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Getting Money Out of a 1031 Exchange
2007-03-08 00:25:01
As many investors know. A 1031 exchange is a way to roll the gains of selling one investment property into another investment property of "like-kind". This method allows the investor to defer paying capital gains on the profits from selling the investment property. Taxes are not paid on the gains until the the investment property is sold without rolling it into another investment and the investor opts to take the proceeds as cash. Well, what if you need to get access to this money, but don't want to pay taxes on it. There is a real estate loophole that allows you to take out a loan on the property that you receive after a 1031 exchange. In other words, do the 1031 exchange, get the new property, and then refinance. This will allow you to access the gains without immediately paying taxes on it. Of course once this property is sold and the proceeds taken as cash, you will have to pay taxes on the money taken out during the refinance. Please consult your tax professional abou...
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First-Time Homebuyers ... get those deals
2007-03-08 00:25:01
Now seems like the perfect time for the first-time buyer to step up to the plate and take advantage of the cooling market. A cooling market does not mean a bad market, just a return to a more normal market. Houses will continue to be sold ?. sellers will sell, buyers will buy, and homes will appreciate over time. All of this will just happen at a more normal pace as compared to the 2000 ? 2005 time periods. A normal market means that home buyers have more time to look around, compare homes, and make informed decisions. This was a non-existent phenomenon during the boom years. Many first-time buyers could not react quick enough to secure the house of their dreams. The quickened pace of home sales did not allow inexperienced first-time buyers to comfortably evaluate potential homes and make a decision in their best interest. Now sellers are giving more incentives and concessions to potential buyers. In addition, many first-time buyer and income-based programs are available t...
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How to afford a Home with little money
2007-03-08 00:25:01
I run across many first-time homebuyers that have trouble coming up with money for closing costs or downpayment. This seems to be a hurdle on the road to homeownership for many people. But with decent credit (600 or above) you can qualify for many community programs that allow 100% financing at competitive interest rates.In addition to these programs there are a few tricks and techniques that one may consider when making a purchase.Technique 1:If you are limited to only 3% closing help from the seller (because of a particular loan program), consider asking the seller to pay for all state transfer and recordation taxes. This is customarily split between the buyer and seller in most states, but you can ask the seller to pay for the whole amount. This is usually not considered "closing help" by lenders. This can save the borrower an additional 1% of the total loan amount.Technique 2:If you secure a loan that is 100% financed, it is not necessary to purchase Owner's Title Insuranc...
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Tax Liens as a Safe Investing Option
2007-03-08 00:25:01
Most of you have heard about the tax lien sales either on T.V., books, or through friends. For those who may have cold feet about taking the jump into full-fledge real estate investing, tax liens may be a viable option. Tax liens are a more conservative, methodical approach to real estate investing. If done right, it is considered one of the least risky ways to invest in real estate. There are about $7.6 billion dollars in delinquent property taxes created each year according to TaxLiens.com. There are thousands of counties in the US that sell tax liens every year. Approximately 31 states currently issue tax liens every year according to the site. If you are considering this investment option, be sure to conduct the proper research. This will ensure you a good return (around 10% ? 15% per year) with minimal risk. With tax lien investing you are partnering with local governments to create above average gains on your money. The liens can be purchased for hundreds to tens of ...
More About: Investing , Vest , Sting , Invest

Interest Rates Affect Affordability the Most
2007-03-08 00:25:01
Now that the heated market is softening, many buyers seem to be waiting on the sidelines for the once high prices to decline even more. Their reasoning is that a lower price will ease the road to homeownership. Currently, prices have decrease and seem to be stabilizing. But, the true factor that affects affordability is interest rates, which is the most powerful component of the home-buying process. A drop in interest rates has a far greater affect on monthly mortgage payments than a drop in home prices. So, if home prices do happen to drop and if interest rates rise at the same time, that once affordable home will quickly become unaffordable. For example, a household with an annual income of $100,000 can afford a $450,000 home at an interest rate of 5.63%. With an increased interest rate of 6.7% (approximately 1% higher), that same family can only afford a home priced at about $399,411. The only factor that changed in this equation was the interest rate. This change in int...
More About: Ford , Interest Rates , Inter , Interest , Most

Certain Investment Ideas may be Illegal
2007-03-08 00:25:01
We can all agree that there are many ways to make money in real estate. You can buy a residential property and rent it out for a steady monthly income. You can purchase a commercial property and lease the space out the businesses for many years. On the other hand, you can acquire a fixer-upper, make some repairs, and resell it for a profit, or acquire a vacation property and rent it by the week to short-term visitors. Well as you embark on your journey of real estate investing, some moneymaking ideas may not be allowed by the local or county jurisdiction that the property resides in.For example, early in my real estate investing career I acquired a large property with many bedrooms and bathrooms. It was formerly used as convent. At the time, it was a good deal, so I made a rush decision to purchase the house. I dreamed of the cash flow I would receive from renting it to students on a per room basis. So, I proceeded without researching the state and county laws until after th...
More About: Ideas , Investment , Investment Ideas , Men , Legal

