Financial Planning Lessons Regular Folks Can Learn from Professional Athletes

Baseball season is in full swing now. While the finances of baseball players and other professional athletes are not quite the same as yours or mine, what can we learn from their financial challenges? A lot, according to a financial planner for players on three pro teams.

I interviewed Scott Morrison for his take on the financial curveballs he faces while working with his clients.  He’s the President of Pennant Asset Management and a financial planner for professional athletes on teams including the New York Mets, the Chicago White Sox and the Oakland Athletics. 

Hey, Big Spenders?

Matt Goren: What is the first impression people have when you say you work with professional athletes to help manage their finances?

Scott Morrison: Athletes often carry around the “dumb jock” stereotype that they want to blow all their money faster than they receive it. Does it happen from time to time? Unfortunately, yes. But what has surprised me most is that athletes are coming in more educated now than ever before – many are frugal and want to track every penny of where their paycheck goes.  

Matt Goren: Frugal athletes is definitely not my stereotype. Is this a baseball thing?

Scott Morrison: I think the sport definitely has something to do with it. In baseball, it usually takes a while to get to the major leagues after draft day. Minor league salaries and lifestyles are, to be kind, not very luxurious, so there is a very real concern about how they will survive financially until they get called up to the big leagues. It forces players to be smart and to make their money last.

Matt Goren: We hear about some giant contracts, but they’re not very common. More often, an athlete gets a signing bonus to join the team and maybe a short contract. Professional athletes don’t normally see the big dollars until their second deal – if ever.

Scott Morrison: With athletes, we often plan as if they aren’t going to make another cent on top of their signing bonus. If and when they do make it to the big leagues and sign multiyear contracts for multimillions, then the fun can really begin. But from the start, we have to protect their initial lump sum with the correct budgets and strategies.

Their Biggest Challenge May Sound Familiar

Matt Goren: What is the biggest challenge you encounter?

Scott Morrison: Taxes! One of their biggest concerns is the amount of tax they have to pay on their signing bonuses and then again in the future on their major league contracts. Players often overlook that this large lump sum isn’t as large as it first appears.

Matt Goren: And that’s a lesson for the rest of us: Our take-home pay after taxes is much less than our gross pay. What other challenges do they have? Do you see problems with overspending?

Scott Morrison: Ultra-luxurious items are the No. 1 spending problem I run into. Aside from the designer items – the Louis backpack, the Gucci wallet, the Yeezy’s, etc. – many newly drafted athletes want to buy the Porsche and the million-dollar-plus home all with their signing bonus. I go through the taxation presentation and then, all of a sudden, they get a lot more realistic.

To be sure, not every penny needs to go into the bank – but we need a realistic approach that considers their uncertain longevity on the field. Is the boat, car and house out of the question? Absolutely not! All I’m saying is, depending on the signing bonus, maybe one or two of those items can be shelved until they are making big league salaries.

Matt Goren: Like retirement savings nest eggs, I’m sure that on-the-field money can be multiplied with sound investments. What sorts of challenges do you see there?

Scott Morrison: The biggest mistake I find that young players make is not all that different than young professionals with their retirement savings – they don’t understand the concept of putting their money to work for them, and they think it’s OK to leave their money on the sidelines. Once they see how important and beneficial it is to have their money appropriately invested, they all say the same thing: “I wish I had started earlier.”

Some Interesting Investment Choices

Matt Goren: Are there certain types of investments that athletes ask you about?

Scott Morrison: I have found an obsessiveness around real estate. So many young athletes want to dig into the cryptocurrency world as well – it’s crazy!

I also get a lot of requests from my clients asking about getting involved with childhood friends’ or distant family members’ businesses. There is always a long-lost friend or cousin who comes out of the woodwork asking for an influx of cash into their business, and it’s important for athletes to be prudent when considering those investments.  

Matt Goren: Good that they found you, then. How do you usually meet your clients?

Scott Morrison: Being a former Division I baseball player, I understand many of the complexities they are dealing with. I’ve known some of my clients since before they became professional athletes. Ultimately, the reason clients choose an adviser is because of relatability and relationships. Players want to trust their money with someone who they feel comfortable with.

