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Credit Journal, Part 3

Let’s get into Credit 101 

Why do we need credit? 

Where you live, work and attend school can all be affected by credit. What you drive is also affected by credit. I know there are some that believe cash is king. If cash is king, then credit is certainly queen. Eventually, having or not having credit will stare you in the face at some point. It may be as simple as getting a job. 

I always wanted to be one of those people that can charge all my monthly expenses (utilities, fitness, gas, and food) on their credit card and then pay it off at the end of the month. I’ll get there very soon. 

In short, we need credit to get most of the big things we desire in life and sometimes the small things. 

Credit Inquiries 

When you apply for credit (someone asks for your full social security number) and an inquiry is made against your fico score. This inquiry will drop off in 24 months. If you’re shopping for a car loan, apartment or mortgage then you may have several inquiries at the same time. The credit reporting agencies counts this as one inquiry. Keep the number of times you apply for credit very low. And be selective on who runs your credit and why.  

Utilization 

Utilization is how much of your credit you use. Keep your utilization as low as possible. If you have a credit line with a $2,500 credit limit, pay your balance down to $750 or less. For most of you, that will pop your credit score significantly. 

Payments 

Pay your credit lines on time. I don’t care if you have to cross the United States to make a payment get it in on time. Years ago you had to mail in the payment and you were at the mercy of the postal service and the credit companies to post your payment by the due date. What I found out later was some credit card companies purposely delayed payment or dropped payments in the trash to make sure you had a late charge. Hmmm . . .

Talk to you soon.

Leona.

Leona@LeonaTurner.com

http://leonagreenlowturner.kw.com

www.facebook.com/BayAreaRealEstateToday

 

 

Credit Journal, Part 2

End of July 2016

As of 7/30/2016, I had 7 credit cards with 7% utilization. My score increased by 18 points. So now Credit Karma has 557 on TransUnion and 567 on Equifax.

The key factors in having good credit:

  • Low utilization <30% of total balance – Don’t get a card and charge it up to the balance unless you’re going to pay it off before it’s due)
  • Length of credit history (years preferred more than months)
  • On time payments (Not negotiable. Pay on time all the time.)
  • Low credit inquiries (< 3 hard pulls)
  • Wide variety of credit (credit cards, loans (car, mortgage, small loans at a bank)

Your credit score may not be as low as where I started and that’s great. Unless you’re at an 850 fico you can always improve.

Short post today. Be encouraged about credit, it can be your friend.

Talk to you soon,

Leona.

Leona@LeonaTurner.com

http://LeonaGreenlowTurner.kw.com

www.facebook.com/BayAreaRealEstateToday

 

Credit Journal, Part 1

Lately, I have been obsessed with personal and business credit. I’ll be transparent and say my scores were not the best. I’m researching, testing and succeeding in raising my credit score. My score has increased by 86 points (on Credit Karma) since July 6, 2016.

In large part, I must thank http://www.CreditKarma.com for giving me a free, painless look at my score. The scores on Credit Karma are not the same as those pulled at car dealerships and mortgage companies but it was a way for me to begin this journey. As a Realtor, the biggest challenges I see for new homeowners are down payments and credit scores. I’m documenting my journey because I know someone will be helped.

July 2016, The Beginning 

I was overwhelmed by credit in college. It was so easy to get a credit card. My family did not teach credit management. I never knew what to do. No blame. At the end of June 2016, my scores were not looking so good. Credit Karma (CK) says my scores were 539 on TransUnion and 552 on Equifax. In actuality, they were a lot lower; they were in the high 400s. I have collections and charge offs. (really transparent here) CK suggested I open two credit lines or in the industry we call them trade lines. The last installment loan was my then new car that I paid off 6 years ago.

The first thing to do is get some credit. Now with scores like mine, a secured credit card was is in my future. If you don’t know what a secured credit card is, it’s going to a bank such as Wells Fargo and deposit money for a secured credit card. The balance of the card is based on how much you deposit. It can be as low as $200. After about a year of on time payments, they return your deposit and now you have an unsecured line of credit.

I found a second method that may not be the best overall but it has been working for me. The first card I got was a clothing store that I will call STORE CARD A. I’m not a big shopper but it was a start. I went to their store online and I found a few items. As I was going to pay, a pre-approved offer popped up for $500. Two great things occurred:

  1. I had a $500 credit line
  2. It was not a hard pull on my credit (A hard pull on your credit is when your score drops after a company runs your credit. Your score can drop 0 – 10 points in some cases.)

