September 29th, 2008 Categories: Arlington, Buying, Commercial, Condo Communities, Entertainment & Lifestyle, Fairfax, Fairlington, Falls Church, Financing, Great Falls, Just for Fun, Keller Williams, Mclean, On The Town, Properties, Property Values, Real Estate News, Reston, Selling, Single Family Homes, Vienna
I was reading the actual bill that describes our ‘$700B bail out’ and WOW is what comes to mind. This should be the cause for an amazing change from the mortgage lock-down we’ve been experiencing the past few months.
If I had a crystal ball and wanted to assure my buyers of when it was a good time to buy, I would suggest that once this bill passes (there is a clause that requires implementation start within 60 days) that later this year early next will be the best time to buy on almost all fronts. Interest rates should remain low, prices should remain low and because of this bill, prices should stabilize. Stabilizing of prices and the churn of new buyers could potential be the perfect storm for equity gains to start again….
Call me today if you’d like to discuss my interpretation or yours. I’d also call your bank and see what they can do for you- this would be EXACTLY what the point of all this is to drive.
Ive attached a snippet of the actual bill that highlights some interesting change potentially headed our way.
“SEC. 109. FORECLOSURE MITIGATION EFFORTS.
…MODIFICATIONS
In the case of a residential mortgage loan, modifications made under paragraph (1) may include—(A) reduction in interest rates (B) reduction of loan principal; and(C) other similar modifications.
TENANT PROTECTIONS.—In the case of mortgages on residential rental properties, modifications made under paragraph (1) shall ensure—(A) the continuation of any existing Federal, State, and local rental subsidies and protections; and(B) that modifications take into account2 the need for operating funds to maintain decent3 and safe conditions at the property.”
| Currently No Comments »
August 13th, 2008 Categories: Financing, Keller Williams, Mclean
If you’d like more information or details about this list of twelve myths please write or call- Im glad to help you decide if this is the right time for you to buy a home. ….
| 1. | Paying my debts will make my credit report instantly pristine. |
| 2. | I must give permission for a company to see my credit report. |
| 3. | Credit counseling always destroys my credit score. |
| 4. | Canceling credit cards boosts my score. |
| 5. | Too many inquiries hurt my score. |
| 6. | Checking my own credit report harms my standing. |
| 7. | FICO scores are locked in for six months. |
| 8. | I don’t need to check my credit report if I pay my bills on time. |
| 9. | All credit reports are the same. |
| 10. | A divorce decree automatically severs joint accounts. |
| 11. | Bad news comes off in seven years. |
| 12. | I can always pay someone to fix or repair my credit. |
| Currently No Comments »
July 29th, 2008 Categories: Buying, Financing, Keller Williams, Tools and Resources
This happens and as a matter of fact just recently to me… Here are easy to follow instructions that I learned along the way that could preserve the deal and the customers earnest money deposit.
SCENARIO:
1. Referral comes in from existing client for their contact in another jurisdiction
2. Referral goes right back out to agent in that area
3. Accepting agent takes customer out and shows houses
4. Customer initiates contract and begins loan processes
5. LOAN IS DECLINED on the day before settlement……YIKES…..
WHAT IS A CUSTOMER TO DO?
SOLUTION:
1. STAY IN FULL COMMUNCIATION WITH YOUR AGENT- they are your advocate and not be dismissed. This is not a reason to be ashamed or embarassed but rather they can help you through what is probably the lender simply needing additional information about your income or the property.
2. Work with lender to find out what caused the issue- You probably had a pre qualifaction letter or your agent wouldnt have taken you out to begin with so what gives now? FIND OUT!!!
3. Request to extend the settlement date and in most cases seller will agree to your agents request since you will be making a good faith effort (especially by staying in communications) to proceed with the transaction. This step will more than likely preseve your earnest money deposit as well.