Matt Goren: If you need a “pitch” to your clients at all, what would that pitch be?

Scott Morrison: Utilize a professional financial adviser who understands your situation so we can put the right guardrails in place. By working with a professional, athletes can focus on their performance on the field and – to the extent it makes sense – enjoy their money now. They’ve worked hard for their money, and we want them to enjoy it! We also want to make sure that they don’t have to work another day once their career is over if they don’t want to!

The Bottom Line for Athletes and the Rest of Us

Matt Goren: And that, to me, sounds exactly like why so many everyday people work with a financial professional.Scott Morrison: Sure, the numbers change, but the strategies for the most part don’t – depending on the risk tolerance and suitability. Ultimately, we want to preserve our clients’ wealth not just for years to come, but for generations to come. It doesn’t matter if it’s a professional athlete or a business owner, or families and individuals, I want our clients to enjoy their hard-earned assets. But no matter who it is, we want to encourage intentional, smart decisions.

Matt Goren: Agreed – thanks, Scott, for your insights! To everyone reading, you don’t have to be a big-league player to make great plays with your money. Focus on the long term, invest for your future, and avoid the temptation to buy that new yacht. If you need some coaching and guidance, make sure to reach out to a professional financial planner who can help you reach those goals.

Assistant Professor of Financial Planning, The American College of Financial Services

Matt J. Goren is an Assistant Professor of Financial Planning at The American College of Financial Services who focuses on the interplay of personal finance and psychology. In addition to teaching and developing content, he provides strategic consulting on financial literacy initiatives and hosts a personal finance radio show, Nothing Funny About Money, which was named 2018’s most outstanding consumer financial information resource by the AFCPE.

Source: kiplinger.com

Understanding How Income Based Repayment Works

If you graduated recently, you’re gearing up to launch your career and start a new chapter of your life. But graduating may also mean it’s time to start paying back your student loans, which is less exciting.

If you have unconsolidated federal student loans, you are likely signed up for the standard 10-year repayment plan. Upon graduation or once your grace period ends, you begin making payments in order to pay back your loans in 10 years.

Many grads will not make tons of money right out of the gate, of course, and that can make paying off student loans at the beginning of a career challenging. If your loan payments with the standard plan are high in proportion to your income, an income-based repayment plan might be an option.

apply and submit information to have your income certified. Your monthly payment will then be calculated.

If you qualify, you’ll simply make your monthly payments to your loan servicer under your new income-based repayment plan.

You’ll have to recertify your income and family size yearly. Your calculated payment may change as your income changes.

What Might My Payment Be?

Qualifying for income-driven repayment depends on your income—specifically how much of your discretionary income goes toward student loan payments.

For the IBR, PAYE, and REPAYE plans, the required monthly payment is generally a percentage of your discretionary income. (Discretionary income is the difference between your adjusted gross income and 150% of the poverty guideline for your family size and state of residence.)

For the IBR plan, the monthly payment is 10% of discretionary income for someone who borrowed on or after July 1, 2014. If a student took out loans before that date, the monthly payment is 15% of discretionary income.

Under the PAYE and REPAYE plans, the monthly payment is 10% of discretionary income.

An example:

•   You are single and your family size is one. You live in one of the 48 contiguous states or the District of Columbia. Your adjusted gross income is $40,000.
•   You have $45,000 in eligible federal student loan debt.
•   The 2021 HHS Poverty Guideline amount for a family of one in the 48 contiguous states and the District of Columbia is $12,880, and 150% of that is $19,320. The difference between $40,000 and $19,320 is $20,680. This is your discretionary income.
•   If you’re repaying under the PAYE or REPAYE plan or if you’re a newer borrower with the IBR plan, 10% of your discretionary income is $2,068. Dividing that amount by 12 results in a monthly payment of $172.33.

Under the ICR plan, the monthly payment will be the lesser of 20% of discretionary income or the amount a borrower would pay under a standard repayment plan with a 12-year repayment period, adjusted using a formula that takes income into account.

