Realty Networth .com

WE HAVE A NEW BLOG SITE !

2009-12-15T17:54:00.001-08:00

Expanded First-Time Home Buyer Tax Credit Becomes Law

2009-11-07T16:23:00.000-08:00

1. For first-time home buyers:..... as high as $8,000. The legislation defines "first-time home buyers" as anyone who has not owned a principal residence in the three years prior to making the purchase.
Old law: buyers needed to close by Nov. 30.
New law: contract before May 1, 2010... the new law raises the annual incomelimits from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples.
2. For current home owners: In addition, the new law makes most current homeowners eligible for a tax credit of up to $6,500 when they purchase their next primary residence. Under the terms of the legislation, current homeowners must have lived in their home for five consecutive years over the previous eight to be eligible. Qualified home buyers can obtain the credit on homes purchased between Nov. 7 and the end of April 2010. That means they need a signed sales contract on a home before May 1, 2010, but they have until the end of June to close the sale.
3. Additional specs: And as long as they use the property as their primary residence for three or more years after the purchase, buyers don't have to pay it back. Furthermore, buyers can claim the credit on their 2009 taxes, even if the purchase was made in 2010 by filing an amended return...we can help with brokerage and amending

4. Fighting fraud: he new law includes measures designed to limit its abuse. Anyone claiming the credit must now provide documentation to prove that the sale has closed.
5. Price tag: First-time home buyer tax credits have cost the government around $10 billion in lost revenue through Aug. 22. The expanded credit program is projected to cost an additional $10.8 billion or so.

Cheap Home Renovations That Pay Off

2009-11-01T11:27:00.000-08:00

Remodeling magazine's "2008-2009 Cost vs. Value Report" confirms that the home renovation projects that will add the most value to your home (meaning that you are most likely to recoup the highest percentage of the project cost when you go to sell your home) are pricey big-ticket items such as replacing siding with fiber-cement ($13,177 with 87% cost recouped) or vinyl ($12,528 with 80% cost recouped) and adding a wood deck ($10,601 with 82% cost recouped).

But if those home renovations are beyond your price point and you're looking at a budget of just $1,000 what should you invest in to get the most bang for your buck?........

Homes: About to get much cheaper // Why Obama's Housing Rescue Hasn't Prevented Record Foreclosures

2009-10-21T08:30:00.000-07:00

Homes: About to get much cheaper

By Les Christie, CNNMoney.com staff writer
On 11:07 am EDT, Tuesday October 20, 2009

If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower.
Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

By Luke Mullins Luke Mullins – Fri Oct 16, 9:53 am ET

After taking withering criticism for the Department-of-Motor-Vehicles pace of its initial efforts to keep struggling borrowers out of foreclosure, the Obama administration proudly announced last week that it had hit its goal of 500,000 trial loan modifications almost a month ahead of schedule. But with the foreclosure rate hitting a new record in the third quarter, the government's ability to put a meaningful dent in the tally of housing-crisis victims faces renewed skepticism.
Foreclosure filings were reported on 937,840 homes in the three-month period, a 23 percent jump from a year earlier, according to a report real estate firm RealtyTrac released Thursday. Home foreclosures in September, meanwhile, decreased 4 percent from August but remained 29 percent higher than a year earlier.

Answering the 25 Biggest Real Estate Questions -Business Week

2009-10-17T08:07:00.000-07:00

What you need to know

........everyone has questions about the real estate market. When will housing come back? How can I stay in my home? What is the government doing? Will I ever be able to sell my house? Despite some positive signs, many people remain scared and uncertain about what is really going on. To help answer some of the biggest questions, BusinessWeek reached out to readers, experts and our own editors........

The Reluctant Landlords

2009-10-13T08:03:00.000-07:00

"With housing prices still in the dumps, many Americans are finding themselves in the uncomfortable position of landlord.........Experts generally advise against becoming a landlord in hopes of recouping lost home value......................The calculation isn't the same for all homeowners. Those who have paid off their home or have a small mortgage balance may be able to wait out the market. And there are pockets of the country—Houston is one—where home prices haven't fallen as hard. Some homeowners may want rental income to supplement retirement savings...............a landlord policy covers the loss of rental income if a fire makes the house uninhabitable. It costs about 25% more than a standard homeowners policy, according to the Insurance Information Institute.................Renting for an extended period can eliminate or diminish the value of capital-gains tax exclusions. Federal tax law requires you to live in the house at least two years of the previous five in order to qualify for the full capital-gains tax exclusion upon sale of $250,000 for a single person or $500,000 for a couple, with some exceptions." ( Realty NetWorth.com note: I recommend reading the "Comments" tab on any of these WSJ articles of interest - the round table like discussions will help you digest the jest of the column )

10 Hard-Hit Housing Markets That Are Ready to Rebound

2009-10-03T05:59:00.000-07:00

Luke Mullins, USNews.com Oct 1st, 2009

As the historic housing crash continues to hammer real estate prices from coast to coast, many homeowners probably can't remember the last time their property's value actually increased. But even with home prices still falling at the national level, a number of hard-hit housing markets are gearing up for a rebound. ...including 2 markets in Michigan.

SHORT SALE tips for your Buyer Agent

2009-10-02T08:57:00.000-07:00

Help your buyers agent help the sellers agent.

After your agent has submitted your short sale package for the seller's lien holder, here's what the sellers agent needs to do next? call the bank. You have to follow up regularly.

Here are a few questions that you help you get started:

Have you received the short sale package? (Hopefully, the answer is yes. If the answer is no, sellers agent should refax the package.)
Are you missing any items that you need to process the short sale? (You'll want to send those a.s.a.p.)
Has a Notice of Default been filed? Is there currently a foreclosure dated scheduled? (Important questions, because if the foreclosure is set for tomorrow, your job is going to be tough.)
Can you tell me about the process and time frames at your bank? (Good learning opportunity. Listen and take notes.)
How soon will a negotiator be assigned? (Write down the answer.)
When will be the BPO (Broker Price Opinion) be ordered? (Write down the answer.)
When would you recommend that I call back to check on the status of the short sale? (Call back the date that is recommended or sooner, if necessary.)

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Agent followup comments:

Having done many short sales, the most important step is the BPO. First you have to push to have the BPO ordered. Often times the bank will tell you that it is not necessary to do an interior BPO because they already did an exterior BPO. You must insist on an interior BPO. Secondly, it is absolutely important to be present when the appraiser/realtor performs the BPO. You must come with comps that support the price you are looking for. Also bring the sales contract and a repair list. You must also explain the seller's situation and the hardship he is going through. Talk to the appraiser while going through the house. Engage in conversation so you can figure out what is important to the BPO agent. I have used these techniques and on many occasions have turned the appraiser to my side. Even though they are not supposed to tell me, often times I have found out what the BPO came in at. If you can get the appraiser/realtor who is performing the to be on your side, the rest is down hill.

Paul Warkow

MI TAX TRIBUNAL PROCESS & dates REMINDER

2009-10-02T08:31:00.000-07:00

The Tribunal's Small Claims Division utilizes an informal hearing process to resolve the majority of all appeals filed with the Tribunal. Parties typically represent themselves in such appeals. See in detail all the Steps to a Small Claims Appeal on our SlashThoseTaxes.blogspot.com blog.

