Real Estate Tips

The Real Estate Disputes And Partition by Mark Walters

What if two people pooled their resources and began investing in real estate. Like many partnerships things progress smoothly for a while and then a dispute arises.

Now they seldom can stand to talk to one another and then only through clenched teeth. A sad story, but one that is not uncommon.

What if they have an undivided interest in a fourplex. They want to end their investing enterprise, but they can’t agree on the disposition of the property?

An action for partition may be the only solution. That means one of the investors turns to the court to decided how and when the interest in the property will be divided.

In a partition action the owner or claimant of real property or any interest in the property may compel a partition (division) of the property between him and other owners. It may vary from state to state, but in Arizona the partition complaint is filed in the superior court of the county in which the property is situated.

The court will hold a hearing to “determine the share of interest in the property sought to be divided of each of the owners or claimants, and all questions affecting the title…”

In other words… when those who have an undivided interest in a property can’t agree on disposal the court can do it for them.

Here’s another example of partition in action:

Your grandmother dies. You are the executor of her estate. Personal property was left 50/50 to me and my brother.

She owned a house and land which was left specifically to her heirs. My cousin has been living in the house and ignoring needed maintenance. The house looks like a junk yard with overgrown landscaping, trash and old cars. There are over $5,000 dollars of fines pending from city inspections.
The cousin refuses to leave and is unable to buy out the other heirs. What can you do? Start a court action for partition. The proceeds for from the estate should pay attorney and legal fees.

If you are an investor and come upon such a situation you might try to buy out the interest of each heir before the partition action is completed. They will often sell there interests at a discount for cash now rather than waiting for the court action to completed.

About the Author

Mark Walters is an investor-entrepreneur helping other investors from his Web pages at http://www.Lease-Option-Sub2.com

Think You Can’t Afford Your Own Home, Think Again! by Sue and Chuck DeFiore

Do you have bad credit, no credit, filed a bankruptcy, have a ton of late pays, medical bills, or been through a divorce? Well, we have the perfect solution for you - Lease Purchasing your own home!

What is Lease Purchasing?

A Lease Purchase is a process that combines a basic rental lease with an agreement to purchase, or with an option to purchase the property. The Buyer (or Lease-Purchaser) pays to the seller a monthly payment that usually approximates a rental amount or a typical mortgage payment on the home. A percentage of that payment is typically applied towards the purchase price. At the end of the term, the buyer has the right to purchase the property for the price and terms to which both parties have previously agreed.

Put another way, a lease purchase is essentially a rental agreement combined with a purchase contract with pre-negotiated terms. The buyer leases the property for a specific period of time and then purchases the property before the end of the lease agreement. Sales price, length of rental, rent credits, escrow instructions, etc., are all contained in the agreement.

A lease purchase is a wonderful way to control property without the headaches of banks, mortgages, taxes or immediate loan qualifying. Lease Purchasing gives you the right to buy the property, but not the obligation to buy.

Following are just some of the benefits of Lease Purchasing for the buyer.

1. Low down payment.
2. Qualification restrictions are not as great as in conventional financing.
3. Past credit problems are not usually a road block.
4. The option consideration can be fully credited to the purchase price.
5. Your rent money is working for you.
6. Purchase price is usually locked-in ahead of time.
7. Gives you sufficient time to check out all the features and faults of the house.
8. Time to check out the neighborhood.
9. Puts you in legal control of a property for a specified period of time.
10. Time to shop for and obtain the best financing.
11. Major maintenance and repairs are the responsibility of the owner; you take care of nothing but minor maintenance.
12. Profits, in case appreciation occurs and you decide to sell in the future.

So, you ask, how do I lease purchase my own home? Drop by our website and check out, How To Live In Your Dream Home Today And Buy It Tomorrow; Without Mortgages, Real Estate Agents Or Credit! Just click on the link below:

http://www.homebusinesssolutions.com/products/lpbuyerman.htm

We feel everyone deserves to own their own home, so why not start looking for your dream home today!

Copyright DeFiore Enterprises 2005

About the Author

Interested in having your own successful, home based creative real estate investing business?