For the ICR plan, discretionary income is the difference between adjusted gross income and 100% of the federal poverty guideline amount for your family size and state.

The Federal Student Aid office recommends using its loan simulator to compare estimated monthly payment amounts for all the repayment plans.

Which Loans Pertain to Which Plan?

Most federal student loans are eligible for at least one of the plans. For the details, see this Federal Student Aid chart .

Private loans are not eligible for any federal income-driven repayment plans—though some private loan lenders will negotiate new payment schedules if needed.

Potential Drawbacks of Income-Driven Repayment

Income-based repayment usually lowers your monthly payment, but stretching payments over a longer period means probably paying more in interest over time. In some cases, your minimum payment might not even cover all the interest on your loan.

Even if income-based repayment makes sense for you, you’ll need to recertify your income and family size every year.

consider refinancing instead. With refinancing, a private lender pays off loans with a new one, hopefully with a lower interest rate.

You can calculate how much you might save by refinancing your student loans with SoFi’s student loan calculator.

Maybe your income doesn’t qualify you for an income-driven repayment plan. If not, consider refinancing with SoFi.

You can refinance both private and federal student loans. Just realize that refinancing federal student loans with a private lender renders them ineligible for federal repayment plans, but if you don’t plan to use those benefits, refinancing might be a good option.

Check your rate in a snap.



IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

How to Maintain a Good Credit Score in College

College life brings a host of new and exciting experiences in the various aspects of your life. Financial independence and responsibility also come to play. While your achievements are important in putting you in your right career path, a good credit score is paramount in bettering the deals you will get when renting or buying a home, purchasing a car, getting a cellphone plan, applying for a student loan or in some instances, getting employment.

This calls on your effort to not only build but also maintain a good credit. It may sound complicated and intimidating especially when you don’t know how to go about it. Below, is all you need to know on how to maintain a good credit score in college.

Good Credit in CollegeGood Credit in College

Taking Advantage of your Parent’s Good Credit

This is commonly referred to as ‘piggybacking’. It allows people with bad or no credit to enjoy a spillover of other people’s good credit. It is a great way of establishing and maintaining your credit especially if you need a little help in managing your budget. For you to qualify for this, you have to become an authorized user of your parents’ accounts.

This comes in handy especially if you can’t get your own credit card; according to Oct 1st 2013 Credit Act report, students and other persons below 21 years of age cannot get their own credit cards without proof of income or at least a co-signer. Apart from the credit boost you get from your parent’s account, your credit card use is forwarded to credit bureaus in your name.

Get the Most Suitable Credit Card

Your ability to qualify for a credit card opens you to the opportunity to choose from a variety of cards. You should research and shop around to find out what these cards have to offer before making your choice. Some of the benefits to look out for include low interest rate, no annual fees, convenient credit limits and other competitive incentives.

Better still, you can opt for student credit cards. These come with incentives such as cashback rewards, limited credit history requirement, no annual fees and 0% introductory APR among other benefits. Your own credit card comes with sole responsibility. This means that it’s up to you to stay on top of your billing statements so as to improve and maintain a good credit

Always Pay your Credit Balance

Your payment history accounts for 35% of your credit. Good credit of course depends on timely and full payment of your balance. Inability to pay or late payment may attract additional interest, accrue more debt and negatively affect your credit.

This can take a long time to repair. Besides this, it is also a sign that you are living beyond your means. Ideally, your credit balance should be about 30% of your credit limit or below.

Tip: The higher your credit balance in relation to your limit is, the worse your credit becomes.

Pay your Bills on Time

Late or failed payment of rent, utility bills, parking tickets, library or school fees and other payments can harm your credit; especially is if they are sent to collection agencies and reported to credit bureaus. Ways of beating this include setting up payment reminders and electronic billing. You can also organize for auto payments with your bank to ensure that timely payments are done.

If you live in an apartment, you might get credit for full and timely payments. You can take advantage of eRentPayment which transfers your payment reports to the three major credit bureaus; Experian, Equifax and TransUnion. This consequently improves your credit. However, your landlord needs to be registered and the lease needs to be in your name.

