Discovering worthy deals takes talent, knowledge, experience, and time…lots and lots of time.
Because of this, scores of investors are rather happy to buy a property “wholesale” from other investors.
Reflect on the following: investor A is a newer investor and has more time than money. Investor B is an more experienced investor and has more cash than time.
Investor A can devote his time constructing systems to find sellers, looking at houses, running comparables, and making offers – most of which will be turned down. The final result of all this legwork will be the sporadic good agreement.
Investor B is more interested in preserving his time for other pursuits since he already has a robust capital foundation and probably has grandchildren vying for attention. He’s still a buyer still, but he’s no longer interested in doing all the groundwork.
By working as one, investor A & B can essentially do extremely well.
For investor A, he’s now open to do as many deals as he can find, devoid of apprehension for running out of capital. Why? Because he’s going to take a small, earlier profit when he sells his deals to investor B.
Consider the fix-and-flip model that is executed by many. If investor A was to tie up all his cash and time in a single fix-and-flip, the risks are sizeable. His capital is in jeopardy and he’s not out searching for new deals. If the project goes south or doesn’t sell, investor A has essentially taken himself out of the game until the house sells.
Most flippers presume to make at least $30,000 per deal and anticipate that it’ll take 4-5 months per transaction.
Conversely, the wholesaler needs no principal and takes virtually no risk, other than his time. Instead of supervising a rehab, his duty is to constantly tie up houses and then flip those contracts to other investors that would like to do the rehab.
Taking the wholesale approach will enable the young investor to execute a deal a month with a wholesale charge of $5-10K per deal. Simple math will tell you that over the same 4-6 months, the profit potential is at least equal to the rehab-to-retail agreement; albeit with significantly less danger!
As you can observe, wholesaling can be a extremely good deal for the investor who has the time and the contacts to get it done. I ought to also point out that although I have inferred that wholesaling is for younger investors, the reality is that it can work awfully well for any investor prepared to devote the time to digging for deals.
So, the next time you control a house under contract that you are thinking of rehabbing-to-retail, perhaps you may want to deliberate wholesaling it for a good fee and at once setting out to find a new agreement.
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Trade Dow Futures and S&P Futures.Apart from professional traders and speculators, futures trading is done by most of the people like you and me who are interested in making money in the markets. Like stocks, “Buy low and sell high”, is the basic premise in futures trading as well.
What is different in futures trading from stock trading? The fact that you can trade futures with leverage on either long or the short positions introduces an additional element of risk not present in the stock market.
Another major difference with stock trading is that there is no uptick rule in futures trading. Thus, it is as easy to sell short as it is to buy long. This means that you can easily enter into a position to capture a downward move in prices with no restriction.
How do you become good at futures trading? How do you manage to survive at futures trading even when you are not particularly good at it? The answer is simple. You should have the money and the ability to develop a trading plan that enables you to keep making money in the market long enough to capitalize your next big move.
In simple words, it means if you don’t have enough money, you won’t be able to trade futures. And if you don’t have a good trading plan, you won’t last long in the market. Your money will quickly disappear.
You must know this thing that only 5% of the futures traders succeed and 95% of the people trading futures lose money consistently. You need to have at least $25,000 in your account in order to start trading futures. However, $5,000 is the minimum with which you can start trading futures.
When you start trading futures make sure that you understand the risks involved and that you go into trading futures contracts with realistic expectations. You can take advantage of the managed futures accounts if you are not sure how to handle the risk involved in futures trading.
Trading futures contracts is truly a hybrid that uses both fundamental and technical analysis. You need money, patience, knowledge and technology to be able to trade futures contracts successful. Only proceed ahead if you these skills in abundance.
You need to know the futures contract specifications and seasonal tendencies of the markets. The fundamental side of futures trading involves getting to know the industry in which you are making trades. You should also know the important report that you need to keep an eye on.
The technical side of futures trading tells you what the market will do in response to the fundamentals. You will need to develop your own trading style whether it is momentum trading, scalping or swing trading.
Once you know your trading goals, establish a trading plan for getting there. Learn technical analysis. Don’t try to conquer every type of analysis at once. Instead, focus on mastering one item at a time—maybe concentrating only on chart patterns such as the candlestick patterns for instance. Candlestick charting can be a good tool in your technical analysis arsenal. Learn candlestick patterns.
