Would you like
to print a copy of this book to read offline? Click Here to download the printable PDF version |
 |
01. This Book
02. Syndicate Boom
03. Get Information
04. Syndicator
05. How much?
06. Depreciation
07. Depreciation Applied
08. Declining Balance
09. Straight Line
10. Paying Taxes
11. Pay Mortgage
12. Income Taxes
13. Paper Loss
14. Tax Shelter
15. Rent?
16. Syndicator Units
17. Wear + Tear
18. Lease-Hold
19. Building
20. Comparison
21. Specialized Properties
22. Growth
23. Leverage
24. Share Growth
25. Why + How
26. Syndicate Agreement
27. Net Lease
28. Long-term Lease
29. No Guarantee
30. Inflation Clauses
31. "Inflation Clause" Works
32. Inflation Clause?
33. Mortgage Due
34. Interest Rates
35. Short Term Mortgage
36. Good Mortgages
37. Refinancing
38. Refinancing Clauses
39. Share of Mortgage
40. Share of Profit
41. Purchase Options
42. How Purchase Options
43. Stunt the Growth
44. "Subordination"
45. Long Term Lease
46. Business Organizations
47. Syndicate Debts?
48. Management
49. Your Consent?
50. Sell Your Unit
51. Investment Trust?
52. Business Syndicate
53. Multiple Properties
54. Dream or Reality?
55. Syndicator's Background
56. Value of Guarantees
57. Look for Yourself
58. Conclusion
Resources
35. Combination of Short Term Mortgage and Low Interest Rate May Be Dangerous
The advantages of paying a low rate of interest are obvious. There is, however, one situation in which a low interest rate may be a danger signal for you. That is in a situation where the mortgage is due in the near future.
Suppose that interest on the mortgage is 4% and that a $1,000,000 balance on that mortgage is due now. Interest rates have gone up. When obtaining a new mortgage the syndicate will have to pay 6% interest. The yearly interest payments will amount to $60,000 instead of the $40,000, which were paid in the past. Where is that money to come from?
If you notice that a mortgage at a low interest rate is due in the near future, you must assume that a higher rate of interest will have to be paid when the time for renewal or refinancing comes along. Make sure that the projected distributions of the syndicate have been computed with a "cushion" sufficient to absorb the higher interest rates which are in prospect. Otherwise your distribution may decline sharply.
Are You Ready To Move Onto The Next Lesson? Click Here...