Howard's Blog

Vacation home never put for rent or sale not like-kind property for 1031 Exchanges

Howard Barnes (Connect Realty.com) — Sun, 28 Sep 2008 12:23:11 -0500

A taxpayer purchased a vacation home as an investment with the hope it would appreciate in value and be sold at a profit. The taxpayer then sold the vacation home and purchased another vacation home as an investment property with the proceeds of the sale.

The properties were never rented or put up for sale and no mortgage interest, maintenance, or other expenses were listed as deductions on their income tax return.

The taxpayer reported the profit on the sale of the first vacation home as tax exempt under §1031 due to the sale and acquisition of like-kind properties.

The IRS claimed the sale and purchase did not qualify as a §1031 transaction since neither the vacation home sold or the one acquired were investment properties as they were never held out for rent or for resale, or treated as investment property on the taxpayer's tax returns.

The taxpayer claimed the sale and acquisition did qualify as a §1031 transaction since the intent was to hold the properties for investment purposes, waiting for their value to appreciate before selling.

A United States tax court held the sale and acquisition did not qualify as a §1031 transaction since the properties were not investment properties as they never were held out for rent or for resale, expenses taken, or depreciation or investment interest deductions claimed, and the mere intent to hold the properties until they appreciate and can be sold at a profit does not establish an investment intent when used solely as a vacation home. [Moore v. Commissioner (May 30, 2007) TC Memo 2007-134]

Be careful of escrow companies using www.HOACerts.com

Howard Barnes (Connect Realty.com) — Wed, 24 Sep 2008 13:26:16 -0500

I have a deal going on a bank owned property with two escrow companies involved. One is Pickford Escrow and one is The Escrow Firm. I believe they are both in Laguna Niguel, California and they are supposed to be affiliated.

My buyer made an offer that was accepted but was unable to get the loan due to a change in circumstance. We informed the listing agent and cancelled our offer within a few days.

The escrow companies did not provide the HOA cc&r's but will not refund the cost of the cc&r's to the buyer.

They are trying to charge the buyer for the cc&r's and a cancellation fee while providing no cc&r's.

The escrow companies say they have to pay www.hoacerts.com up front and there is no refunds so the buyer has to pay whether the cc&r's are delivered or not.

As well, the escrow companies say they are not willing to use the cc&r's for the next deal on the property.

You need to be aware of what these guys are doing out there so that you can protect your buyers.

We have given the escrow companies an ultimatum, refund the deposit or we will report them to the dre for attempting to deduct fees for services not provided.

We will see what happens

FHA Seller Assisted Financing In Huntington Beach May Come Back

Howard Barnes (Connect Realty.com) — Thu, 18 Sep 2008 13:06:40 -0500

Barney Frank has been pushing to keep FHA seller assisted financing alive.

The House Financial Services Committee adopted H.R. 6694, legislation designed to reauthorize and reform down payment assistance programs that the Bush Administration banned in July.

In a final effort to head off the Oct. 1 ban on the use of seller-funded down-payment assistance with FHA-backed loans, H.R. 6694 is picking up steam as an alternative bill that would mend rather than end the practice of down payment assistance.

HR 6694 would allow qualified borrowers with credit scores of 680 or above to use seller-funded down-payment assistance on FHA-backed loans. Borrowers with scores between 620-680 will be subject to risk-based pricing and higher insurance premium fees.

This bill still needs to be approved by Congress and the President.

The committee vote was a positive step toward keeping a down payment assistance program, but it's not over. Members of Congress need to know that we are watching their vote on H.R. 6694.

Everybody who wants to see seller assisted down payment assistance preserved needs to call their representatives in the House and the U.S. Senate. They need to be told that a vote for H.R. 6694 is a vote for the next generation of homeowners.

Huntington Beach Green Expo on Saturday

Howard Barnes (Connect Realty.com) — Wed, 17 Sep 2008 15:43:02 -0500

The first ever Huntington Beach Green Expo happens this Sunday September 20, 2008 from 10 am to 4 pm at the Huntington Beach library at 7111 Talbert Ave, Huntington Beach CA 92648.

The expo will be held in the parking lot between the library and the sports fields.

Those attending will be able to get information on how to live and work in a more environmentally sensitive manner.

The expo is completely sold out and we invite all in Southern California to attend.

This expo is sponsored by the Huntington Beach Chamber of Commerce and the City of Huntington Beach Economic Development Department.

What is tenants in common?

Howard Barnes (Connect Realty.com) — Wed, 17 Sep 2008 15:36:59 -0500

Tenants in Common is a way to hold title, to own property, by two or more individuals. Sometimes it is referred to as Tenancy in Common. There is no limit to the number of individuals who can hold title to one piece of real estate. A property held by tenants in common can be owned by two owners or 100+ owners.

