Market Humor?
A SIGN THE MARKET IS TURNING AROUND….
Oprah Winfrey sold her New York City penthouse for $7.9 million in less than a week, with buyers starting to line up as soon as the property hit the market on Feb. 22, according to media reports.
The 26th floor unit is 2,530 square feet and has three bedrooms and includes a 768 square foot balcony, a master suite with three walk-in closets, and views that extend from New York’s Central Park to the Hudson River. Oprah reportedly never lived in the penthouse, but a friend had occupied it.
Growing your Investments
Building wealth. Buying low/ selling high. Equity income. Tax deductions. Positive cash flow. Interest deduction. Let’s even throw appreciation in there because, well, we will see it again. I have posted on here numerous times about the benefits of buying rental or investment property. These deals are real, affordable, and available now. The deals I speak of: buying a duplex and renting out one side. Purchasing a townhome that cash flows with little maintenance. Snatching up a single family home, that with a little TLC that turns into a nice income producer. Buying property close to college for your children and others to rent while attending. These deals are real and happening and you don’t have to be Trump to get in on it. I would decline to self promote if it weren’t true, easy and if I weren’t helping people do it. Disclosure on the self promotion, I’m not creating the environment or the potential, it’s there. It’s the buyers that are smiling and making agreat deal, I am just having fun counseling, coaching, and helping them achieve it.
Buying Short Sales
To being with, this post is meant to touch upon the news that an increasing number of lenders will not borrow money to purchase a house in the redemption period, not short sales specifically. However it is more common for homes listed as a short sale or potential short sale to be up against the clock that is ticking towards the sheriffs’ sale. Which at that point begins the redemption period. To clarify, if you are buying a house, whether a short sale or not, and the sheriffs sale has happened, you may be out of luck. Check with your lenders on this.
Purchasing REO’s with Retirement Funds
A bill was introduced in the U.S. House of Representatives that would waive withdrawal penalties on certain retirement plans if the money is used to buy a home that has been in foreclosure for a year or more. This bill was introduced recently by congressman and real estate professional Bill Posey, R-Fla, and is expected to apply to Roth IRAs, 401(k) plans, and company pensions.
The intent is to promote purchases of these types of properties by owner occupants or second homes rather than people looking to “flip” them. According to the bill, purchasers must agree to hold the property for at least two years to avoid penalties associated with the withdrawals.
The “second home” idea could be an inviting one as California (25%)and Florida (9%) accounted for nearly 34% of foreclosure activity during the first quarter according to RealyTrac.
The bill has been sent to committee for further consideration.
$600 1099 Landlord Reporting Law Repealed
In a little-noticed but important victory for REALTORS®, particularly those who help households and mom-and-pop owners of small rental properties, Congress this week passed legislation to repeal a short-sighted provision in small business legislation enacted last year (and a similar provision in the big health care reform law) that imposed onerous reporting requirements on small landlords and the real estate practitioners who work with them.
UPDATE: Presid
ent Obama signed the repeal into law yesterday, April 14, making it official.
Forgiven Mortgage Debt May Be Taxed…
The Mortgage Debt Relief Act of 2007 that extends through 2012 has no doubt helped a lot of people. There have been many, that given their unfortunate situation, were faced with tough choices such as foreclosure, a short sale, or a lengthy loan modification. I have previously stated on this site, not all debt should be assumed forgiven…
The debt your lender canceled must have been used by you “to buy, build or substantially improve your principal residence.” One of the keys in this is “principal residence.” This means not your investment property, 2nd home or seasonal condo. Another factor in deciding the qualifying forgiven debt: was any of the unpaid mortgage balance used for non-qualifying purposes? Refinanced for kids tuition? Maybe a vacation? A new car? Consolidating credit cards? As currently written, the IRS does not see these as qualified principal residence debt.
If you have foreclosed, sold short, or modified your loan and have never received a 1099-C, you should request this of your lender to possibly avoid tax issues. A person should verify with a qualified professional in the tax arena on their responsibility. The site IRS.gov also has information on filing details such as Form 982 and IRS Publication 4681.
FDIC Chair: Banks Need to Increase Lending
In order for banks to fully recover from the financial crisis they need to start lending more and “get back to the basics of making loans,” Federal Deposit Insurance Corp. Chairman Sheila Bair said on Wednesday.
While banks have decreased their loan balances in the fourth quarter, “we are looking to the industry to take the next step, and begin to build their loan portfolios,” Bair said.
The biggest decrease in loan portfolios came from construction and development, which fell 9 percent or $32.5 billion. However, lending is increasingly slightly in other categories: Lending for residential mortgages inched up by $17 million, or slightly less than 1 percent.
Banks have said they aren’t lending more due to decreased demand with a still sluggish economy.
But the industry’s outlook continues to improve, even for smaller banks who were hard hit by commercial real estate loans that went bad, Bair said. The amount of bad loans — those 90 days or more past due — decreased for the third consecutive quarter.
Source: “U.S. Banks Told They Need to Start Lending Again,” Reuters News (Feb. 23, 2011)
