1. Insurance Companies

2. Utility Companies

3. Credit Card Companies

4. Mortgage Companies

5. Car Finance Banks

6. Employers

7. Even Hospitals are now determining your Credit Risk.

Folks this is serious business, just imagine if you are applying for that new job that pays more, and they determine whether they are going to hire you based on your Credit Score. The main point is, yes you can get a Free Report with Annual but it’s once a year and no Scores are included. A Report with no Scores is useless, especially when that is what creditors look at. Let’s just assume you are getting ready to buy a car, and you are a customer that does not know there scores. Dealerships love customers like you because an uneducated consumer is a consumer they can rip off and make more money on. An educated consumer that knows there scores will show up ready to get the interest rate on the loan. This is what most lenders don’t want to deal with, because they make less money on consumers like this. Maybe you are wondering what is considered a good score.

Here is a break down:

o 780-850 – Low Risk

o 740-780 – Medium -Low Risk

o 690-740- Medium Risk

o 620-690- Medium High Risk

o 620 and Below – High Risk

There are all of these offers out there selling Free Credit Score Reports with all these up sales. For example:

1. Credit Monitoring

2. Savings Club memberships etc

When it comes down to being an educated consumer and that is all that is available out there to get your scores, there is not much choice. I would not hesitate to get these services, because everyday thousands of people get there identity stolen. I would recommend being an educated consumer so you are aware of what is being reported about you. Start saving today and protect yourself and your family.

First I would like to state that the process of debt negotiation as your means of consumer debt relief is not for everyone, some people are better suited for bankruptcy and others do not have the correct mindset to go through this process.

I would like you to first understand what debt negotiation is and how it works. The goal of a debt negotiator is to obtain a debt settlement for you on the current debt amount you owe your creditor. So for example you may owe one particular creditor $10,000 so the goal of the negotiator would be to have you end up paying back say $6,000. The two main benefits of going through this process are to save money on what you currently owe your creditors and to save time. By just paying the minimum payment with even a modest interest rate you will be looking at 30 or more years to become debt free, with a sound debt negotiation program you will be out of debt within 2-3 years or sooner depending on your current financial situation.

Now you must understand these are great benefits but as with anything in life there are drawbacks, nothing is perfect and this consumer debt relief procedure is no different. For starters your creditors will not be willing to negotiate a debt settlement at all if you are current with your monthly minimum payments. They would prefer you to stay on their credit treadmill for the next thirty years and pay them back over four times the balance in interest alone. So you must fall behind on your payments to put the creditors into a position where they will be willing to settle. Once you stop paying them the ball game changes completely and they will then be willing to talk in terms of negotiating a settlement.

So obviously for some people the beginning of this process will have a negative effect on their credit score. For those who are already falling behind then the negative effect will be no different than it already is. Unfortunately for some people this will be the deterring factor that keeps them from going into debt settlement making them a slave to their creditors for the next thirty years. The good news is that this negative effect does not last forever, in fact once the settlements start coming through your credit score will begin to rebound and go back up. The reason being over 30% of your credit score according to MyFICO is based on how much debt you owe. But if you are stuck in a bad debt situation even if you are current with your payments your score is probably not all that good in the first place, and besides when stuck deep in debt your focus should be on how to get out of debt as quickly as possible, not on your ability to accrue future debt.

Now by falling behind on your debts you must understand that these creditors are just not going to roll over and play dead, they will be calling to try and collect the debt. For some this is not a problem at all, for others it is, that is why I stated above this process is not for everyone and the consumer must be in the correct mind set. From my years of helping people there is no rhyme or reason to how many calls you will receive some clients of mine barely get calls while others get them almost everyday. Something to keep in mind too is that no company has the power to legally stop the calls, so any company that tells you they can is flat out lying.

As you can see like I said earlier there are pro’s and con’s, but if you can accept the con’s you will be quickly on the road to financial freedom and will save a lot of money in the process. Now to get to the meat of the matter and why I named this article “consumer credit card debt relief scams”.

We here in America over the past couple of years have been experiencing a very negative downturn in our economy. Thus putting many consumers in a compromising position financially, leaving boat loads of people stuck in credit card debt. So naturally this opened up a much larger market for debt negotiation. Many fly by night companies have been popping up all over the country, many of which are ex mortgage brokers who sold people bad loans and helped them get into this sticky position in the first place. Now I use the word scam which can take on a few meanings, while yes there are some companies out there that are flat out scams and have no intent on doing any work for you at all, most of the times that is not the case. Instead many companies simply do not give people all the facts on how debt negotiation works nor do they truly put them on a plan for success, which I will explain in a minute.

One common issue that most consumers have with debt settlement companies is they do not fully tell them about how the process works, instead they sugar coat things and just preach about the great benefits. I have spoken to countless amounts of people who have signed up with companies and were under the impression that they were going to stay current with their creditors and will never receive any calls. So needless to say this became a huge problem once they began.

Another major problem a lot of these companies have is deceiving people into the kind of savings they will be getting on their debts. Some companies will say they will save you 70% of what you owe. Now while they may get settlements that low what their opting not to tell you is how much you will be saving after you have A) paid them their fees, and B) paid back the creditors. Honest companies will tell you what your true savings will be. If you will save somewhere between 40-50% of what you owe including their fees and paying the creditors than that is pretty darn good. Plus many of these companies will try and guarantee a certain amount of savings, if you hear this run for the hills. NO one in this industry can guarantee a certain amount that is why it is called DEBT NEGOTIATION! They are negotiating to get a settlement for as low as they can get.

Then there are the companies who will let you pay whatever you can to get on their program. These are the worst because they do not truly have your interest at heart and know they are setting you up to fail and not succeed. You must understand to achieve the type of savings I stated above this process should take no more than three years, preferably two or less. And the bottom line is some people simply cannot get it done in that time frame and should realistically be looking into bankruptcy. What these unscrupulous consumer debt relief companies will do is put you on a program for 4 or more years and basically accepts whatever payment you can afford. Knowing full well you are not going to be saving much of anything and will more than likely fail off the program, all they care about is getting the fees and that is it. An honest company will diligently review your budget with you and make sure this is something that you can manage, as well as fully explain to you both the benefits and drawbacks of doing this. And let you make the conscience decision as to whether this is the best consumer debt relief method for your situation.