In my research I found my credit use or utilization should be under 30%. I charged $150 (exactly 30%) which included tax and shipping.

I also got another clothing store card, STORE CARD B. The balance was a lower at $200. I mentioned this only to emphasize I bought one thing that was $60 (30%) to keep my utilization low. My goal is to get larger credit lines that are not store cards. I immediately paid STORE CARD B off. I made a large payment on STORE CARD A.

At the end of July, I had my first big score increase of 18 points.

This is great two lines of credit. Now what?

More journal coming up . . .

Talk to you soon.

Leona@LeonaTurner.com

http://leonagreenlowturner.kw.com

www.facebook.com/BayAreaRealEstateToday

 

This “FREE” report outlines 10 reasons why I believe your had trouble selling while it was listed with another real estate company. Although these suggestions are not fact, they do generally reflect situations why homes have not sold during the listing period. Please note that these reasons are only this agent’s conclusion or ideas and do not suggest or have any accusations or wrong doings toward any previously listed real estate company and or their agents.

 

  1. Your Property Was Priced too High! Like it or not, price is generally the main culprit when it comes too why homes do not sell. Yes the property might be in a poor location or other negative factors about the real estate, but the bottom line is that somewhere out there at “some” price there is a buyer willing to purchase the real estate. If the price is attractive enough or priced below market value there is always a buyer willing to purchase it. Making certain your real estate is priced at market value is important if you’re serious about selling.
  2. Your Property Was Not in the Multiple Listing Service (MLS). If your agent did not belong to the MLS then your home may not have been exposed to the right number of agents. It’s imperative that your property be in the correct position in the local MLS to gain the maximum exposure to the agents selling property in your area.
  3. Lack of Staging. Did your real estate agent help stage the home? If not, this could be one of the problems for finding a buyer for your property. One of the ways that you can determine if staging is a factor is to the number of showings you had. A lot of showings and no offers then staging might help. It could also be related to price but this is an area that I can assist with as a real estate professional. 
  4. Photos. Many times as a real estate professional I have noticed properties listed that had few, if any photos or virtual tours added to the local MLS or company web site. I cannot commit on this fact or issue with your property but it is one you should ask yourself and see if this is an area that could be improved upon. Professional photos can make a world of difference in the appeal your home has to buyers. The more clear and professional photos the better. 
  5. Lack of Facts. Did your agent have the needed facts to convey to buyers and other agents about updates and additions made to your property? These facts can be a good marketing tool to use in showing potential buyers what improvements and upgrades you have made to the property. This information is very helpful for agents and buyers when your property is shown. 
  6. Lack of Open Houses. Many agents do not like to hold open houses to the public or for other real estate agents. I believe it is important to expose as many people as possible (other agents and the general public) to the properties I have for-sale. Open houses are excellent ways to get people inside your dwelling and then get them interested in the property! The more marketing programs the better for everyone involved. One of my popular marketing tools is through the use of open houses. I believe that an open house for agents is important as well as open houses for the general public. 
  7. Working with the Neighbors. Who better wants to sell your home than the neighbors? That’s not too say that your neighbors will be glad to see you leave, only that they will have a concern as to who might move in. Many times the neighbors in your area would love to help find the right family that they are acquainted with and know on a personal level. There’s something about having friends living close by that is a good feeling. Usually if your neighbors can help in selling your property they will! This is generally a winner for everyone involved. As a real estate professional if I’m chosen to work for you I promise to work closely with your neighbors and make sure they have the needed information to share with any friends or acquaintances they may know who might be interested in your home. 
  8. No Internet Presence. Unfortunately many real estate agents still do not have their own web sites. The majority of buyers are going to the World Wide Web to get information about homes for-sale. If your property was not properly positioned on the web for these new tech savvy buyers then you’ve missed a golden opportunity for potential buyers. I will make sure your property is placed on our web site and given full exposure to internet buyers shopping for a home in our marketplace. 
  9. Communication. One of the main goals and functions of your Realtor is to a make certain the listing is conveyed to the other real estate agents in the community. Marketing flyers, property data sheets with detailed information in flyer boxes, along with other important features about your home need to be readily available for the buying public. Perhaps your property needed a little bit more of a push to the other agents in the area. One of my main functions is to always keep our properties in front and promoted to the other real estate agents throughout the community. My philosophy is that the agents in our marketplace may have a buyer on any given day. Making sure they are exposed to your listing is exposed to the agent population and in front at all times is essential to help speed up a sale for your property. After all, most homes are sold by someone else other than the listing agent and seeing that your property details are in front of the other top agents in our board is essential! 
  10. Some Properties Just Don’t Always Sell! There are a lot of great real estate agents in community and they work very hard at what they do. Unfortunately not all properties sell nor can we always show your property in every situation. It’s never a good idea to make the seller “think” we are working hard or have prospects when we don’t. Don’t be discouraged if you did not have a sell the first go around. Make sure your property is priced correctly; follow the suggestions with these tips, have a positive outlook and I’m certain your real estate will sell soon. Oftentimes in my real estate career that other agents have had listed and sold them quickly. The same thing has happened to me with other agents. I would have a home listed and it did not sell and then another company would get it and it would sell fast. I don’t have all of the reasons or facts why this happens only to say that a fresh new sign, a new marketing plan and a change can be a good thing for everyone involved. If you think you might be ready for a new plan and some fresh ideas I would love to visit with you and review my marketing strategy with you.
    Feel free to call me at Leona Greenlow-Turner(510) 717-0094.

