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RICHMOND INVESTORS UPDATE

Saturday morning February 27th from 9 to 11 am I will be addressing the top three questions I continue to get asked :

1. How can I finance investment real estate – I will give you information on 3 ways you can finance.

2. What areas of the Richmond market are the best to invest today? I will share my most recent experiences in a variety of areas

3. How can I get my houses sold?

I will address all three of these topics and we will have some good old fashioned networking over bagels and coffee. I hope you can join me. This event is FREE of charge, but you can donate toward bagels and coffee to help us out.

I have a couple of different locations that will work, but need to get a feel for the number of people interested in this event… SO if you can join me I REALLY need to Know right away because space will be a limited.

To Reserve your space: Leave a comment at this blog that you will be joining us or Just send me an email direct : jim@cheaprichmondhomes.com and simply tell me you will attend!

You wont want to miss this event as we unravel the mysteries of how to get your deals financed, review the specifics of the Richmond market and tackle the solutions to getting your houses sold for an instant profit!

This will be a great time of investor networking and you can NOT beat the price — FREE. Come ready to have fun! Come ready to network! Come ready to learn how to capitalize in this market by INVESTING NOW!

Jim Ingersoll
http://www.cheaprichmondhomes.com
804-270-7377
jim@cheaprichmondhomes.com

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In November 2009 President Obama has signed the extension of the first time home buyers $8,000 tax rebate. President Obama also has signed an expansion of the original plan. The expansion provides a $6,500 tax rebate for qualified buyers who already own their own home. Both will be in effect until April 30, 2010. The provisions are providing a tremendous opportunity for homeowners as a huge incentive for buying a home. The new extension and expansion has created a sense of urgency for those buying homes. According to Mark Sauers, Assistant Vice President with Sun Trust Mortgage

“The only thing i would say is that if history teaches us any lessons we should move forward sooner rather than later. April 30 will be here before we know it. I really do not expect any further extensions beyond this”

The following guide will simplify the qualification process for homeowners looking to take advantage of the home buyer tax credit.

    $6,500 Tax Credit for trade-up buyers who already own their own home:

1. Income qualifications: Single taxpayer incomes must not exceed $125,000 and married couples income can not exceed $225,000

2. Purchase date qualifications: Purchase must be after November 6, 2009 and on or before April 30, 2010.

3. Ownership qualification: Buyers must have lived in their previous home for five consecutive out of the past eight years. The purchase price of the new home can not exceed $800,000 and the new home must be a personal residence (non investment or non-owner occupied).

The total tax rebate is equal to 10% of the purchase price, up to a total of $6,500 and does not need to be repaid back to the Government.

    $8,000 First time home buyer tax credit:

1. Income qualification: Single tax payer income can not exceed $125,000 and couples filing jointly can not exceed $225,000

2. Purchase date qualification: All sales that occur between January 1, 2009 and April 30, 2010

3. Buyer qualification: Anyone who has not owned their own home during the previous three years prior to current purchase

The tax rebate is available for 10% of the purchase price of the home with a maximum of $8,000 and can not be used on a home that is over $800,000. Really now, how many first time home buyers can afford an $800,000 home?

first time home buyers rebate expanded and extendedPresident Obama has signed the bill to extend and expand the home buyer tax rebate.  First time home buyers have been enjoying the $8,000 tax credit since it was signed in early 2009.  The first time home buyers tax rebate was set to expire on November 30, 2009 but now it has been extended to all houses put under contract before April 30, 2010.

Along with the extension President Obama signed an expansion of the original tax credit.  The expansion allows many homeowners, who purchase a new primary residence home, to enjoy a $6,500 refund.  Homeowners are eligible for the $6,500 if they have lived in their home for five consecutive years out of the past eight years.   The earnings income limit for receiving the tax credit are $125,000 for individual and $225,000 for a couple.  The new purchase does not need to cost more than the original purchase and here is an example of how the 5 out 8 consecutive year residency should apply:

Renting scenario:  If you previously owned your home for the five consecutive of previous 8 years, then sold it and chose to rent a different home you would become eligible to purchase a home and receive the rebate. Please contact your cpa or tax specialist to be certain of your situation.