Another very good way to evaluate a company is to make sure they are registered with the BBB (Better Business Bureau) and that they are in good standings with very few complaints. And if there are complaints make sure they were resolved to the clients liking.

If you are an investor who foresees your interest rate increasing, or who is behind on your mortgage payments, you are not alone. While you may be temped to, the worst thing you can do is to hide from the banks. Banks will likely work with you if explain your situation to them. They might modify your loan, defer your payments, or offer other forms of assistance so you can make good on your commitment without losing the investment.

This article will help real estate investors gain an understanding of the step-by-step loan modification process, and teach them how to reach a successful result.

What Type of Loan Should Be Modified?

If your loan’s interest rate is adjusting, every month, every 6 months, or every year or if your interest rate is above 5%, you should consider negotiating with your bank to modify the loan. It’s not uncommon to see banks lower the interest rate to the 2% to 3% range for as short as three years, or as long as the remainder of the loan.

Some types of loans that have low introductory interest rates, but that have hidden costs may also need to be modified. These mortgages may have been easy for you to obtain and afford initially, but will not be affordable later on.

One example is a balloon loan, whose full principle is due 3-5 years from the loan initiation rather than the 30 years term of convention loan. No one can pay the full principle unless you try to sell the property before the due date. If your loan is upside down, the only option is to short sell or to foreclose. The former requires bank to approve; the latter will hurt your credit score. You will want to start negotiating with the bank early on, at least 1 year prior to the due date to allow sufficient time to solve the issue to your own interest.

Some other loans may have conventional 30 years term; however they are embedded with a provision called a prepayment penalty, which you may not even know about it. A fair-minded loan agent should never sell you a loan with a pre-payment penalty unless they disclose it in advance. You will usually pay a steep fee if you want to refinance or sell your property unless you fulfill the entire 30 years term. If these terms are present, they should be completely removed during loan modification.

Investors vs. Homeowners

This article is focusing on providing information for real estate investors. We will not cover homeowner-specific topics such as Making Home Affordable, the federal program announced in early 2009. A lot of our focus will be on the differences the investors will face when negotiating with the banks whose loan modification largely concentrates on federal programs and helps homeowners rather than investors.

It’s unfortunate that there is a lot of more help from the federal and state governments for homeowners but very little for investors. This article provides detailed and specific information for investors to get a head start on their loan modifications.

Should I hire a firm?

You will see a bunch of firms that claim to be able to help you with the loan modification, saying that having an attorney on your side will boost your chance of success. The truth is that the attorney at these firms does not work on your case directly. Instead he or she hires a bunch of assistants who take your financial data, fill out forms, and call the banks on behalf of you. These attorney in these firms is a means for them to charge retainers up-front before you even know their quality of work. The assistants will not know your situation better than yourself, so they generally aren’t worth the cost.

Think about how many client files these assistants handle a day coupled with the frustration of having to deal with banks’ overworked negotiators, who go through thousands of files and voice messages daily. You can imagine the hoops you have to jump through in order to get a status update from the chain of people handling your file. Most of the investors we talk to ended up tossing the firms they hired (after wasting money on the up-front lawyer retainer) and started over the process on their own. Most have more success this way.

This does not mean you will have no hurdles in trying to get hold of your bank negotiator or getting the correct financial data through to the banks, but you will have one fewer layer between you and the bank.

Remember that loan modification is not the only option you have when it comes to handling your real estate. “After Crash, What to Do with My Rentals Now?” helps you to decide if loan modification best suits your financial, tax, and life situation.

The process to get one of the good mortgage refinance companies is illustrated below. Research would be the first step. Of the companies that are in your area, find out which of them have had the least number of disagreements with their clients.

A company that has had very few disagreements is a company that one can trust. It means that they are serious about their business and they give their clients satisfaction. You can also check their duration in the business. Due to the high level of cons that have been happening all over, it would be prudent to choose a company that has been in business for several years at least.

This will give you security when you are dealing with them. It also means that they have been in the business long enough to able to know the pros and cons of the business. The mortgage refinance companies that have been in the business for long have a higher chance of having the best interest rates in the market.

Alternatively you can inquire from close relatives and friends on which mortgage refinance companies they have used. Having had first hand experience with a company, a relative or a friend can be able to direct you on the do’s and don’ts of mortgage refinancing.

They can be able to tell you of their experience with certain companies this can help you in saving time that one would use to physically find out for themselves the history of a certain company. They may also warn you on companies that they have had a bad experience with. Another method that one can find a mortgage company is through the internet.

There are very many online mortgage companies that can be found on the internet. From these sites you will be able to find which companies will work best for you. You can contact them and inquire with a few questions before you make up your mind. Online refinance companies are easier to research as they are on the internet and in a few hours you will have gotten one that suits you.

It can be really difficult to get approval for personal loans if you have a bad credit history. Lenders are reluctant to lend to bad credit applicants because of the high risk of default. Those that do offer a bed credit lending facility will be compensated via high charges and interest rates, making it even harder for you to manage the required repayments.

If you’ve you recently applied for a personal loan but had it declined because of your poor credit history, we recommend the following website which specialises in finding lenders for people with really bad credit history. The site Youdeservecredit.org specialises in providing you with introductions to reputable bad credit lenders who offer guaranteed personal loan approval.

The site has an exclusive database of lenders for people with really bad credit. These lenders understand the difficulties a bad credit rating can cause and specialise in providing guaranteed personal loan approval. Youdeservecredit.org has years of experience in the credit industry, and only deal with established reputable lenders with a proven track record.

As well as supplying you with a list of potential lenders, the site will also arm you with lots of credit industry insider knowledge that will allow you to improve your credit score before you apply, and thus improve the loan terms you get offered further. The savings you can achieve by following their tips can be considerable over the term of your loan.

You can find out a lot more about the service offered by the Youdeservecredit.org web site by visiting our Lenders For People With Really Bad Credit web page, if you do have bad credit, and you’re struggling to secure a loan, our resources are well worth a visit. We’ve lots of information on all types of loans and finance, together with tips and advice as to how to improve your financial circumstances quickly, so take a look at NeedMoneyQuickly.com today.