Talk to you soon.

Leona.

Leona@LeonaTurner.com

http://leonagreenlowturner.kw.com

www.facebook.com/BayAreaRealEstateToday

 

If you don’t already know about QRPs or Qualified Retirement Plans in a nutshell it’s your employer’s way of assisting with your retirement. With this plan you gain tax breaks for moving money from your paycheck into retirement. Many employers use a company match where the company will match your contribution if you contribute a certain percentage. For example, if your employer matches your contribution if you contribute 3% of your income. Other employers participate in matching as well as 100% vesting.

Vesting means as you leave the company you can take the money you contributed to your Qualified Retirement Plan as well as the money the company matched, if any. Vesting can be immediate or it may take years for you to fully vest or take your money and matched money upon leaving the company. I worked for a Financial Services company that allowed 100% vesting. When I was laid off, I was able to take my money and the companies matched money and roll it over into a Non-Qualified Retirement Account. Vesting entices employers to stay with the company during the vesting period. Without full vesting, you may take all of your contribution and a portion, if any, of matched money.

Here is a high level list of U.S. Retirement Plans:

Defined Benefit Plan (QRP)

Target Benefit Plan (QRP)

Defined Contribution Plan (QRP)

Profit-Sharing Plan (QRP)

Money-Purchase Pension Plan (QRP)

Stock Bonus Plan (QRP)

457 Plan

401(k) Plan (QRP)

403(b) Plan

Tax Sheltered Annuity (TSA)

Traditional IRA

Roth IRA

Converted Roth IRA

Rollover IRA

Simple IRA

SEP-IRA

Keogh Plan (QRP)

QRP = Qualified Retirement Plan

Why are some retirement plans qualified? Qualified means the employer offering the plan will gain a tax break for their contribution. And money automatically deducted from your pay into your 401k is pre-tax dollars. This pre-tax contribution is a benefit to you as the employee because you may use your contribution as a tax deduction.

If you work for XYZ Company and you have a 401k plan (I use 401k because it’s very common at companies) and you decide to quit (this includes layoffs and firing) you can move that 401k to your new company or into a non-qualified retirement plan such as a Roth IRA.

Non-Qualified Retirement Plans are everywhere and they can be as close as your local bank branch. The key in finding a good one is research. The top finance magazines make suggestions as well and your financial planner, Certified Public Accountant (CPA), bookkeeper and next door neighbor. I would imagine if your dog could talk they would weight in their top picks as well. You don’t have to Ben Bernanake, the former Federal Reserve Chairman, to be a good retirement investor.

Now if you are investing in a non-qualified retirement account such as a Traditional IRA or Roth IRA, the 2014 maximum the Internal Revenue Service will let you contribute is $5,500 per year or $6,500 if you’re over 50 or over. Self-employed business owner can use a SEP-IRA and the contribution 2014 limits are 25% of compensation or $52,000 and subject to annual cost-of-living adjustments for later years.

Tips to remember:

  1. Find out what type of retirement plan you have Qualified or Non-Qualified
  2. Does your company match your contribution and at what percentage?
  3. What is the vesting at your company? How long does it take to vest to 100%
  4. Research Traditional and Roth IRAs.

I will go into more detail in the next post.