4. Work with lender inside new timeframes to ensure you get to closing table.
5. Enjoy your new home! (hopefully)
| Currently No Comments »
July 28th, 2008 Categories: Arlington, Commercial, Fairfax, Financing, Property Values, Real Estate News
For most Nothern Virginia homeowners property taxes were increased on July 1. In addition local jurisdictions may also increase the commercial poperty tax rate by as much as .25 cents per every $100.00. Fairfax and Arlington countoes have increased commercial property taxes .11 cents and 12.5 cents respectively in their 2009 budgets.
Residential tax rates in:
1. Arlington County is .848 cents per $100
2. Fairfax Counbty is .92 cents per $100.
3.City of Alexandria is .845 cents per $100.
4. Town of Herndon is a whopping $1.16 per $100.
For more information on this or other real estate questions please call or email us today!
| Currently No Comments »
March 25th, 2008 Categories: Financing, Keller Williams
Good news for the state of Virginia and the District, foreclosures fell in both areas from the month of January to February.
The State of VA as a whole, dropped 18.7%, from 5,152 properties to 4,187
Fairfax County fell 19.2% and Arlington County fell 12.8%
Washington, D.C. saw a 32.5% decrease!!
Compare these to the national average, of a 4% decrease, and you can see this area is doing very well!! We’re moving in the right direction to get these foreclosure filings down!! Let’s talk about how this may affect the market in the months to come, call us!
| Currently No Comments »
March 10th, 2008 Categories: Buying, Financing, Keller Williams
On March 6th, the Housing of Urban Development (HUD) published new conforming loan limits for FHA, Fannie Mae, and Freddie Mac loans. They are now calculated at: 125% of published mean prices, with a floor of $271,050 and $417,000, respectively, and a ceiling not to exceed $729,750.The higher loan limits will help those buyers looking foo jumbo loans, like the buyers in our area with higher real estate values. It’ll help those seeking new loans, and those looking to refinance to lower, more reasonable rates.
TIME TO BUY YOUR NEW HOME! :) Call us today to discuss how this might affect your buying power for a new property.
| Currently No Comments »
February 9th, 2008 Categories: Financing, Keller Williams
When you hear people talking about a “refi” they mean refinancing their loans…but I want to briefly explain refinancing mortgages. Basically, refinancing means replacing your previous mortgage terms with a new one, usually at a lower interest rate. Given the recent rate cuts, now seems like a great time for folks to “refi” their current mortgages. However, there’s a lot for the lenders to consider when applicants submit refi requests.
CNN Money has recently published an article that says many people are having trouble refinancing, because of qualifications and equity. Call me today to discuss! 703-283-4524!
| Currently No Comments »
February 5th, 2008 Categories: Financing, Keller Williams
Not only for loan applications and real estate transaction, but in general, it’s good to know your credit score. It’ll give you a better idea of what your budget/loan amount might be when considering purchasing your new home. On the Federal Trade Commission website, they list the 3 sources that will give you 1 free credit report per 12 month period. All 3 of these sources are provided through annualcreditreport.com. Once you login to this website, you should be able to access all of the information required to obatin your free credit report.
Be cautious of fake websites offering free credit reports!! The FTC says, “Only one website is authorized to fill orders for the free annual credit report you are entitled to under law”…this website is the annualcreditreport.com
Hope this helps some of you!
| Currently 1 Comment »
February 1st, 2008 Categories: Financing, Keller Williams
With the recent Fed rate cuts, stimulus package talk, up and down stock markets, the U.S. fears we’re headed towards a recession. They say foreclosures are up, defaults are up, there’s excess supply of homes for sale, etc. etc. BUT, and this is a big but, the National Association of Realtors (NAR) reports that 2007 had the 5th highest exisiting home sales on Record. Over 5.6 million (exisitng) homes were sold in 2007.
Does that sound like a slumping market to you??
I know that prices are declining, and sales are slowering, but with the lowered interest rates, it should make getting a mortgage loan (for those with good credit) easier - and cheaper. The cost of borrowing, i.e. the interest rate, is less. Of course, this does make it harder for those of you with poor to average credit ratings to get a loan. But that’s how we got into this “mess.” Banks were giving high loans to people who couldn’t afford to pay them, so it should come as no surprise that people couldn’t make payments on their mortgages in time.