First-Time Homebuyer Credit

2009-09-28T07:47:00.000-07:00

Overview

First-time homebuyers may be able to take advantage of a tax credit for homes purchased in 2008 or 2009. The credit:

Applies to purchases that close after April 8, 2008, and before Dec. 1, 2009.
Applies only to homes used as a taxpayer's principal residence.
Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

CALL US TO ASSIST WITH ANY ASPECT OF PURCHASE & APPLYING FOR THE CREDIT - THERE IS NO CHARGE for us to complete the IRS filing after we assist you in your first time home purchase.

http://www.irs.gov/pub/newsroom/marketing/print/p_4771_final09_home_flyer.pdf

STATISTICS: Now offered in out LINKS area

2009-09-23T11:00:00.000-07:00

Useful week to week and year to year stats on listings/sales/& % increases and decreases.

Yes, the Housing Market Has Rarely Looked Better

2009-09-07T06:06:00.000-07:00

SMARTMONEY.COM..In short, the data suggest that real-estate prices hit a bottom some time during the second quarter, and have now begun to rise............the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June..........For every hardship story, and no doubt there are many, others are realizing their dreams of home ownership and getting what may well turn out to be the deals of their lives.

Forbes is a useful resource.

2009-08-18T10:21:00.000-07:00

We are getting differing opinions on "is it time to get back in the market?"
Some say:

The die hard bears are a little bullish since money sitting in one of those empty cheap condo's will bring a better return w/ a renter than cash sitting in the bank.
While others say: We're in the eye of the storm, the back side is moving in and its gonna be worse
Still others: Investment level homes and rentals - all good - minimal down.
And the logical: In a softening market, move up if you ever have thought about it. An X% hit on your $1xx home is less money than the savings on a $2xx home that you can get on the cheap right now. As always - in a hot market, look to downgrade and take your profit on the big one though you'll overpay to a lesser amount on the smaller one. In a soft market, move up and glean the larger savings. ( We like this advice best ).

This post highlights the perspective that you get better real estate advice from resources that do their homework and hold their tongue than the at the beautician or from the local paper or news show. So we've spotlight Forbes.

Others we like: Wall Street Journal.
Some we don't: Money.
==================================================

Real Estate: The Eye Of The Storm Has Passed | Story

August 12, 2009

The bad news is slowing down, but we're not out of the woods yet for housing. Expect a national bottom in a year, then slow appreciation.

Where To Cash In On Real Estate | Story

July 29, 2009

From coast to coast, unsold condos sit empty. In these 10 spots, deals are likely aplenty.

Foreclosures / Short Sales

2009-08-02T18:42:00.000-07:00

How To Do a Short Sale

Why Would a Lender Accept a Short Sale?

http://homebuying.about.com/od/4closureshortsales/a/shortsalebasics.htm

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Short Sale and Foreclosure Effects on Credit

The Impact of Short Sales and Foreclosures on Credit Reports

http://homebuying.about.com/od/4closureshortsales/qt/060907SScredit.htm
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Buying Foreclosures - How Foreclosures Work

What Is a Foreclosure and How to Profit From Foreclosures

http://homebuying.about.com/od/4closureshortsales/qt/foreclosures.htm
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The Drawbacks to Buying Foreclosures

The Condition of Foreclosed Homes

http://homebuying.about.com/od/4closureshortsales/qt/AuctionASIS.htm

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Another Win at the Michigan Tax Tribunal

2009-07-28T10:31:00.000-07:00

Just saved another client about $1700/yr in taxes while getting 2 back years of reduction for another and saving about $900.

On another protest, about $4400/yr for a 2 year judgement, was won at 3rd and final appeal/hearing.

FHA borrowers mortgage insurance premiums overview

2009-07-23T14:19:00.000-07:00

excerpts from

http://www.fhaloanpros.com/2008/07/how-much-for-fha-mortgage-insurance/

It says the following:

“In the past, some FHA borrowers have paid annual mortgage insurance premiums throughout the life of their mortgages. Effective for all loans closed on or after January 1, 2001, FHA’s annual mortgage insurance premiums will be automatically canceled under the following conditions:

*For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the loan to value ratio reaches 78 percent, provided the mortgagor has paid the annual mortgage insurance premiums for at least five years.

*For mortgages with terms 15 years and less and with loan to value ratios 90 percent and greater, the annual mortgage insurance premiums will be canceled when the loan to value ratio reaches 78 percent, irrespective of the length of time the mortgagor has paid the annual mortgage premiums.

*Mortgages with terms 15 years and less and with loan to value ratios of 89.99 percent and less will not be charged annual mortgage insurance premiums.”

The FHA also says:

“FHA will determine when a borrower has reached the 78% loan to value ratio based on the lower of the sales price or appraised value at origination. New appraised values will not be considered. For example, if the lower of the sales price or the appraised value at origination was $100,000, when the loan amount reaches $78,000, FHA will no longer collect annual mortgage insurance premiums on the loan. Cancellation of the annual mortgage insurance premiums will normally be based on the scheduled amortization of the loan. However, in cases where the loan payments have been accelerated or modified, cancellation can be based on the actual amortization of the loan as provided to HUD by the servicing mortgagee.”

list them and forget them

2009-07-23T08:57:00.000-07:00

Dana Schultz - a past client of ours (one who sold 2 homes using Homeowners Concept and saving thousands in each case) - called the other day. Her daughter had been trying to sell her home in Illinois in an area where Homeowners Concept does not have an office, using an MLS only broker (also known as Limited Service) and having paid $500 upfront just to go in MLS. The property had been on the market for 9 months her daughter had moved to California and she was doing the showings because the service they used did not have the option to show. After a few trips over the IL border to show the home, her daughter decided to cut the price of the home drastically so it can sell ($30K to be exact).

This price cut had spurred some activity but she was wondering whether other Realtors were
avoiding the home or talking buyers out of it because it was limited service. This issue has been raised many times by sellers, ever since the MLS only companies came into the market a few years ago. Yet, you will not find an agent admitting such but as our study of the local market showed (see the blog post dated 2/20/09 titled: MLS only companies - an eye opener) many sellers who pay all this money upfront have little success. The companies (known in the industry as "list them and forget them") collect their money upfront (around $500) and have no incentive to sell the home. There is definitely more work for an agent that decides to show and write on a limited service home because the seller is still For Sale By Owner and there is no other agent to assist the seller with the contracts, counters, inspection, closing, etc. As a result this work falls on the shoulders of the selling agent. So putting yourself in an agent's shoes having to choose from a vast selection of homes and looking at the dismal success rates Dana's observation is right on the money.

from
http://www.merchantcircle.com/blogs/Homeowners.Concept.Milwaukee.WI.414-258-7778/2009/3/Thinking-Limited-Service-MLS-only-Think-again./212464

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From article #2:

CAN A REALTOR NEGOTIATE A BETTER DEAL THAN YOU CAN?
There is more to negotiating than just the price.

Realtor
There is no substitute for experience when it comes to negotiations. As I said before, there is more to negotiations that just price, there are repairs, time-frames and many other small details that become part of the negotiation. A Realtor has the ability to step back emotionally and really look at the deal in an unbiased way. They should be able to analyze proposed price & use their data to support the selling price. Through experience, they recognize which repairs make sense to accept, which ones can be settled with money & which repairs should be thrown out with supporting arguments as to why. Further, a buyer looking at the FSBO is holding onto his/her money now expecting to get the better end of a deal also...so who gets the "savings" ?