Divorce scenario:  If you and your spouse lived together for five consecutive out of the past eight years, got divorced and went your own paths but did not repurchase a new home you would then potentially be eligible for the $6,500 tax credit.  Please be sure to contact your cpa or tax specialist to be certain of your situation.

It is estimated that approximately 2 million home buyers will take advantage of the tax rebate this year and that this tax credit could pump more than $20 Billion into our general economy.  The hopes of our Government leaders is that it will ultimately lead to a sharp rise in home sales and ultimately help lead to a stabilization in the overall market and economy.

Extending the tax rebate will help to continue to give a great incentive to first time home buyers nationwide.  The expansion is expected to lead to greater sales in the “Trade-up” category where home owners move up to a more expensive home to take advantage of this offer.

invest-now.jpgThe Senate has agreed to extend the first time home buyers tax credit.   Approximately 1.5 Million first time home buyers have taken advantage of the rebate in 2009.  The rebate allows first time home buyers to capture the $8,000 rebate.   The Senators have agreed that the tax rebate be extended to April 2010.  Next up is the vote of the House.  The House is expected to accept the package and send it to the President for signature.  It is expected that President Obama will gladly sign the extension.  In addition to the extension of the $8,000 tax rebate, they have agreed to expand the tax rebate to repeat buyers for a total of $6,500.

What impact will the extension and expansion have on our economy?  National Association of REALTORS® estimates that each home purchase contributes approximately $63,300 into our economy which is the approximate contribution of one new job.   Which organizations financially benefit from a home sale?  Here is a short list of some of them:

Realtor’s and Brokers:  6% commission on each sale.  Assuming the national average of a home sale is approximately $200,000 the commission per sale will average approximately $12,000. 

Settlement Agents:  The title companies and attorney’s generate income by selling the title insurance and providing legal services.

Mortgage Brokers:  Earn commission by writing your loans

Home inspectors and contractor’s:  Earn income on inspecting and then repairing the homes as needed.

Appraisers:  Earn their income for determing the value of your home

Financial institutions:  Earn their income through interest and numerous fee’s associated with your financing.

The first time home buyers rebate has had a big financial impact on our economy.  Expanding it to include a $6500 rebate to everyone will have a huge impact which will be covered in our next blog.

investnow.jpg 

Nearly 1.5 Million people have taken advantage of the $8,000 tax rebate since it’s conception in January 2009. The tax credit has been available to all first time home buyers. The first time home buyer is defined as anyone who has now owned their own home for three consecutive years. Oh, one more criteria for eligibility… It must be for your primary residence which is unfortunate for investors. The credit is in the form of a tax rebate for 10% of the purchase price of the home, up to a total of $8,000. One of the great benefits of the tax rebate is that is FULLY refundable to the buyer. For instance if the first time home buyer owed no taxes on their taxes, then the first time home buyer can ammend their tax return and capture the full $8,000.

The tax rebate has helped improve the national home sales. The current tax rebate is set to expire on November 30, 2009.  This means that the purchase must be fully closed and completed in order to qualify. It typically takes approximately 30 days to close on a home transaction with conventional bank financing. The point is that in order to be confident your purchase will qualify you should plan to be under contract to purchase your home by November 1, 2009. If you are trying to capture the $8,000 tax rebate and have not yet put your home under contract or you dont qualify for conventional financing then you need to consider finding an alternate approach. One alternate approach is to find seller financing. If the seller is providing the financing and you do not need to wait the typical 30 days for bank financing, then you can still close by December 1, 2009 without many challenges.

What about the possibility of extending the rebate past December 1, 2009?   There are currently several bills  in Congress that would allow the extension. Each of the bills in Congress provide alternate solutions toward the extension. Of course there is a lot of politics involved in completing the extension, from all poitical parties. Here is a brief summary of the extensions:

S1230:  Senator Johnny Isakson  introduced Senate Bill 1230 in June.  The Bill proposes a tax credit up to $15,000 that can be split over 2 year for everyone who purchases a home for their personal residence.

HR 2619:    This one  proposes to extend the existing $8,000 tax credit to July 1, 2010 and adds provisions for a tax credit of up to $3,000 for homeowners who refinance.  This would certainly create a ton of refinanes.  Is this part of the recent mortgage issue?  Many Americans seem to use their home equity as an ATM machine, pulling it out and spending it.  I guess that would potentially help spur the ecomony in the short term.