I just wanted to make the point that things don’t look quite as gloomy and ominious as everyone’s predicting. Agree? Disagree?
| Currently 2 Comments »
January 30th, 2008 Categories: Financing, Keller Williams
(Picture Courtesy of CNN Money)
As predicted, the Fed cut interest rates again by 1/2 a point, bringing the rate down to 3%. Combined with the other rate cut this month, that’s a total of 1.25% in January. According to the Washington Post, that’s the steepest rate cut in a single month in 20 years. The Post also says,
“The lower rate is likely to reduce the cost of borrowing money through credit cards or auto loans or to invest in a business, and is likely reduce rates on many adjustable-rate mortgages.”
This should make borrowing money for a new mortgage, and refinancing, easier. That’s the point of these rate cuts - to increase the ease with which new mortgagors can obtain funds to buy your next home!
| Currently No Comments »
January 29th, 2008 Categories: Buying, Financing, Keller Williams
Since i’ve been on the theme of mortgage rates and financing of late, I thought I would add one more post about the issue.
Mortgage rates are at their lowest since 2004.
If you take a look at all of the information available out there today on historical mortages rates, whether they’re 30 yr, 15 yr, ARM, etc, they’re all low! And it’s rumored with another Fed meeting scheduled for tomorrow, they could go even lower. I would just like to make very clear a few points about today’s market:
-Low mortage rates
-An abundance of houses on the market for sale
-Steep decline in sales price
Now what does this mean for the buyers in Northern Virginia?? BUY. And buy now. Let’s go shopping for your new home today!
| Currently 1 Comment »
January 28th, 2008 Categories: Buying, Financing, Keller Williams
The proposed Stimulus package by President Bush will take affect sometime before June, say reports. Aside from the obvious advantage of $600 for singles (earning less than $75K) and $1,200 for married couples (earning less than $150K), there’s an additional benefit for the housing market.
The stimulus package will help those markets - like Northern Virginia, where home prices are higher. It will aim to make getting a mortgage easier, refinancing easier, and prevent foreclosures. The package will raise FHA and VA loan caps to $725K, and would be permanent. Additionally, for those requiring a “jumbo” loan, the cap will be higher (currently $417K).
All in all, hopefully this will start easing people’s concerns and stress about getting mortgages for new homes. With the abundance of supply around, and sales prices dropping, now is definitely the time to consider buying your new and/or next home.
| Currently No Comments »
January 24th, 2008 Categories: Buying, Financing, Keller Williams
It seems everytime we look up an article on CNN, WashingtonPost, etc. there’s this box with the daily mortgage rates from Bankrate.com. What do the rates show? Why do they appear on these websites?
Bankrate.com is one of the leading web resources for financial information. They survey over 4,800 financial institutions in the 50 U.S. States to find the quotes they display on charts, like the one shown above (daily quote for today, January 24th). It shows you the rate change since last week - we see above the drastic drop following the Fed rate cut. While the image above shows current mortgage rate estimates, Bankrate also provides estimates for credit cards, new and used automobile loans, money market accounts, certificates of deposit, checking and ATM fees, home equity loans and online banking fees.
*Note: In the bottom right corner of the image above, it says “rates may include points.” For those of you who don’t know what points are, here’s a brief, high-level explanation. Each “point” is 1% of the LOAN amount. By paying points, you pay a lump sum of the interest amount upfront to essentially “buydown” your interest rate for the life of your mortgage.
Bankrate has a lot of other useful information during this time of economic change. Please call me if you have any questions or would like to discuss anything!
| Currently No Comments »
December 6th, 2007 Categories: Financing, Keller Williams
President Bush announced today that in an attempt to help almost 1.2 M people who have Adjustable Rate Mortgages (ARMs), there will be a 5-year freeze on interest rates. However, Bush’s relief plan is limited - it is not applicable to delinquent mortgage payments that are more than 30 days past due, or anyone who has been more than 60 days late on a payment within the past year (past 12 months).
