Real Estate News & Commentary by Chris McLaughlin, February 10, 2009
http://www.shortsalesriches.com/welcome.html
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There’s still a fair amount of confusion regarding the new home buyer tax credit, as the legislation isn’t final and the draft is still pending a final vote in Congress. As you know, I’m not happy about Congress’s wimpy $8,000 credit versus the $15,000 proposed, but something is better than nothing.
According to today’s Wall Street Journal, the tax credit is for first time home buyers only that are buying between April 2008 and June 2009. The credit is now nonrefundable. That means that the existing $7,500 credit is increased by $500 and no longer needs to be paid back as an interest free loan over 15 years, as was previously the case.
The National Association of Realtors provided a different window on effective dates, however. They indicate that the pending legislation is $8,000, but that it is for purchases made between January 1, 2009 to December 1, 2009. And if the home is resold within 3 years the credit must be recaptured on the sale of the property, but if it is held for more than 3 years it is nonrefundable.
In addition, the existing credit was ineligible for homeowners utilizing revenue bond financing. That provision, according to NAR, has been eliminated.
Stay tuned: once the legislation passes both the House and Senate we’ll have the final facts to you ASAP!
Now, on to our real estate investing section…
Short Sales Real Estate – The Perfect Baby Gift?
Grandparents or parents searching for the perfect baby gift should pass by those standard Savings Bonds and instead, turn to short sales for the perfect baby gift that is able to transform a life forever. Think this sounds a little “over the top”? Consider how real estate would have performed in the past by using these simple steps:
1. Purchase an affordable short sale home in a growing area or college town. Finance it for 15 to 20 years using a fixed interest mortgage.
2. Rent the home while the child is growing up. If you make money – consider it a big bonus or reinvest the extra to help pay tuition or other expenses.
3. Once the child is ready to begin college the home will be paid in full. College cost will be dramatically reduced since they do not need a dorm and can actually generate a small income by renting out rooms to other college students. Less work means more study time for your future student!
4. After college they can continue to rent for an even larger monthly profit, exchange the property for one closer to their new work location or sell the property to purchase their first family sized home…with a huge down payment and instant equity or perhaps even pay cash if desired.
5. If they continue to hold, the property will only increase in value while gaining greater appreciation over the years.
Now ask yourself…how would your life have been different without big student loan debt? Never having to worry about a roof over your head? A small rental income coming in every month? Enough money to purchase a great family home or even a retirement account in old age? You can provide this plus so much more simply by purchasing a short sale property with a 15 to 20 year mortgage on behalf of a special child.
It is hard to determine what the future may have in store for the younger generation although most experts agree, inflation is likely to make college less affordable than ever. As the federal government prints their way out of the current economic crisis, higher than average rates of inflation are likely to impact every area of life, resulting in severely limited futures for many young Americans.
On the other hand, even with low rates of inflation, the price of a home typically doubles or even triples every 20 years. Today’s ultra low priced short sale home could easily double or triple in value by the time your child begins college then double or triple again by the time they are in middle age. For example, a $100,000 home could easily be worth $200,000 by the time they start college – all paid in full! If inflation continued to creep along the same house could be worth $400,000 by the time they are in their 40’s and $800,000 by their early 60’s. This one gift could radically alter the rest of their productive life and even the lives of your great-grandchildren. So, buy a short sale house and place it into a trust to assure the financial future of that very special child in your life.
See you at the top!
Chris McLaughlin
http://www.shortsalesriches.com/welcome.html
P.S.
This week’s webinar replay is right here…
http://www.webinarwizards.com/custom/index.cfm?id=170879
Copyright Loss Mitigation Institute 2009.
All Rights Reserved.
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About the author:
Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.
* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid flipping of distressed homes. Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner and Supervising Broker of one of Florida’s
largest Real Estate firms, running 4 different
offices, supporting nearly 450 agents, uniquely
positioning him to help thousands of investors
make money in the biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
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