Happy Halloween

Happy Halloween

Have you voted yet?

Today is the last day for early voting in Nevada. Polls will be open until 8pm just to make sure they catch everyone. Otherwise you have to wait until Tuesday, November 4 to vote. In the meantime a lot of propaganda has been going around about all the candidates. I brought in all the direct mail pieces I received this week and I had at least 17 political cards. Ironically enough, only three were from a national campaign. Most of them were from the contentious Congressional race in my district.

Whoever you vote for, make sure you are making an educated decision. Don’t just vote for someone because of something you heard on a commercial or let the direct mail pieces scare you. Do some research. Find out where the candidates stand on all the issues. This is your decision to make.

 

 Now GO VOTE!

A home of my own

 

Last week, I was talking to a friend about my first home in Las Vegas. It was a single story new home of about 1600 s/f in Green Valley.  I closed in late 1984, interest rates were coming down and I was thrilled to get an FHA loan at 12¼ %.  He asked me: “How did you afford it?”  His question was not about how I balanced my checkbook; he wanted to know what changed between then and now that made owning a home seem that much harder to attain.  Property values are higher, but interest rates are lower.  Wages are higher, but savings are lower and personal debt is at an alltime high. 

 

I thought it might be interesting to go back to 1984 and compare that first home purchase with the same house purchased today. Than I found this blog and realized Rhonda did all the work for me. Although it’s a different market, I would guess my results would be similar.

 

The author writes:

    “How many first-time homebuyers would be willing to commute like I did or to buy a true starter home?” 

 

Are first-time homebuyers willing to settle for a less-than-perfect home while cutting back on their spending to meet the loan requirements? 

 

Has the current housing downtown soured a whole generation on the idea of home ownership as a vital part of the American Dream?

It’s time to trim your sails.

  

“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.”

Jimmy Dean (the sausage guy, not the bad driver)

 

 

Congress has passed 2 game-changing pieces of legislation in the last 4 months – the Housing and Economic Recovery Act of 2008 and the Emergency Economic Stabilization Act of 2008.  These acts will create 6 new government agencies and programs, expand 4 existing programs, change numerous tax laws and increase the federal debt limit.

 

How do the changes impact the Millionaire Real Estate Investor?

 

These changes won’t have much impact on the real estate market and may prolong the downturn. Both bills contain provisions for the U. S. Treasury to work with delinquent homeowners to avoid foreclosure, only delaying the inevitable.

 

Values will stay down as long as most properties for sale are either owned by the bank or facing imminent foreclosure. 

 

One of the programs the new legislation will create is the Troubled Asset Relief Program (TARP).  Ostensibly, it’ll authorize the Treasury to buy bad assets from banks, thus infusing the banks with fresh capital. The Treasury will also be able to simply hand over taxpayer money to illiquid banks.

 

These moves will allegedly make more low-interest, low-cost mortgages available to both owner-occupants and investors. 

 

This means opportunities if you’re looking to buy single-family homes to rent. 

You should add to or expand your portfolio because:

 

1)      People who lose their homes need places to live.  In 2005-06, Las Vegas developers converted many apartments into condos.  With increased land prices, this meant fewer apartments – thus forcing renters into single-family homes.  And rents continue to increase while home prices decrease.  With credit tight, first-time homebuyers need to save more (and longer).  This means positive cash flow for landlords who rent out single-family homes.

 

2)      If the Democrats end up controlling the White House and both houses of Congress, your taxes will rise. You can claim depreciation on your real estate investments, which offsets income, making your investment tax-neutral. You can also set up a small business to run your investments, letting you deduct expenses.  Check with your tax accountant.

 

 

Watch out for these pitfalls:

 

1)      With prices at historical lows, you’ll be competing with other buyers. Calculate the maximum you’re willing to pay, then bid.  If it doesn’t work, move on to the next property.  Overpaying in this market is a rookie mistake.

2)      New federal laws and proposed state laws will make it tougher to remove a tenant who has a valid lease.  If you’re looking at an occupied property, do your homework and know your legal options before bidding.

 

Chicken Little: “The sky is falling.”

 

Winston Churchill: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

 

Choose which one you want to be.

 

Did you know?

The “Vision Group” of Evofi One (Evolution in Finance) has a new FHA insured loan, called the “Rehab/ Redesign Limited Repair Program” that permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. All standard FHA underwriting guides apply as they do for regular FHA loans in regards to credit, income & asset documentation. 

 

Each borrower using our preferred Keller Williams Realtor participating in this program with Evofi One’s Vision Group will also have access to our “Home Design Package” in the event they would like to preview with their clients while showing properties prior to appointment with General Contractor. The “Home Design Package” includes samples of the materials offered as well as catalogs that products can be selected from.

 

A Few Eligible Improvements Include:

 

1. Repair/Replacement of roofs, gutters and downspouts

2. Repair/Replacement/upgrade of existing HVAC systems

3. Repair/Replacement/upgrade of plumbing and electrical systems

4. Repair/Replacement of flooring

5. Minor remodeling, such as kitchens, which does not involve structural repairs

6. Painting, both exterior and interior

7. Weatherization, including storm windows and doors, insulation, weather stripping, etc.

8. Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens

9. Accessibility improvements for persons with disabilities

10. Lead-based paint stabilization or abatement of lead-based paint hazards

11. Repair/replace/add exterior decks, patios, porches

12. Window and door replacements and exterior wall re-siding

 

For details of this program, call The Kincaid Team (702) 212-2214 to get in touch with a lender. The Kincaid Team would like to extend a special thank you to Doug Yates and Evofi for this week’s blog. If you have a great idea or program for a blog post, please email Jessica@thekincaidteam.com.