While this may help some people, there will still be many people who will need future help making their mortgage payments. There is some talk that lenders will now be better able to work with borrowers to resolve these issues.
For more information on how this can benefit you, feel free to call or email me!
| Currently 2 Comments »
November 19th, 2007 Categories: Financing, Keller Williams
In the Mason Dixon Week in Review (for 11/19/07), Senior Loan Officer Fontaine Williams indicates there is slight Fed talk of no further rate cuts, while others anticipate another quarter-point cut that will be announced on the 11th of December.
| Currently No Comments »
July 3rd, 2007 Categories: Financing, Keller Williams
Your credit score can have a tremendous impact on your pocketbook, your future and also your general peace of mind. If your credit score is not great, it can cost you tens of thousands and even hundreds of thousands of extra dollars in your lifetime in the form of excess interest, fees and charges. Of course if this same money was invested over a lifetime, it could make you a millionaire rather than a slave to debtors who keep charging higher and higher interest rates the lower that your credit score falls.
Notice that in order for you to lose a lot of money in terms of interest rates on loans, your credit score doesn’t have to be bad …all it has to be is “not that great.” Unfortunately, a person’s credit score can be very fragile. Sometimes all it takes is one missed payment to knock about 100 points off of your numbers and knock you from the coveted position of a person with good credit to a struggling and more expensive existence as a person with mediocre credit.
The key is to think of your credit score as being an extension of your personal reputation. If your credit score is high enough then lenders will be fiercely competing with you trying to get your business. Your mailbox will be crammed with offers from credit card issuers and mortgage lenders who will be competing fiercely to offer you loans, credit cards and mortgages with low interest rates.
However, if you have a low credit rating you are still likely to find yourself with a crammed mailbox but it will be full of offers for loans with a high interest rate and notification of sudden split decisions made by credit card companies and other lenders to raise your interest rates with no warning.
A high credit score will also get you great deals on auto financing if you need new wheels, home loans if you want to buy or renovate a house and business loans if you want to start your own enterprise. A low credit score turns you into a renter for life.
Whether or not your credit score is high or low can also affect your personal reputation. Landlords and insurance companies also look at your credit scores to find out what kind of person you are. A landlord may ask you for more of a deposit or deny you an apartment if your credit score is low. An insurance company might up your monthly rates if they detect that you are a financial risk that may not make its payments on time.
Life can be rigid and expensive if you have a bad credit score. If your credit score is low or next to non-existent you will find yourself in a consumer’s purgatory where it is impossible for you to maintain mainstream credit. If you do happen to stumble upon an opportunity to obtain credit, chances are that it will be offered by one the many legal loan sharks in North America who will charge you high rates and fat fees (usually more than 40%) to borrow even the slightest amount of money.
In essence, your low credit score can cost you. You can even have a really great credit score and not realize that you qualify for better terms. Sometimes the problem isn’t getting loans; it is getting loans that cause you to pay a high price over the long term.
I always advise my customers to protect their credit in order to let the mortgage lenders do their jobs. I’m not in the mortgage business but I know enough to know your credit is a huge percentage of the equation!
So like I tell my clients do the RIGHT MATH 
!!
| Currently No Comments »
June 7th, 2007 Categories: Buying, Financing, Keller Williams
I am fascinated over the concept of an IO loan and actually believe in them. It sounds crazy I’m sure, but for the last few years i’m still averaging a conventional loan rate/payment and I have used my money in other investments that have done quite nicely. Its been a nice ride while my equity gains have been up and my monies have not been tied up in the walls of my house due to a conventional loans higher payment.
I searched high and low for the pitch I got when I started my IO and found a great article worth reading- All buyers/sellers and agents should take a look!…..What’s your opinion?