In order to buy a house, people should have a good enough credit score to qualify for a low rate mortgage. In this case, a credit score will play a vital role in having the best possible solution for every person in their effort to have a mortgage and a home of their dreams. They should know that FICO credit scores range from 300 up to 850. People with credit scores of 850 are the ones who are ultimately eligible in applying for a mortgage with no problems at all.

Having this score can really guarantee the best offers in applying for mortgages. Moreover, people can have the advantage in having an ideal credit score of 720 and above because they can have the edge compared to people with an average and low credit scores.

However, for those people who belong to the average group, they should find ways in increasing their FICO scores in order to help them get the best offers for mortgages. Nevertheless, they must know that the minimum FICO credit score requirement for them to obtain mortgage loan. A credit score of 580 is the baseline for a person to be entitled to get a mortgage, but they should know that they will go through a series of test in order to prove that they are eligible enough to apply for a mortgage.

Also, they should know that not all agencies are having the same guidelines when it comes to the basis of their minimum requirements. Lenders will always have the last decision whether they want people to have the loans or not.

On average, people having a credit score of 620 or more will encounter some difficulties along the way. It all depends on the rest of your application if a lender will proceed or just give you a denial letter. If you are having trouble with conventional mortgage loans, you could also see if you are eligible for a VA loan, or any FHA or HUD programs which might have lower lending requirements.

For people who want to apply for mortgage but do not have the sufficient credit score, experts believed that they should climb their way through the figures wherein they can apply for the mortgage they need in order to support their living. Upon doing this, people can also boost their chances of getting the best company that can help them in their attempt to look for the mortgage that will serve them the best.

If you find yourself on the short of the credit score scale, you can take 6 to 12 months to improve your score by paying all your bills on time and reducing your outstanding debts and applying again. These low rate mortgages will not rise dramatically over the next year as unemployment is still high and the economy is not as robust as it once was.

Unless you already have millions of dollars at your personal disposal to invest, or are fortunate enough to have come from a family of wealth, borrowing money is the only way to become a commercial real estate investor. It is a great way to purchase commercial property, even if you have your own millions already, because you don’t have to worry about losing your personal money. In fact, that is how many multi-millionaire commercial real estate investors make their money- by not using their own! If you don’t use it, then you never lose it.

One of the reasons you can borrow money to purchase property is because of something called leverage. You simply borrow money against the property, as it is the property that actually holds the value. This will play a major role in our discussion of purchasing property without using any of your own money.

The first way to purchase property with none of your own money is subordination. Many people consider this way of purchasing property as creative financing. In this situation, the current owner actually takes out a second mortgage on the property to cover the difference of what the purchaser (you, the investor) can get loaned from a bank or private lender. If you are lucky enough to have an owner who will sell the property with no money down, and he or she subordinates a second mortgage for the difference you owe, then you just purchased a property with none of your own money!

When using this tool, it is a good idea to have the owner only subordinate for a short amount of time, like one to two years, just until you can take the money generated from the commercial property and pay off the second mortgage, leaving the owner free of the property. At this point, payment for the property can take place because you will have generated cash through the commercial property. The owner will actually wait to get paid his money for the property! It happens all the time, and everyone comes out happy in the end. You purchase your money generating property with none of your own money, and the owner gets paid for the property. This situation may seem backwards at first, but it works rather well, if you find an owner who is very motivated to sell, and he or she understands this way of investing.

You must always be sure that the property can support the debt, as you do not want the owner getting into financial trouble with the second mortgage. Some owners are weary of this type of investing, as some purchasers do not do as they say, and problems occur. You want to be an investor of integrity and have a reputation of making things happen in the way in which you and the seller agreed.

Another way to purchase property with none of your own money is through the owner releasing some acreage that is free and clear which you, in turn, use to borrow enough money to cover a down payment on the entire piece. This strategy works especially well with raw land. You are basically using a piece of the property to purchase the entire property. Owners may not even be aware of this option, so be sure to mention it or address it in a letter of intent, especially when dealing with many acres of land!

A third way to purchase commercial property without using your own money is using partners. There are experienced investors, builders and developers who will find the financing for you, and basically get the deal ready to go, if you are willing to do the work. The agreements can greatly differ, but the partner(s) will basically finance the deal and take a piece of the return that you create through, either turning a distressed property around, or overseeing the development or building of a specific type of property and making it profitable. Partners can offer great experience and insight so that you can learn more about a specific type of property or the actual industry itself.

When it comes to commercial real estate, there are so many options; don’t ever limit yourself! Be creative and find resources. There is a wealth of information and money available to anyone who is willing to take some time and make some contacts. This industry is not one of limitations, but one of abundance.

Some forms of scientific inventions have changed our lives entirely. For example the refrigerator has played a major role in maintaining public health ever since its invention. The first automobile, dating from the 1880s, made use of many advances in physics, mathematics and engineering; the first electronic computers emerged in the 1940s from simultaneous advances in electronics, physics and mathematics. Today we have extra high- speed super computers with 100 % accuracy.

Science has enormous influence on our lives. It provides the basis of much of modern technology – the tools, materials, techniques, and sources of power that make our lives and work easier. The discoveries of scientists also help to shape our views about ourselves and our place in the universe.

Research in food technology has created new ways of preserving and flavoring what we eat. Research in industrial chemistry has created a vast range of plastics and other synthetic materials, which have thousands of uses in the home and in industry. Synthetic materials are easily formed into complex shapes and can be used to make machines, electrical, and automotive parts, scientific, technical and industrial instruments, decorative objects, containers, packing materials and many other items.

1: The use of science in daily life has helped us a good deal in solving problems, dealing with the maintenance of health, production and preservation of food, construction of houses and providing communication and trans-portational (related to transport) facilities. With the help of Science we have controlled epidemics and much other kind of diseases. Now we know the basic structure of DNA and Genetic Engineering is conducting research to find out the right and correct Gene Therapy to overcome all the diseases.

2: Science has changed the people and their living, life style, food habits, sleeping arrangements, earning methods, the way of communication between people and recreational activities. All kinds of music systems, computer games, electronic video games, DVDs, cinema entertainment and communication have been brought to our door with the help of Science. The life of man was very different from what it used to be 100 years back. Science has given ears to the deaf, eyes to the blind and limbs to the crippled. Science has adequately, energetically and productively advanced, changed, civilized, enhanced and progressed human life. Science has brought sophistication to human life.

