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Ron Lovett, Founder of Source Security (Halifax): Halifax Businessman Wins Olympic Entrepreneurial Gold

olympic

On February 12, when the Olympic Torch was lit and opening ceremonies were on their way, over one hundred Source Security protectors radiated across Surrey’s Holland Park, an Olympic Celebration site housing a 25,000 square foot entertainment tent and an Outdoor Concert Stage. The Halifax security company guaranteed protection to the tens of thousands of visitors, cultural performers, RCMP musical riders and big name musicians for the duration of the International Games.

Source Security and Vancouver Olympics

This was not Source’s first intimate connection with the Vancouver Olympics, as a band of mindful mediators and beefy brawn followed the entire Canadian lag of the Torch Relay, providing safety in caravan style. The success of winning the Surrey Celebration site contract came out of the company’s bid to supply security for the entire Olympic and Paralympic Games, a $122 million contract. Source Security’s proposal was purely strategic. “We always have punched high above the belt,” says Ron Lovett, founder, owner and president of the security company. He is very pleased they won the Surrey venue as their British Columbian offices had only been in the province for one year. “It shows that we have built a brand so quickly [out here],” he says.

Lovett’s Entrepreneurial Beginnings

So who is this man behind the ever-growing company now having offices in all four Atlantic provinces, BC and soon to be Ontario and Quebec? Like Bill Gates, Walt Disney and the gifted Google creators, Larry Page and Sergey Brin, Ron Lovett started his company in his early twenties. After high school, like most grads, he was initially pressured by society, guidance councillors and public bus advertisements to attend university. He realized true education comes from experience, thus leaving undergrad life and embarking on a world-wide soul-searching voyage. From Thailand to Morocco, Australia to South Africa and travel through various European and South American countries, he had the chance to observe and learn from security companies that outsourced bodyguards to nightclubs and bars. He realized this was an open niche area for him to enter once he got back to his hometown of Halifax.

His entrepreneurial spirit was reawakened. He tapped into the past where he was a newspaper boy for three routes at a time and operated his own haircutting business in his mother’s attic for $5 a cut. At the age of 16, he decided one day he wanted to work for himself. “I had three goals: I wanted to own a business, own real estate and have investments.”

What it Takes to be a Successful Businessperson

His youthful dreams are now a reality; besides Source Security, he owns real estate, IT and construction companies. His curriculum vitae also includes being decorated with several prestigious entrepreneurial awards and he is now a member of the International Young Presidents Organization.

His successes have not come easy, however. He says that risk taking, when starting and operating a business, is not optional. “If you’re not up for risks, you may as well get a regular job,” he adds. It has taken a lot of sacrifice. When he first started, he would often work at a Halifax nightclub until five in the morning, sleep a couple of hours, and then wake up again to perform operational duties.

Source Security’s Growth and Connection to the Community

Now that Source Security has exploded exponentially from three employees to its present day 1,500, and providing security at KISS and Paul McCartney concerts, not to mention personal service to Bill Clinton and Tiger Woods, the company is thriving. But Lovett still remains connected to birthplace Halifax. Source Security has donated funds to several organizations in the community including local hospitals, the Micmac Friendship Centre, local sports teams and the Big Buddy Program. Lovett himself volunteers as a Big Brother to children in Spryfield and is also a foster parent.

When asked where he sees himself in the next five to ten years, Lovett replies: “My goal is for [Source Security] to be the top national security company and to have offices all across the country.” In Lovett’s world, dreams are not made of pipe. It’s just a question of by what month in 2015 will Source Security span the entire nation?

Serious Games: The World of Professional Gaming

Gaming

How do you define “game”? Usually, a game is considered something fun, something that is not of importance but which one choses to do for amusement. Therefore, if you wanted to stress the seriousness of something, you would exclaim: “This is not a game!”. A game is also something that is opposed to work, something you do as a pastime.

Games and Money

Enter money. If games develop a large numbers of followers, there is a profit to be made. We know this from sports, which attract a huge number of fans and therefor sponsors. This leads to professionalization, the game enters a new dimension and suddenly becomes much more than a game to a lot of people. It can now even become a valid career option, evidently opposing the above definition of a game.