Limit Applications and Inquiries for New accounts

Numerous credit inquiries negatively impact your credit score. In the event that you need to make new credit applications that warrant hard inquiries, concentrate them into period of 14 days in which they will factor as one inquiry.

Once you decide to get a credit account, get all the facts right to avoid the urge to close and open others every now and then. Short credit histories with several new accounts are seen as riskier compared to a few accounts with long credit histories. When you close a credit card, you not only lower your available credit but also shorten your credit history both of which can reduce your score.

In a Nut Shell

Maintaining a good credit score in college is important if you are going to get any good deals in personal credit in the future. This requires vigilance on your part to ensure that you do not do anything that can have negative impact on it. When all is said and done, it all comes down to personal financial responsibility.

Source: creditabsolute.com

What is a Good Entry Level Salary?

Recent grads — or even just those starting a new career midstream — may wonder what sort of offer to expect when negotiating a starting salary. While it’s unlikely an early-stage hire will outearn senior management from the get-go, it can be key not to accept a pittance below the going market rates.

Since pay can vary greatly based on location or line of work, there’s no one answer to the question, “What is a good entry level salary?” The size of the paycheck will differ based on where someone lives, the industry they work in, the hiring institution or company, and other hard-to-tabulate variables.

So, how might a job seeker figure out a good entry level salary before sitting down with the new boss or an HR representative to talk pay? Here are some helpful resources to get a handle on entry level rates across the US, including tips for negotiating compensation:

Understanding Entry Level Salaries?

Entry level salary information changes on a regular basis, but many job-focused websites offer insights into the going rates. For instance, ZipRecruiter, a well-known American employment marketplace, lists the average U.S. entry level salary by state , which ranges, at the time of this writing, from $12.61 per hour or $26,219 per year in North Carolina to $17.09 per hour or $35,750 per year in New York.

Still, even state-by-state averages don’t show the whole picture. Although more than half of US states have minimum wage requirements higher than the federal minimum wage, which remains set at $7.25 per hour, the amount an early-career hire might expect can also vary by county and city within the same state.

According to Glassdoor, the average entry level salary in the Jacksonville, FL area is $14 per hour, whereas the average in the Miami-Fort Lauderdale area is significantly higher at $16 per hour.

Along with location, the industry one works in can play a big role in what kind of starting salary a new hire might expect. For instance, a data scientist at a tech company might be able to earn as much as $95,000 right out of the gate, while a newly minted journalist might expect something closer to $30,000.

(Psst: early-stage college students might want to align their eventual courses of studies with one of these high-paying entry level jobs.)

One way to grasp what sort of salary that might be expected is targeted research on the specific industry, location, and even position and company.

Researching a Good Entry Level Salary

Recent grads wanting to understand if they’re being offered current market rates for a particular job (or location) can turn to the internet to research details. Some sites that might offer resources for those job seekers include:

Payscale , for example, allows employees to create custom “pay reports” based on their job title, years of experience, and city.

Salary.com offers a similar feature, allowing job seekers to search for positions by keyword and compare them accordingly.

Glassdoor is another well-known web resource that publishes employee-generated information on salary by specific company and position. It also hosts reviews by current and former employees, which may help a job applicant learn more about what it’s, actually, like to work there. (In some cases, Glassdoor lists interview specifics that could help future interviewees better understand what’s expected from them).

After researching average pay by role, location, and company, job seekers might also next want to mull over how to negotiate an acceptable offer.

Negotiating a Higher Offer

So, what can a job seeker do if their dream job doesn’t (initially) come with a dreamy paycheck? What are some tips for negotiating?

While it’s not always possible to eke precious water from a parched stone, coming to the negotiating table prepared to negotiate can help job applicants angle for a more generous compensation package.

Negotiating a salary can be scary, especially for a recent grad who’s not used to the salary tango. Nevertheless, negotiating an offer up front can have a significant effect on one’s paycheck (and, by extension, one’s long-term earnings).

One Glassdoor press release estimated that the average US employee could be earning 13.3% more—if they negotiated.

