e. In addition, you must inform them by registered letter with acknowledgment of receipt, well before the registration of your company.

This solution is undoubtedly one of the most economical and allows entrepreneurs to have an administrative and tax address at lower cost. Whether they are engaged in commercial, liberal or artisanal activity, the majority of microentrepreneurs – formerly autoentrepreneurs – and individual entrepreneurs opt for this solution. As for those who do not exercise their activity in a specific place such as hairdressers, groomers, beauticians at home, the head office is, in most cases, fixed at home.

Fix its headquarters in a commercial premises

Fix its headquarters in a commercial premises

This solution, although expensive compared to the previous solution, has some advantages. On the one hand, setting up your headquarters at the very place where your activity is carried out makes it easier for you to organize, since everything is centralized in one place. On the other hand, the choice of the location of the commercial space can play a determining role for your business and make you aware of your prospects without necessarily using advertising. In addition, depending on the nature of your activity, you will be able to find the place that you need, the one adapted to your real needs and your activity.

On the other hand, any medal has its reverse; this solution involves significant costs, particularly with regard to leases through a commercial lease which, at the time of launching, can have unfortunate consequences in case of insufficient turnover.

Domiciling your business in a business center

Domiciling your business in a business center

This consists of fixing your head office with a business center owned by a domiciliation company . Commercial domiciliation gives entrepreneurs many advantages, including that of being able to benefit from a prestigious address .

Indeed, by choosing the place of your domiciliation, you can, for example, opt for the famous neighborhoods of big cities. Such an approach certainly reinforces your credibility with your potential customers as well as their trust. In addition to separating your personal home from your business – useful in case of litigation – this solution proves to be less expensive than renting a commercial space.

 

The nursery: an interesting solution

The nursery: an interesting solution

The nursery allows many entrepreneurs to settle down for rent. The latter is well below the prices practiced on the rental property market, hence its interest.

In addition to the pecuniary aspect, the nursery provides project creators with its infrastructure – meeting rooms, computer equipment, dining room, etc. – while providing them with expert advice, either through private meetings or personalized training. It goes without saying that the interest of such a structure is also to establish contacts, and thus to promote networking.

To conclude, this list is not exhaustive, other solutions exist, in particular that allowing to domicile his company within the premises of another company. Little known to entrepreneurs, the sharing of premises is more common than we think. Also think of the coworking spaces that are also places authorized to install the headquarters of his company. In just a few years, coworking structures have multiplied, no doubt you will find one of them in your city or department.

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Diversification When Investing In Start-Ups – The Start-Up Investor

I invest my money in start-ups through crowdinvesting. That this is associated with a certain risk, should be well known. I can live with that. At the same time, in addition to the risks of the individual investments, there is still the concentration risk. Concentration risk means that the individual exposures are all highly correlated.

This correlation can be fed by many different characteristics: asset class, currency, investment instrument, counterparty, contract type, etc. To avoid or at least minimize this concentration risk, I have personally set up a limit system for myself. This consideration goes back to the portfolio theory of Markovitz . Accordingly, the risk of a portfolio can be minimized while maintaining the expected return through diversification.

For that I have set myself the following limits: Overall, I do not want to invest more than 10% of my portfolio in start-ups; At the same time, I do not want to invest in any platform with more than 2% of my portfolio. At the first limit, I am slightly over it and the second limit I have (clearly) exceeded in a platform. But in both cases I only invest now, if all criteria fit.

In addition, I still have country and currency limits at the portfolio level, but these are relatively irrelevant for the start-ups, as most of the companies I have invested in and invest in come from Germany and the investment is therefore settled in EUR. I have set no limits for these two characteristics.

I also have industry limits at the portfolio level. However, honestly, I do not look at the industries in start-ups as a) the investments per start-up are comparatively low (~ 0.1% of the portfolio value) and b) the development of the start-up is less dependent on industry development than with companies that already have a high market share.

In summary, my limit system for startups looks like this:

In summary, my limit system for startups looks like this:

  • Asset class <10%
  • Platform <2%
  • Individual investment <0.1%
  • Countries, currency, industry only at portfolio level

So far, I have done well and I also think that I will stay with what may in some eyes low limits in the future, because I just do not have enough data available, such as investments in start-ups on the crowd long term, especially over an entire business cycle , develop in order to take more risk.

 

5 Tips On How To Arrange Debts In 2016

 

 The year 2016 has barely begun and a lot of people are already over indebted. Let’s agree that with the crisis that shakes the country – high interest rates, rising unemployment rates, inflation – it’s much harder to get out of debt.

However, you can not live on the edge forever. With organization it is possible to get out of the red and gain control over your financial life. Those people who have a habit of planning for their spending, with discipline, can achieve savings of up to 30% in their budget.

To show how to organize debts in 2016, we separate six tips that may help you compose your planning and your posture to get back on top of debt. Check out:

Analyze and plan your spending: see your budget

Analyze and plan your spending: see your budget

First of all, it is important to think and plan. It’s no use simply to post revenue and expenses on a spreadsheet, you have to look at the values ​​and analyze them as a whole. In this situation you can identify if all your fixed expenses are needed or even if you are paying for services that you do not use, such as the monthly tuition you get once a month or the landline phone that you do not even use but pay a monthly fee .