Magic: The Gathering

But could this happen outside the world of sports? It can, and it does. Chess, for example, is considered to be a kind of sport by a lot of people, is a game that has professionals. And it was only the beginning. The card game Magic: The Gathering was not only voted one of the top five mind games by Mensa in 1994, it has been so successful that to promote it, a Pro Tour with several tournaments is held every year, each tournament paying $40,000 to the winner and the overall annual prize payout of the company being several million dollars. Other card games have since followed, for example the World of Warcraft adaption that paid its world champion $100,000. That is more than most working people make in a whole year and so top players use their hobby as a means to finance their studies instead of spending money on it.

Poker and Virtual Gaming

An even better known example is tournament poker. Players can make millions, and even on the lower levels it can support a comfortable living. Computer games, too, have attracted a huge following, not only creating a whole business branch for their design but also being played at tournaments that, especially in some Asian countries like Korea, are even broadcasted on TV and thus include the whole machinery of fans, sponsors and merchandising. In the new wave of mass online games, people pay real money to purchase virtual bonuses that other players have achieved. The high demand for virtual gold in the World of Warcraft online game has created a business called gold farming. Workers are paid to play and then the gained in-game currency is traded for hard dollars via the Internet. This industry is worth billions of dollars but is a serious health risk to the hired players, many of them underage Chinese who play for 12 hours or more every day.

Why Professional Gaming Is Good for Business

For gaming companies, it remains crucial to advertise their games and the best way to do that is by giving every player the hope of fame and fortune, to make them before everybody else believe that they are not just playing a game and wasting their time but in fact have the chance to turn their hobby into their occupation and to become a professional. To create stars and pay them to be just that means is the best promotion they can wish for.

Of course, not all players aim for such a goal. Some even feel that this takes the fun out of gaming and thus are opposed to any commercialization apart from making their game available for purchase. But in a society that values entertainment as high as ours, it should be of no surprise that there can no longer be any clear distinction between gaming for fun and gaming as a career.

What to Consider Before Starting a Small Business

small business

There are many reasons why people choose to start up their own small businesses. A self-owned business may mean the possibility of doing something enjoyable, of capitalizing on a great opportunity, of making a good income, or having a better work-life balance. But all the excitement and enthusiasm of the most well-intentioned entrepreneur can, and often does, lead to failure.

This may seem puzzling at first, but the truth is that the success of a new business usually boils down to having the right information at the right time and then knowing what to do with that information, and obviously the sooner this process starts, the better. For this reason, first-time entrepreneurs should be familiar with the basic steps of small business start-up before they start their ventures. That way, they can establish good habits right from the beginning.

So for anyone who is thinking of going the entrepreneurial route, the following is a brief, step-by-step guide to small business start-up. It covers some of the most important, yet often overlooked, aspects of starting a new venture:

Step 1: Know What Small Business Start up Resources are Available and How to Get Them

Thanks to the internet, most of the information a would-be entrepreneur will need to start a business is widely available, and best of all, it is usually free. Entrepreneurs can begin their search by checking out the following sites:

  • The Small Business Association- The SBA has a series of comprehensive articles, resources, programs (including several free online courses) posted on their website. Everything is designed to help small businesses start up and run effectively.
  • The National Foundation for Independent Business- The NFIB is an advocacy organization for small and independent businesses. Here entrepreneurs will find advice and resources for running a small business. Members receive discounts on many business products and services.
  • SCORE- This organization offers business advice, mentoring, courses, and other information.
  • SME Toolkit- This organization offers free software, business forms, interactive tools, training, information, and more to help small businesses.

Step 2: Deciding What Business to Start

Entrepreneurs should make sure that the venture they choose is in line with their experience, their available resources and time, their personality, and their income needs. There are several sites that provide assessment forms consisting of a series of questions and points of consideration to help people choose the most suitable business ideas. This site has a list of different assessment forms: breitlinks.com/careers/.

Step 3: Seek Out Professional Guidance or Mentoring

At various points throughout the start-up process, the budding entrepreneur is going to need the advice and assistance of several different professionals. Examples include: an attorney to offer advice on all the legal matters pertaining to the ownership and management of a small business; an accountant to assist in the area of small business finance and tax management; and finally some kind of business consultant to offer advice in areas, such as business management, human resource management, and IT.