“”Here are the figures provided by my loan officer. The payment on the 30-year 5.5% fixed-rate mortgage is $567.79 for each $100,000 of loan, of which only $109.46 is reduction of principal. On the interest-only, the rate is 3% and the payment only $250. If you take the IO and then make the $567.79 payment, $317.79 of it will go for principal. This means that you will pay off your loan much sooner.”I receive letters similar to this every day, and the number of them seems to be increasing. The pitch is evidently very effective, so more and more loan officers are adopting it. Interest-only (IO) is HOT, and one of the major reasons is that it is now being sold as a way to amortize a mortgage more quickly.A fascinating thing about the rapid amortization pitch is that it is the exact opposite of an earlier and still popular pitch for IOs: that the lower payment allows the borrower to invest the payment savings and earn a return higher than the mortgage rate. This pitch is for no amortization. “Why invest in repaying your loan balance, which is only costing you 5.5%, when you could put that money into common stock that will yield 10% or more.”Although I don’t think many borrowers would profit from adopting the no amortization strategy, the pitch is at least straightforward. Most borrowers understand the costs and potential benefits of investing (or spending) monies that would otherwise go to paying down the loan balance. The rapid amortization pitch, in contrast, is extremely deceptive.
Everything in the statement of your loan officer is true, yet it is extremely misleading. The rate on the IO is not 3% because it is IO but because it is an adjustable rate mortgage (ARM). Rates are lower on ARMs than on FRMs because ARMs are riskier to the borrower. The real choice that is being made here is not between IO and non-IO but between FRM and ARM.
By making it appear as if the rate differential is IO vs something else, borrowers are encouraged to ignore all the features of ARMs that they should be concerned with in making a selection. The writer above and all the others don’t tell me how long the 3% rate lasts.
Borrowers making this choice do indeed have the option of taking the lower-rate ARM while making the larger payment. This is a good risk-reduction strategy when selecting an ARM because, if the ARM rate rises in the future, the payment increase won’t be as large. ARM borrowers can adopt this strategy, whether their ARM has an IO option or not.
Indeed, borrowers who plan to do this may do better with an ARM that does not have an IO option, because in many cases the rate will be lower. If the ARM in the example above were available at 2 7/8% without an IO option, the borrower would be better off selecting it. The sales pitch obscures this possibility.
Copyright Jack Guttentag 2004″
| Currently No Comments »
May 23rd, 2007 Categories: Financing, Keller Williams
Several of my ”new to real estate investing” friends have been asking what precisely is a 1031 exchange. To avoid any uncertainty I decided I better get a simplified response for them so I looked it up and this is what I landed on-
“A 1031 Exchange, also known as a Like Kind Exchange or Starker Tax Deferred Exchange (named for an investor who challenged and won a case against the IRS) is a transaction under United States law which specifies under section 1031 of the Internal Revenue Code, 26 U.S.C. § 1031the following:
This allows taxpayers to defer all of the capital gains taxes resulting from the sale of investment property, when they use a Qualified Intermediary, follow the IRS guidelines, and use the proceeds of the sale to buy more investment property within 180 days of their sale. In order to obtain full benefit, the replacement property must be of equal or greater value, with equal or greater debt, unless the taxpayer adds cash to the deal to replace debt instead, and all of the proceeds from the relinquished property must be used to acquire the replacement property. The taxpayer must have assigned his interest in the relinquished property to a Qualified Intermediary prior to the close of the sale, so that the taxpayer has lost control of the funds before he has any opportunity to obtain them.
At the close of the relinquished property sale, the proceeds are sent by the closing agent to the Qualified Intermediary, who holds the funds until such time as the transaction pertaining to the replacement property is ready to close. Then the proceeds from the sale of the relinquished property are deposited by the Qualified Intermediary to purchase the replacement property, which is then delivered to the taxpayer, all without the taxpayer ever having “constructive receipt” of the funds.
