Nobody likes to be left out of the holiday fun, including all those holiday parties. Here’s some pointers that will allow you to be social and enjoy yourself without splitting your pants before the New Year:

1.) Train With High-Intensity Activity Before and/or After a Big Meal or Holiday Feast

I know, I know, tell it to the judge. I promised diet strategies, but I simply cannot go without recommending some activity. Your body is most receptive to higher carbs within 30 minutes before and within three hours following an intense workout. Ideally you would want to workout out before AND after a big meal, but if you can only do one, that will suffice. Don’t obsess over it – just pick one or the other and do it. Your best options will be 20 minutes of circuit resistance training or cardio interval training. Even a 20-30 plus minute walk a few hours afterwards can help a little bit.

2.) Do NOT save up your calories for your Holiday Feast

Eat as you normally would on a good nutrition plan – Every two to four hours, get in your protein and veggies. If you go into that huge meal in a fasted state, you are going to overeat, and because you are so hungry, your body will be craving all the high sugar and fat foods! You are just setting yourself up for a sugar crash and fat gain.

3.) Do NOT Gorge Yourself

Maintain your discipline, and eat until you are satisfied, not until you have to loosen your belt. Remember this: binge eating is not the habit of lean individuals. It is imperative to understand that that holiday meals are not a ticket to eat as much as you can in as little time as possible. Eat to live, don’t live to eat.

4.) Eat a High-Fiber, Protein-Rich Meal An Hour Before the Big Party

This is another great way to help you from stuffing your face with sugar cookies. Fiber and protein are a powerful combination in helping you be full and satisfied. A great strategy is to have a protein shake with some flaxseed. Nutritious, delicious, easy to prepare and it won’t go from your mouth to your hips.

5.) First Things First – Eat Your Vegetables

Just because it’s a holiday meal doesn’t mean you can’t eat any nutritious food. Head for the vegetable and meat tray and get something good in you. This will leave less room for the unhealthier, higher calorie treats.

6.) Water, Water, Everywhere

Water competes for space in your stomach and really does help keep you from overeating. For every plate of food you eat, drink a glass of water. After that second plate, when you have 1 full liter of water in your stomach, I bet you might just throw in the towel!

7.) Immediately Resume Your Normal Eating Schedule at the Next Meal

Ok, you had your fun, and what’s done is done. It’s time to get right back on the wagon, and back to normal, healthy eating habits. Don’t let one meal become one week become one month.

8.) Don’t Eat Junk Food at Breakfast or Bedtime

Eating a highly refined carbohydrate meal first thing in the morning will make your blood sugar levels go crazy for the rest of the day resulting in greater junk food cravings and uncontrollable hunger. On the other hand, eating a big meal before bed will result in a bunch of unused energy that will be stored as body fat and can cause trouble sleeping.

9.) Don’t Drink Your Calories

It is way too easy to get way too many calories in liquid form. One can easily consume over 1,000 calories per day from liquid calories alone. This means that in one week, you will gain 2 lbs of body fat from just fluids! Those holiday lattes ARE good, but the extra fat attached to your backside not so much! Also, sugar laden and alcoholic beverages tend to make you hungrier in general and often hungrier for junk food in particular. Furthermore, your body cannot burn fat until the alcohol is processed out of your body, as well as the fact that alcohol consumption actually lowers leptin levels. Decreased leptin levels increase hunger and decreases your body’s use of fat for fuel. Thus alcohol can prevent the fat burning process from resuming until several days later and/or even cause unwanted fat gain, setting you back anywhere from a few days to as long as a full week!

10.) Avoid Eating Meals that are High in Both Fat and Carbohydrates

The absolute worst thing that you can do is to eat a meal that is high in both fat and carbs. The high amount of carbs will lead to a rapid increase in blood sugar levels , which increases the potent fat-storing hormone Insulin. The high amount of fat will lead to a large increase in free fatty acids in your bloodstream. Since Insulin is already present in large amounts, in addition to there being a large amount of free fatty acids now available in your blood, the stage is set for all those free fatty acids to be gobbled up and stored by your fat cells. Good for a Sumo wrestler, bad for you. Following the strategies outlined above will keep this eating pattern to a minimum.

Don’t give into the mindset that holiday fat gain has to happen. Following these simple strategies will help you enter the new year better than ever!