Step 4: Choosing the Appropriate Business Structure for a Small Business

Unless one is buying a per-existing business or franchise, one needs to decide what will be the corporate structure of the business. Will it be a sole proprietorship, a partnership, or a corporation? The decision will define several important things: tax status, who has ownership in the business, and what the extent of the owner’s personal liability is should the business go into debt or close down.

Step 5: Time to Create a Business Plan

Writing a good business plan is one of the most important steps in the process of small business start-up. A business plan is basically a written outline of all the aspects of the business including the proposed product or service, the target market, and the economic potential of the venture. Having this information on hand can help entrepreneurs to stay focused on their business goals, and it will make it easier to pinpoint any potential pitfalls in their plan. Finally, this document is often used when approaching banks, commercial lenders, and investors for financing.

Step 6: New Ventures Need Start up Financing

It is obvious that the best ideas will go nowhere without some initial capital investment. This start-up financing (also called seed capital) should cover the preliminary expenses including: market research and product or concept development, legal fees, and any necessary equipment and supplies- anything that is needed to get the business up and running. Aside from standard bank or commercial business loans, seed capital can come from SBA-backed micro loans, governmental grants and assistance programs, peer-to-peer lending, and in some cases, venture capital or angel investment.

Step 7: Make Sure that the Business is Registered and Legal

This step is quite broad and beyond the scope of this article. In short, entrepreneurs should make sure to get a tax ID number for their business and register the organization with their local chamber of commerce. They also need to be educated (or seek advice) about any appropriate zoning laws or licensing fees.

When to Switch From a Variable Mortgage to a Fixed Rate Deal

The following is a guest post from Nigerian real estate developer Michael Chudi Ejekam.

The cost effectiveness of most mortgage deals is dependent on market interest rates. Those that currently have a variable rate deal may be wondering when or if it will be better to switch to a fixed interest option. Homeowners coming to the end of a deal and those looking to switch to try and save money may want to consider the pros and cons of fixed or variable mortgage products.

How Market Conditions and Interest Rates Affect Variable and Fixed Mortgages

Each type of mortgage deal comes with a potential cost benefit. But, this benefit is not guaranteed. Choosing the right deals at the right time could save homeowners money. Making the wrong decision could see them paying more than they technically need to.

For example, variable rate mortgage deals give the best cost benefits when interest rates are dropping or are at a low point. These products will have repayments that rise or fall depending on market conditions. In a decreasing or low rate scenario, payments go down. As soon as interest rates start to go up, then this kind of deal becomes more expensive.

Fixed rate deals work in a different way. Here, the homeowner is given a guaranteed fixed repayment for a period of time and market conditions have no effect. So, if interest rates go up, then the mortgage holder will potentially be saving money as their repayments will not rise. But, if rates drop significantly, then they could be paying more than if they had a variable product.

When is the Best Time to Switch From a Variable to a Fixed Rate Mortgage?

Although it is possible to anticipate what might happen to market interest rates, it may not be possible to guarantee accuracy. Some consumers will look to fix a deal when rates look likely to rise. This may work if they are particularly low (i.e. there is nowhere to go but up) or if market conditions make interest rate increases likely.

The best time to switch to a fixed rate deal from a variable product will happen at a point where switching saves people money (i.e. when their fixed rate payment is less than their variable payment would be). It can, however, be hard to get the timing exactly right.

Some that move early may end up paying more on a fixed rate deal ahead of market rises actually taking place. Those that move later when rates start to rise may find that the costs of their fix are not as good as they were in the past.

When Entrepreneurs Become Job Seekers

job seekers

We all know how tough the job market really is.

As if the competition from fellow grads and the recently terminated isn’t enough, here comes the competition from another, not so often talked about pool of job seekers – entrepreneurs.

Many small business owners are coming back into the job market and having a hard time connecting. Since the beginning of this year, I have probably talked to at least 10 entrepreneurs, who have had to seek out other employment to either keep their own businesses going, or closed their businesses all together.