The prevailing idea behind 1031 Exchange is that since the taxpayer is merely exchanging one property for another property(ies) of “like-kind” there is nothing received by the taxpayer that can be used to pay taxes with. All the gain is still locked up in real estate and so no gain or loss can be claimed.”…. Click here for more information.
| Currently 1 Comment »
May 23rd, 2007 Categories: Buying, Financing, Keller Williams
I started out investing in real estate because of 1. My interest 2. The affirmation from the series of books by Robert Kiyosaki that explained it can lead to quicker than expected financial freedom. Fortunately I am on my way! However, over the years I have noticed a few flaws in the approach and tax ramifications I didn’t expect (Ill explain those in another blog). As far as the flaws, noticed I kept hitting the wall to 100% financial freedom when I realized that continuing to leverage OPM (other people’s money) eventually has a cap. “Rich Dad, Poor Dad”, for me, didn’t ever advise there is a limit to what the world will allow you to borrow/leverage. The good news is ‘my’ cap is manageable and the “assets” are appreciating and the leverage is not even close to my net worth (partly due to my own comfort level in leveraging).
Since now we have the ability to share what we know via blogging, I wanted to uncover a few thoughts on “Rich Dad, Poor Dad” especially for those perhaps bitten by his ‘word’- I pulled a portion of the analysis from John T. Reed’s analysis- it is quite an interesting read. It certainly helped me keep things in percpective and I’m hoping it does the same for other Kiyosaki readers….
| Kiyosaki said | Reed comment |
| avoid mutual funds and 401(k)s because they are too risky | Mutual funds vary in their risk. Some are very low risk. 401(k)s have tax benefits that are hard to ignore. Also, you can invest them in almost anything you want in many cases.Bogus gurus like to give extremely simple rules. Ignorant readers love them. That’s fine when the subject permits. But this is an extremely simple rule that is not valid because of the complexity of the subject. |
| says his net worth is “$50 million to $100 million depending on the day” | I don’t believe that. He was bankrupt and homeless in 1985 by his own admission. Although a lawyer who searched the federal case management system on line says he could find no bankruptcy filing for Kiyosaki. He claims to have sold 26 million books. I don’t know if I believe that either. The highly successful book What Color is Your Parachute? has only sold seven million copies since it first came out in 1970. But even if you accept the 26 million figure, Kiyosaki’s co-author royalty would appear to be about 72¢-not enough to get you anywhere near $50 million even if you had no living expenses. He claims to make money in other businesses, but will not disclose enough detail that anyone can check that.Also, what’s this “depending on the day” nonsense? I presume that’s a shameless effort to impress people who are really ignorant about the world of finance. What he is saying is that his net worth doubles or halves within 24 hours. He implies that causes him not the least bit concern. Gimme a break! If my net worth dropped in half in one day, I would be pretty upset about it.What must he be invested in to enable his net worth to double or halve in 24 hours? Pork belly futures? No one in his right mind would invest his entire net worth in an investment vehicle that could double or halve in 24 hours.In the 2/03 Smart Money magazine article, he said his net worth was $35 million. Must have been a really bad day in pork belly futures. Actually, his book selling success notwithstanding, I would guess his net worth is more like $3 million, virtually all of it from book and related sales. |
| the investments of the wealthy are managed well | Laymen think that. I don’t. The main thing in managing an investment is stock picking. That is impossible to do well on purpose. It’s a crap shoot. If anybody ever figured it out, he would not need to work-for the wealthy or anyone else. There have been numerous studies proving this, most notably the classic book, a Random Walk Down Wall Street by Burton G. Malkiel. The wealthy do get good advice on legal implications of their portfolios, but not on how to earn a high return. The notion that anyone gets good advice on how to earn a high return in securities is a laymen’s myth. |
| says he was able to retire at 47 | So why didn’t he? He’s still hustling his butt off to sell stuff. |