Chuck and Sue have been helping folks start successful home based businesses for over 20 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com

A Few Points About Interest Rates by Madan “Raja” Ahluwalia

Less is more

If you’re new to investing or real estate and don’t know the first thing about interest rates, here’s a good tip: the higher the interest rate, the more expensive it’s going to be. High interest rates mean you will have to pay back more on the money you borrow. Another good rule of thumb is that affordability increases if you use an adjustable rate mortgage (it’s easier to qualify this way). Of course, there will be a wide range of prices that you can choose from, depending on what kind of financing you choose.

Not even the Fed knows for sure

The Fed holds a considerable amount of power, but they can’t control everything. Mortgage interest rates are affected by many unpredictable political, economic and social events. So there is no guarantee what direction interest rates will go, despite the forecasts of the experts. Therefore, make your financial decision based on where things are today including your budget, your needs and your future plans.

Locking in rates assures your lowest interest

If you do decide you want to lock in at a certain interest rate, you will need to complete a loan application and send it to your lender as soon as possible. This must be done so that your commitment doesn’t run out before your loan is approved. Follow up and be se sure that the lender is receiving all of the necessary documentation. Get a property appraisal, which usually costs about $300, through your loan agent as soon as possible.

Don’t obsess and miss a good real estate deal

Although rising interest rates can create more problems for home buyers, waiting and hoping for low rates is not necessarily a smart move. You may end up paying a higher price. Also, refinancing is always an option in the event that interest rates come down.

(c) Copyright 2005 Madan Ahluwalia. All rights reserved.

About the Author

Madan “Raja” Ahluwalia is an Attorney at Law & Realtor. Raja offers his clients a counseling-based approach to home buying, where the client’s long-term goals are the most important consideration. He possesses a thorough understanding of the market and trends, based on years of involvement in real estate. He provides expert insights and helps clients understand timing, pricing and financing issues. Contact Raja at raja@kw.com or 650.430.4023.

Think You Can’t Afford Your Own Home, Think Again! by Sue and Chuck DeFiore

Do you have bad credit, no credit, filed a bankruptcy, have a ton of late pays, medical bills, or been through a divorce? Well, we have the perfect solution for you - Lease Purchasing your own home!

What is Lease Purchasing?

A Lease Purchase is a process that combines a basic rental lease with an agreement to purchase, or with an option to purchase the property. The Buyer (or Lease-Purchaser) pays to the seller a monthly payment that usually approximates a rental amount or a typical mortgage payment on the home. A percentage of that payment is typically applied towards the purchase price. At the end of the term, the buyer has the right to purchase the property for the price and terms to which both parties have previously agreed.

Put another way, a lease purchase is essentially a rental agreement combined with a purchase contract with pre-negotiated terms. The buyer leases the property for a specific period of time and then purchases the property before the end of the lease agreement. Sales price, length of rental, rent credits, escrow instructions, etc., are all contained in the agreement.

A lease purchase is a wonderful way to control property without the headaches of banks, mortgages, taxes or immediate loan qualifying. Lease Purchasing gives you the right to buy the property, but not the obligation to buy.

Following are just some of the benefits of Lease Purchasing for the buyer.

1. Low down payment.
2. Qualification restrictions are not as great as in conventional financing.
3. Past credit problems are not usually a road block.
4. The option consideration can be fully credited to the purchase price.
5. Your rent money is working for you.
6. Purchase price is usually locked-in ahead of time.
7. Gives you sufficient time to check out all the features and faults of the house.
8. Time to check out the neighborhood.
9. Puts you in legal control of a property for a specified period of time.
10. Time to shop for and obtain the best financing.
11. Major maintenance and repairs are the responsibility of the owner; you take care of nothing but minor maintenance.
12. Profits, in case appreciation occurs and you decide to sell in the future.

So, you ask, how do I lease purchase my own home? Drop by our website and check out, How To Live In Your Dream Home Today And Buy It Tomorrow; Without Mortgages, Real Estate Agents Or Credit! Just click on the link below:

http://www.homebusinesssolutions.com/products/lpbuyerman.htm

We feel everyone deserves to own their own home, so why not start looking for your dream home today!

Copyright DeFiore Enterprises 2005

About the Author

Interested in having your own successful, home based creative real estate investing business?

Chuck and Sue have been helping folks start successful home based businesses for over 20 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com

Top 10 Mistakes to Avoid When Buying a Home by Best-Internet-Mortgage-Loans.com

Buying a home is one of the most exciting things you can do, but don’t let
the excitement overwhelm your common sense. If you’re not an experienced home
buyer then it’s easy to fall victim to these Top 10 Mistakes that Homebuyers
Make.