Seller - For Sale By Owner
It's hard to compete with experience when you are negotiating a contract. It's like playing cards. You get better the more you play. You learn when to hold fast, when to bluff and when to fold. A buyer face to face with a seller will have more of an incentive to "win", since the meeting IS face to face. This doesn't mean that you can't do it. Here is where you have to weigh your options carefully. If you sell on your own and get the raw end of the deal on repairs or even lose a few thousand dollars on price because you didn't have the data to support your argument, how much did you save by not using a Realtor?

Conclusion:
How many accidental legal representations did you make in face to face showings, emails, contracts, and advertisements ? How often did you violate state and federal disclosure laws, fair housing HUD laws ? How much future liability will you have ?

How to Use the Produce the Note Strategy to Save Your Home from Foreclosure

2009-06-22T08:51:00.000-07:00

What is "produce the note"? Why is everyone talking about it? Does it apply to me? How can it help to save my home from foreclosure? All these questions will be addressed in this article.

What It Is: Produce the note is a defensive strategy that you can use to fight foreclosure and force the bank to prove that you owe it any money at all. In courts of law, the plaintiff has a "burden of proof", meaning that it has to put forth evidence that shows everything it says is actually true. However, when the plaintiff makes claims that the defendant does not challenge, then the court usually accepts the Plaintiff's claims on face value on the basis that you had a chance to contradict them and didn't.

When you say "produce the note" what you are doing is challenging the bank's assertion that you owe it money, that it has a mortgage on your house, and that it has the right to foreclose on you at all. One attorney has estimated that nearly 50% of mortgages have been lost or destroyed in the carnage of all the selling, pooling, servicing, tranching, and defrauding that went on in the years from 2001-2008 in the American Secondary Mortgage Market. 50-50 is pretty good odds of YOUR note coming up missing.

When Its Used:

Typically, the best time to use "Produce the Note" is during discovery. That is, after you have sued the bank (say, for Quiet Title), or the bank has sued you (i.e., foreclosure). Discovery is the process by which each side of a pending lawsuit gets to ask the other side for all of the pertinent information with which it intends to prove its claims. For instance, if a bank sues you for foreclosure, then you have a right to "discover" all of the damaging evidence against you. The most basic piece of evidence here would be a "Note", which is the financial term for "mortgage" or other debt. Without a mortgage, then there is no document proving that you and the bank have an agreement, and therefore, the bank cannot prove its foreclosure claim against you.

Some proponents of "Produce the Note" suggest that ANYTIME is a good time for "Produce the Note" - even if there is no lawsuit going on. In some cases it may work, but the problem here is that there is no right to discovery outside of litigation. therefore, if you are not in foreclosure and you want to get the bank to have to produce the note, then find an attorney to evaluate your case for a quiet title case against whichever entity has a mortgage recorded against your home. Chances are, if the mortgage was sold more than once, SOMEONE forgot to make all the proper recordations, and you may just end up with your home free from any outstanding liens.

A third alternative, used in bankruptcy proceedings, is to file chapter 13 bankruptcy and list the mortage - NOT AS SECURED DEBT - but as UNSECURED DEBT. Similar to the discovery tactics above, this puts the bank of having to PROVE its mortgage in order to get the bankruptcy court to treat the debt as secured rather than unsecured debt.

How To Do It Right:

As hinted at above, if you want to get the most out of Produce the Note, you will wait until your guns are fully loaded: i.e., you are in litigation, with a right to discovery. Send a "Request for Production of Documents" to the lender or servicer and demand examination of the original mortgage note at a place of your choosing. If the bank hasn't complied within 30 days, file a Motion to Compel Discovery. In your motion, refer the court to your proper Request for Production of Documents and to the bank's responses. Point out the bank's failure to comply with your request for it to produce the mortgage which it claims gives it a right to record a claim against your title, and ask the judge to compel discovery. If the bank has lost the note, then it will further fail to comply. At that point, file a motion to dismiss the bank's foreclosure action or at the very least to bar any evidence of a mortgage note as penalty for failure to comply with the court's order. It will be impossible for the bank to win. In the alternative, in a quiet title action, if the bank cannot comply, then you will be primed to win.

Word to the Wise: DO NOT rely solely on "Produce the Note." There are MANY possible claims and defenses that may come up in each case, and if you put all your eggs in one basket, you may get a rude awakening if your bank actually HAS your note. See an attorney, know your rights, and have a back-up plan.

The above article is not intended as legal advice, and is for informational use and entertainment only. If you are in need of legal advice or counsel, then consult a licensed attorney in your jurisdiction who is competent in the area you need.

Chase Loan Modification- Easy Tips to Speedy Approval

2009-06-02T16:20:00.000-07:00

See the Loan Modification Blog for more info

http://myloanmodificationcenter.com/blog/chase-loan-modification-easy-tips-to-speedy-approval/

Citi: Workouts Outnumbered Foreclosures by 10 to 1 in First Quarter

2009-06-02T13:46:00.000-07:00

See http://www.thetruthaboutmortgage.com/ Blog for more info.

http://www.thetruthaboutmortgage.com/citi-workouts-outnumbered-foreclosures-by-10-to-1-in-first-quarter/

Snag a great deal on a short sale

2009-05-24T11:38:00.000-07:00

Short sales - where a lender agrees to take less than it's owed on a mortgage - are rising sharply. Here's how you can profit.

Homes: Most affordable in 2 decades

2009-05-24T11:36:00.000-07:00

Affordable By Les Christie, CNNMoney.com staff writer

10 Most Affordable

Big metro areas where residents are most able to afford to buy a home.

Rank	Metro area	Affordability Index	Median home price
1	Indianapolis, IN	94.8	$98,000
2	Youngstown, OH	94.4	$67,000
3	Akron, OH	93	$78,000
4	Grand Rapids, MI	91.8	$97,000
5	Syracuse, NY	91.3	$85,000
6	Warren, MI	91.2	$119,000
7	Cleveland, OH	91	$86,000
8	Buffalo, NY	90.4	$90,000
9	Toledo, OH	90.2	$78,000
10	Dayton, OH	90	$85,000

10 Least Affordable

Big metro areas where residents are least able to afford to buy a home.

Rank	Metro area	Affordability index	Median home price
1	New York, NY	21.5	$418,000
2	San Francisco, CA	32.1	$525,000
3	Los Angeles, CA	42.1	$288,000
4	Nassau-Suffolk, NY	43	$375,000
5	Honolulu, HI	44.1	$360,000
6	Santa Ana, CA	48.2	$360,000
7	Newark, NJ	49.3	$315,000
8	Miami, FL	49.6	$185,000
9	McAllen, TX	50.3	$106,000
10	El Paso, TX	52.9	$127,000

Staging a vacant home.....WSJ

2009-04-25T21:12:00.000-07:00

Whoever occupies 211 Windward Way, they seem to live the good life. Too good to be true, in fact. The house is owned by a builder, who hasn't been able to sell it for more than a year. And while someone really does live here, it's as part of an elaborate bit of stagecraft.........