Preparing to Negotiate

How might a new hire negotiate a higher-paid entry level salary? Well, having a well-researched entry level salary forecast in mind is one place to start.

Of course, it’s not likely that early-career hire can simply negotiate up to a data scientist’s $95,000 salary if that’s not the norm for the role or location they’ve applied for.

But, it’s still possible to make the case to hiring managers for why a higher rate is merited. When making this case, it could be helpful to give concrete examples of how a worker’s current skills might benefit the company. In these conversations, it may be possible to push an offer up a few percentage points (especially when the skills required are in high demand).

Glassdoor suggests that job seeker’s practice their negotiating pitch. Doing so ahead of time can help some to hone a confident delivery style. What’s more, knowing why a higher salary is being requested could also allow some new hires not to sell themselves short. Adopting negotiation tactics might help some new grads or career changers to meet their salary goal (or inch closer to it).

On top of baseline salary, it’s also possible in some roles and industries to negotiate for other valuable forms of compensation—such as, fitness stipends, work-from-home time, funding for continued education, and more.

Of course, negotiating a good entry level salary is not necessarily an easy undertaking. The Harvard Business Review warns soon-to-be negotiators to prepare for tough questions, especially where salary is concerned. Interviewers may put candidates on the spot, asking if they’re considering other offers or if the position is their top choice.

In an already uncomfortable situation, some candidates may stumble or misspeak if they don’t know how to justify what they’re asking for.

One simple place to start is asking whether it’s possible to negotiate the offer in the first place. Candidates may also inquire about future career growth and promotion potential, which could lead to a bigger salary later down the road.

Navigating Post-College Life, Financially and Beyond

Navigating life after college can be exciting and challenging. Trying to make ends meet on an entry level salary might be particularly tough, especially when on the hook to pay back student loans—as 54% of young adults who went to college took on some debt , including student loans, for their education.

A flexible and adaptable approach to finances and where one lives could make the transition to post-college life more manageable.

For instance, recent graduates who are in a position to choose a new place to live, might opt to move to one of the top cities for college grads. Cities like Houston or Nashville (to name just two) have boasted strong economies, affordable rent prices, and low unemployment rates.

Learning how to make a budget can also go a long way toward covering common expenses—even when one’s starting salary leaves a few zeroes to be desired. That said, there’s only so much instant ramen to eat or cups of coffee to skip out on.

For those feeling weighed down by student loans while earning an entry level salary, additional options exist. Those with outstanding federal student loans, for example, may qualify for income-driven repayment plans, loan forgiveness for public service, or deferment.

Refinancing educational debt with a private lender is one extra option that could save money each month—or help the borrower pay off student loans faster.

Student loan refinancing may allow recent grads to make lower monthly payments toward their existing debt, freeing up some extra cash. Or, it could help a borrower to save money on interest paid on the loan as a whole, allowing them to pay off the debt total faster.

It’s important to note that refinancing with a private lender causes borrowers to forfeit certain guaranteed federal benefits, like income-driven repayment (IDR).

SoFi refinances both federal and private student loans, offering no application fees and no prepayment penalties. Those who refinance their student loans through SoFi get access to a wide range of exclusive member benefits, including career coaching, financial advice, and more—at no additional cost.

Checking your refinance rate won’t have an affect on your credit score and could be the first step toward saving thousands of dollars—or making more affordable monthly student loan payments.

Interested in student loan refinancing? Applying with SoFi might be a smart money move for you.



SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.

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Source: sofi.com

Blanket Mortgage Loans – Definition, Pros & Cons of Using for Real Estate

For real estate investors, juggling multiple property deals and loans can get complicated.

Blanket loans often help simplify matters. Borrowers take out a single loan to cover multiple properties.

Even so, blanket loans come with their own quirks and have their pros and cons. Before entering into a blanket loan as an investor, make sure you understand exactly what you’re getting yourself into.

What Is a Blanket Loan?

A blanket loan is simply one loan that attaches to several real estate investment properties.

For example, if you buy a portfolio of five properties, a blanket loan allows you to take out one mortgage that covers all five buildings. The lender attaches a lien against each property, so if you default on your loan, the lender can foreclose on all five properties to recover their money.