Two of these entrepreneurs were in the construction business. One owned a painting company and the other a small general contracting company. Both have had to lay off workers and became job seekers themselves. One owner of an adult day care facility is considering selling his building, at a loss no less, and operating his business from his home, where his 19-year old can help with clients as he seeks on a night job. Another, a property manager, is unable to find renters and need to now himself find a job to augment his investment property mortgage payments. These are a few. There are others and don’t think this phenomenon is limited to sole proprietors either.

There is a lot of support out there for the unemployed who want to start a business, but not much for the entrepreneur who has to become a job seeker.

Here are some of the tips that I have been sharing with the entrepreneur who has to go back to working for someone else:

  1. Sell your skills as a team player. Many successful entrepreneurs are “take-charge”, mavericks who have been used to making all the decisions. Some employers might say they like that in a candidate, but it really is about balance.
  2. Show your willingness to learn new things…quickly. As an entrepreneur, you may have become a master in a specific niche. Now that you are looking, you may find that your niche, although good for your business, doesn’t have wide demand.
  3. Look for opportunity and potential. You may not be able to make the same starting out, as you were when your business was up and running. Instead of looking at just the wages, consider the peace of mind for you and your family as well as benefits like health insurance and retirement accounts.
  4. Talk with your vendors and suppliers. They may be able to help or certainly make recommendations. Network also with others in your professional groups such as your union. You may be able to collaborate on jobs.
  5. Brush up on your job search strategy and skills. Get a resume together and become familiar with searching for jobs online or networking your way into a job. You networked to land clients before, you will now have to do the same to land a job. Only problem is that you may not have a marketing department to do it for you. Look for free job search resources. I actually met three entrepreneurs at a job search workshop I volunteered to do at my local library about 4 months ago. They were preparing for job search because their revenues were in the tank or heading there. One I am happy to say has landed a great opportunity in sales with a vendor. Two are still looking. Use free resume samples from here!
  6. Use headhunters. Entrepreneurs are independent thinkers. No question about that. However, they may have to rely on the expertise of others in this situation.
  7. Put yourself in the employer’s shoes. Would you hire you? Remember what you looked for in an employee and think about the best way to sell that to potential employers. One of the things you thought about was – “will this employee stay?” Your new potential employer is thinking the same thing. What happens once his/her business picks up? Will I lose them as an employee? This is what the employer is thinking and so you have to prepare an answer.

No question that this is a difficult time to find a job. If you have been used to doing the hiring, but now have to be doing the looking, it could be a real challenge.

Your problem solving skills as an entrepreneur will serve you now better than ever. Stay focused yet flexible!

ICTs Proved Vital for Economic Development: How ICTs are Helping Business Growth Among Women in Africa

ICT

A project in Uganda has shown that ICTs can greatly contribute to the economic empowerment of women though increasing access to relevant information.

Evaluations for the CEEWA-Uganda ICTs Project show that most business women who were trained and helped to utilize ICTs like mobile phones, radio, computers (internet), photocopying, television were able to register marked business growth after starting to utilize these ICTs as tools to improve their businesses.

The project was implemented by CEEWA-Uganda (Council for Economic Empowerment for Women of Africa-Uganda Chapter), an NGO committed to the economic empowerment of women in Africa.

Baseline for ICTs Role in Business

Under its Women and Entrepreneurship Development program, CEEWA-Uganda in 1999 commissioned a survey to find out the information needs of women entrepreneurs in business information and entrepreneurship skills.

The survey revealed that women entrepreneurs at the grassroots (entrepreneurs in small-and medium-size businesses)—lacked information on credit facilities, credit and savings management and ways of improving their products and services. Samuel Sefunka, the Program Offier of CEEWA-Uganda says this was in addition to the businesswoemn not always knowing market prices, costing and pricing.

Speaking in an interview, Senfuka says the baseline study found that the women entrepreneurs also lacked computer and writing skills. “Many of the respondents expressed desire for training in enterprise development. It was from this survey that CEEWA-Uganda developed the ICTs Project,” Senfuka says.

With support from International Development Research Centre- IDRC, (1999-2001), CEEWA-Uganda was able to mobilize economically active rural and peri urban women entrepreneurs and pilot test the Project in three districts of Mpigi, Wakiso and Kampala in central Uganda.

Business Information and Skills Website

Under the ICTs project, CEEWA-Uganda designed a database driven website with information on best practices in agriculture, business skills, market prices, trade related issues, finance support institutions and women network groups. CEEWA-Uganda also developed training manuals on ICTs use in furthering of businesses.

