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Real Estate News – $8,000 Tax Credit to ALL home buyers?
Real Estate News Overview:
A new bill was introduced Thursday by Howard Coble (R-NC) which would allow almost anyone who purchases a principal residence to take advantage of the $8,000 tax credit through the end of 2010.
The proposed bill would also lift the income limitation which currently states that singles earning more than $75k and couples earning more than $150k are disqualified. This would be good news for higher income earners.
The proposed bill also extends the repayment waiver to account for the extended credit availability. Current law states the tax credit does not have to be repaid unless the homeowner sells the property or no longer uses it as a primary residence within 36 months of purchase.
Real Estate Investor Coach Response:
Ok, so what does all this really mean for the creative real estate investor?
I’m glad I asked…. Because this raises a VERY interesting opportunity that may help you sell properties and get a down payment that makes the deal worth while. Now, I have not done this personally, but I have spoken with one of my real estate investor peers and learned a creative technique that appears to be perfectly legitimate. What he is doing is selling his properties with owner financing, or Land Contract, or AITD, (depending on where you live) and allowing his buyers to use their $8,000 tax credit as part or all of their down payment on the house. Pretty smart if you ask me. And in the eyes of his attorney and the IRS this transaction is perfectly legitimate and the tax credit is provided just like it would be for any other conventional sale. He gets his houses sold, the buyer gets the house, the tax credit money goes to the seller when it comes in, the buyer makes payments to the seller and everyone wins! Man, I wish I would have thought of this.
Personally, I’m not sure If I’ll try it because I like to sell my homes through a lease option because then I still own the home for certain tax purposes that work for me. However, on some of my homes where I’ve owned it for more than a year, I may consider this technique to get an extra $8k. If I do I’ll let you know. And if I do, I’ll be sure to consult with my attorney and consider all the “Murphy factors” that could come into play to make sure that everything is done correctly, and so should you!
If anyone as done a deal this way, I’d love to hear about it.
To your Real Estate Investing Success,
Brian Evans
Real Estate News – Mortgage Rates Increase to 6 month high
The average rate on a 30-year, fixed-rate home loan climbed to 5.29% for the week ended Thursday, Freddie Mac reported. That’s the highest since December and up from 4.91% a week earlier.
“There’s a real risk interest rates could climb up beyond 6% or 6.5%, which can immediately shut down the housing recovery and undermine the national economy,” says Bernard Baumohl, chief global economist at the Economic Outlook Group.
Also, as a result of the increase in rates, refinancing activity fell 24%.
Real Estate Investor Coach Response:
These are interesting facts to know considering the ongoing housing slump and economic “crisis” we as a country are in. Whether the rates go up or down dramatically or slightly doesn’t really matter. As a real estate investor you can have flexibility when you buy and flexibility when you sell if you are educated enough to know how to structure a deal. Remember, properties are our “widget.” In order for us to make money on our product we need to be able to buy our inventory right. I’m going to repeat that because it is a very important sentence. We need to BUY RIGHT. How you buy a property is ultimately going to determine how you will be able to sell a property. Therefore, the better terms and flexibility and price that you are able to negotiate when you buy sets you up to be able to handle the economic “crisis” easier when you sell because you can then make it easier on someone to buy. Make sense? If not the re-read this paragraph as many times as it takes until you figure it out.
And since I don’t use banks to buy my “widgets” (you shouldn’t either) then that is why it doesn’t matter what the interest rates are doing. Remove yourself from the mindset that you have to go down and qualify for a loan to buy properties and be a real estate investor. That is the wrong kind of thinking and will ultimately set you and your business up for problems. There are too many other ways to buy, sell, flip, hold, lease, option, properties than having to rely on what the banks, rates, the economy, etc is doing. Go make your money investing in real estate the right way and let everyone else worry about those “conventional wisdom” things.
Be sure to post your comments on this article below.
To your Real Estate Investing Success,
Brian Evans
How to Buy Houses with 0% Interest
Buying Houses with 0% Interest is one of my favorite ways to buy houses and it isn’t as difficult as you may think. The key is getting the seller to be the bank for you. Watch this short video to learn the 5 steps to get started!
Fellow Real Estate Investors, if you enjoyed this video today then it is really important that you post your comments below and let me know. If there are other specific questions or topics that you would like to learn about then be sure to mention that as well!
To your Real Estate Investing Success,
Brian Evans
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