Real estate investors can be broken down into three categories with the distinctions between them based on the length of time the property is held. On the short end, you’ve got flippers. These guys look for properties on the cheap, maybe put some money into fixing them up and then selling for a profit. For the most part, they have no intention of renting the property out and work as quickly as possible to complete the deal. This category represents a lot of the people chasing foreclosures and probate sales. From the lending perspective, their biggest motivators are low down payments and NO prepayment penalties. They’ll even pay exorbitant Subprime interest rates to put these deals together without penalties.

Next up, you’ve got speculators. These guys look for quickly appreciating markets. The idea is to get in, buy a bunch of properties, keep them for 3 to 5 years and then move on to the next booming market. For that length of time, they have to rent out their properties but are not particularly interested in paying down the principle balance on the mortgage. In fact, if they’re confident in the appreciation potential, they may be willing to accept negative amortization loans in order to keep the cash flow on their properties positive.

The last category is investors. These guys try to accumulate a portfolio of properties and have the rental income pay down the principle balance over time. The idea, obviously, is to own a number of properties outright or with minimal mortgages and enjoy positive cash flow on each. From the lending perspective, these investors are looking for longer term loan products like intermediate ARMs or 30-year fixed mortgages. Clearly, a property with a 30-year fixed mortgage and a sustainable cash flow will eventually be paid off, leaving just the property taxes and insurance behind.

So, let’s talk about each of these a bit more. A lot of flippers do this stuff full time. In terms of underwriting, it makes it a lot easier if they’ve got a real job. But if they don’t, they don’t have a verifiable source of income either. Of course, if they’ve done it for more than two years, we can say they’re self-employed and get the loan done that way. But if they’re new at the game – and many of them are – we almost always have to use a No Doc program. That’s the lowest level of documentation and the pricing reflects the increased risk.

Meanwhile, if we say they’re self-employed, they obviously have an investment property as well as a primary residence – and maybe more than one – all without any rental income. So they’re supporting two houses. That means we’d have to show a VERY high income to fit within debt ratio limitations. The moral to the story is the vast majority of these deals end up in Subprime programs because it’s easier to get approvals, particularly for low or no down payment programs.

Now, the question is: does it matter? Well, not really because you’re only planning to keep the property for a few months anyway, so the monthly payment isn’t that important. Yes, the payment may be big but you only have to make three or four of them (hopefully) before you can get out. It’s just another cost of doing business. By the way, I’m not saying A-paper and Alt-A programs are impossible for these types of deals. They’re just harder to qualify for.

What about the speculators? People buying for 3 to 5 years. Well, the negative amortization Option ARMs are extremely popular. I’m not a big fan of Option ARMs because they’re risky and largely misunderstood by those who get into them. The big attraction the low initial monthly payment but that’s balanced by the resulting negative amortization and an interest rate that’s variable from the very first month.

Anyway, they do have advantages for speculative real estate investors because they make it more possible to have positive cash flow on investment properties. So we should really take a moment or two to fully understand how they work. First and foremost, the initial payment is an artificially low payment. In many cases, it’s based on a 1% interest rate but that definition is based more on marketing than reality. Fact is; the minimum payment is less than the accrued interest so the mortgage balance goes up every single month.

This minimum payment doesn’t stay the same forever. It’s fixed for the first 12 months and after that, it increases by 7.5%. Then it’s fixed for another 12 months and increases by another 7.5%. The minimum payment increases by 7.5% each year for the first seven years OR until the loan balance has reached its ceiling. Depending on the program, these loans can grow to either 110% or 125% of the original loan balance. Actually, the ones that can go as high as 125% are becoming increasingly rare. Most will only allow you to go as high as 110%. Anyway, once you’ve reach that ceiling, the loan starts amortizing right away – and that means a BIG payment shock at that point.

For obvious reasons, these loan programs are only justified if the real estate market is appreciating FASTER than the loan is growing. Although it depends on where interest rates go, most of these loan programs grow by 2% or 3% each year if you only make the minimum payment. So if the real estate market is appreciating faster than that, you’re still building equity. If not, you’re losing money every month. That’s the scary part. If it ever comes to that, you actually SAVE money by selling today – unless you’re okay making the larger interest only payment. And don’t forget the interest rates on these programs are variable so the interest only payment can be different each and every month.