1. Buying a home before you are ready for home ownership

Lots of people get pressured into buying a home by well meaning friends and
family who tell them what a waste of money renting is. While renting does not
build equity, it comes with a whole lot less responsibility and expense than
home ownership does. Take your time and don’t buy until you are ready to buy.

2. “Falling in love” with the house.

This happens when we are overwhelmed by the emotional aspects of buying and
spurred on by the subtle pressures of the seller and their agent. Just like we
tend to overlook the faults of people we love, a buyer who falls in love with a
house might end up overlooking flaws that will haunt them later.

Buyers often find out things after the sale that might have stopped them
from buying if they knew in advance. Although Agents and sellers are obligated
to disclose certain defects or circumstances about a property, those
requirements may not cover everything that you’d want to know. After reading
the disclosure list, if any, ask specific questions about anything else that’s
important to you. For example, if the idea of living at a former crime scenes
turns you off, ask if any major crimes or incidents occurred at the home.

3. Misunderstanding the loyalties of the Real Estate Agent.

In most areas the Real Estate Agent represents the seller and not the buyer.
That means that you can’t expect the agent to keep anything you say from the
seller. If you’re offering 200k, but you’ll go to 210k if you have to, keep
that secret to yourself. If the agent knows your top limit then he or she is
actually obligated to tell the seller if that’s who they represent.

4. Overpaying because of pressure or deceitful sales tactics.

Buyer soften pay more than they have to because they are warned that there
are “other offers” being considered so they need to make their highest offer
first. That may or may not be true, but never make an offer that’s higher than
you would make without any outside pressure. An offer is legally binding if it’s
accepted and you’ll have to live with that buying price for a long time to
come.

Another reason buyers overpay is because they don’t realize that anything
can be negotiated including closing costs, inspection fees and the price of
repairs. Real magic happens when a motivated seller and an earnest buyer sit
down to conduct business.

5. Failing to get mortgage pre-approval before shopping

Buyers who start the shopping process without being pre-approved for a
mortgage have a harder time getting their offers accepted and they set
themselves up for disappointment if their dream home turns out to be more than
they can afford.

You also run the risk of not getting the best mortgage deal possible if you
are forced to rush into accepting the first offer that you get.

6. Failure to get it all in writing

Buyers who accept verbal agreements or promises made on a handshake often
find that no one remembers that conversation at closing time. If it’s important
to you then get it in writing.

7. Not finding defects before you buy.

While new homes come with specific warranties and guarantees, you’re usually
on your own when you’re not buying new. Don’t rely on the word of the seller or
the agent when it comes to ascertaining the physical condition of the home. Protect
yourself by writing “Subject to satisfactory property inspection results”
on any offer you make and then hire a professional property inspection company.

Another word of advice is to find your own property inspector and do not
reply on one that is recommended by the seller or agent. Make sure you are
there when the inspector arrives and don’t let the agent or seller have any
conversations with the inspector outside of your presence.

8. Losing control of the transaction.

This is going to be your home and buying it is your decision. When you let
agents, friends or family persuade you for or against a particular piece of
property then you are losing control of the transaction. Just stop, relax, take
a deep breath and remember who is in control. It’s you.

9. Failure to do your own due diligence

The chances are your visit to the home of your dreams occurred during the
best time of day, but you’ll be living in that home 24/7. Visit the
neighborhood during rush hour, late at night and at other random times. Can you
deal with getting in and out of your neighborhood during your commuting times?
Does the sound of the nearby NASCAR track drown out backyard conversation on
Sunday afternoons?

Also make sure that the schools and community amenities suit your needs and
lifestyles. Check property taxes and utility bills to make sure that you can
afford the cost of living in your chosen community. If you are subject to deed
restrictions or homeowner/condo rules then make sure you can live with them. Even
automobile insurance rates are affected by zip code so the more you know about
a community the better off you are.

10. Buying more house than you can afford.

Just because the lender approved you for a certain amount doesn’t mean that
you can handle the payments. This is especially true if you have a
life-changing event on the horizon such as having a baby or changing jobs. Be
especially wary of your payment thresholds if you have an Adjustable Rate
Mortgage because you can bet those payments will be going up a lot sooner that
you want them to. Don’t forget to factor condo fees or homeowner association
dues into your monthly expenses.