WSJ , Cracking a Valuable Homebuyer Credit & Energy Tax Credits

2009-03-21T11:10:00.000-07:00

http://online.wsj.com/article/SB123732757823462281.html?mod=article-outset-box

up $500 this year to $8000
max out at $70k purch price
need not be "house"
need not be "your first home"
need not be paid back like last years credit
limited window for purchases
CALL US TO HELP YOU SORT IT OUT www.RealtyNetWorth.com

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How Your Home May Qualify for Bailout Cash aka:Energy-Efficient Upgrades Yield Valuable Tax Credits

The credits fall into two primary camps. One is energy efficiency, which covers certain improvements to an existing home's structural elements, such as windows and insulation, as well as for the purchase of qualifying high-efficiency heating, cooling and water-heating equipment.
The second is for renewable energy, which includes solar, wind, geothermal (heat generated from the earth) and fuel-cell technologies (which convert the chemical energy of a fuel, such as hydrogen, into electricity). In a nutshell, the energy-efficiency tax credit increases to 30% of qualifying costs from 10%, and the cap also rises to $1,500 from $500.

Outside buyers drawn to Detroit's foreclosed homes

2009-03-08T13:57:00.000-07:00

Jeff Karoub and Corey Williams / Associated Press

DETROIT -- Welcome to Landlord Nation, where foreclosure notices are plentiful and for-sale signs offer at least 1,800 homes for under $10,000 that once were worth at least 10 times more.

In extreme cases, homes are on sale for $1 or less, which has enticed investors to Detroit from as far away as the United Kingdom and Australia.

"In the past few months, I've picked up 10 new clients from out of state that are buying in bulk," said Mike Shannon, a suburban Detroit real estate agent. His office specializes in foreclosures in a city that's among the national leaders.

"They're coming to us, saying 'Look, I want to buy 50, 100, 1,000.' They want to own every decent and cheap house they can find."

............... read on................

http://www.detnews.com/apps/pbcs.dll/article?AID=/20090308/BIZ03/903080323

Principal Residence for Property Taxes: pick old or new !

2009-02-26T07:07:00.000-08:00

Principal Residence Information:
The new Public Act 96 of 2008 is designed to allow people to maintain the principal residence status on their first home when they are unable to sell that home before they move into a new residence. The property owner must file a form with the local assessor by May 1. Click here to view the form.

Produce The Note “How-To” DELAY FORECLOSURE

2009-02-25T06:39:00.000-08:00

Using the “produce the note” strategy is something all homeowners facing foreclosure can do.
If you believe you’ve been treated unfairly, fight back.
Templates for a legal request, a letter to your lender and a motion to compel to help you through the process.
Read the step by step “how to” under the videos.
Article: http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/

Feb 2009 Stimulus Package & First-Time Homebuyers

2009-02-15T13:51:00.000-08:00

IRS ARTICLE:
Tax Credit to Aid First-Time Homebuyers; Must Be Repaid Over 15 Years
http://www.irs.gov/newsroom/article/0,,id=186831,00.html

Congress Strikes $789 Billion Stimulus Deal

http://online.wsj.com/article/SB123436825805373367.html

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First-time buyers get $8,000 tax credit in stimulus bill

First-time home buyer tax credit details reported today in a Wall St. Journal article:

Home buyers who hoped for a $15,000 tax credit to buy a new home, as promised by the Senate, will be disappointed. A proposed $35 billion credit to support home sales was jettisoned in favor of a more modest $2 billion to $3 billion provision.

The proposal would eliminate the repayment requirement in an existing tax credit for first-time home buyers, and raise the credit to $8,000 from $7,500. Congressional aides cautioned Wednesday that the credit's size was still subject to negotiation.

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Response post:

LETS GET THIS STRAIGHT PEOPLE:

The devil is in the details..

First off, this housing "credit" isn't stimulus at all. Don't be upset. You thought you were going to get 15K right off the bat? Think again.

Assuming you qualify (buyers in 08 will get the shaft),

1) The sum of WHATEVER the housing credit is (they seem to change it everyday) will BE SPLIT into two tax returns. Hence, two years.

2) The biggest catch of em all is, YOU MAY NOT BE ELIGIBLE for that full credit!! IT depends on your TAX LIABILITY. So the higher your income, the closer you will be to getting the full credit.

3) You can claim this credit in the 2008 tax return (even though you've purchased in 09)

4) You do not have to repay this credit.

5) You do not have to be a first time home buyer for this credit.

Posted by: DiggySRQ

Feb 09 Stimulus provisions

2009-02-15T06:40:00.000-08:00

http://www.mahalo.com/2009_Stimulus_Package

Look for another/larger real estate incentive for "first time" home buyers....no payback required this time ?

Michael Gray, CPA's Real Estate Tax Letter

2008-12-27T12:54:00.000-08:00

Timely content useful for realty investment from a financial perspective.
http://www.realestatetaxletter.com/

SE MI commercial_real_estate Blog

2008-02-25T13:51:00.000-08:00

SE MI commercial_real_estate Blog

America's Free-Falling Housing Markets

2008-02-15T17:53:00.000-08:00

Matt Woolsey

Feb 14th, 2008

Residents of Sacramento, Calif., where home sale prices for November 2007 fell a startling 18.6% over the year before, are likely breathing a sigh of relief.

That's because homeowners there stand to benefit from the Bush administration's initiative, announced this week, aimed at helping homeowners facing foreclosure. Called "Project Lifeline," and assembled by six of the nation's largest financial institutions, which service almost half of the country's mortgages, the program allows qualified homeowners to suspend proceedings for 30 days while providing them with rewriting and refinancing assistance.

The lenders involved--JPMorgan Chase, Bank of America, Countrywide Financial, Citigroup, Washington Mutual and Wells Fargo--say they will contact homeowners who are 90 days or more overdue on mortgage payments and work with them on ways to make their mortgages more affordable.

While resetting rates on many of these mortgages are causing homeowners to default, falling prices, which lead to negative equity, are also playing a part.

Behind The Numbers

To assess which cities are hardest hit, we used data from Radar Logic, a New York-based real estate research firm. Radar Logic differs from the more familiar Case-Shiller index in that it tracks more markets (25), includes data on foreclosures, condos and new construction, and is a spot price, not a running average.

ZipRealty, a San Francisco-based real estate tracking firm that aggregates multiple listing service data, provided us with the number of homes on the market that have been relisted below their initial asking prices.

In Sacramento, 43.6% of homes on the market have been lowered in price. There are currently 36,097 homes on the market there, with very few potential buyers.

Just lagging Sacramento is Las Vegas, where between November 2006 and November 2007, prices plunged 17.2%. What's more, from December 2006 to December 2007, the number of homes on the market surged by 30%, further stalling sales, and likely leading to more price depreciation down the road.

A city you might have expected to see higher on the list-- Detroit--finished ninth. Simply put, there just isn't much further for the city's housing prices to fall; in percentage terms, it doesn't look as depressed as other (once over-inflated) markets. In some areas of Motor City, banks are literally giving homes away if the buyer agrees to bring it up to code.

Florida nabbed three spots on the list of 10 fastest-falling markets, with Tampa down 11.7%, Miami depressed by 10.6% and Jacksonville in an 8.7% decline from last year.

The one sign of good news in these markets is that construction has all but stopped, and sellers are starting to get realistic about cutting prices.

For full-year 2007, almost every market experienced an inventory spike, but in the last month of the year, according to ZipRealty's numbers, inventories started to decline nationwide. Even in Sacramento and Las Vegas, inventory numbers have started to fall, if only marginally.