HR 2801 – Similar to S1230 but it extends benefits to January 1, 2011.

Several key politicians are publicly making comments about getting the extension approved by early November.  Those making positive comments include Senator Bill Nelson of Florida, Senate Majority Leader Harry Reid and Senate Finance Committee Chairman Max Baucus.  They are hoping to extend the rebate along with unemployment benefits at the same time. 

One thing for sure is our current Government is committed to spending an unlimited amount to try and stimulate our ecomony.  Our Leaders appear to be committed to short term gains at the expense of future generations.  That said, extending the first time home buyer credit will certainly help encourage American’s to own their own home. 

What do you think?  Should the first time home buyers credit be extended?  Why or Why Not?  What are the short term benefits and long liabilities associated with this extension?  I would like to hear your viewpoints so please leave some comments.

Gross looking kitchen

Gross looking kitchen

Door with hole in it from dog

Door with hole in it from dog

Gross bedroom before renvoation

Gross bedroom before renvoation

Welcome! We are glad you have joined us for our series on the Road to Financial Security.  We are going to follow a road map that will lead to cash.  Anyone need extra cash in this economy?  Ulitimately the real road to financial security is the buy and hold strategy.  I recognize that our economy will prevent those with job loss and insecurities from following this road map which is why this series will focus on flipping a house for fun and profit.

As mentioned in the previous blog our chosen investment needs a lot of loving in order to restore it to it’s former glory.   This house was literally a Dog House prior to our acquisition.  There is evidence of this point throughout the house.

1.  Severe dog stains on the hardwood floors…  you know what I mean by dog stains right?  You can see and smell them.

2.  Holes in the bottom of the doors and moulding around the doors in the lower bedrooms.  I believe the dogs were kept locked in these bedrooms and the literally attempted to chew their way out.  Take a look at the attached photo to see what I mean on this point.

3.  The whole downstairs really smells bad right now.

Besides the bedrooms ruined by the dogs, the kitchen is the next worst room needing some serious attention.  Take a look at the photo to see what I mean.  We will soon be gutting this kitchen and look forward to brand new cabinets, countertop, plumbing, appliances and a ceramic floor.

We will also be gutting the lower bathroom and installing new ceramic, tub, vanity, etc. into that so it will be brand new as well.  The hardwood floors will be refinished, the house will be painted entirely on the interior.  Once complete you can walk through the front door into the living room and the nice fireplace will catch your attention along with the refinished hardwoods and the newly installed ceiling fan.  From there you will notice the nicely renovated side screened porch and proceed to the brand new kitchen.  This house will offer 4-5 bedrooms, 2 full baths a nice yard and great neighborhood once complete.

On the exterior of this house we will be repairing the vinyl siding, painting the porches, and fixing up the garage along with lots of yard work.

Come along with us on the road to financial security.  The next segment will be coming soon with our construction updates and new photos, etc.

French St - Richmond, VA

French St - Richmond, VA

Welcome!  We are glad you have joined us for our series on the Road to Financial Security.  We are going to follow a road map that will lead to cash.  Anyone need extra cash in this economy?  Ulitimately the real road to financial security is the buy and hold strategy.  I recognize that our economy will prevent those with job loss and insecurities from following this roadmap which is why this series will focus on flipping a house for fun and profit.

The house we have chosen to chronicle is located on French St in Richmond, VA.  French St is an awesome neighborhood where every single house is very well kept and the home owners shown tremendous pride in keeping their lawns and such in a meticulous fashion.  It is also just 3 short blocks to the Maymont Park Pond and the Byrd Park area.  These are the reasons we have chosen to buy, fix up and flip this house.

The chosen house is the only house in the block that needs work.  The neighbors are very happy, let me repeat VERY happy to know it will soon be fixed up.  The neighbors are great and have lived in their houses for a long time (aka stable, nice neighborhood).