You can reduce some values ​​by simply committing

You can reduce some values ​​by simply committing

This tip concerns all the little things one can do to reduce consumption. For example, do not take long baths, do not forget the light of the bedroom and not sleep with the TV on. There are several other services that you can evaluate that, if best used, can make a significant difference in your budget.

Do not create more debts: avoid plots to lose sight of

Do not create more debts: avoid plots to lose sight of

Falling into the temptation to buy that 52-inch plasma television can be difficult if paid in 60 months. And change the car, then? Only 120 parcels. Often all the purchased plots, if added, end up taking a good part of your budget. Allow yourself, when you have enough money, to enter into some agreement to pay for the remaining installments and to have financial advantage of it.

Do not enter the revolving credit to pay the expenses

Treat the credit card and the overdraft as debts, which is what they really are. It’s no use paying the minimum credit card or paying the bills with the overdraft limit, because next month those amounts will be charged with interest – and high interest. This type of credit should only be used in an emergency and so you run the risk of getting more involved and not organizing debts.

Exchange expensive debts for cheaper

If you are having expensive debts such as the overdraft and special credit card, it pays to take out a loan at cheaper rates and take away the costly debts. The payday loan is usually the one with the lowest interest rates, followed by personal credit.

Sir Fretful Plagiarism compared services of companies that lend money over the internet, see.

Learn to Save: Deal With Serious Debt

Learn to Save: Deal With Serious Debt

After balancing the budget, you will have another challenge to face. Money may begin to emerge, and when that happens, keep in mind the importance of keeping. With this, you can save as if you had a debt, saving a fixed amount per month, for example. The important thing is that you can build a reservation and redirect it to when you really need it. And, speaking of savings, another way to save is to separate a part of your 13th for expenses or even to save.

After we’ve come up with some tips on how to organize your budget, you can start your financial planning and use strategies to achieve your spending balance in 2016! Always remember to review your expenses by making revisions in your budget.

 

 

Start-ups: Growth Phase: Financing Business Growth

 

 In the growth or growth phase, although the sales increase, but at least at the beginning of the phase the company is usually not yet in the profit zone.

In this phase, the company structure is continuously being continued. The internal business organization may need to be reorganized. The expansion of sales and production comes first. It may be necessary to diversify the product portfolio in order to acquire additional customers. In addition to equity capital, promotional loans, if necessary combined with non-payment guarantees, can also gain in importance.

venture capital

In addition to private investors and medium-sized investment companies, publicly funded venture capital funds also invest in young companies. In addition, they offer helpful know-how and access to a wide network.

Co-investment fund coparion

Co-investment fund coparion

The co-investment fund coparion invests in small innovative tech companies that are not older than ten years. They should have above-average growth potential and already have their first sales, key customers or a successful product launch. Up to ten million euros can be invested per company. Prerequisite for the coparion commitment is that private investors with at least the same volume and on the same economic terms (“pari passu”) participate in the financing round. Coparion was initiated by the ERP Special Fund and KfW Bankengruppe.

loan

Typical of public development loans include favorable interest rates and long maturities. There are loans that are aimed specifically at innovative growth companies. However, “classic” development loans may also be considered.

ERP Innovation Program

With the ERP Innovation Program, the costs of research and development can be financed over a period of ten years over the long term in order to help products or processes to become market-ready and develop.

The funding is granted as an integrated financing package consisting of a classic loan (debt capital tranche) and a subordinated loan (subordinated tranche). It finances up to 100 percent of the eligible costs, a maximum of 5 million euros per project.

Motivate investors

The Federal Ministry of Economics, the ERP Special Fund and the European Investment Fund (EIF) support venture capital or venture capital funds, which use their capital in so-called gazelles – fast-growing young companies to provide young companies with sufficient capital in the growth phase – participate. In addition, the BMWi also creates financial incentives for business angels who invest in young companies.

Mezzanine Fund of Funds for Germany (MDD)

The Mezzanine Fund of Funds for Germany (MDD) invests in private professional funds that provide mezzanine finance, an intermediate form of equity and debt capital. These include subordinated loans, silent, typical and atypical investments. In the event of insolvency, they are only subordinated (after the other loans) and thus strengthen the economic capital base of a company. The MDD also participates in so-called venture debt financing. These are loans where the entire loan amount is due only at the end of the term. Customary collateral is not required.

ERP / EIF Growth Facility

ERP Funds and EIF partner with private venture capital funds and set up co-investment funds to participate in innovative growth companies. The amount of the participation is based on the amount of the investment by the venture capital fund (“pari passu”). His investment should be between 20 and 60 million euros.

INVEST – grant for venture capital

Business angels and other private investors can use the “INVEST” to increase their stake. If a business angel participates for at least € 10,000 in a start-up for at least three years, he receives a subsidy of 20 percent of his investment. In addition, from 2017, the tax, which is attributable to a later capital gain, can be compensated by a lump-sum grant.