Guide to Reducing Your Business Property Taxes

2007-12-04T12:41:00.000-08:00

Guide to Reducing Your Business Property Taxes

Strategies to help you stop overpaying and start saving

By Gary Stern

Extremely
Useful

8.0

out of 10

Add Your Comments

Many complex issues can affect your business property taxes. If you're like most small business owners, you probably don't have the manpower or the expertise to keep track of all those issues. As a result, you could be overpaying on your business property taxes — to the tune of thousands of dollars per year. However, there are several simple steps you can take to reduce your property tax payments. One of the first steps in minimizing your tax obligation is scheduling an assessment of your property. When you do, keep the following in mind:

Even if commercial property values in the local market are rising, taxes at every business property are based on an individual assessment and history and may not increase as much as other adjacent businesses.
After you receive the new property assessment, check with an assessor to determine if the market value compares accurately with the assessment.
Another option is to ask your personal banker to see if he or she can appraise your property and compare that to the local tax collector's assessment.
Local tax collectors have been known to hike commercial property taxes beyond what the market dictates, so there is precedent for challenging assessments.

Action Steps
The best contacts and resources to help you get it done

Assess your assessment

Determine whether the assessed value of your business property fits the current market conditions.

I recommend: AVTI, a nationwide property tax consulting firm, offers valuation analysis and assessment tracking among its many services. The American Society ofAppraisers has a searchable database that will allow you to locate an appraiser in your area.

Compare your assessment to neighbors

Find out what other businesses in your area are paying to see if your taxes are in line with theirs. You may have grounds for an appeal if you're paying more than your business neighbors.

I recommend: For a small fee, Intelius gives you the ability to look up the property tax information for any address in the U.S.

File appeals

Call your local tax office to ascertain exactly how to file an appeal. Some cities have 311 numbers that can direct you to the right office.

I recommend: The National Tax Resource Group offers professional appeal services for all types of commercial real estate nationwide. These services are handled through qualified consultants in your local area.

File appeals for business personal property

Sometimes, you can reduce business property taxes through a business personal property tax appeal. This involves the valuation of equipment, furniture, computers and inventory.

I recommend: BurrWolf.com offers a number of property tax reduction services, including business personal property appeals.

Analyze additional factors

Several things can affect your property taxes, such as income and expense statements, market capitalization rates, replacement costs, costs of environmental cleanup and more.

I recommend: CBiz.com, a national property tax solutions firm, analyzes a wide variety of elements that may result in a reduction in taxes.

Consider a cost-segregation analysis

Cost segregation studies identify various components of your building that may be eligible for accelerated tax depreciation. By reclassifying certain assets in this way, you may see significant savings in your property tax obligations.

I recommend: The Griffin Valuation Group are experts in cost-segregation analysis and property tax consulting and aim to lower business property tax burdens.

Use software

Using a property tax software program can help you root out possible reductions and facilitate the appeal process.

I recommend: With ePropertyTax Office, you can track appeals, process assessments and analyze valuations.

Ensure proper zoning

Tax rates are linked to the various zoning classifications so it's a good idea to contact your local state tax office to ascertain if your zoning classification is accurate.

I recommend: Click on your state at TaxSites.com to make sure your business is classified correctly.

Tips & Tactics
Helpful advice for making the most of this Guide

When you receive your annual commercial tax assessment, if you question it or are going to file an appeal, don't delay. In some states, you have only 60 to 90 days to file or lose the right to appeal.
Remember that several factors can influence a change in commercial property taxes including a change of ownership or new construction.
Ascertain whether your business is located in a designated empowerment or technology zone, which can reduce commercial taxes.

The official source of Reducing Your Business Property Taxes is Business.com

Flip This House

2007-12-01T19:47:00.000-08:00

Flip This House show site

http://www.aetv.com/flipthishouse/

Watch exclusive video
Get Flip Tips

APPEALING PROPERTY TAXES

2007-12-01T19:36:00.000-08:00

"As real estate values rise, so do property taxes. The good news is that property taxes are the one area where fighting city hall usually pays off. Among those that are appealed, a whopping 75 percent result in a reduction of taxes." Money Magazine-Jan. 05

"The biggest thing that any individual property owner can do is make sure they aren't overassessed. The errors that take place in assessing properties are rampant," there are often tremendous disparities, for no apparent reason." MSN Money-July 05

To Pay Less Property Taxes: Hire a Soldier of Fortune

2007-12-01T19:08:00.000-08:00

By SYDNEY P. FREEDBERG and CONNIE HUMBURG, St Petersburg Times Staff Writers

Michael Hagen won at least $36.7-million in reduced property assessments in Lee County last year, trimming 16 tax bills by $588,000. Gary Appel haggled $35.8-million off the value of the upscale Loews Hotel on Miami Beach, saving $715,000 in taxes. Gregory Orcutt got $38.4-million lopped off the property assessment of GL Homes in Tampa. Savings for the big developer: $844,000.

Call them tax consultants, agents, brokers or representatives (tax reps for short). By whatever name, they share a goal: shave their clients’ property assessments - and city and county property taxes - as much as possible.

Tax reps can be mom-and-pop accounting firms with a post office box. They can be blue-chip lawyers with political clout. Or they can be promoters who hawk their tax-reduction services on the Internet.

At public hearings and - more often - behind the scenes, these hired guns dicker with county property appraisers in an appeals process marked by back scratching and slack oversight.

Florida relies heavily on property taxes for schools, police and fire protection, roads and other vital services.

Yet no state agency oversees tax reps, who number in the hundreds, or tracks how much they manage to cut each year from property tax rolls.

“It’s a game and it can be extremely lucrative,” said Tim Wilmath, director of valuation in the Hillsborough County Property Appraiser’s Office. He was once a tax rep himself.

Some reps make up to 50 percent of any tax savings they achieve. Others charge up to $450 an hour. Some make a lot of money. Others don’t.

Because the big money is in high-end commercial property, many tax reps are reluctant to take on single-family homes unless they’re worth at least $1-million. Many less affluent homeowners don’t need a tax rep anyway; they have “Save Our Homes,” which caps the amount their assessment can rise from year to year.

To help gauge the size and influence of the tax rep industry, the Times reviewed records of some property assessments that were lowered on both real estate and business equipment in 19 of Florida’s 67 counties last year. Comprehensive data was available for only six of those counties. Many others don’t track tax reps or provided information in outdated forms that made it hard to analyze. The Times also found glitches in the computer data provided by some counties.

While limited, the Times review found:

-Many of Florida’s largest companies used tax reps. In just two counties, Home Depot lowered its bills last year by $134,000, real estate conglomerate CNL by $303,000 and Walgreens, by $398,000. Sprint Nextel got $183,000 in reductions in three counties and Publix, $414,000 in four.

-The top five tax rep firms in the Times review got at least $1.8-billion in value chopped off property rolls in seven counties last year. That translated to about $36.1-million in tax cuts. The top five are Property Tax Consultants Ltd., a partnership based in Hallandale; Berman Rennert Vogel & Mandler, a Miami firm specializing in real estate law; the firm run by Gary Appel, a lawyer and real estate broker in Miami; Marvin F. Poer & Co., a national property tax specialist based in Dallas; and the property tax division of Deloitte & Touche, the giant accounting firm.