This house has grass that is higher than my knee’s along with heavily overgrown shrubs and trees.  Other than the outrageous lawn, the exterior is not in bad shape.  It already has nice vinyl siding and vinyl replacement windows.  Inside is another story…

The story from the neighbors is that when the former owners died the house went to the kids who then moved their dogs into the house.  Needless to say this is the smelliest house we have tackled.  The dogs were kept in a bedroom and they literally chewed a hold in the door and chewed off the door moldings.  Did Michael Vick live here at one point?  ha-ha, just kidding on that one.

This house does have a lot of great features including 4 or 5 bedrooms, hardwood floors and some nice character features.  It also has a nice fireplace and screened in side porch.  This home has approximately 1700 square feet and will appraise for around $220k once  our renovation is complete.

We are buying this house for $106k so their is penty of equity in this house.  I have financed it using a private lender so I did not need a bank mortgage.  I have worked with this private lender on several other houses and he continues to receive an outstanding return on this investments with me.  If you would like to partner with me and have available capital for one of our investments, please contact me direct at 804-677-9025.

The next blog will include the interior photos along with our construction plans and budgets, you wont want to miss it…  Happy House Hunting!

From acquiring, to investing, to repairing, to staging, to appraising, to inspecting, to putting it on the market, to open houses, to listing, to contracts, to actually selling… the process of investing in and selling a home from start to finish can be confusing and a daunting task. We want to make it easy! We are working with a new home that a private lender has invested his money in to yield a great percentage. We are the experts in the field of home acquisition and investments. This particular home has just been acquired and is in the process of getting repairs and getting ready to go on the market… SO we have decided to do a series of blog entries following this home and it’s investors from the beginning to the day it sells.

 Welcome to WEEK FOUR (the FINAL week) of our entries: the process of investing in real estate from START to FINISH.

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Oh man have we had an amazing experience with this latest property!

Okay, here is the rundown on who gets what on this investment:

What WE get:

ALL of the renovations are complete. We bought this property with a DOUBLE exit strategy in mind:

  1. We can rent it for a very positive monthly cash-flow
  2. We can sell it to a first time home buyer and we would get a nice chunk of income at closing

What the HOME BUYER gets:

We have listed this home using Just List ‘Em for $124,900.  A first time home buyer is able to purchase this home for LESS than renting with under $1,000 out of pocket to buy (since we are paying ALL of their closing costs) AND a monthly mortgage payment of around $850 per month.  The home buyer gets a HOUSE with very little out of pocket, a very low monthly payment, and the $8,000 Tax Credit from the Government.

The home owner also gets an affordable, renovated house with a dimensional shingle roof, new heating and air conditioning, 3 BR, 2.5 baths, nice fenced yard with deck and driveway, beautiful refinished hardwood floors, new kitchen appliances, etc. It doesn’t REALLY get any better than that.

What the IRA Investor Gets:

Our IRA investor gets a GREAT yield and is no longer losing money in the stock market.  Once this house sells, the investor wants us to move his money to another house so we can repeat the process again and continue to provide him a great return to his IRA.

Sounds to me like this is a win-win-win TRIPLE win situation. Everyone walks away happy.

Here are some pictures of the FINAL product: 

Living Room

Living Room

Kitchen

Kitchen

Bedroom

Bedroom

GREAT back yard

GREAT back yard

FINAL exterior of the house

FINAL exterior of the house

If YOU or someone you know is interested in this property, partnering with us on an investment, or considering selling your home, let us know. We would LOVE to work with you.

From acquiring, to investing, to repairing, to staging, to appraising, to inspecting, to putting it on the market, to open houses, to listing, to contracts, to actually selling… the process of investing in and selling a home from start to finish can be confusing and a daunting task. We want to make it easy! We are working with a new home that a private lender has invested his money in to yield a great percentage. We are the experts in the field of home acquisition and investments. This particular home has just been acquired and is in the process of getting repairs and getting ready to go on the market… SO we have decided to do a series of blog entries following this home and it’s investors from the beginning to the day it sells.

Welcome to WEEK THREE of our entries: the process of investing in real estate from START to FINISH.