About the Author

© Copyright 2005 by Best-Internet-Mortgage-Loans.com.
Please visit Best Internet Mortgage Loans
for more on mortgage basics and tips on finding the mortgage you seek.
This article may be freely posted as is on the Web as long as this message and the live link remain intact.

Home Equity Loans – Beware of Appraisal Fraud by Charles Essmeier

A new report by the independent Demos group has revealed what may not be a surprise to many people – corruption is rampant in the home appraisal industry. The bust in the dot-com market of some five years ago has left would-be lenders with a surplus of cash to lend. This has led to a huge boom in both mortgage and home equity loan lending. That’s not a bad thing; a record 69% of Americans now own their own homes. Owning a home is easier than ever; in 2004 the average down payment was a record low of only three percent.

So if everyone is buying a home, and loans are easier to obtain than ever, what is the problem? The problem is that nearly 55% of the appraisers polled in the survey said that they had been pressured by lenders to deliver appraisals that met a “target” value. The appraisers said that failure to meet the “target” value resulted in either their not being paid, or not being hired again. Since most appraisers want to keep working, they have had a tendency to meet the target value, even if it means that they have overestimated the value of the property. This drives prices artificially higher and leaves many homeowners with mortgages that may be worth more than the homes they were meant to finance. This problem becomes acute should the owner need to sell the home, only to discover that it isn’t worth as much as he or she owes on it.

The worst-case scenario to result from this would be a burst in the current real estate “bubble” and a nationwide collapse in home values, leading to massive foreclosures. This probably will not happen, but there are several things prospective borrowers can do to avoid being caught in the appraisal trap:

# *Become educated about the appraisal and lending process. The more informed you are, the less likely you are to be caught in a scam.

# *Be aware that refinancing your home isn’t a cure to all problems. It may seem appealing to use the equity in your home for such uses as debt consolidation but if the result of that is that you owe more on your home than it is worth, you probably haven’t gained anything.

# *Be active in the appraisal process. Talk to the appraiser, and ask to see the finished appraisal, along with the data used to create it. Appraisals are based in part on the sales of similar properties in your area. Check them out yourself and compare the home you saw with the stated appraisal value.

# *Be bold. Ask your lender if they pressure their appraisers to provide inflated values. You might not get an honest answer, but pay attention to how they respond. You might be able to determine if they are lying.

Ultimately, if you take out a home equity loan or a mortgage for more than your home is worth, you are the one that suffers. That can be easily avoided if you simply pay more attention to the process and educate yourself about the possible pitfalls. The last thing you want to lose is your home.

About the Author

©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com/ and http://www.HomeEquityHelp.net/

10 Important Tips to Successful Real Estate Investing by Madan “Raja” Ahluwalia

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

1. Compare Property Values and Rents

Financial statistics only go so far; the best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.

2. Be Careful - Tax Laws May Change

Don’t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.

3. Specialize In Something You Know

Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you’ll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know The Costs Going In!

Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.

5. Know Where Your Tenants Are Coming From

If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants’ security deposits at closing.

6. Assess The Tax Situation

Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.
7. Investigate Insurance Coverage

If seller’s coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.

8. Confirm Utility Costs

Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.

9. Consult Your Accountant

Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

10. Inspect!

Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

(c) Copyright 2005 Madan Ahluwalia. All rights reserved.

About the Author

Madan “Raja” Ahluwalia is an Attorney at Law & Realtor. Raja offers his clients a counseling-based approach to home buying, where the client’s long-term goals are the most important consideration. He possesses a thorough understanding of the market and trends, based on years of involvement in real estate. He provides expert insights and helps clients understand timing, pricing and financing issues. Contact Raja at raja@kw.com or 650.430.4023.

7 Selling Mistakes You Don’t Want To Make! by Madan “Raja” Ahluwalia

Mistake #1 — Pricing Your Property Too High

Every seller obviously wants to get the most money for his or her product. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property. Also, it may lead other buyers to expect more than what you have to offer. As a result, overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price.

Mistake #2 — Mistaking Re-finance Appraisals for the Market Value

Unfortunately, a re-finance appraisal may have been stated at an untruthfully high price. Often, lenders estimate the value of your property to be higher than it actually is in order to encourage re-financing. The market value of your home could actually be lower. Your best bet is to ask your REALTOR® for the most recent information regarding property sales in your community. This will give you an up-to-date and factually accurate estimate of your property value.