-If reps were baseball players, their batting averages would get many of them sent down to the minors. Some larger tax rep firms obtained tax breaks in fewer than one in five formal assessment appeals.

-Miami-Dade, Florida’s most populous county, had the most assessment reductions, by far. That’s where Macy’s, McDonald’s and building products titan Rinker Materials each reduced their tax bills by more than $600,000. That’s also where the family business of former Sen. Bob Graham used five reps to save $294,000 and the enterprises of singer Gloria Estefan and her music producer husband, Emilio, used one to save $8,000.

-Among celebrities who pared their taxes with the help of reps: former Miami Heat center Rony Seikaly ($22,000 on a $7.7-million house in Miami Beach); talk show host Jerry Springer ($37,000 savings on his $3.6-million home in Sarasota); billionaire businessman H. Wayne Huizenga ($59,000 on his $12.5-million home in Fort Lauderdale); and Kay O’Rourke, daughter of a founder of Winn-Dixie Stores ($174,000 on a ranch in northwest Hillsborough County).

For the little guy

In interviews, tax reps play down their big business ties, saying their goal is to keep all taxpayers from overpaying. Some say the appeals process is tilted against them. Others portray themselves as tax rebels fighting for the little guy against an oppressive government.

“What’s more fundamental than ‘no taxation without representation’?” said Appel, 45.

Tax reps say they understand the state’s arcane property tax procedures. By noodling through technical details, they say they often find faulty appraisals - from erroneous comparable sales to incorrect building measurements. Or they take advantage of loopholes, such as farmland deductions that can dramatically cut property owners’ taxes.

For the Loews Hotel, part of the corporate empire built by the billionaire Tisch family, Appel supplied information about the economics of the building: its income, occupancy rates and value of comparable hotels.

His arguments persuaded a hearing examiner to slash the Loews assessment, but it still paid about $4.7-million in real estate taxes, $2-million more than in 2005.

Appel won’t say how much he was paid on that deal or any other. He saved hundreds of property owners more than $4.5-million in four counties last year.

In June, some of Appel’s clients on Miami Beach’s ultra-expensive Fisher Island drew criticism from a union trying to organize the island’s low-wage workers. The union issued a scathing report showing how some workers’ property assessments increased more quickly between 2002 and 2005 than some Fisher Island owners.”The rich who can afford the reps get the breaks. The working poor pay more of the taxes,” said Rick Smith, a union representative.

Cows and horses

The industry got its start in the 1920s, when oil and gas companies complained that they were paying more than their fair share of taxes. Some property tax managers at oil companies left to start their own consulting businesses. Texas soon became the epicenter of the tax rep world.

As Florida’s property taxes rose, the industry gained a foothold here in the late 1970s. Some of the new firms were staffed with former property appraisers’ employees who knew just what it took to keep tax bills low.

Among the first to switch sides was Al Blake, Miami-Dade’s property appraiser in 1970-1979.

“I was at the point I was working for 50 cents on the dollar,” said Blake, 81. He denies any inside edge. In fact, he says, some of his former colleagues “resented it greatly” that he changed sides and made it even tougher on him.

Then there’s Michael Hagen, 48, a Fort Myers lawyer and real estate broker. For nine years, he was counsel for the Lee County Property Appraiser’s Office. He fought against property owners who abused agricultural tax breaks by planting a few palm trees or renting a few horses or cows in an effort to get or preserve an agricultural designation for their land, which means much lower taxes.

In 2003, Hagen left the appraiser’s office. He kept fighting, this time for the landowners and for the tax breaks.

One afternoon in August, Hagen appealed for agricultural exemptions for six property owners, including Premier Island Group, a real estate investment firm. He told special magistrate Lori L. Rutland that Premier qualified for an exemption (worth about $90,000) because it operated a horse breeding business on 15 acres.

The land, which is zoned for commercial development, had been leased for $10 to a cattleman, Steven Game. Game testified that he kept five horses on the property.

But the appraiser’s office portrayed it as a rent-a-horse facade. And the hearing examiner rejected the exemption, noting the property had no stalls or barns for horse breeding.

That setback aside, Hagen and his firm, TaxCuts1, are doing very well. At formal hearings in Lee County last year, he saved at least $588,000 for property owners like Alico Industrial Park in South Fort Myers and DiamondHead Beach Resort in Fort Myers Beach.

While county appraisers say they give no special treatment to former-employees-turned-tax reps, that doesn’t stop the reps from trying to gain an advantage. Some contribute to political campaigns. Some join trade groups. Some lobby for lower taxes or rules making it easier to win reduced assessments.

Yet only a few tax reps break into the highest income bracket.

“You can make a good living, but I’m not going to retire next year,” said Gary Strong, 45, who runs the one-man Tampa office of Fellers, Schewe, Scott & Roberts.

Last year, Strong won at least $355,000 in tax savings for clients like Palm Harbor’s Lansbrook Village, Tampa Palms Shopping Plaza and Prudential Insurance Co. in Miami. He got reduced assessments for almost every appeal petition that he filed in six counties.

That’s in stark contrast to many reps, who lose far more appeals than they win.

In fact, according to the Times review, some reps appear to do no better in formal hearings than property owners who appeal on their own.

The spaghetti strategy

Tim Wilmath, Hillsborough County’s valuation director, was earning between $80,000 and $90,000 a year from the county when he crossed over to what he jokingly calls the “dark side” in 2000. He was wooed to Deloitte by the prospect of making $300,000 eventually. But Wilmath was back at his old job within a year.

“The problem I had with the work is that you basically had to exaggerate to achieve reductions,” said Wilmath, who now earns $137,000. “Money isn’t everything.”

Because many tax reps need just a few big wins a year to earn a decent living, they go for volume. Some recruit clients by sending out mass mailings.

“We remain committed to smart, aggressive property tax advocacy to help ensure that you do not pay one penny more than your fair share of taxes,” says a letter sent in August by lawyer Jeffrey Mandler.

In seven counties last year, Mandler’s law firm, Berman Rennert Vogel & Mandler, sliced more than $11-million off tax bills of clients like Apartment Investment and Management Co., the nation’s largest owner and operator of apartment communities.

After signing up clients in droves, some reps swamp appraisers’ offices with appeals petitions that can be frivolous. In what some property appraisers call the “spaghetti strategy,” some reps throw a potful against the wall and hope that some of it sticks. Other times, they withdraw petitions at the last minute or fail to show up for hearings. The Times found several instances where more than one rep filed appeals last year for the same property.

“Have you heard of the term ambulance chaser?” Roger Alejo of the Lee County Property Appraiser’s Office asked. “We’re being swamped with sillier and sillier arguments.”

A little horse trading

Like some lawyers who appeal assessments, Gregory Orcutt doesn’t consider himself a tax rep. Founder of a now-defunct law firm that handled work for the Hillsborough Property Appraiser’s Office, Orcutt obtained one of that county’s largest tax savings last year: about $844,000 for builder GL Homes.

At the appeals hearing, Orcutt said the developer was growing Bahia grass on more than 1,000 acres, entitling it to keep an agricultural designation. The Property Appraiser’s Office argued that only a fraction of the site, which is zoned for development, was a sod farm. Special magistrate Catherine Teti sided with Orcutt.