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A red door ALWAYS helps a home sell

A red door ALWAYS helps a home sell

We had another VERY productive week with a lot of people working on this house.  We have owned it two weeks now and are very happy with the overall progress! Even though I discussed a lot of the improvements in last week’s post, I’m going to include them in this one, in addition to what we worked on this week, so that someone new coming across this can feel caught up on everything we have done! 🙂

Well, the biggest constraint with the house was that it only had 1.5 baths, and to make matters worse, they both were ONLY accessible from bedrooms.  Every house has a problem to solve, and the bathroom situation was a major problem for this house.  So, we added a full bath downstairs, located just off the kitchen.  We also added a new laundry room, and we opened up the kitchen and gave it a new dining area as well.

So here’s where we are right now:

  • New bathroom downstairs is almost done 
  • All electrical work is done  [we rewired a portion of the house]
  • Plumbing – all updated now
  • 2.5 Ton heat pump installed (new heating and air conditioning )
  • New dishwasher installing in the kitchen
  • New flooring put in kitchen, bathrooms, and laundry room
  • All interior walls painted
  • New black shutters on exterior of house AND we painted the front door red since red always sells the house
  • New deck is complete
  • New dimensional roof complete

New windows will be installed on Tuesday and then we will be 100% complete! How awesome is that?!

Other good news, the house has been appraised at $130,000 this week and we will fine tune our marketing strategy on justlistem.com very soon.  We, including our private lender, are very happy that it appraised at $130k with the 3 bedrooms and 2.5 baths. 

I hope you enjoy the pictures I have included. Check back next week where we outline our marketing strategy using justlistem.com, and where we discuss all the finishing touches on the house!

Exterior work on home
Exterior work on home
Electrical work
Electrical work
New flooring
New flooring
Flooring
Flooring

 

 

 

 

From acquiring, to investing, to repairing, to staging, to appraising, to inspecting, to putting it on the market, to open houses, to listing, to contracts, to actually selling… the process of investing in and selling a home from start to finish can be confusing and a daunting task. We want to make it easy! We are working with a new home that a private lender has invested his money in to yield a great percentage. We are the experts in the field of home acquisition and investments. This particular home has just been acquired and is in the process of getting repairs and getting ready to go on the market… SO we have decided to do a series of blog entries following this home and it’s investors from the beginning to the day it sells.

Welcome to WEEK TWO of our entries: the process of investing in real estate from START to FINISH.

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The Bolling house -- Week TWO.

Our project -- Week TWO.

Of course, there are no surprises this week!  Renovating a house is just like peeling an onion–you never know for sure what you have until you peel it all back.  We had TEN people working on this house for the better part of this week.  It is critical to be prepared to start the work the very first day that you close on the home. Our first trip to Lowe’s home improvement center was fun. It was like a parade with about four carts full of materials.  [BTW: ANYONE can save 10% at Lowe’s by getting the coupon from the “change of address packet” at their local post office.  This week we spent $1,400 in materials at Lowe’s and saved $140. Pretty sweet, right?]

Here is what we did this week:

Constructing the new full bathroom

Construction of the new full bathroom

  • New dimensional shingle roof
  • New deck in the back yard
  • New full bath (almost done)
  • New heating and air conditioning installed (WITH a 2.5 ton heat pump)
  • Prepped all walls for painting

Here’s what’s happening NEXT week:

  • Completing all interior work
  • Refinish all hardwood floors
  • Lay new kitchen floor
  • Lay new bathroom flooring
  • Replacing shutters
  • Painting of exterior trim
  • Complete all landscaping work
  • Determine sale and listing price
  • List home using Just List ‘Em: http://www.justlistem.com

Our investor is very pleased with the progress of the renovations on the property. By using his IRA to fund the project, he is receiving an 8% interest return on his overall investment–something he would never have received from a bank. We are so happy to be collaborating with a private lender on such a great project. By becoming a private lender and investing in real estate when the stock market is not at it’s best, you are able to achieve greater financial gain in an easy and reliable manner. After last week’s post, we received A LOT of questions regarding this process. We would be happy to answer them, but I would also like to refer you to this website:http://www.entrusttexas.com. [The contact is Quincy Long.] The Entrust Group provides a lot of GREAT information regarding self-directed retirement plans–this is a great place to start when considering investing in real estate and properties.

Look forward to next week when we discuss the completion of the renovations, sale-price, and MORE.

In the meantime, follow us on Twitter! @justlistem

-Jim Ingersoll

Jim Ingersoll

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