Talk to you soon,

(510) 717-0094

Leona@LeonaTurner.com

 

I was talking to some business associates yesterday and we were discussing QRPs. QRP is an acronym for Qualified Retirement Plan. I stressed most people know what these are and use them to their full capacity. My colleague said I wouldn’t believe how many do not know what they are or how to use them. I joked I should blog about that very topic. So here I am with a short snippet on QRPs.

Tiburon Golden Gate BridgeI was in a short sale real estate transaction and the lender requested the seller’s 401k (retirement) statement. I was shocked because that rarely happens in the many short sale transactions I’ve been involved in as an agent. The seller was sure he didn’t have one. I pointed out a deduction was being made every paycheck to his 401k account. (Maybe my colleague was correct after all.) It took him a while to get it to me since he never viewed it online and had no username or password.

401k_eggOnce I had it in hand, I decided to take a peek. His 401k had different options for allocation (where to place the balance of funds deposited). Normally, there are options for all levels of risk: low, high, medium, a money market fund (similar to a savings account) and a stock purchase (depending on the type of company you’re working for). Anyway back to my seller, most of his money was in the lowest performing least risk option. He was younger that I was and if it were me I would put more into high risk, stocks and some in my money market. I would try to make the most money I could In higher performing allocations while I was young and could still make the money back if I were hit with a large loss in the stock market. As I am aging I would go for a more moderate risk. I felt bad that he had no idea what was going on in his financial life. How many others out there are heading for a scary retirement because they didn’t make the most of their retirement while they were young?

I wish I would have read a blog like this when I was in my 20s because I would have make significant changes. I remember working for a large banking institution. I was 21 or so and not very financially savvy. My employer XYZ Bank put me into a 401k plan once I became a salaried employee. I received my first quarterly statement and I was totally confused. How dare they take money out of my account? Typical 20 year old, right? And then retirement was the furthest thing from my mind.

401KThen I started comparing my statement to others in my department. My supervisor had a lot of money in hers but I also noticed every quarter it was increasing substantially. So I asked her what she was doing to make her account grow rapidly. She looked at my allocations and let me know that putting more money in would help but also changing my allocation. By putting a larger amount in something with a higher payout and increased risk, I would see a substantial change. Then I asked should I change my allocation since this is where the company placed me. She said companies start everyone in an allocation that involved the least risk. Based upon our own research, we can change our allocation however we desire. Once I made the changes I saw a whole new world by the next quarter. I was making a lot more money every quarter.

Things to keep in mind:

  1. Your employer may offer you a 401k, 403b, etc to make tax free deposit for retirement.
  2. You should have a statement at minimum quarterly. Otherwise find out how to access your account online.
  3. Make sure your money is diversified (spread into different sections) and not lumped into one account.
  4. If you are self-employed, look at SEP-IRA, Roth IRA or Keogh.
  5. Do not withdraw funds before you are 59 and ½ years old to avoid fees and penalties.
  6. Under some circumstances you can take a loan against your retirement account to make a home purchase or an emergency.

I will go into more detail in the next post.

Talk to you soon,

(510) 717-0094

Leona@LeonaTurner.com

There are so many areas to focus on regarding raising capital. My company, Funding Wealth Capital, LLC uses Private Placement Memorandums (PPMs) to raise capital for ourselves as well as other entities: for-profits and non-profits). Many templates exist on the web for you to follow but its best to use an attorney to create a document that protects your company from liability.

PPMs allow you to successfully raise capital from the sources that have the money. You select the individuals and conduct a private reception to introduce your PPM. The investors at your reception should not be novice investors. With net worth’s well over $2,000,000 that can shoulder the risk of poor investment. No investment is iron clad and an investor with a stable financial portfolio can make it a pleasant experience because they will not pressure you every step of the way.

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Before you draft your PPM you must have a plan of action to pay your investors interest as well as repayment of principle. What type of investment vehicle can give solid returns? Many vehicles exist but research and study to find the right investment. Hopefully, returns are greater than what investors are realizing on the certificates of deposit and money market accounts. Notice I never mentioned savings or interest-bearing savings accounts. Tragically, the interest rates are under 1% per annum.

How long is the process? It’s best to officially open and close within 3 months. Depending on the amount you are raising, it may take a lot longer. The length of the process may depend on what is included in your investor presentation. Can you answer every investor question and concern? What is the level of trust the investors have in you and your mission? The PPM process is not to be taken lightly. My advice to you is research, research, and research. You reception and presentation must be tight and right.

Please contact me and I can give more details on the process and how to begin.

Talk to you soon.

Leona Greenlow-Turner (510) 717-0094 Leona@LeonaTurner.com

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