In short science has changed, improved, enhanced, modified and refined human life in all ways.

3: Today with the help of Science we can explain what was strange and mysterious for the people of the past. The Science of Genetics opening new doors of understanding the human gene and cell.

4: Now human beings have become more critical and less fearful than our fore-fathers and ancestors.

5: Two hundred years ago death rate among children was very high. In those days seven out of eight babies died before their first birthday. Now with the help of vaccines, medications and proper health care system life expectancy has improved. Now people live longer and safe lives as compared to 200 years ago. Biochemical research is responsible for the antibiotics and vaccinations that protect us from infectious diseases, and for a wide range of other drugs used to defeat specific health problems. As a result, the majority of people on the planet now live longer and healthier lives than ever before.

6: After that and up to the age of 12 one used to fall in a prey to diseases like small pox, measles, whooping- cough, scarlet fever and diphtheria. Now Science has defeated these diseases.

7: At a later stage again one was under constant threat of yellow fever, malaria, typhus, cholera, typhoid and influenza. Today we have vaccines and medical aid to cope with these health problems. Further research is underway to find out the causes and treatment of these and other diseases.

8: From one person the disease used to spread among the other people. It is called Epidemics. Now with the help of Vaccines and Medications we have defeated these diseases. But still Science has to do more research and has to fight with other arenas of diseases.

9: Life was uncertain. It was rare to see to somebody thirty years old because due to diseases many people died earlier than the age of thirty. These conditions were prevailing just a short while ago.

10: In everyday life, we have to communicate with different friends and relatives, various official people and for general purposes. And many people to be contacted can be at very far off distances. However, time and distance both have been conquered by Science. Whether we want to communicate or travel, both are possible quickly, briskly and expeditiously.

11: These days there are very little chances of babies catching diseases, because births normally take place in hospitals under the supervision of a team of specialist doctors. Science has invented vaccines for young babies to protect them against future life illnesses.

12: Young people are also given medical treatment in time and these days the man lives for about seventy years.

13: Science and scientific methods have helped in finding out the cause of disease and its prevention.

14: Sanitary condition in the past was deplorable. Now we have better sanitary systems.

15: The city streets were unpaved; there was no proper drainage system. Garbage and other refuse was seen everywhere. Pigs were seen wandering through the streets. People got water from filthy wells. Now filtered mineral water is available to overcome diseases. Solid waste management is not a problem now a days, it is the duty of the city municipal committees to manage and dump it with the latest machinery and equipments

16: Now all these defects have gone. There is cleanliness everywhere. It is illegal to throw garbage into the streets. There is a proper drainage system and new and improved methods for solid waste management as it has been told earlier. There are separate departments that bother about sanitary condition of the towns.

17: A century ago for house hold purposes water was carried from wells outside in buckets. It sometimes proved injurious to human health. Moreover, it was insufficient for the daily needs. But now water filters have become a thing of common usage.

18: Now there is sufficient supply of water in cities. For example Los Angeles gets water through pipes from Colorado River, which is 340 miles away. This water is supplied to Los Angeles after the proper water filtration process.

19: With the help of science there is change in our food also. We get varieties of food. In the past, food could not be preserved. But now the quick freezing methods have made possible preservation possible. Due to modern technologies like dehydration and sterilization there is no chance of food poisoning. We get all kinds of fruits, meats and vegetables. Even those fruits and vegetables which are out of season.

20: Not only our eating habits are changed, but also there are improvements in our houses. Means of transport has also undergone a big improvement and change.

21: Science has also changed our attitudes. Superstitions have been discarded, because there is no scientific basis for them. Now people do not fear cloud thunders.

22: Now people no more believe that diseases are caused by evil spirits.

23: Astrology and fortune- telling have lost popularity as compared to 100 years ago. Nobody now fears black cats, broken mirrors and the number 13. Because science has proved that these kinds of fears are un-scientific and illogical.

24: Science has changed the longstanding false notions of the people, which are not supported by Scientific Facts.

25: Research in the field of science and technology has made people open-minded and cosmopolitan, because the Scientist does not like to travel on the beaten track and he always tries to find out new things, new explorations, new discoveries and new inventions.

26: Science has also brought medical equipments that help to save human life. The kidney dialysis machine facilitates many people to survive kidney diseases that would once have proved fatal, and artificial valves allow sufferers of coronary heart disease to return to active living. Since the 1980s, lasers have been used in the treatment of painful kidney stones. Lasers are used when kidney stones fail to pass through the body after several days, it provides a quick and low-pain way to break up the stone and allow the stones to be easily passed through the body. This technique is called Lithotripsy.

27: Arthroscopic surgery is a technique using fiber optics to probe complex joints such as knee, shoulder, ankle and wrist to evaluate injury. It is a minimally invasive operation to repair a damaged joint; the surgeon examines the joint with an “arthroscopy” while making repairs through a small incision.

28: 200 years ago nobody even knows that human body parts can be replaced or transplanted. Now kidney transplant is widely used to save human lives around the globe. Dr. Christian Bernard first of all invented the method of heart transplant. Eye transplant techniques are used in these days to see again this beautiful world, for those who have lost their eyes. These all are the blessings of Science.

29: Ultra-high-frequency (UHF) waves are allocated for variety of uses, including television, cellular phones, public safety radios, business radios, military aircraft communications, military radar, cordless phones, baby monitors, etc. So, whether someone is watching over-the-air TV, talking on cell phone, having police/fire/ambulance dispatched to an emergency they are experiencing, or having national airspace protected by military aircraft, they all are benefitting from the science that has allowed the use of UHF waves. Even it is used to treat some illnesses.

30: For communication, now we have fixed wire telephones, moveable wireless phone sets, cordless phones, mobile phones, wireless, video conferencing, Internet, Broad Band Internet, E-mail, Social Networks, Satellite Communication and many other ways to communicate. These all are blessings of Science. Today we are better aware of what is happening around the globe due to satellite television channels. The benign and benefits of science for human life are endless.