“The Humanistic Institute for Cooperation with Developing Countries (Hivos) came in to support CEEWA – Uganda to continue implementing the ICT project, now in six project sites/districts extending to eastern Uganda in Budondo Sub-County, Jinja district and Bulamagi sub county Iganga district as well as Mukono district,” Senfuka says.

ICTs Benefits to Business Women

According to the review of the CEEWA-Uganda ICTs project, beneficiaries realized a lot of achievements, especially being able to order for and sell goods on phone; getting market prices from sms, radio and internet; being able to pay or contribute to school fees for their children, increased power to negotiate and better business relations.

Teo Kamya of Sango parish, in Mpigi district, central Uganda is one of the beneficiaries of the project. “I also learned to use a mobile phone to send text messages to look for markets and new products,” Sango says in an interview.

“I had been selling milk but couldn’t tell how I was spending the money until CEEWA-Uganda trained us in book keeping and best practices in animal rearing. I have bought an incubator that breeds 120 chicken at ago which I sell at sh700 each. In addition, I have got a heifer cow that produces 15 liters of milk a day,” Sango adds.

Challenges of Women Entrepreneurs

Despite the good achievement, the evaluation of the ICTs project did raise a number of challenges women entrepreneurs are facing, which challenges must be addressed if entrepreneurs are to enjoy full benefits that ICTs bring to businesses.

Edith Mwanje, the Chairperson of CEEWA-Uganda says that their evaluation of the project noted that apart from the multiple gender roles of women beneficiaries that constrains their time, women are not able to maximize the benefits of ICTs use because of limited access to ICTs, which is mainly due to infrastructure problems such as unavailability of connectivity, power supply, long distance to centers, high cost of ICTs and maintenance of the ICTs.

“High illiteracy levels among the beneficiaries also hinder maximum use of the ICTs. Stakeholders also need to address the high levels of poverty and relevancy of ICTs to small size of Small Micro Enterprises,” Mwanje says.

Increasing ICTs Role in Women’s Empowerment

Senfuka and Mwanje believe that these challenges are better addressed in the framework of improving the Uganda National ICT Policy. The Government of Uganda in 2002 put in place an ICT policy to guide the government’s role of supporting the access of relevant ICTs in all parts of the country.

“The ICT Policy needs to be gender sensitive by ensuring most women at the grassroots can access ICT services. It is not enough to have an ICT center in the town when most women do not have transport to go there. The access of ICTS needs to also be supported by reliability of ICTs so that women really save time,” Mwanje says.

 

The government of Uganda has been laying a fiber optic cable in different parts of the country. Uganda together with her East Africa Community partners (Kenya, Tanzania, Rwanda and Burundi) are also working together to connect to the Under Sea Fiber Optic Cable that is expected to greatly reduce internet connection and related costs, and thus improve access to most ICTs and reliability of ICTs for most Ugandans.

Successful Entrepreneur Characteristics

The following article is by guest writer Pat Mackaronis, CEO and Founder of Brabble, Inc, a social network based in New York City. Visit Pat on Twitter at @patty__mack.

The definition of success is often subjective and differs from person to person. However, when determining the characteristics of a successful entrepreneur, there seem to be several fundamental traits in place. The aim of this article is to figure out what has worked for others and how to implement those concepts into the business plans of up and coming entrepreneurs.

Creativity

More often than not, creativity and a knack for thinking outside the box is a major aspect of building successful businesses. Many entrepreneurs have the ability to either come up with original, unique ideas or improve an existing one.

Work Ethic

You rarely hear about success stories from people who sit back and have their business empires grow by themselves. Getting ahead and growing a business on any scale usually requires determination and at least some initial hard work. It seems like this is the area where many new entrepreneurs fail. They simply don’t see the results they desire right away and quit. People who “make it” typically build their businesses from the ground up, putting forth lots of effort and persevere over the inevitable obstacles in their paths.

Confidence

This is another extremely important trait of most success stories. The world is often filled with negativity and envious haters who like to suck the life out of those who dare attempt to make it on their own. The ability to understand your strengths and qualities and implement them into your business strategy is an integral part of an entrepreneur’s growth. Almost every successful person has faced setbacks and adversity at some point. It’s those that can shake it off and keep going that end up on top.