Mistake #3 — Forgetting to “Showcase Your Home”

In spite of how frequently this mistake is addressed and how simple it is to avoid, its prevalence is still widespread. When attempting to sell your home to prospective buyers, do not forget to make your home look as pleasant as possible. Make necessary repairs. Clean. Make sure everything functions and looks presentable. A poorly kept home in need of repairs will surely lower the selling price of your property and will even turn away some buyers.

Mistake #4 — Trying to “Hard Sell” While Showing

Buying a house is always an emotional and difficult decision. As a result, you should try to allow prospective buyers to comfortably examine your property. Don’t try haggling or forcefully selling. Instead, be friendly and hospitable. A good idea would be to point out any subtle amenities and be receptive to questions.

Mistake #5 — Trying to Sell to “Looky-Loos”

A prospective buyer who shows interest because of a “for sale” sign he saw may not really be interested in your property. Often buyers who do not come through a REALTOR® are a good 6-9 months away from buying, and they are more interested in seeing what is out there than in actually making a purchase. They may still have to sell their house, or may not be able to afford a house yet. They may still even be unsure as to whether or not they want to relocate.

Your REALTOR® should be able to distinguish realistic potential buyers from mere lookers. REALTOR®s should usually find out a prospective buyer’s savings, credit rating, and purchasing power in general. If your REALTOR® fails to find out this pertinent information, you should do some investigating and questioning on your own. This will help you avoid wasting valuable time marketing towards the wrong people. If you have to do this work yourself, consider finding a new REALTOR®.

Mistake #6 — Not Knowing Your Rights & Responsibilities

It is extremely important that you are well-informed of the details in your real estate contract. Real estate contracts are legally binding documents, and they can often be complex and confusing. Not being aware of the terms in your contract could cost you thousands for repairs and inspections. Know what you are responsible for before signing the contract. Can the property be sold “as is”? How will deed restrictions and local zoning laws affect your transaction? Not knowing the answers to these kinds of questions could end up costing you a considerable amount of money.

Mistake #7 — Limiting the Marketing and Advertising of the Property

Your REALTOR® should employ a wide variety of marketing techniques. Your REALTOR® should also be committed to selling your property; he or she should be available for every phone call from a prospective buyer. Most calls are received, and open houses are scheduled, during business hours, so make sure that your REALTOR® is working on selling your home during these hours. Chances are that you have a job, too, so you may not be able to get in touch with many potential buyers.

(c) Copyright 2005 Madan Ahluwalia. All rights reserved.

Madan “Raja” Ahluwalia is an Attorney at Law and Realtor. Raja offer his real estate clients a counseling-based approach to home buying, where the client’s long-term goals are the most important consideration and outweigh the benefits of any single sale. Raja possesses a thorough understanding of the real estate market and trends, based on years of involvement in real estate. He provides expert insights and helps clients understand timing, pricing and financing issues. Contact Raja at raja@kw.com or 650.430.4023.

USED THIS BIO

Madan “Raja” Ahluwalia is an Attorney at Law & Realtor. Raja offers his clients a counseling-based approach to home buying, where the client’s long-term goals are the most important consideration. He possesses a thorough understanding of the market and trends, based on years of involvement in real estate. He provides expert insights and helps clients understand timing, pricing and financing issues. Contact Raja at raja@kw.com or 650.430.4023.

About the Author

Madan “Raja” Ahluwalia is an Attorney at Law & Realtor. Raja offers his clients a counseling-based approach to home buying, where the client’s long-term goals are the most important consideration. He possesses a thorough understanding of the market and trends, based on years of involvement in real estate. He provides expert insights and helps clients understand timing, pricing and financing issues. Contact Raja at raja@kw.com or 650.430.4023.

Finding the Best Real Estate Professional by Madan “Raja” Ahluwalia

Finding the Best Real Estate Professional

Finding the right real estate professional requires doing a little research and asking a few questions. You need to know everything about the selling process. What is the marketing strategy? What kind of advertising will be done? Is the REALTOR® capable and willing to communicate effectively? Can the REALTOR® effectively present and sell the less-noticeable assets of the property?

Real estate professionals also need to be knowledgeable about the community. They need to have a feel for the history of the area and the approximate price that people will be willing to pay. Also, real estate agents should know what the competition is and how much it will affect your sale.