Your home’s appraisal is a written estimate of the market value of your property. Mortgage lenders use the appraisal to determine how much of a mortgage you qualify for. When you are refinancing your mortgage, the appraisal will also determine how much equity you own in your home. If you will be borrowing against this equity, the lender will most likely require that you pay for a new appraisal prior to approving your loan.

The appraiser is a licensed professional that will do a market analysis of sale prices for similar properties in your neighborhood and evaluate the condition and amenities of your home. The appraisal will require a thorough inspection of your home inside and out.

When you are refinancing your mortgage your goal is for the appraised value to be as high as possible. There are a number of improvements you can make to your home that will improve the appraised value of your home; however, don’t go overboard. New carpet and a coat of paint will go a long way to improve the appraised value. What you don’t want to do is purchase top of the line appliances; these purchases rarely give you enough of a boost in your home’s value to justify the expense. The best thing to do is make sure your home is up to snuff with your neighbors as far as the amenities and add-ons you invest in to improve your home’s value.

When searching for a home appraiser, look for an experienced professional licensed in your area. Your realtor may be able to recommend a good one; if you are not able to find a recommendation try contacting the Appraisal Subcommittee. The ASC maintains a database you can access on their website to help you locate a licensed appraiser in your area. You can learn more about your mortgage and the appraisal of your home by registering for a free mortgage guidebook.

There are 3 major drugstore chains in the US: Walgreens, CVS, and Rite Aid. Below are some key statistics about the 3 major drugstore chains as of July 2010:

Walgreens
ranks #1 with market cap of $29.33 Billion, $66.25 Billion in revenue, and S&P rating of A+. According to Walgreens, 75% US population lives within 3 miles from its stores. On Oct 1, 2009, Walgreens opened its 7000-th store in Brooklyn, New York. In April 2010, it acquired 258 Duane Reade drug stores in New York Metropolitan area.
CVS
ranks #2 with market cap of $42.09 Billion, $99.1 Billion in revenue (CVS revenue alone is less than Walgreens if revenue from its Caremark group is taken out), and S&P rating of BBB+. CVS opened its 7000-th store in Little Canada, Minnesota on October 5, 2009 and currently operates 7025 drug stores..
Rite Aid
ranks #3 with market cap of $869 Million, $25.53 Billion in revenue, 4780 drug stores and S&P rating of B-.

Investors purchase properties occupied by these drugstore chains for the following reasons:

The drugstore business is very recession-insensitive. People need medicine when they are sick, regardless of the state of the economy. Both rich and poor people in the US have access to medicine. Some even argue that low-income people use more medicine due to free or low-cost drugs offered by government-assisted programs. So the tenants should do well during tough time and have money to pay rent to landlords.
The drugstore business has a good prospect in the US:

People are living longer and need more medicine to sustain longevity, e.g. Actonel for osteoporosis, Aricept for Alzheimer’s symptoms. Older people tend to use more medicine than younger ones as they often have more medical problems. As the 78 million baby boomers are getting closer to retiring age starting from 2008, the drugstore chains anticipate the demand for medicine to increase in next 20 years.
The drug market continues to expand as the US population will continue to grow. More and more Americans suffer from various diseases. The number of Americans suffers from seasonal allergies doubled in the last 15 years to 37 million people per Fortune magazine. They spent $5.4 Billion in 2009 for allergy drugs. As their waist lines balloon (75% of Americans are forecasted to be either overweight or obese by 2020), more Americans are diagnosed with diabetes, high cholesterol at younger and younger ages. In addition, doctors also recommend treating various diseases sooner than later due to better understanding about the diseases. For example, doctors now prescribe antiretroviral drugs for patients soon after infected with HIV virus instead of waiting for the infection to become AIDS. More doctors combine insulin with oral medicines to treat type-2 Diabetes instead of just oral medicines alone. All these factors increase the size of the drug market.
Advance in genetic engineering has introduced various new genetic DNA testing kits which allow the genetic diagnosis of vulnerabilities to inherited diseases and disorders. Genetic testing is currently the highest growth segment in the diagnostics industry. Some of these genetic tests will probably transform into direct-to-consumer testing kits available in drug stores in the near future. Upon FDA approval, these new products will potentially bring in additional revenue for drug stores.
The passage of Health Care Reform Bill on March 23, 2010 provides insurance coverage to an estimated 33 million more American. This is a major present to the drugstore industry.
There are new drugs to treat previously untreatable illnesses, and new diseases, e.g. Viagra for men’s unhappiness, Zoloft for depression, Avastin for colon cancer, Herceptin for breast cancer, Nicotine patches for smokers to kick the habit, Tamiflu for a potential bird flu pandemic, vaccine for swine (H1N1) flu pandemic, Tekturna/Rasilez for hypertension and various new drugs for AIDS and Attention Deficit Disorder (ADD). The new medicines are very expensive, e.g. a year’s supply of Avastin costs about $55,000. Eli Lilly has sold about $4.8 billion of Zyprexa in 2007 for schizophrenia and yet most people have never heard of this medicine.
There are existing drugs now approved to treat new illnesses and thus increase their sales revenue. For example, Lyrica was originally intended to treat pain caused by nerve damage in people with diabetes. It is now approved by FDA to treat Fibromyalgia which affects 5.8 million Americans per WebMD.
Big advances in genetics, biology and stem cells research are expected to produce a new class of drugs to treat diabetes, Parkinson’s and various rare genetic disorders. For example the new drug Ilaris from Novartis targets genetic causes of an inherited disorder that there are only 7000 known cases worldwide. However, Novartis hopes to gradually broaden its drugs to a blockbuster drug to more common disorders caused by similar genetics.
Technology and modern life introduce and require new products, e.g. pregnancy test kits, Lamisil for stronger clearer toe nails, Latisse for longer & thicker eyelashes, Premarin for menopausal symptoms, diabetic monitors, electronic toothbrushes, contact lenses, lenses cleaners, diet pills, vitamins, birth-control pills, IUDs, nutrition supplements and Cholesterol-lowering pills (Americans spent nearly $26B in 2006 on Cholesterol medications alone per IMS Health, a Connecticut-based consulting company that monitors pharmaceutical sales.) There are also more surgeries: C-sections, Kidney transplants, open-heart triple by-pass, and breast augmentations. More surgeries mean more medicines are needed such as Vicodin for pain management and Warfarin to prevent blood clots in surgeries.
Before the customers can get to the medicine aisles or pharmacy counters, they have to pass by chocolates, sodas, digital cameras, watches, toys, dolls, beers and wines, cosmetics, video games, flowers, fragrances, and greeting cards. Drug stores hope you use the one-hour photos services and exchange your liquid propane tanks there. The stores also carry seasonal items, e.g. Halloween costumes, and “As Seen on TV” merchandise, e.g. Shamwow. As a result, customers buy more than their prescriptions and medicine in these drugstores. Rite Aid sells more 28,000 non-pharmacy items in its stores while Walgreens has 22,000 different items on store shelves. CVS reported that non-pharmacy sales represented 30% of the company’s total sales in January of 2007. The figure for Walgreens is 34% and 37% for Rite Aid. Many pharmacy locations are in effect convenience stores especially ones that are in residential or rural areas. And so Walgreens hopes that customers also pick up WD-44, and screw drivers at its stores instead of at Home Depot; Thai Jasmine rice, and fish sauce to avoid a trip to Safeway or Kroger Supermarkets. During the recession, sales of these non-drug items are down as customers buy what they need and not what they want. Walgreens tries to reduce the number of items by 4000. It also introduces its own private label which has higher profit margins.
There are more and more generic medications on the market as a number of enormously popular brand-name blockbusters will lose their 20-year long patents, e.g. Lipitor (best selling drug in the world to lower cholesterol) in 2010, Viagra (you know what it’s for) in 2012. Drugstores prefer to sell generic drugs to customers due to higher profit margins than the brand-name medications.
Some people are addicted to pain killers, e.g. Hydrocodone and consume a large amount of medicine, e.g. 30-day dosage in a day to get high. According to testimony from the National Institute on Drug Abuse, US retail pharmacies dispensed nearly 180 million prescriptions in 2007 for opiates, e.g. Hydrocodone. A high percentage of these prescriptions are probably not used for any legitimate medical purposes.
This author estimates that at least 10% of the dispensed prescription drugs are not used at all and sit idle in the medicine cabinets. They are eventually expired and thrown away.