Flexibility

The world is constantly in flux with trends coming and going like the seasons. The ability to be flexible and improvise on the fly is so often a common winner’s trait. Those who resist change and are unable to adapt find themselves permanently lagging behind and find their lives stagnant. This is why adaptability is often a necessary aspect of taking a business to the next level and keeping customers happy.

Passion

This seems to be an often overlooked aspect of successful business owners. It’s hard to consistently work on a project and give it your all if you’re completely uninterested. You may be excited with a full head of steam initially, but over time your enthusiasm wanes if you’re not dealing with something you truly enjoy. This is why it’s vital to ask yourself if you’re truly passionate about a business idea you have in mind. However, if your business idea gets you super excited and you can see yourself doing it long term, you might just have a winning idea.

So if you’re a budding entrepreneur just getting into the game, try to develop these characteristics and you will have a great shot at success and obtaining your goals.

Becoming an Auto-Entrepreneur in France

entrepreneurship france

What is an Auto-Entrepreneur?

The scheme was introduced by minister Hervé Novelli under the 2008 law to modernise the economy, and came into force in 2009. It aims to encourage small-scale start-ups and entrepreneurship in France. Auto-entrepreneurs are not required to register with the Registre du Commerce et des Sociétés (Chamber of Commerce and Businesses) or the Repértoire des Métiers (Trade Directory). Registration can be done online, at a Centre de Formalités des Entreprises, at chambres de commerce, chambres des métiers, or URSAFF centres.

Auto-entrepreneurs pay tax and social contributions at a flat percentage rate of turnover (previously, many would-be entrepreneurs were deterred from setting up their own businesses because of high charges and legal obligations in France). Charges are only due where there is income: if turnover is zero, nothing is owed. Most auto-entrepreneurs are also exempt from VAT, as long as their income remains below a certain threshold.

Who Can Register as an Auto-Entrepreneur?

Anyone aged 18 or over who is not already trading as a business can register as an auto-entrepreneur, including students, retired people and employees looking to supplement their income, as long as they belong to an accepted category.

Micro-Entreprise Tax Regime

The tax advantages of the auto-entrepreneur system are available to those who do not charge (or claim) VAT; and who do not exceed the threshold for turnover for their category of business. These thresholds are as follows:

  • €80,000 for businesses selling goods, articles, supplies, food (to take away or eat on the premises) and accommodation services.
  • €32,000 for other activities.
  • €32,000 for services that are taxable under BNC (bénéfices non commerciaux; this mainly applies to professions libérales.

Taxes and charges are calculated as percentages of turnover:

  • Businesses selling goods, articles, supplies, food (to take away or eat on the premises) and accommodation services: 13% (12% in charges + 1% income tax)
  • Other activities: 23% (21.3% in charges + 1.7% income tax)
  • Services that are taxable under BNC: 20.5% (18.3% in charges + 2.2% income tax).

ACCRE: Financial Help for Auto-Entrepreneurs

ACCRE stands for aide aux demandeurs d’emploi créant ou reprenant une entreprise. Would-be auto-entrepreneurs who are unemployed or under 25, for example, may be eligible for a reduction in social charges during the early years of their micro-entreprise. Information can be obtained from the APCE agency.

The Best Strategies to Avoid Foreclosure: Sound Plans for to Prevent a Mortgage Default

With the holidays coming up, homeowners will be stretched financially. Foreclosures rose to unprecedented levels in 2016 due to the loss of jobs and the steep decline in real estate values. Banks and mortgage companies also face the strains of a tough economy. Stressed homeowners should consider the following strategies to avoid being evicted from their home during this holiday season.

Proactively Call the Mortgagor/Bank

The best strategy to avoid foreclosure is to call the bank before a payment is missed. Borrowers, who let the bank know they have lost their job or face some other serious financial strain, will be more likely to get relief if they call before they are behind in their payments. While there are lots of items to be concerned with when a job loss occurs, “call the mortgage company” should top the list.