NEVER choose a REALTOR® on price alone. Remember that a REALTOR® cannot magically raise the selling price of the house. Consider the buyer. The purchaser won’t willingly pay too much; it’s most likely that he or she will do research on the market and try to find the best product for the best price. The facts simply cannot be changed, no matter which REALTOR® you select. In spite of these unchangeable factors, the REALTOR® you select must still be diligent and knowledgeable.

If your property does not elicit attention within several weeks, the cause can most likely be attributed to one of these three factors: location, condition, and price. The location obviously cannot be changed. You should consider examining the conditioning of your property and reevaluating the marketing strategy. Ask your REALTOR® to offer an explanation of the competition and your pricing strategy.

(c) Copyright 2005 Madan Ahluwalia. All rights reserved.

About the Author

Madan “Raja” Ahluwalia is an Attorney at Law & Realtor. Raja offers his clients a counseling-based approach to home buying, where the client’s long-term goals are the most important consideration. He possesses a thorough understanding of the market and trends, based on years of involvement in real estate. He provides expert insights and helps clients understand timing, pricing and financing issues. Contact Raja at raja@kw.com or 650.430.4023.

Four Timeless Investing Tips by Dr. Steve Sjuggerud

Uh oh. We’re in trouble…

I just hosted our annual Investment U seminar, where a few hundred attendees came to learn to be better investors. With a laundry list of the stars in our business, attendees picked up a lot of great investment ideas. And that might have been the problem…

While picking up a few good investment picks might be a nice thing in the short run, it’s not going to sustain you over the long run.

So in my closing remarks at Investment U, I tried to make sure attendees stayed on the right path. I turned investors’ attention back to Investment U’s “Twelve Timeless Rules of Investing.” I pointed out a few that are particularly important right now…

Timeless Rule #1: An attempt at making a buck often leads to losing much of that buck.

“Wow, Exxon sure has soared. If only I’d bought call options on the stock instead of just buying the stock, imagine how rich I’d be… I’d be retired now. Or… If only I’d bought a tiny oil exploration company instead of the big blue chip, I’d also be retired.”

It’s a nice thought… but it just doesn’t work in practice. As natural resources expert Rick Rule (http://www.gril.net) said: “Your risk is infinitely higher with a company looking for oil than a company that’s already got it.”

Everyone wants the big score. But chasing it is like playing the lottery - for a lucky few, it works. For everyone else, those lottery tickets expire worthless.

Timeless Rule #3: Cut your losers, let your winners ride.

This was a big theme of the conference. Most individual investors invest with a strategy that’s doomed from the start. They invest in a limited upside, unlimited downside way. If a stock goes up 20%, they’ll take a profit. If it goes down, they’ll hold it. This leaves them with a portfolio of losers.

We recommend investing in an unlimited upside, limited downside way. If you use something like a 25% trailing stop, then your losers get sold, and you end up with a portfolio of winners.

Timeless Rule #7: Bear markets begin in good times. Bull markets begin in bad times.

I don’t know about you, but times are good where I live. “You can’t go wrong in real estate” is the common sentiment. Everyone is into it. And it’s the same with the stock market. The Dow Jones average is like 10% away from its all time highs. Chances are, now’s not the time to be buying stocks or real estate (on the coast of Florida, at least!).

Timeless Rule #10: Investing in what’s popular never ends up making you any money. Buy an investment when it has few friends.

It makes sense. If you’re doing what the average guy at a cocktail party is doing, you’re doomed to average returns… at best.

In order to buy something cheap, you’ve got to buy when nobody wants it. So you can’t be buying what everybody else at the cocktail parties are buying.

There’s always something that everyone hates. I’ve been recommending gold coins and some stocks in Argentina and Israel recently. Now, those are conversation stoppers at the cocktail parties! And that’s just what I want to buy…

If a few of your neighbors are bragging about how much money they made in “X,” then chances are, it’s time to avoid “X.”

I picked these Timeless Rules out of our list of 12 because I felt they were the most pertinent rules for the attendees at our conference now. And if these reminders were good enough for attendees, they’re probably good reminders for you, too.

Good investing,

Steve

About the Author

Investment U President Steve Sjuggerud received his PhD in International Finance and was formerly the VP of a $50 million global mutual fund, an analyst, broker, and offshore hedge fund manager. His latest book, Safe Strategies for Financial Freedom, made The NY Times Business Best Sellers list, and today his investment advice is shared with over 300,000 readers in the Investment U newsletter.