These companies sign very long-term, NNN leases, guaranteed by their corporate assets. This makes the investment in the underlying property fairly low risk, especially for Walgreens with an A+ S&P rating. In fact, these properties are sometimes referred to as investment-grade properties. Once the drugstore chains sign the lease, they pay the rent promptly and timely. This author is not aware of any properties leased by one of these drugstore chains in which the tenants failed to pay rents. Even when the stores are closed due to weak sales (Walgreens closed 119 stores in 2007), these companies may sublease the properties to other companies and continue to pay rents on the master leases.

A typical Walgreens lease consists of 20-25 year primary term plus 8-10 five-year options. During primary term and options, there will be no rent increases in most of the leases. This is the main disadvantage of investing in Walgreens drugstores.
A typical CVS lease consists of 20-25 year primary term plus 4-5 five-year options. The rent is normally flat during the primary term and then there is a 2.5%-10% rent increase in the in each 5-year option.
A typical Rite Aid lease consists of 20-25 year primary term plus 4-8 five-year options. The lease often has a rent increase every 5-10 years.

Investment Risks: Although the pharmacy business in general is recession-insensitive, there are risks involved in your investment:

The main downside about investing in pharmacies is there is little or no rent bump for a long time, e.g. 20-50 years, especially for Walgreens. So the rent is effectively reduced after inflation is factored in. This is one of the main reasons these properties do not appeal to younger investors.
The 3 drugstore chains now have a new formidable competitor, Wal-mart. Wal-mart sells prescription drugs in more than 4000 Wal-mart, Sam’s Club and Neighborhood Market stores in 49 states. The retail giant is known for launching in 2006 a highly-publicized $4 generic prescription drug program which now sells 350 generic medications for a 30-day supply. The actual number of medications is less as the medications with different strengths are counted as different medications. For example, Metformin 500 mg, 850 mg, and 1000 mg are counted as 3 medications. Wal-mart probably makes very little profits on these medications if any. However, the marketing campaign–created by Bill Simon, the President and CEO of Wal-mart US, generates a lot of publicity for Wal-mart. Wal-mart hopes to draw customers to its stores with other prescriptions where it has higher profit margins. In an unscientific survey with just one brand-name prescription of Lyrica, this author finds the lowest price at Costco, the highest price at Walgreens and Wal-mart at the middle. Other drug chains try to counter Wal-mart in different ways. Target now offers the same 350 generic medications for $4 for a 30-day supply. Walgreens has a Prescription drugs club with membership fee which offers 1400 generic medications for as little as $1/week. CVS says it will match any offers from its competitors.
Chief Business Correspondent Rick Newman from US World & News Report predicted that Rite Aid might not survive in 2009. While Rite Aid is still around in 2010, dire predictions continue. The study by Audit Integrity gave Rite Aid about a 10.5 percent chance of filing for bankruptcy in 2010.
Drugs are also sold in thousands of supermarkets, Target stores, and Costco warehouses. However, there are no drive-through windows at these stores or Walmart to conveniently drop off the prescriptions and pick up medicines. Customers will not be able to pick up their prescriptions during lunch hour or after 7PM at Target stores or supermarkets. They need to have membership to buy medicines at Costco. Others may not fill their prescriptions at Walmart because they don’t want to mingle with typical Walmart customers who are in lower income brackets. And some babyboomers don’t want their prescriptions filled at Target or Walmart because there are no comfortable chairs for them to sit down to wait for their medicines.
Many leases in areas with hurricanes and tornados are NNN leases with the exception of roof and structure. So if the roof is damaged, you will have to pay for the expenses.
The tenant may move to a new location down the road or across the street when the lease expires. This risk is high when the property is located in small town where there is low barrier for entry, i.e. lots of vacant & developable land.
The tenant may ask for rent concession to improve its bottom line. The possibility is higher if the tenant is Rite Aid and if the store has low sales revenue and/or higher than market rent.
More Americans are walking away from their prescriptions, especially the most expensive brand-name medicines. This may have negative impact on the sales revenue and profits of drug stores and consequently may cause drug store closures. According to Wolters Kluwer Pharma Solution, a health-care data company, nearly 1 in 10 new prescriptions for brand-name drugs were abandoned by people with commercial health plans in 2010. This is up 88% compared to 4 years ago just before the recession began. This trend is driven in part by higher and higher co-pays for brand name drugs as employers are shifting more insurance costs to their employees.