Real Wealth Through Rental Properties
2007-03-08 00:25:01
Since the market has cooled in many cities, many new investors are starting to panic because they are worried about how to now make money in real estate. They can no longer buy a property, slapped on some paint, and sell it six months later for a $50,000 profit. These investors are used to making money through quick appreciation or asset growth. This is really a secondary means of making money in real estate. The recent boom has given the false impression that property prices always go up. The key to building true wealth in real estate is through buying and holding. Good and consistent tenants can create wealth for you by paying for mortgage, insurance, taxes, and other fees through rental payments. The power of leverage also allows you to make huge returns by using the banks money. If you put $10,000 down on a $200,000 home, with 5% yearly appreciation, you will have 100% yearly growth of the money that you actually invested. With real estate you have many vehicles for cre...
More About: Wealth , Rental , Real , Through , Rent

Promissory Notes as a Real Estate Investment Option
2007-03-08 00:25:01
In this slowing real estate market a promissory note may be a good alternative for investing in properties and creating a steady stream of income. This is similar to offering someone a 2nd trust or ?piggy-back? loan that accompanies a 1st trust or primary loan. This could also be a good option for sellers that may have a potential purchaser that needs a 2nd loan to complete the transaction. This scenario will only work with sellers that have a good amount of equity in their homes. The seller will need to pay off their own mortgage and have enough equity to offer a 2nd trust and maybe pocket some profits.The promissory note process is not very difficult and I have actually done it myself. You can get sample promissory notes on the web and then have a real estate attorney look it over and fine-tune it for your particular needs. If done right, this vehicle can provide you with years of constant monthly income. For those of you who currently have mortgages, do you often look at y...
More About: A Real Estate , Estate , Real Estate , Real Estate Investment , Investment

PMI is tax-deductible ..... for now ......
2007-03-08 00:25:01
A $40 billion tax bill signed in December introduced a long awaited tax break for homeowners - tax-deductibility of private mortgage insurance, also known as PMI. This deduction is only available to homeowners with adjusted gross income less than $110,000 ($55,000 for individuals) and who itemize their deductions. The new PMI deduction will only apply to mortgage insurance contracts issued in 2007. Congress is supposed to evaluate the law at the end of the year for a possible extension. Homebuyers may no longer have to opt for the popular 80/20 or 80/10 loans because PMI is now tax deductible. This tax deductibility makes loans with PMI cheaper than the 80/20 or 80/10 alternatives. Homeowners with PMI will now be able to deduct it from their incomes and pay less in taxes each year. It will be tough to justify going for a 80/10 or 80/20 loan if this law is made permanent. It is best to consult a good tax advisor to determine if a PMI loan is good for you.
More About: Tax

2007 Foreclosures
2007-03-08 00:25:01
It is predicted that 2007 will be a big year for foreclosure sales. Nationwide foreclosures were up 35 percent from December 2005 to December 2006. This is according to RealtyTrac.com. The biggest culprits for this prediction of increased foreclosures are the combination of resetting ARMs and slowing home sales. Many Adjustable Rate Mortgages (ARMs) have reset in 2006 and will continue to reset in 2007. This is forcing homeowners with these loans to pay increasingly higher mortgage payments because of the ARMs? increasing interest rate. The slowing real estate market makes it more difficult for these owners to sell their homes before foreclosure sets in. Many of these homeowners are even unable to refinance into new ARMs because of credit issues, lack of equity, or an inability to qualify for today?s higher ARM rates.This is creating new opportunities for foreclosure investors, but you will definitely need to do your research. The foreclosure market is very different from the...
More About: Foreclosures , Foreclosure , Closure , Sure , Fore

Spring will probably be a Buyer's Market
2007-03-08 00:25:01
We have just got out of the month of December, which is not the best month to sell a home. In actuality, it is the best month to buy a home because most sellers are more desperate and buyer traffic grinds down to a trickle. This spring will increase the sales chances, but it is predicted to still be a buyer?s market. The problem is that there is currently an abundance of unsold inventory on the market and the spring usually brings an additional influx of homes on the market. Even if buyer interest increases, it probably will not be enough to satisfy the current amount of homes on the market, let alone the predicted increase of homes to hit the market. Sales chances are calculated by dividing a month?s sales figures by the inventory on the last day of the month, resulting in a percentage. A number less than 20 percent indicates a buyer?s market. Currently, there is just too much surplus inventory. In addition, with all of the current homeowners sitting on piles of equity, the in...
More About: Market , Spring , Buyer , Ring , Will

Mistake Buyers Make around Settlement Time(audio)
2007-03-08 00:25:01
Here is a link to part of an audio interview that I had with an owner of a reputable settlement company. We are discussing the mistakes people make before, during, and after settlement. Click here to listen to the audio. You can log onto HouseWealthy.com to listen to the whole interview (requires a quick registration).
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