| there are three different types of income: earned, portfolio, and passive | This is primarily an income-tax-rate distinction as Kiyosaki explains it. He says these types of income are taxed at 50%, 20%, and 0% respectively.The phrases “passive income” and “portfolio income” do appear in the Internal Revenue Code. I have used “earned income” to describe money you make from your salary or business.In fact, Kiyosaki is spouting nonsense. The federal income tax rates on earned income, passive income, and portfolio income are the same-not 50%-but your overall rate can get to that level when you add state income taxes. The distinction between the different types of income involves whether the losses from one category can be deducted from income of another category.The 20% tax rate of which Kiyosaki speaks only applies to long-term capital gains. Those come from selling assets at a profit after holding them for a specified number of months. You can have such 20% -tax-rate gains in both the passive and portfolio categories.The only income that is taxed at a 0% rate are special things like municipal bonds and gains of less than $250,000 per person from the sale of certain personal residences.It is possible to do transactions where there is no tax due at present, like IRC §1031 exchanges, but the tax-free nature of such transactions stems from the fact that you received no income. Rather you put the proceeds from the sale of one rental property into the purchase of another rental property. If and when you eventually take out your profit by selling your rental property, you will be taxed on the gain that you had when you exchanged. See my books Aggressive Tax Avoidance for Real Estate Investors, How to Do a Delayed Exchange, and Reverse Delayed Exchanges. |
| I own 10 rental buildings in Miami, Austin, and Phoenix. | Most investors use more specific terminology like “apartment complex” or “office building” or “shopping center.” Investors usually use the phrase “rental building” to hide the fact that their properties are mere rental houses.You should not own rental property in three states unless you have a specific reason for doing so. Why not own all ten rental properties in Phoenix, where he lives? With Kiyosaki, I suspect he thinks having property in three states makes him sound like more of a tycoon. To experienced investors, it makes him sound like more of a dilettante. You want the property in the same region-preferably where you live-so you can use the same people to work on all the properties and save on air fares, hotels, and so forth.One reader said investing in three different regions gives you diversification benefits. Only against regional economic downturns and possibly rent control if the buildings are bigger than one family. But rent-control risk is better dealt with by staying out of multifamily and states that do not have a rent-control pre-emption in state law. The risk of regional economic downturns is not great enough to overcome the disadvantages of spreading yourself that thin in terms of travel, personnel, need to learn different laws and markets, etc. |
To read more of John T Reed’s comments visit: visit here.
| Currently 1 Comment »
May 23rd, 2007 Categories: Financing, Keller Williams
So I learned this (the hard way this year) and wanted to share my findings to those who may not have good accountants guiding them through the process. It involves pretty interesting tax implications- let me start with the basics- keep in mind I’m not an accountant or attorney and I am only sharing my one dimensional perspective thru my unofficial blog…..So here goes…
I think in most states the rule of thumb is you get to write off the interest portion of your primary residence from your annual Federal Tax Bill. I was also under the impression I could write off the interest on my 4 investment properties as well. And for one year (that I was consulting as a 1099 and doing real estate for majority of my time) I did just that and received almost a $40,000 tax return. Things were humming-my investment properties equity was growing, the tenants were paying their bills on time and I was planning for the next year’s tax return, when I got really busy consulting for a portion of the year, and then got a new accountant to do my taxes. Important factors to the end result since I ended up paying close to $30,000.00 in taxes and have been annually since.
Here’s the bottom line: If you are a real estate investor and you are interested in writing off your investment property interest payments you need to make sure that you are a “real estate professional” for at least 750 hours in a given year –OR– at least worked one hour longer than any other earnings you may have received outside of your real estate profession. I have been consulting in the information technology industry the past few years (while “doing” real estate investing and attempting to sell too). The problem for me lies in that my consulting time has exceeded my real estate profession time the past few years and therefore I don’t get to write off my investment property interest.
Just a point of interest when deciding on how many hours you dedicate to your real estate profession- it could mean you get a nice tax return or you pay one…..
| Currently 1 Comment »
May 16th, 2007 Categories: Financing, Keller Williams
Here’s what I have recently learned is the difference between a broker, a lender, and a portfolio lender.
Seems to me these differences are important things to undertand in our line of business
1. Broker. Broker’s don’t have their own money to lend. Brokers have access to various lender’s money. i.e. Wells Fargo, Countrywide, Citibank, Suntrust, National City. Okay, you say, if these companies give money to the broker, how does the broker make money–they need to charge above the going rate to make a profit, right? NO! NO! NO! Within each of these companies, like Wells Fargo, etc. there are two divisions. One is the retail division and one is the wholesale division.