Lenders do typically include a release clause, allowing the borrower to sell individual properties held as collateral as part of a blanket loan. However, they require the borrower to either repay a portion of the loan at the time of sale or put the money toward another investment. The lender then attaches a lien to the new investment property as a replacement for the sold collateral property.

That keeps their collateral — your remaining properties secured by the blanket loan — sufficient to cover their loan risk.

Who Takes Out Blanket Loans?

Blanket mortgages are exclusively for real estate investors and developers, not homeowners.

Investors can use blanket loans in many ways to invest in real estate. Landlords can take out a blanket mortgage to buy a portfolio of turnkey rental properties, as outlined above. Flippers could do likewise, to buy several fixer-uppers to renovate and flip, all with one loan. As they sell off properties, they typically repay a proportion of their loan.

Real estate developers use blanket loans to buy large swaths of land that they plan to subdivide into many units. As they build and sell off those units, they can either repay portions of the loan or put the money toward adding more properties to the portfolio.

Businesses with multiple locations and commercial properties can also use blanket loans. That could mean refinancing multiple existing loans into one blanket loan, or using a blanket loan to buy several new locations in one sweep.

When You Should Use a Blanket Mortgage

As touched on above, you can either use a blanket loan at the time of purchase or you can refinance to consolidate multiple mortgages into one loan.

It makes sense to use a blanket loan at the time of purchase if you plan to buy multiple properties simultaneously. You may also be able to negotiate staggered funding if you buy multiple properties in rapid succession but not quite simultaneously.

Another possibility with blanket mortgages includes buying only one new property, but securing the loan against other properties you own for additional collateral. Real estate investors sometimes do this in lieu of making a down payment on the new property.

For example, say you own a property worth $100,000, but you only owe $50,000 on it. You want to buy another property for $100,000, and the lender demands a $20,000 down payment.

Rather than cough up the $20,000 in cash, you offer your existing property as additional collateral for the new mortgage loan. The lender agrees to fund the full $100,000 for you to buy your new property, but puts liens on both properties. They now hold the first (and only) lien against your new property, and they have a second lien against your old property.

Advantages of Blanket Loans

Blanket mortgages come with several upsides for real estate investors.

To begin with, they can save on lender fees and settlement costs by holding one combined closing rather than having to pay separately for several. Lenders charge flat fees in addition to points, and those flat fees add up quickly. Title companies also charge many flat fees for each closing. With blanket loans, borrowers can pay those flat fees once, rather than at each settlement.

Aside from saving money, combining financing for several properties into one loan can also keep your finances and cash flow simpler. Rather than keeping track of 20 mortgage payments and loans, you need only track one or two.

When buying new properties, blanket mortgages can potentially reduce or eliminate your down payment if you use equity from an existing property for a cross-collateralized loan. Consider it one more way to pull equity out of your properties — and one that doesn’t require a totally separate settlement with its attendant costs.

Larger loans often mean more negotiating room for you as the borrower as well. Lenders don’t need to charge as many points on a $1 million loan to make it worth their while, compared to five $200,000 loans. Similarly, borrowers can often negotiate lower interest rates as well.

Downsides of Blanket Loans

Blanket mortgages come with their share of risks and disadvantages.

To begin with, it can be hard to find lenders that offer these loans. Up to this point in your real estate investing career, you may have established relationships with two or three lenders — none of whom might offer blanket loans. That forces you to go out and build new relationships with lenders who do.

Expect more intensive scrutiny by the lender for these larger, more complex loans. Rather than using a garden variety underwriter, bank managers might underwrite these larger loans themselves. Lenders might ask more probing questions and require more extensive documentation and paperwork from you. They may require higher credit scores than their typical loan products.

Blanket loans often come with shorter loan terms than traditional mortgage loans. Rather than the 25- or 30-year loan terms you’re used to, lenders often limit blanket loans to 10 to 15 years. That could come in the form of a balloon payment, or the loan could be entirely amortized over those 10 to 15 years. In the case of short-term amortization, that means higher monthly payments.