Trade Dow Futures and S&P Futures. The first choice for many investors was and is the stock market. Many small investors are looking for new avenues after getting their fingers burnt during the recent stock market crash. Investors have many choices for investing their money today. Learn swing trading.
Have you ever thought of futures trading? But futures trading is not for you if you are among those who take a look at their mutual funds portfolios only once a year. Risk and uncertainty goes hand and hand in money making opportunities.
You will have to get out of the buy and hold investment mentality if you want to take on futures trading. Those who can’t shake off the preconceived notions and discover to make money as the market rise and fall are not successful at futures trading. What it means that those who can embrace the inherent volatility of the world and the markets and use it as a wealth building tool are more successful at futures trading.
Futures trading didn’t have global significance until the 1980 when companies and governments embraced futures trading as financial management tools for hedging although futures markets began in the United States in around 1850s. Futures trading belongs to the 21st century.
Today individuals trading futures are on a level playing filed with professional traders and institutional investors. Technological advances especially the internet has transformed the futures trading landscape.
Now most futures contracts are electronically traded with online order entry and execution. E-mini products have been created specifically to appeal to the individual investors and are now standard among exchange offerings.
There are many ways that individuals can use futures for trading and portfolio diversification. Futures contracts are highly leveraged and marked to the market daily. Futures industry is well regulated and has superior financial safeguards in place to ensure trading integrity.
Good services and basic materials will probably undergo major price swings, up and down during the next two to three decades. The volatility of the markets is only going to increase. The chances for sustainable trend that last for decades like that happened in the stock markets during the 1980s and 1990s are less likely.
The past investors could afford the luxury of buying and holding stocks and mutual funds for the long term (this is what Warren Buffet did in building his fortune). The today’s world calls for a more active and even speculative investor. The new world calls for a trader and futures trading offer one of the best opportunities to make money by trading in volatile times.
However, to change from a couch potato to a futures trader, you will have to work at it or you will be out of the game very quickly. Trading future contracts is a risky business and requires active participation. You need to know the futures market intimately. A winning futures trading plan can help you achieve success!
I start with a warning that is issued by the National Futures Association, and is actually very sound advice.
Never trade with money that if lost would adversely affect your life
One of the great dangers of this business is that over the years some rather unscrupulous people have portrayed foreign currency trading as a very lucrative way to turn a modest sum of money into a fortune with ease….If only you had their training or their system. “It’s like having your own personal ATM machine”, and other such outlandish claims of riches with ease
In fact I originally entered the Forex arena with just such beliefs.
The reality is that trading foreign currencies is far from easy and is not best suited to everyone. Whilst it is possible to make a lot of money relatively quickly, it is also possible to lose part or all of your investment with the same speed.
Most people who are highly successful in any endeavour start off with a desire to do the work. As their knowledge of the subject grows, and their passion for the subject intensifies, they find that their level of success also increases.
It is rare indeed for anyone to achieve success in any field if all they entered that enterprise for was easy money.
The only way to attempt to turn a modest sum of money into a large amount very quickly is to take some very big risks – not at all what forex trading is really about. If you want to take some hefty risks, then it might be far better to go to the roulette wheel and place all of your money on Red or Black and then cross your fingers.
I am not trying to persuade anyone to not trade the forex market, but I do want you to be aware that there is considerable risk regardless of what forex trading system you may decide to use.
On the upside, you can practice trading with a demo account which is funded with “virtual money” and practice the craft in simulated real conditions. The charts will be live and real time and you can win or lose your “virtual money” in exactly the same way as if you were forex trading for real, except that at the end of each forex trading session you have actual not put any of your real money at risk.
By practicing in this way, every “would be” forex trader has the opportunity to see first-hand whether forex trading would be suitable for them using a forex system, and bear in mind that one’s own personality, emotional control and level of self discipline will have a major impact on the way that one trades.
The secret to success in this business is to have a solid and reliable system that you have learned to trust. Then you must follow it to the letter through both wins and losses, using strict money management principles, knowing that the system, over time, generally produces more and bigger wins than losses.