The retail division has loan officers out on the street approaching realtors, clients, etc. just like me. The wholesale division has reps that solicit business from loan officers like me–they do not deal directly with the agents or the public. They get their business from mortgage brokers. How can the wholesale reps hope to get any business while they have to compete with their retail counterparts? Because the wholesale money is offered at a CHEAPER rate than the retail money. That leaves room for the broker to make money. The loan closes in the name of the company that lent the money-not the broker.
2. Lender. A lender has what is known as a wholesale line. i.e., a line of 4 million, let’s say. Okay, so GMAC has given the lender a line of moneythat he can lend. Within the lender’s company is a department called secondary. Secondary marks up the money to make the company a profit. The loan closes in the lender’s name.
3. Portfolio Lender. This is like Chevy Chase Bank, or Suntrust or Wells Fargo. These companies usually have both a retail and a wholesale division. These companies can sell their loans or keep them (keep them in their “portfolio”). Loans close in their name.
So do I need to pass out three business cards when giving a lender referral?????
| Currently No Comments »
May 13th, 2007 Categories: Financing, Keller Williams
I found this on Inman News Blog after I joined their community - not sure if you’re allowed or supposed to share, but what this is a great article regarding credit scores. Below is a snippet of what they say… “The roots of the credit repair industry go back to 1970, when Congress said credit bureaus have 30 days to correct errors in consumers’ credit histories after they are brought to their attention. Now, with delinquencies and foreclosures on the rise and lenders tightening their underwriting standards, there’s some controversy over the apparent ease with which FICO scores can be boosted, and debate about how useful they really are.Many of the techniques used by credit repair companies to help consumers boost their FICO scores are legit. They can help clear up out-of-date, inaccurate or duplicated “derogatory items” on a credit report. These companies also offer advice any consumer can take advantage of — borrow money to pay off other debts, open more credit card accounts — which can sometimes boost FICO scores. ” Check out the INMAN news BLOG for additional info.
| Currently No Comments »
The BEST Time to Buy Northern Virginia Real Estate … September 29th, 2008
I was reading the actual bill that describes our ‘$700B bail out’ and WOW is what comes to mind. This should be the cause for an amazing change from the mortgage lock-down […]
Read MoreMid Town North- Reston Town Centers Finest September 17th, 2008
Welcome to a great presentation I found on You Tube that offers terrific video footage of Reston’s, Mid Town North condominiums. The Kettler CMO and sales team that created this presentation are doing a […]
Read MoreThe Odyssey, Arlington Virginia’s not so hidden gem September 4th, 2008
Standing over 12 stories tall and located in the heart of Arlington Virginia this high tech looking, contemporary condominium building has terrific view of the DC skyline, especially from the […]
Read MoreThe Wooster and Mercer Lofts- Centered between Rosslyn and Courthouse Metro stops September 4th, 2008
Situated practically in the middle between Arlington’s Rosslyn and Courthouse metro stops the Wooster and Mercer Lofts are available for sale now. Boasting anywhere 10-18 foot high ceilins in most […]
Read MoreClarendon 1021- Great sense of Community in Arlington Virginia September 4th, 2008
Built in 2005, Clarendons 1021 holds 400+ units and has roughly 500 parking spots in an attached underground garage. Situated right next door to Station Square, in the heart of […]
Read MoreStation Square: The Heart of Arlington, Virginia September 4th, 2008
Built in 2006, this cluster of 3 condominium buildings hold 300+ units and have roughly 600 parking spots in an attached underground garage. Situated in the heart of Clarendon these […]
Read MoreReston Virginia, 20194 Home Sales are on the Rise August 29th, 2008
I was looking around at a great website www.city-data.com for information on Restons home sales and to my surpise I learned so much more about the demographics of this steadily growing […]
Read MoreRestaurant Three (3) Clarendon August 25th, 2008
Saturday night my wife and I, with a few close friends, enjoyed an amazing atmosphere and dinner at Restaurant 3 in Arlington Virginia. Situated in small corner of the block that Station Square condominiums […]
Read More