Finally, blanket loans pool your risk for many properties into a single loan. If you default on that loan, you could lose all the properties secured by it to foreclosure, not just one. In contrast, if you hold separate loans for each property, in a crisis you could isolate your losses to one property as long as you can afford to make your other monthly payments.

Where You Can Borrow Blanket Loans

Conventional mortgage lenders don’t typically allow blanket loans. Commercial lenders, portfolio lenders — who keep loans on their own books rather than selling them — and hard money lenders often do allow them.

Make no mistake, these lenders usually charge more than your personal home mortgage lender. But they also allow far more flexibility, and as a real estate investor, that flexibility is often necessary.

Call up your local community banks to ask whether they offer blanket loans for real estate investors. You can also reach out to portfolio lenders such as Lending Home and Rental Home Financing to inquire about them. For commercial loans, make sure you choose a commercial lender, because even many portfolio lenders only handle residential (single-family and 2-4 unit multifamily) properties.

Word to the wise: start building these connections now, before you actually have a time-sensitive deal on the line. Real estate investors need to be able to move fast and close deals quickly, else they risk losing the deal entirely.

Final Word

The average mom-and-pop property owner with a couple units on the side of their full-time job will probably never need to take out large blanket loans. But for real estate developers and full-time real estate investors, blanket loans can help them scale their investment portfolios faster and cheaper.

Start expanding your network of lenders now, before you have a hot deal at risk of falling through. Think in terms of building a financing toolkit of many different options for buying your next investment property — or portfolio of properties.

Source: moneycrashers.com

How to Prepare for a Job Interview: 9 Tips to Getting an Offer

Be ready with stories from your professional life that demonstrate the company’s core values, such as collaboration, leadership, teamwork and integrity, says Jill MacFadyen, a career coach and former recruiter who works with clients nationwide.
Did you or one of your colleagues or friends previously work at the same organization? Go to the same school? Belong to any mutual clubs or groups? Check alumni networks, LinkedIn and community pages. You’re likely to score points if a current employee can recommend you.
Search newspapers, magazines and specialty journals to see whether the company or the industry have been in the news recently so you can demonstrate that you know the latest trends and developments.

How to Prepare for a Job Interview

“You have to convey a message that you’re serious about the job,” Gellman says. “And if you go in casually, you’re not going to convey that message.”

1. Seek Information on the Company

“These kinds of things may seem kind of corny and stuck up,” Zimmerman says. “Well, that’s corporate America. That’s what they want.”
If you have to wait before you’re called in, bring a magazine or a book to read that’s relevant to the industry.
Prior to your job interview, ask for the names of the people who will interview you, and search online to see whether you have any mutual friends or connections. You may also be able to get information about those who work in the department from the company’s website or LinkedIn.
“The fact that you got an interview means you’ve done something right,” Zimmerman says. “Relax. Eat a good breakfast and believe in yourself. And then it’s up to the universe.”
It’s a good idea to do a dry run of your trip to the interview site up to a week in advance, especially if you’re unfamiliar with the area or exact location. You’ll flub your chances if you’re late, so make sure you anticipate how much traffic you’ll encounter, where you’ll park and how long the door-to-door process will take.
Write down key points you want to get across so you don’t forget them, and store that piece of paper or notebook in a business-appropriate binder or folder so you can access it easily. Remove any extraneous items from your (clean) pocketbook or (polished) briefcase so you’re not rummaging around to find the essentials.

2. Do Your Homework on the Interviewers

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Even if you’re interviewing at a startup where the employees dress in flip-flops and shorts, you need to dress like, well, you’re on a job interview. That means professional and conservative relative to the industry. If you wear a jacket and find you’re overdressed, you can always remove it after you arrive.
Consider doing a mock interview with a friend to sharpen your responses.
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3. Clean Up Your Social Media Profile

Have you won any awards in the field? Did you attend seminars or read books that could help you stand out as well-informed and committed to the brand or industry?
“Err on the side that your grandmother would look at your outfit and say, ‘You look so professional,’” Zimmerman says.
Stand up straight and take some deep breaths. Envision yourself greeting your interviewer with confidence, warmth, good eye contact, a clear voice and a pleasantly firm handshake (no spraining the interviewer’s hand, please). Visualize yourself nailing the interview.
Smile and greet everyone you meet politely, from the receptionist to the CEO; your behavior very well may be reported to the hiring manager, especially if it’s disrespectful.