Forget much of the nonsense that you may hear in the forums about setting goals of “just10 pips a day” etc., forex trading does not necessarily work in that way. The market moves with no respect whatsoever for your goal.
You have to learn to take what is on the table, and at exactly what point in the move. Some days there will be lots of profit to be made. Some days there will not be much profit. Some days the market will take YOUR money. Some days will be NO TRADE days and you will need to have the discipline and emotional control to sit and wait and smile through them all. For all of these types of days are what go to make up a traders working life.
Forex trading can be one of the most rewarding business activities on the planet. It has all the elements of high success and high failure. It is demanding and has an above average level of risk which all adds to the appeal. But it is not a business to jump into with your life savings clutched in your hand and a burning desire to be rich.
If you have a couple of thousand dollars in cash and a family to feed and the car needs fixing and the rent or mortgage is due – Then it is highly likely that the forex markets will just part you from your money.
In fact one of the biggest reasons for failure in this business is an under-funded trading account coupled with an urgent need to make some fast cash.
If you have a few thousand dollars or more put aside that if lost would not adversely affect you or your family, and if you have the time and inclination to learn how to trade first, then you may be able to turn that money into a worthwhile sum……..OVER TIME. In that case, forex trading might be the line of investment business for you. Remember though!!! There are no guarantees of success in this business.
Trade S&P Futures and Dow Futures. The E-mini S&P futures contract trade almost 24 hours per day with a 30 minute maintenance break in trading from 4:30 to 5:00 PM daily. The monthly identifiers for the E-mini S&P futures contracts are H for March, M for June, U for September and Z for December.Learn swing trading.
If you are a new E-mini trader you be careful as traders are expected to pay for the difference between the margins for the entry and exit points. In case you lose at the end of the day you are likely to pay in a big way. The margin requirements for E-minis are much less than the normal contract. The day trading margin is less than the margin to hold an overnight position in S&P 500 E-mini Futures contract.
All futures contracts are settled daily (assigned a final value price). Based on this settlement price, the values of all positions are marked to the market each day after the official close. Your account is then either debited or credited based on how well your positions fared in that day’s trading session. In other words, as long as your positions remain open, cash will either come into your account or leave your account based on the change in the settlement price from day to day.
As losses are not allowed to accumulate without some response being required, this system gives futures trading a rock-solid reputation for creditworthiness. It is this mechanism that brings integrity to the marketplace.
Leverage: Because futures markets are highly leveraged, the effect of price changes is magnified. With stocks, you typically pay the price in full (i.e., without leverage) or on margin (50 percent leverage). If you speculate in futures and the market moves in your favor, leverage can produce large profits in relation to the amount of your initial margin. However, if the market moves against your position, you also could lose your initial margin and then some.
Suppose you have decided to put $10,000 into a futures account and you buy one E-mini S&P 500 index futures contract when the index is trading at 1000. Your initial margin requirement for that one contract is $3,500.
Each one-point change in the index represents a $50 gain or loss because the value of the futures contract is $50 times the index. You could realize a profit of $2,500= (50 points) ($50) if the index increases 5 percent, to 1050 from 1000. Conversely, a 50-point decline would produce a $2,500 loss. The $2,500 increase represents a 25 percent return on your initial investment of $10,000 or a 71 percent return on your initial margin deposit of $3,500.
That’s the power of leverage. Conversely, a decline would eat up 25 percent of your original $10,000 or 71 percent of your initial margin. An increase or decrease of only 5 percent in the index could result in a substantial gain or loss in your account in either case.
It makes your money work harder and produces more in a shorter period of time when everything’s going your way, than if you paid for everything in full, up front. In such a situation leverage can be a beautiful thing. Indeed, leverage is the key distinctive aspect of futures trading as compared with stock trading.
Now suppose you use $5,000 in your account to buy an E-mini S&P 500 contract worth $50,000. However, prices fall by 10 percent instead of going up, and the contract’s value drops to $45,000. Your $5,000 is completely gone. This is the dark side to leverage. You’ll be obligated to put up even more money if the market keeps moving against you unless you get out of the position with an offsetting sale when your maintenance margin level is violated. Leverage is the one ingredient that can produce either horror stories or happy endings. It is extremely important that you fully understand the power of leverage and how to manage it well to get the happy ending.
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