Brokers and Traders

If you are knowledgeable in the field of finance perhaps you already know the differences between a broker and a trader, but for many, the two terms sort of all roll into one job description. Yes, it is true that both brokers and traders sell and buy securities, but one is also a sales agent while the other works for a large firm and takes orders from a portfolio manager from that firm.

Lets start with brokers. They have direct contact with their own clients, and they then buy, sell or trade securities based on what their clients specifically want. They also have to maintain and manage their client roster as they are working on behalf of their clients all day every day.

Brokers have to watch the markets each day like a hawk, since they have to keep their clients informed of which stocks are doing what throughout the day. If they have a specific client who only wants to buy a stock if it dips under an agreed upon price or only wants to sell a stock it goes over a certain price they need to know what the market is doing throughout the business day in order to know when to buy and when to sell. They also have to do their homework and research the market so they can make recommendations based on their expertise as well as the market trends to then relay this information to their clients.

Traders on the other hand work for a company and they sell, buy or trade those same securities on behalf of the firm and the assets managed by that firm. They will buy and sell or trade depending on what their portfolio manager tells them to do rather than go on a client by client basis.

They too have to know what’s going on with the market throughout the business trading day and they can also use their expertise to recommend buying and/or selling at certain times to their managers. The big difference is if you are a trader you aren’t dealing with clients of your own, though you are still influential in what happens to their money.

The Benefits of Using a Property Investment Specialist

When you are in the market for a new property, especially if it is far away from home in another country, it is advisable to do your homework first. If you are considering investing in property overseas, you need to be sure that you are making the best investment you can. However, sometimes you’re not able to go there yourself. You could then list the services of an investment specialist that will do the homework for you.

Here are the main benefits of using a property investment specialist.

They will advise you on the neighbourhood. If you are considering purchasing property in another country, then you may not be familiar with the neighbourhood where the property is located. The property investment specialist will know a lot about the neighbourhood you are considering and can advise you accordingly. This will assess whether it is a growing or declining neighbourhood and whether it’s worth the investment.

They will advise you on the safety of the area. Usually, they would have assessed the area beforehand and are well aware of the safety aspects of the area. A good property investment specialist will indicate which areas are worth considering as an investment.

They will check the exact location of the property. If it is a house or building that you are looking at purchasing, then you need to find the exact address where it is located, so ask the property investment specialist to show it to you on a map. For obvious reasons, you need to know where the property is. You may discover that it is near a shopping centre which will be beneficial to you.

They can advise you on the state of the property. The property investment specialist will conduct a full inspection of the building. They can advise you on the structure of the walls, the conditions of the doors, the functioning of the plumbing and geysers, the electrical fixtures, the stability of the roof structure, the condition of the floors, as well as the front and back yard. Therefore you will be fully informed of what you’re purchasing.

Winning Bidding Strategies – From The Tax Lien Lady

Recently I went to a tax sale in New Jersey. It was a very small tax sale in a small rural borough. There were only 7 properties in the tax sale and I was able to get 2 liens at 10 and 12 percent. That’s not bad at all in today’s competitive tax sale environment in New Jersey. Usually at a tax sale like this I come away empty handed because I’m not willing to pay premium for small tax liens.

Most of the liens in this sale (all but one) were under $600. In some states, local governments sell utility liens at the tax sale right along with the taxes. Anything that is paid to the local municipality can be sold as a tax lien at these tax sales. Most of these liens were for either water or sewer delinquencies. Only one lien included taxes along with delinquent sewer amounts and was just over $1700. All of the others were for either water or sewer amounts or both.

The trend in the last couple of years in New Jersey has been to bid premium on these small utility liens. Investors are willing to pay premium on these liens in order to pay the subsequent taxes. But on small utility liens, you usually do not get to pay the subsequent tax payments, but only the subsequent sewer or water amounts which are much smaller than the tax amounts. Keep in mind that in New Jersey, the interest on the lien is first bid down to 0% before premium is bid. Although you do get your premium back if the lien is redeemed in 5 years, you do not get interest on the premium amount bid or on the lien amount. You do get a small penalty on the lien amount and the statutory interest rate (18% once the tax payer is $1500 delinquent and 8% on anything before that).

What some tax lien funds have been willing to pay to get these small utility liens has gotten a little out of hand. In the last year I have seen them pay up to $1500 premium to get a small $200 or $300 lien. What that really amounts to is that they are making such a small blended return on their investment that it’s really not worth it at all; especially for the individual investor.

So how was I able to buy 2 small liens at decent interest rates at the last tax sale I attended? First I went to a small sale that had only 15 liens on the original tax sale list and there were only 7 properties left on the list on the day of the sale. Secondly, there were no really big liens in this sale; the largest one was under $2000. Large liens bring out all the competition.

Third, you’ve got to know when to stop bidding. I actually was a little lucky at this sale as there was only one other bidder representing a tax lien investing fund company. I bid on every lien except one, but I didn’t bid him down too far. If you don’t get greedy and insist on bidding every lien to your bottom line, then the other bidders might not bid every single lien down to their bottom line.

The forth thing is that I was happy to get the crumbs from this sale. What I mean is that the 2 properties that I got liens on were the worst properties in the sale. One was bank owned and falling apart. It hadn’t been taken care of in years. You can see a picture of it on the cover of this issue. You can’t see it from the picture, but it also had junk piled up in the driveway and backyard and a dilapidated, falling down shed in the back. The other house was vacant and about to be foreclosed by the bank. It was also a very small house with no garage, in need of some TLC and a lot of updating.

If I had decided not to bid on these properties because of their condition, I would have missed out on a couple of good liens, and the only liens that I would have been able to get. You have to be willing to take what the big boys don’t want or are willing to let go. These properties might be vacant and in terrible shape but they are still good liens. The bank is going to redeem them at some point, but probably not until they sell them which could take a long, long time. That will give me time to pay subsequent utility payments (remember these were small utility liens, add to my investment and make more interest!