“It isn’t anything that was shocking or out of the ordinary,” said Orcutt, 58, declining to comment on how much he was paid. GL Homes “went through the proper procedures. … That’s the way the system is supposed to work.”

Orcutt’s case was unusual because it was decided in the open before a special hearing examiner. Most cases are settled at “informal conferences” or “off the record” sessions between tax reps and county property appraisers.

Reps write, call or sail in and out of appraisers’ offices, and in some counties, they lobby the same tiny group of employees who tend to value the same properties year after year.

They negotiate and sometimes do a little horse trading. “They try to get reductions on two or three of their petitions in exchange for withdrawing the rest,” said Wilmath, adding that his office rejects such deals. If the staff makes a mistake, they fix it, regardless of who brings it to their attention, he says.

In 1990, a statewide grand jury criticized county appraisers for changing assessments, without documenting the reasons, when property owners complain at informal conferences.

Today, the paper trail for such “counter changes” is still thin. In Pinellas, for example, the Property Appraiser’s Office does not keep records of meetings between staff members and tax reps. A reporter was told to dig through stacks of pink papers in a storage box to determine why a particular decision was made.

Lax oversight goes beyond the informal conferences. Florida doesn’t require tax reps to register or report lobbying activities or expenses. The state has no “revolving door” or “cooling off” rules that bar former employees in property appraisers’ offices from contact with ex-colleagues for one or two years after leaving public service.

Ken Muller, a real estate broker in Parkland, claims on his Web site that he slashed more than $100-million from property assessments - enough to retire at 42.

Times researcher Carolyn Edds contributed to this report.

Tags: Florida Property Tax Reform, Florida property taxes, Florida real estate taxes

Foreclosures hit like a hurricane

2007-12-01T18:57:00.000-08:00

By Times Wires

Published December 1, 2007

WASHINGTON

The home foreclosure crisis slamming into the nation's neighborhoods is having the effect of about "one Hurricane Katrina per month," James K. Galbraith, an economist with the University of Texas at Austin, said Friday at a forum examining the credit crisis. In the immediate aftermath of Hurricane Katrina in the fall of 2005, nearly 275,000 Gulf Coast residents were forced to move into group shelters, according to the Federal Emergency Management Agency. This October, lenders reported 224,451 foreclosure filings to drive people from their homes, according to RealtyTrac Inc., a housing data firm based in Irvine, Calif.

INVESTOR TOOL SITES

2007-11-14T13:36:00.000-08:00

Property Taxes
Get Sales History, Current Value
Lot Size, Property Details & More.
www.Intelius.com

GOVERNMENT FINANCING & TOOLS FOR HUD FORECLOSURES & OTHER PROPERTY
http://www.fha-home-loans.com/

FORECLOSURE TOOLS
Topics include selling your own home, buying foreclosure properties, financing real estate, how to guides, and more.
http://www.bargain.com/homes/articles/

Real Estate Investing Articles
Real estate investors can browse hundreds of free real estate investing articles to increase your investment education. Topics include creative real estate, wholesaling, 1031 exchanges, asset protection, commercial real estate, hard money lenders, IRA investing, landlording, lease options, mobile homes, no money down, owner financing, rehabbing, tax liens, and more.
http://www.reiclub.com/

Zillow - Entertaining but near Zilch value

2007-09-11T12:02:00.000-07:00

New Tool Highlight:
http://www.zillow.com

Usefulness:
This site has quick mapping features, shows a very delayed on-market & solds info & some details from the assessors card: year built, etc.

Caution:
I found the assessor info significantly inaccurate: wrong # of baths, wrong s/f, etc.
Sales include mortgage company buy backs & loan balance, not a real sale.
"Values" show the bouncing ball the from the assessor office - no where close to realistic.

Bottom line:
After browsing the site, contact us with your info if you need

a property tax protest
a market analysis
a buyer agent with current MLS data to represent you in purchase negotiations

ANNUAL HOMEOWNERS POLICY REVIEW

2007-05-09T16:58:00.000-07:00

Keep the costs down.
We will review your policy w/ you before you go to your insurance agent.

http://www.michigan.gov/documents/cis_ofis_03homegd_74854_7.pdf

Video Tips ! For Real Estate Buyers / Sellers

2006-11-26T13:36:00.000-08:00

Buyer / Seller Tips
http://abcnews.go.com/Video/playerIndex?id=1763785

Rent or Buy ?
http://abcnews.go.com/Video/playerIndex?id=2319061

More on Tax Free Exchanges !

2006-10-28T08:41:00.000-07:00

http://www.1031exchangelowdown.com

1031 Exchange Deadlines

2006-10-28T08:35:00.000-07:00

1031 Exchange Deadlines

There are two deadlines associated with a 1031 exchange.

The 45-day deadline: In a delayed 1031 exchange, you have 45 days in which to identify the replacement property, from the day you sell your relinquished property. Once you identify the property, you have to submit the Identification of Replacement Property form, which is a written announcement of your choice, to your qualified intermediary or accommodator for the exchange. You can change the replacement property within the 45-day period if you so desire.
The 180-day deadline: Once you transfer title of your relinquished property, you have 180 days to close on the sale. There is a caveat to this deadline though. If your Federal tax returns are due for the year in which you sold the relinquished property before the 180 days are up, you will have to complete all formalities associated with the purchase before your tax due date. This period includes extensions for time to file. In other words, unless you complete the sale of your relinquished property before October 17 of any year, you will have less than 180 days to finalize the purchase of your replacement property.

No extensions on account of weekends and holidays are allowed for either deadline.

So you want to own a rental property

2006-10-28T08:31:00.000-07:00

Here's an eye-opening statistic: In 2005, roughly 28 percent of all homes purchased were as investment property, according to the National Association of Realtors. That's up about 23 percent from 2004. Equally surprising, about half of rental-property owners had two or more investment homes.

What do these people see in being a landlord? Extra income and excellent tax deductions, for starters, and possible appreciation of the investment. But there are pitfalls as well. Inevitably, there will be times when apartments are vacant. Property owners must be prepared to pay for all expenses themselves during such periods, which could last a few months or more. Unexpected repairs, possibly costing thousands of dollars, are another downside. And not everybody is cut out for the landlord-tenant relationship.

These are the primary things to consider:

Find out where renters want to live

Location, location, location takes on added economic urgency when purchasing a rental property. Ask your real-estate agent to show you properties that have an established rental track record going back two or three years, during which vacancies were limited to no more than three months at a time.

The best rental properties usually are in neighborhoods where there are a lot of jobs or sufficient public transportation to take people to work, shopping areas, or entertainment venues. Ideal rental communities are often populated by either Gen X-ers just starting out in their careers or senior citizens, who prefer to avoid the effort and expense of owning a home. In addition, look for neighborhoods that are on the rise, particularly where the town is putting money into roads and recreational improvements and where people are taking care of their property by doing basic things like mowing the lawn, keeping the streets clean, and maintaining the exterior of their home.

Home ownership is higher than 70 percent--a record--and finding areas with good, trustworthy tenants has become much more difficult."

Do the math

Before you buy, figure out whether the rents will cover your expenses and leave room for profit. To determine how much yearly rental income you are likely to receive, ask real-estate agents for the going rates and scan the classifieds for comparable properties in the same neighborhood. Don't forget to take into account the possibility that the property may be vacant for a month or so. Then subtract annual mortgage payments and operating expenses--insurance, utilities, projected repairs and maintenance, and landscaping. Also figure out what you can deduct, but more about that later. Ideally, income tops outlays, and what's left is called cash flow. If outlays top income, producing negative cash flow, the property is too expensive. Either negotiate a lower price or continue hunting.