Compose Assets and Liabilities

Think like a business here. The faster a borrower can provide the bank or mortgagor proof that he/she faces financial hardship, the easier it will be to get some relief. Taking a half day to gather all sources of income and sources of expenses will go along way. Be prepared to send out multiple copies of the latest documentation (i.e., paystubs, bills, canceled checks, etc.).

Keep Records of Bank Contacts

Be patient, but persistent once the information is sent to the institution. Borrowers should keep a regular record of exactly who they talk to at the bank and when they called them. A good paper trail can help the bank stay on to of their records. Don’t be surprised if the people at the bank are frustrated and overwhelmed. Many banks were not prepared for the sheer number of people that would be calling and requesting modifications.

Be timely with all requests. Any requests for information should be completed the same day or the next day. Remember, the sooner the bank receives the information, the sooner the borrower can receive some kind of relief.

Be Open to All Options (Short Sales, Deferred Interest, Reduced Rate, etc.)

Most banks are willing to work with borrowers in good times, so it should be no surprise that they are willing to offer borrowers a variety of solutions to their problem. If the set back is temporary, they may consider changing the loan to interest-only for a period of three to six months. If it seems longer-term, the bank may suggest a short sale. Be open to all options. Even if a borrower has to sell their home at the bank’s request, they still maintain a good credit rating and have the opportunity to move to a place that they can afford.

Always be patient and kind. Remember, the borrower needs the bank much more than the bank needs the borrower. Additionally, banks are understaffed and that staff is definitely overworked. Be willing to explain the situation as many times as necessary and be timely with documentation. These strategies should help most troubled borrowers avoid foreclosure.

New Short Sale Program Can Benefit Investors: Federal Push for Foreclosure Alternative Means Buying Opportunities

Investors in property who have several years of experience and are committed to their real estate investment plans are always alert to opportunities to add to their portfolios. They do not hesitate to pursue alternative ways to acquire properties at good prices because they always remember the real estate adage that profit is made at the time of purchase – in other words, profit is ensured by paying the lowest price possible for a piece of real estate.

In the United States, enterprising investors are about to get a helping hand from the federal government, albeit indirectly. As its name suggests, the Home Affordable Foreclosure Alternatives program (HAFA) which took effect April 5, 2010, seeks to discourage foreclosures. The program provides incentives for lenders to accept deeds in lieu of foreclosure and also encourages more property owners who are in arrears in their mortgage payments and more lenders that hold those mortgages to participate in short sales.

How and Why HAFA Encourages Short Sales

In real estate, a short sale occurs when a mortgage debtor sells his or her property for less than is owed on the mortgage and the lender has consented to accept that amount. In a traditional short sale, the debtor must agree to pay part or all of the balance that remains due on the mortgage after the proceeds of the short sale have been applied to the debt.

As explained on the HAFA Web site, owners who engage in a short sale under HAFA and lenders that consent to it must accept the proceeds of the sale as payment in full of the underlying debt.

The federal government has estimated that the value of about 11.3 million U.S. homes is less than what is owed on their mortgages. The government also believes that more than 5 million households are in arrears on their mortgages and at risk for foreclosure. HAFA offers mortgage debtors who meet certain requirements the short sale as an alternative to walking away from their homes and handing over the keys to their lenders or going through the foreclosure process.

According to David Streitfeld in his New York Times article “Program Will Pay Homeowners to Sell at a Loss,” under HAFA, lenders will use real estate agents to determine how much a home is worth, that is, the minimum that a lender will accept. This figure will not be revealed to the homeowner-debtor, but if an offer is made for the property at or higher than the acceptable minimum, the lender is obligated to consent to the short sale.

Traditionally, lenders were cool to the idea of short sales and preferred to take possession of properties through the foreclosure process rather than accept less than the amount owed on a mortgage. But the burst of the housing bubble resulted in a glut of homes on the market, going unsold for months and even longer. This in turn has meant that lenders have much larger inventories of homes (real estate owned or REOs) on their books and for longer periods of time.

The HAFA guidelines specify that every homeowner-debtor who may qualify for the program must be considered for it before the delinquent loan is referred to foreclosure or the lender allows a pending foreclosure sale to proceed. HAFA also allows $1,000 from the sales proceeds to lenders for administrative and processing costs, and $1,500 to the seller as relocation assistance.