Among 3 drugstore chains, Walgreens and CVS pharmacies in general have the best locations-at major intersections while Rite Aid has less than premium locations. Walgreens tends to hire only the top graduates from pharmacy schools while Rite Aid settles with bottom graduates to save costs. When possible all drugstore chains try to fill the prescriptions with generic medications which have higher profit margins

Walgreens: the company was founded in 1901 by Charles Walgreen, Sr. in Chicago. While the company has existed for more than 100 years, most stores are only 5-10 years old. This is the best managed company among the three drugstore chains and also among the most admired public companies in the US. The company has been run by executives with proven track records and hires the top graduates from universities. Due to its superior financial strength–S&P A+ rating– and premium irreplaceable locations, properties with leases from Walgreens get the highest price per square foot and/or the lowest cap rate among the 3 drugstore chains. In addition, Walgreens gets flat rent or very low rent increase for 20 to 60 years. The cap rate is often in the low 6% to 7.5% range in 2009. Investors who buy Walgreens tend to be more mature, i.e. closer to retirement age. They are looking for a safe investment where it’s more important to get the rent check than to get appreciation. They often compare the returns on their Walgreens investment with the lower returns from US treasury bonds or Certificate of Deposits from banks. Walgreens opened many new stores in 2008 and 2009 and thus you see many new Walgreens stores for sale. It will slow down this expansion in 2010 and focus on renovation of existing stores instead

CVS: CVS Corporation was founded in 1963 in Lowell, MA by Stanley Goldstein, Sidney Goldstein, and Ralph Hoagland. The name CVS stands for “Consumer Value Stores”. As of 2009, CVS has about 6300 stores in the US, mostly through acquisitions. In 2004, CVS bought 1,200 Eckerd Drugstores mostly in Texas and Florida. In 2006, CVS bought 700 Savon and Osco drugstores mostly in Southern California. And in 2008 CVS acquired 521 Longs Drugs stores in California, Hawaii, Nevada and Arizona for $2.9B dollars. The acquisition of Long Drugs appears to be a good one as it CVS does not have any stores in Northern CA and Arizona. Besides, the price also included real estate. It is also bought Caremark, the largest pharmaceutical services company and changed the corporation name to CVS Caremark. When CVS bought 1,200 Eckerd stores, it formed a single-entity LLC (Limited Liability Company) to own each Eckerd store. Each LLC signs the lease with the property owner. In the event of a default, the owner can only legally go after the assets of the LLC and not from any other CVS-owned assets. Although the owner loses the guaranty security from CVS corporate assets, this author is not aware of any incident where CVS closes a store and does not pay rent.

Rite-Aid: Rite Aid was founded by Alex Grass (he just passed away on Aug 27, 2009 at the age of 82) and opened its first store in 1962 as “Thrif D Discount Center” in Scranton, Pennsylvania. It officially incorporated as Rite Aid Corporation and went public in 1968. By the time Alex Grass stepped down as the company’s chairman and chief executive officer in 1995, Rite Aid was the nation’s largest drugstore chain in terms of total stores and No. 2 in terms of revenue. His son, Martin Grass, took over but was ousted in 1999 for overstatement of Rite Aid’s earnings in the late 1990s. Rite Aid is now the weakest financially among the 3 drugstore chains. In 2007, Rite-Aid acquired about 1,850 Brooks and Eckerd drugstores, mostly along the East coast to catch up with Walgreens and CVS. In the process, it added a huge long term debt (currently owes over $5.69 Billion) and is the most leveraged drugstore chain based on its market value. The integration of Brooks and Eckerd did not seem to go well. Revenue from some of these stores went down as much as 20% after they change the sign to Rite Aid. In 2009, Rite-Aid had over 4900 stores and over $26 Billion in revenues. The figures went down in 2010 to 4780 stores and $25.53 billion in revenue. On January 21, 2009 Moody’s Investor Services downgraded Rite Aid from “Caa1″ to “Caa2″, eight notches below investment grade. Both ratings are “junk” which indicate very high credit risk. Rite Aid contacted a number of its landlords in 2009 trying to get rent concession to improve the bottom line. In June 2009, Rite Aid successfully completed refinancing $1.9 Billion of its debts. However, it continues to struggle in 2010 as same store sales decreased 2.5% in June, 1.7% in May, 1% in April,.1% in March, 3.2% in February, and 2.1% in January..

Things to consider when invested in a pharmacy

If you are interested in investing in a property leased by drugstore chains, here are a few things you should consider:

If you want a low risk investment, go with Walgreens. In stable or growing areas, the degree of safety is the same whether the property is in California where you get a 6% cap or Texas where you may get a 7.5% cap. So, there is no significant advantage to invest in properties in California as the property value is based primarily on the cap rate. In 2010, the offered cap rate for Walgreens seems to come down from 7.5%-8.4% in 2009 to 6.5%-7.5% for new stores.
If you are willing to take more risk, then go with Rite-Aid. Some properties outside of California may offer up to 10% cap rate in 2010. However, among the 3 drug chains, Rite Aid has 10.5% chance of going under in 2010. Should it declare bankruptcy, Rite Aid has the option to pick and choose which locations to keep open and which locations to terminate the lease. To minimize the risk that the store is shuttered, choose a location with strong sales and low rent to revenue ratio.
Financing should be an important consideration. While the cap rate is lower for Walgreens than Rite Aid, you will be able to get the best rates and terms for Walgreens. A 7.25% cap Walgreens with 5.25% interest rate on the loan will generate more cash flow than a 10% cap Rite Aid with 9% interest rate (if you could find a lender for Rite Aid).
If you are not a conservative investor or risk taker, you may want to consider a CVS pharmacy. It has BBB+ S&P credit rating. Its cap rate is higher than Walgreens but lower than Rite Aid. Some leases may offer better rent bumps. On the other hand, some CVS leases, especially for properties in hurricane areas, e.g. Florida are not truly NNN leases where landlords are responsible for the roof and structure. So make sure you adjust the cap rate down accordingly. Some of the CVS locations have onsite Minuteclinic staffed by registered nurses. Since this clinic idea was introduced recently, it’s not clear having a clinic inside CVS is a plus or minus to the bottom line of the store.
All 3 drugstore chains have similar requirements. They all want highly visible, standalone, rectangular property around 10,000 – 14,500 SF on a 1.5 – 2 acre lot, preferably at a corner with about 75 – 80 parking spaces in a growing and high traffic location. They all require the property to have a drive-through. Hence, you should avoid purchasing an inline property, i.e. not standalone and property with no drive-through windows. There is a chance that these drugstores may not want to renew the lease unless the property is located in a densely-populated area with no vacant land nearby. In addition, if you acquire a property that does not meet the new requirements, for example a drive-through, you may have a problem getting financing as lenders are aware of these requirements.
If the pharmacy is opened 24 hours a day, it is in a better location. Drugstore chains do not open the store 24 hours day unless the location draws customers.
Many properties may have a percentage lease, i.e. the landlord can get additional rent when the store’s annual revenue exceeds a certain figure, e.g. $5M. However, the revenue used to compute percentage rent often excludes a page-long list of items, e.g. wine and sodas, tobacco products, items sold after 10 PM, drugs paid by governmental programs. The excluded sales revenue could account for as much as 70% of store’s gross revenue. As a result, this author has seen only 2 stores in which the landlord is able to collect additional percentage rent. The store with a percentage rent is required to report its monthly sales to the landlord. As an investors, you want to invest in a store with strong gross sales, e.g. over $500 per square foot a year. In addition, you also want to check the rent to revenue ratio. If the figure is in the 2-4% range, the store is likely to be very profitable so the chance the store is shut down is low.
It does not matter how good the tenants are, avoid investing in declining and/or low-income areas or small towns with less than 30,000 residents within 5 miles ring. In a small town, it may be the only drug store in town and captures most of the market share. However, if a competitor opens a new location in the area, revenue may be severely affected. These properties are easy to buy now and hard to sell later. In 2009 where the credit market is tight, you may have problems finding a lender to finance these properties.
Many properties have an existing loan that the buyer must assume. If you have a 1031 exchange, think twice about buying this property. You should clearly understand loan assumption requirements of the lenders before moving forward. Should you fail to assume the existing loan (assuming an existing loan is a lot more difficult than getting a new loan), you may run out of time for a 1031 exchange and may be liable to pay capital gain.
With few exceptions, drugstore chains do not own the stores they occupy for several reasons. Here are just a couple of them:

They know the pharmacy business but don’t know real estate. Stock investors also don’t want Walgreens to become a real estate investment company.
Owning the real estate will require them to carry lots of long term debts which is not a brilliant idea for a publicly-traded company.

About 10% of the drugstore properties for sale and typically CVS pharmacies require very small amount of equity to acquire, e.g. 10% of the purchase price. However, you are required to assume an existing fully-amortized loan with zero cash flow. That is, all of the rent paid by the tenant must be used to pay down the loan. The cap rate may be in the 7% range, and the interest rate on the loan could be attractive in the 5.5% to 6% range. Hence, the investor pays off the loan in 10 to 20 years. However, the investor has no positive cash flow. This requires you to come up with outside cash to pay income tax on the rental profits (the difference between the rent and mortgage interest). The longer you own the property, the more outside cash you will need to pay income taxes as the mortgage interest will get less and less toward the end. So who would buy this kind of property?

The investors who have substantial losses from other properties. By acquiring this zero cash flow property, they may offset the income from the drugstore tenant against the losses from other investment properties. For example, a property has $105,000 of rental profits a year, and the investor also has losses of $100,000 from other investment properties. As a result, the combined taxable profits are only $5,000.
The uninformed investors who fail to consider that they have to raise additional cash to pay income taxes.

Out of the Box Thinking If you put too much weigh on the S&P rating of the tenants, you may end up either taking a lot of risks or passing up good opportunities.

Good location should be the key in your decision on which drug store to invest in. It’s often said a lousy business should do well at a great location while the best tenant will fail at a lousy location. A Walgreens store that is closed down later on (yes, Walgreens closed 119 stores in 2007) is still a bad investment even though Walgreens continues paying rent on time. So you don’t want to blindly invest in a drug store simply because it hasa Walgreens sign on the building.
No company is crazy enough to close a profitable location. It does not take a rocket scientist to understand that a financially-weak company like Rite Aid will make every effort to keep a profitable location open. On the other hand, a financially-strong Walgreens will need justifications to keep an unprofitable location open. So how do you determine if a drug store location is profitable or not if the tenant is not required to disclose its profit & loss statement? The answer is you cannot. However, you can make an educated guess based on store’s annual gross revenue is often reported to the landlord as required by the percentage clause in the lease. With the gross revenue, you can determine the rent to income ratio. The lower the ratio, the more likely the store is profitable. For example, if the annual base rent is $250,000 while the store’s gross revenue is $5M then the rent to income ratio is 5%. As a rule of thumb, it’s hard to make a profit if this ratio is more than 8%. So if you see a Rite Aid with 3% rent to income ratio then you know it’s likely a very profitable location. In the event Rite Aid declares bankruptcy, it will keep this location open and continue paying rent. If you see a Rite Aid drug store with 3% rent to income ratio offering 11% cap, chances are it’s a low risk investment with good returns. The weakness of corporate guaranty from Rite Aid is probably not as critical and the risk of having Rite Aid as a tenant is not really that significant.
Drug stores with new 25 years leases tend to sell at lower cap, e.g. 7-7.5% cap on new stores versus 8.0-8.5% cap on established locations with 8-10 years remaining on the lease. This is because investors are afraid that the tenants may not renew the leases. Unfortunately, lenders also have the same fear! As a result many lenders will not finance drug stores with 2-3 years left on the leases. The fact that drugstores with new leases have a premium on the price means they have potential of 10% depreciation (buying new at 7.3% cap and selling at 8.3% cap when the leases have 10 year left). Some investors will not consider investing in drug stores with 5-10 years left on the lease. They might simply ignore the fact that the established stores may be at irreplaceable locations with very strong sales. Tenants simply have no other choices other than renewing the lease.