But we also have to keep in mind that these loan programs will only go as high as 95% financing. In fact, on investment properties, some lenders won’t even go that high. Depends on the lender. Also, the 95% financing is generally split into two separate loans. The 1% start rate loan usually only applies to the first 75%. The 20% second mortgage makes up the difference and is usually a fully amortizing loan with a much higher interest rate. Sometimes, you can do an 80/15 but most are 75/20s. So that means you have to come up with at least 5% down payment to qualify for one of these loans. That makes it more difficult to buy more and more, unless you continuously refinance and take cash out of other properties.

The speculative investors who use these programs are trying to keep their properties cash positive, or as close to cash positive as possible. But as we discussed a moment ago, the payments rise by 7.5% each year. After three or four years, the payment will be 24% or 33% higher (respectively) than it was at the beginning. If the market is still appreciating strong at that point, the investor may want to keep the property for another three or four years and refinance into another identical loan product, bringing the payment back down to the initial 1% point again. Doing so would increase the negative amortization but it may also keep the cash flow positive on that property.

You have to understand how underwriters evaluate investment properties. It really doesn’t matter how much equity you have. They only look at the cash flow impact of owning it. And you can show that impact in one of two ways. You can show lease agreements on the properties but the underwriters will always take the monthly rental figure and mark it down by 25% to account for periodic vacancies. It’s called the occupancy factor and most loan programs give you credit for 75% of the rental income listed on lease agreements. Incidentally, many Subprime programs will give you 90% or even 100% of such rental income – another example of easier Subprime guidelines.

The other way to show the cash flow impact is with the Schedule E of your federal tax return. That schedule details the income you make from rental properties but you clearly have an incentive to reduce that income as much as possible to limit your tax liability. Meanwhile, for underwriting, you want to show as much income as possible. So there’s a conflict there. Point is, there are disadvantages with both methods and you should usually look at both options to see which one will calculate the highest.

Each time you have a property that’s got negative cash flow, you have to show more income to squeeze into the same debt-to-income limitations for the next loan. It makes sense. If you’re subsidizing a property with your own income, it represents a monthly expense just like a car payment. So each time you add another property you have to subsidize, you have to show more income to qualify for the next loan. Depending on how much you’re subsidizing, you will quickly be claiming more income than you actually earn and will eventually be considered unreasonable by underwriters.

If a speculator wants to continue accumulating properties in hot markets, one of his or her top priorities is staying cash positive, or as close to it as possible. That priority exists for long-term investors as well but so does the repayment of the mortgage balance. As a result, these investors tend to consider more factors than just annual real estate appreciation. Appreciation is attractive but so is a healthy rental market, and the rental market depends on the types of jobs available in the local area and the health of the local economy.

There are plenty of companies that study this type of information and provide various reports and ratios to help identify healthy markets. I’m sure you could go to Google and find a lot of such offerings. I recently read an article that chose Charleston SC, Jacksonville FL and Austin TX as particularly attractive markets for long-term real estate investments. All three cities have diversified economies, good wages and affordable housing. Anyway, the motivation is clearly different then speculators or flippers. Long-term investors want a stable market where they can cover an amortizing loan payment – that’s principle AND interest – with the rental income from the property.

Now, a well planned real estate investment strategy may involve more than one type of investment. For example, a long-term investor may buy a property in a hot market using a negative amortization loan and keep the property for only three or four years. After realizing some appreciation, the investor may sell the property and use the profits to pay down a mortgage on a different property in a more stable market. Perhaps the reduced mortgage balance will bring that property from a cash negative situation to a cash positive one. For the right investor, this strategy can work well even for flipped properties.

There are plenty of promoters encouraging people to take these profits and leverage them even further into more and more properties. Many of these promoters encourage negative amortization on all their properties. That’s where I have to disagree. That would’ve been fine four years ago but I just don’t believe the real estate market will continue to appreciate the way it has in recent years. Given the current market conditions, I don’t believe it makes sense to expose yourself to that much risk. If real estate goes sideways, these loans erode your equity and add volatility to the market.

There’s always a balance. That balance will definitely be different for a sophisticated investor than it will be for an average homeowner but that doesn’t mean you have to stretch it to the absolute limit. At the end of the day, the ideal situation remains; owning properties free and clear and collecting monthly rent payments on each.

Related Sc Refinance Articles