Transfer on Death or Payable on Death

Quick one today as the markets are moving..

Just a gentle reminder as a real simple way to add a beneficiary designation to checking, savings, brokerage accounts.

On IRA's, 401(k)'s, and other retirement accounts you have to designate beneficiary designations to whom you would like your money to go upon your passing.

Outside of retirement accounts assuming you don't have a revocable/irrevocable trust set up to dictate the direction you should look at something called "Transfer on Death."

This is a free option to add beneficiaries to your checking, savings, brokerage accounts and bypass any potential confusion over where you want your money to go.

As a reminder having a will is only the start of the probate process and it generally does not suffice as as a directive for assets held in accounts.  When you attach an actual beneficiary to something you are leaving no doubt to where things are supposed to go.  Simple estates may not need to create a trust and spend the money.  However, there is no substitute for a trust when it comes to specific instructions and directives.  A Transfer on Death only allows for primary and contingent beneficiaries and nothing else.

Disclaimer:  Please consult with an attorney to determine what is best for your particular situation.



Eric Marvin, CFP®

Buy a Fixer Upper or Move in Ready?

Happy Hump Day to everyone!  A good question I get all the time is whether or not to buy a fixer upper or something that is move in ready.

Well, from personal experience there can be great value and wonderful investment opportunities to buying the "bad apple" in a good neighborhood.  However, you have to weigh some important factors.  First, do you have enough money to not only buy the place, but factor in hiring a contractor, cost of materials and most important of all time!  Buying a fixer upper with a newborn on the way can be challenging to say the least( I can speak from experience!)

In real estate you can force the value creation in a sense by transforming something nobody wants to a dream home that everyone wants.  Now another consideration is acting as your own general contractor in a sense by hiring out all sub-contractors and saving money.  However, if you don't have the experience dealing with all the various trades it can be cumbersome.

At the end of the day you need a roof over your head first and foremost and if that means buying something that is completely ready to move in that is not all bad.  As an investment buying a fixer upper also comes with enormous risks on the back end when/if you go to sell it.  Did you keep all the finishes neutral and appeal to all buyers or did you take chances and customize more to your specific taste?  Did you put high end appliances in a house/condo that you won't get your money out of?  Did you have to spend a lot of money on things that no one sees?  For example, new electrical work, plumbing, sewage, foundation issues, etc.  People don't want to pay up for that stuff, they just expect it especially if you are buying and trying to sell for a profit.

So, bottom line is one may work better for one person over another.  You need a roof over your head, and not everyone wants to commit to doing the repairs.  In hot housing markets you can potentially buy something and do nothing to it and make money as well.  It all comes down to the right opportunity.

Real Estate is another bucket that makes up your total net worth.  If done right you can have equity in your home and stop paying rent to someone else..

Until next time...

Eric Marvin, CFP ®

Personal Net Worth Pilot Blog Post-Portfolio Loan Mortgage

Hello,

This is the first post in a new blog series titled, "Personal Net Worth."  The aim here is pretty simple. I will look to share any topic/topics that are related to your personal net worth.



I wanted to shed light on a different type of mortgage out there that may not be as well known as the traditional types.  As anyone who is self-employed can vouch for obtaining a traditional mortgage can be challenging to say the least.  They want two years of tax returns first and then copies of bank statements, brokerage accounts,etc.  Then they ask for copies of P&L statements and proof of funds for down payment purposes.  Well, if you have the ability to make at least a 20% down payment and/or have had a short sale/ foreclosure recently you may want to look at something out there called a "portfolio loan."  The first thing I would do is a google search for them in your area.  Since these loans are held on the books of the banks they can have a different criteria for lending than a traditional mortgage.  I recently obtained a five-year ARM at 3.5% from a local bank in Fort Myers.  I was able to close in approximately 30 days and was impressed with the process compared to a traditional type of financing.  If this doesn't work for you I would encourage you to call a local mortgage broker in your area as they can usually assess the best option for your specific situation.  If anyone is in the local Fort Myers area I have the best broker who can get deals done.

Until next time...

Eric Marvin, CFP®