Negative cash flow doesn't always bother investors, particularly if the property is in an area that has a high potential for appreciation. That's because any shortfall could be more than made up for by the increase in the price of the property when it is sold. Or so the theory goes. Also, you might be able to deduct your losses. But remember that this can be a risky strategy: Long-term appreciation is no guarantee.

In general, the best values will be found in multiunit housing, so-called triplexes or fourplexes. Often these properties cost about the same or less than one- or two-family homes and "offer economy of scale," says Norm Bour, a real-estate agent who co-hosts "The Real Estate and Finance Hour," a nationally syndicated radio show based in Southern California. "If you landscape or paint the house, for instance, you are doing it for four renters, not one or two. And if one apartment is vacant, you lose 25 percent of your income, not 50 or 100 percent." But the economies of scale work both ways. The building furnace is probably bigger than your backyard and costlier to fix than your kid's teeth. So keep in mind that some improvements and unexpected repairs can be more costly for larger properties.

Assess the tax consequences

Anything left over after expenses is taxed as ordinary income. You can depreciate the cost of residential rental property, but not the land it sits on, over 27.5 years--even if it is increasing in value. Suppose you paid $400,000 for a triplex on a sliver of property assessed at $50,000. Depreciation would come to nearly $13,000 a year, or, put another way, you could have that much rental income without paying taxes on it.

Losses from rental property can also be advantageous, but only for some people. If your adjusted gross income (essentially wages, interest, and capital gains) is less than $100,000, up to $25,000 of the shortfall from rental real estate is deductible each year. For income between $100,000 and $150,000, the deduction is gradually phased out.

Choose tenants carefully

Neophyte landlords often fail to conduct a thorough background check on prospective renters, says Vito Simone, a broker at Simone Real Estate in Baltimore. Such a lapse can be costly if the tenant stops paying rent or damages the property. Don't approve tenants until you have checked their credit and criminal histories and talked to references and employers. The lease should lay out rules about pets, parties, rent due dates, and late fees. (You can find boilerplate leases and other landlord resources for purchase on the Web at www.lawdepot.com and at www.landlord411.com.) If tenants already occupy the property when you buy, you will have to honor their lease until it expires.

You may not be thrilled about dealing with tenant problems: responding to complaints, pestering people for the rent check, and enforcing rules like making sure a tenant's permanent "guest" leaves. If so, consider hiring a reputable management firm. Such companies charge 7 to 10 percent of the monthly rent, but their value in easing landlord pain could more than make up for the cost.

consumerreports.org

2006-09-30T14:58:00.000-07:00

Tax
Consequences of Flipping Real Estate - If you're not careful,
you'll be making big profits for the IRS.

Should
You Remodel or Move? - You can fix it up or you can buy a
new house. Here are some things to think about before you decide.

2006-09-30T14:52:00.000-07:00

Like
Kind Exchange on Rental/Vacation Home - Using a rental property
as a part-time vacation home generally takes the property outside
of the like-kind exchange realm, says CPA George Saenz.

2006-09-30T14:47:00.000-07:00

Selling
Your House in a Down Market - 5 Tips - It's official. It's a buyer's
market out there for home sellers. But homes are still selling, mostly
by people who know the landscape has changed.

Lowballing
in a Cooling Housing Market - Current market conditions will spur
home sellers to consider lower offers, but don't expect them to panic,
says Real Estate Adviser Steve McLinden.

Be
Patient - Home Buyers Will Return - The market has chilled in
many areas of the country but the current construction slowdown will
create new demand down the road, says Steve McLinden.

All of Anibal's SITES_and_BLOGS

2005-01-16T18:27:00.000-08:00

All of Anibal's Blogs & Websites

Realty Networth .com

WE HAVE A NEW BLOG SITE !

Expanded First-Time Home Buyer Tax Credit Becomes Law

Cheap Home Renovations That Pay Off

Homes: About to get much cheaper // Why Obama's Housing Rescue Hasn't Prevented Record Foreclosures

Homes: About to get much cheaper

Answering the 25 Biggest Real Estate Questions -Business Week

What you need to know

The Reluctant Landlords

10 Hard-Hit Housing Markets That Are Ready to Rebound

SHORT SALE tips for your Buyer Agent

MI TAX TRIBUNAL PROCESS & dates REMINDER

First-Time Homebuyer Credit

Overview

STATISTICS: Now offered in out LINKS area

Statistics

Yes, the Housing Market Has Rarely Looked Better

Forbes is a useful resource.

Foreclosures / Short Sales

How To Do a Short Sale

Why Would a Lender Accept a Short Sale?

Short Sale and Foreclosure Effects on Credit

The Impact of Short Sales and Foreclosures on Credit Reports

Buying Foreclosures - How Foreclosures Work

What Is a Foreclosure and How to Profit From Foreclosures

The Drawbacks to Buying Foreclosures

The Condition of Foreclosed Homes

Another Win at the Michigan Tax Tribunal

FHA borrowers mortgage insurance premiums overview

list them and forget them

How to Use the Produce the Note Strategy to Save Your Home from Foreclosure

Chase Loan Modification- Easy Tips to Speedy Approval

Citi: Workouts Outnumbered Foreclosures by 10 to 1 in First Quarter

Snag a great deal on a short sale

Short sales - where a lender agrees to take less than it's owed on a mortgage - are rising sharply. Here's how you can profit.

Homes: Most affordable in 2 decades

Staging a vacant home.....WSJ

WSJ , Cracking a Valuable Homebuyer Credit & Energy Tax Credits

How Your Home May Qualify for Bailout Cash aka:Energy-Efficient Upgrades Yield Valuable Tax Credits

Outside buyers drawn to Detroit's foreclosed homes

Jeff Karoub and Corey Williams / Associated Press

Principal Residence for Property Taxes: pick old or new !

Produce The Note “How-To” DELAY FORECLOSURE

Feb 2009 Stimulus Package & First-Time Homebuyers

Congress Strikes $789 Billion Stimulus Deal

First-time buyers get $8,000 tax credit in stimulus bill

Feb 09 Stimulus provisions

Michael Gray, CPA's Real Estate Tax Letter

SE MI commercial_real_estate Blog

America's Free-Falling Housing Markets

Guide to Reducing Your Business Property Taxes

Guide to Reducing Your Business Property Taxes

Strategies to help you stop overpaying and start saving

Assess your assessment

Compare your assessment to neighbors

File appeals

File appeals for business personal property

Analyze additional factors

Consider a cost-segregation analysis

Use software

Ensure proper zoning

Flip This House

APPEALING PROPERTY TAXES

To Pay Less Property Taxes: Hire a Soldier of Fortune

Foreclosures hit like a hurricane

INVESTOR TOOL SITES

Zillow - Entertaining but near Zilch value

ANNUAL HOMEOWNERS POLICY REVIEW

Video Tips ! For Real Estate Buyers / Sellers

More on Tax Free Exchanges !

1031 Exchange Deadlines

1031 Exchange Deadlines

So you want to own a rental property

All of Anibal's SITES_and_BLOGS