4. Dress Professionally

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Then, get to sleep early enough to feel rested in the morning.
A good rule of thumb is to dress a level or two above the position you’re seeking, he says.  Make sure your clothes fit and are clean and wrinkle-free — no stains, rips or pet hair — and that your shoes are in good shape.
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“It’s about judgment,” Gellman says. “It’s about character for the company. Could this person be a good ambassador for us?”

5. Turn Off Your Cell Phone

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What should you wear? How can you research the company? What should you say — and avoid saying?
It all starts with first impressions. You can make a good one before you ever walk in the door by researching the company you’re applying to.

6. Treat Everyone With Respect

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“There’s a notion that this person has been vetted in some way,” says Mike Gellman, CEO and founder of High Five Career Coaching in Irvine, California. “There’s a level of trust there.”
Bring at least half a dozen copies of your resume on quality paper (even if you sent it electronically) and, if applicable, a portfolio of your work. Not everyone may have had time to review your credentials. You’ll also want a functioning pen so you can jot down any questions you have for the interviewer.
“In my opinion, you can never overprepare,” says Carlota Zimmerman, a New York City career coach with more than a decade of experience. “I cannot stress how much passion and preparation you should bring.”

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7. Show You’re Serious

To prepare for a job interview adequately, you must turn off your cell phone — or, better yet, leave it in your car. It’s too easy to reflexively reach for a phone that pings or vibrates. When Gellman was interviewing applicants in his role at a previous employer, the ones who texted during the interview — yes, it really happened — were immediately disqualified.
Then do something you enjoy to wind down. That may mean watching a fun movie, doing some light reading or taking a warm bath or shower.
After the interview, write thank you notes to everyone you met with and send them out within 24 to 48 hours. Email is acceptable, but an old-fashioned mailed card will distinguish you.

Gellman says he made the mistake once of arriving only two minutes before the start of an interview on a windy day and didn’t notice that his hair was sticking up. It stayed that way for the entire interview, and nobody gave him a (drumroll) heads-up.
Just the words “job interview” can strike fear into the heart of any job seeker.

8. Arrive Early

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“They’re trying to get a feel for how you’d be every day in [the] office,” Zimmerman says.
You should also sign up for company newsletters and emails, and follow any influencers at the organization who can keep you up to date.

9. Picture Yourself Succeeding

More than two dozen states have laws prohibiting employers from asking for applicants’ social media usernames and passwords, while federal law prohibits employers from making hiring decisions based on factors such as religion, disability and pregnancy. Accordingly, some companies have stopped monitoring candidates’ social media accounts to avoid potential discrimination lawsuits.
Once you’ve done your research, study the job description and think about how your skills, knowledge and personality mesh with the duties the position requires. Have examples ready from your education and work experience that show you have what it takes to succeed.
Never use profanity, even if your interviewer cusses a blue streak. Sit up straight and don’t fidget. If your interviewer takes or makes a phone call that interrupts the process, just wait patiently. If you complain or get angry, it will be game over.
Allow enough time for unexpected glitches and for a stop in the restroom, where you should give your hair, face and clothes a final once-over. Be ready for show time 10 minutes before your appointment.
“You’re demonstrating that you care enough to have done the research,” she says. “You’re setting yourself apart from the other people who are interviewing.”
But many companies still do check. You can protect yourself by avoiding posting photos of anything you’d be embarrassed to have a recruiter discover — or at least adjusting your social media settings to private. And remember: Nothing is absolutely private on the internet.

A wealth of information is available online. Start with the business’s website and Facebook, Twitter, Instagram and LinkedIn pages.

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It’s the night before your moment of truth. You’ve done your research on how to prepare for a job interview. You’ve picked out the clothes you’ll wear. Your briefcase is packed. Now it’s time to relax.