The market staged a healthy comeback today from the last several days of down side action, and I have to attribute most of the rebound to the reports and speculation that the Fed might put a halt on interest rate hikes, even as oil prices crept up yet again to hold above $71 per barrel.

It’s not looking good for my Chaparral Steel (CHAP) short position, and while I’m in shallow negative territory, the stock rallied today on news of a distribution deal with L.B. Foster (FSTR).

While the chart for CHAP doesn’t look too bad just yet, my gut tells me it will go up some more before it starts to come down any. Considering it closed out the day with a 4 hour run, it may not be attractive to cover first thing in the morning either, as the momentum going into today’s close may carry over to the open tomorrow.

I’m getting closer to finding my second investment property. Today I went through a house that’s in the same area as my first one, and it has a ton of potential.

The foundation looked structurally sound, and I didn’t see any signs of mold or wood rot. There is a lot of work to do in the house, but nothing that’s out of my reach. The carpet is in terrible shape, but pulling up a corner revealed some nice hardwood floors.

The property is currently owned by a corporation, and given the work that needs to be done; they’re still asking a bit much for a …

As I mentioned in a previous post, the book I’m currently reading, Freakonomics, talks a lot about how we are driven by incentive.

One discussion on incentive really struck home for me: What incentive does a real estate agent have to sell your house for top dollar?

A real estate agents job is to sell your house, hands down.  He has financial incentive to do so due to the fact that he doesn’t get paid unless he sells your house.  But what is his incentive to get the most out of your house?  You might be surprised.

A very basic and fundamental concept entered my mind over the Easter holiday about strategies behind real estate acquisitions:

You will have many opportunities to renegotiate a mortgage rate, but you get one chance to negotiate the sale price.

It’s such fundamental and logical concept, but it had never really occurred to me the significance of the statement.

You negotiate the price of the house once and only once, but you could refinance the house every year if you want, for better or worse, of course.

Therefore, when looking for rental acquisitions, you should be in favor of rising interest rates. Overall, the rising interest rates will reign in the appreciation rates in …

Last weekend I tagged along with my brother who is looking for a house to live in, and at the same time fix up.  The house we looked at is in a nice little neighborhood that’s being revitalized by the 30-something crowd.

The house had a nice layout, and you could tell the owners had started some rehab on it, but it has a ways to go.  The exterior of the house was painted a faint pink color, and the interior was equally as repulsive with trim in nearly every different shade of pastel you can imagine.  The paint is old and deteriorating, and needs a new coat anyway, but it was obviously not painted with resale value in mind.

Overall, I didn’t see anything structurally wrong with the house, and the plumbing and electric looked to be updated within the last decade or so.  The roof was in decent condition, and did not appear to be in need of major work.

Yesterday I started investigating different financing opportunities for both my oil company and my real estate ventures. Effectively, I want to buy another rental property, but I want to look at some more financing opportunities that might cover the rehab costs as well, without using hard money.

My online research led me to iBank.com which is an online financing outfit out of California. They seem to specialize in business loans, commercial property loans, equipment leasing packages, etc.

From what I can tell, you put together your business plan, including past tax returns and other due diligence on your proposed acquisition and then upload it to their Finance$uite. You then put out a request for financing, and qualified lenders develop proposals to meet your needs. They submit their proposals and you then make a decision on which lender best meets your needs. A fairly novel idea, if I may say.

I am currently reading Freakonomics by Steven Levitt and Stephen Dubner.  About 40 pages into the book, I’m hooked.  In those first 40 pages they discuss the incentive behind nearly everything we do, and how we are driven by different types of incentive.

For instance, they talk about the effect of implementing a $3 fine to anyone who shows up late to pick their kids up from daycare.  Before the fine was implemented, the daycare had about 5 parents per week who arrived late to pick up their kids.  Naturally, the daycare has to have someone work late to watch the kids until they are picked up, costing the daycare in overtime.

However, after they implemented the fine, the number of late pickups actually increased.  The theory behind the reaction to the fine was that now there was only a monetary value(monetary incentive) to being late to pick up your kids, rather than just a moral incentive.

About a week ago I wrote about how I finally paid off my initial business loan for the oil company.  Well, after talking to the banker and the loan officer, I got them to convert the loan into a line of credit, using the assets I bought with the loan as collateral.

That way, when I find another interest to buy I don’t have to go through the loan process and pay mortgage filing fees all over again.  Additionally, it’s nice to know that I have quick access to capital whenever I need it.

There are some oil and gas auctions coming up in my area in …

I woke up today to find my internet connection was on the fritz.  Ironic, isn’t it, just after Comcast raised their rates?  For many, this isn’t such a big deal, just jump on the net later.

With that in mind, there is only one thing worse for an active stock trader (with short positions on the verge of taking a beating, might I add) than watching your portfolio take a hit:  Not having any idea what your portfolio is doing, especially when the market could be poised to reverse on you.

After telling myself that it’s only money, I decided to catch up on my magazine reading.  Only after thumbing through three different magazines over the course of 5 hours did the Net suddenly reappear.  Frantically, I logged into my account only to find the market subdued on even lighter volume than yesterday and my portfolio relatively flat.

…that is the question.

I talked to a real estate attorney this morning about whether or not I should form a separate business entity to cover my liability for my rental property.  It would cost me a little bit, but it would protect my personal assets if my tenants feel the need to file suit against me.

He said that a lot of people question the value of incorporating for a single property, but as you add properties, your risk of liability goes up so it’s a better idea.

After doing a little digging on the REI blogs this morning, I found a post from Bryan at …