How Are Tenants in Common and Joint Tenants Similar?

They aren't, really. Tenants in common hold one unity or requirement that is similar to joint tenancy. That unity is the right of possession.

•· Tenants in common can be between two or more persons who are related or who are unrelated. Husbands and wives can hold title as tenants in common. Joe Williams, Mary Phelan and Amir Shaik can hold title together as tenants in common.

•· Ownership can be held in equal shares or unequal shares. For example, Joe could hold 50% ownership, Mary 25% and Amir 25%.

•· Co-tenants have the right to possess the property by one tenant or by all the tenants. Amir can live in the property by himself or share the property with Joe and Mary. Neither tenant can exclude the other.

•· Upon death, the interest of the deceased co-tenant will pass to the co-tenant's heirs. If Amir died, Joe would still hold 50%, Mary would own 25%, but Amir's 25% would pass to whomever she designated in her will.

How Can Joint Tenants Become Tenants in Common?

Joint tenancy requires four unities. Unlike tenants in common, joint tenancy involves right of survivorship, meaning the interest held by each tenant will pass to the other upon death. The four unities necessary to create joint tenancy are:

•· Time. Each owner must receive title at the same time.

•· Title. Each owner must receive title on the same deed or document evidencing title.

•· Interest. Each owner receives the same proportionate and equal share of ownership.

•· Possession. Each owner has the identical right of possession.

If one of the joint tenants sells or conveys the interest created in a joint tenancy to another person, the joint tenancy is broken, and a tenancy in common is created. Joint tenants cannot stop another tenant from breaking the joint tenancy.

Dissolving Tenants in Common

•· To dissolve the tenancy in common, one or more co-tenants can always buy out the others.

•· The property can be sold and the proceeds distributed equitably among the owners.

•· A partition action can filed. This involves going to court and asking to sell the property under court order and distribute the proceeds among the owners. When a co-tenant dies, you may see a partition action filed when an heir may want to sell and the other co-tenants do not.

Need a mortgage, What is good credit?

Howard Barnes (Connect Realty.com) — Mon, 05 May 2008 16:53:16 -0500

According to Experian's National Score Index for credit score stats, the average American credit score was 678 (as of 4/2008).

If your score is below 620, then you might have a tougher time getting a loan.

The following ratings explain the impact of the different score ranges:

* 720-850 - Excellent - This represents the best score range and best financing terms.

* 700-719 - Very Good - Qualifies a person for favorable financing.

* 675-699 - Average - A score in this range will usually qualify for most loans.

* 620-674 - Sub-prime - May still qualify, but will pay higher interest.

* 560-619 - Risky - Will have trouble obtaining a loan.

* 500-559 - Very Risky - Need to work on improving your rating.

When is a hard money loan an option?

Howard Barnes (Connect Realty.com) — Wed, 30 Apr 2008 18:32:41 -0500

Hard money (private money) fills a niche in mortgage lending and provides alternate funding for your clients who have specialized needs or too many credit problems for conventional financing.

Many brokers have clients who would pay higher rates to gain access to capital, including non-traditional funding, and who have the amount of equity available to guarantee payment.

Who Benefits from the Use of Hard Money?

Here are a few mainstream examples of broker clients who benefit from the use of hard money:

Borrowers that need quick funding for time sensitive loans
Borrowers who want to use equity for a real estate investment
Borrowers who want short term loans
Borrowers who have lost bank loans because of previous declines
Borrowers who want to avoid the hassle of institutional loan processing
Borrowers who want a loan that has more flexible terms and conditions
Borrowers who cannot qualify for bank assistance, due to:
- Poor credit
- Tax liens
- Other liens
- Bankruptcy
- Foreclosure
- Divorce
- Medical emergencies

What Benefits Do Hard Money Loans Provide?

When speed is very necessary to complete a profitable transaction, it can make sense to pay for short-term private money rather than walk away from the deal.

Owners of expensive properties benefit when they want to cash out large amounts of their equity via refinance loans, equity loans, equity lines of credit or debt consolidation loans.

Real estate investors use private money loans because there are no lengthy timelines or restrictions required by bank loans.

Borrowers facing foreclosure also benefit. When the foreclosure process starts, the borrower may be so far behind that conventional lenders hesitate to refinance the loan. A private money lender may be willing to give your client a new loan. Your client can use the funds to pay off the original loan and secure enough time to sell the property and find a new place to live.

Borrowers who have temporary problems, such as a job loss, can use a private money loan to rebuild their credit. By making payments on time for a year or two, they create the opportunity for a future refinance at a more favorable rate.

Borrowers who own properties that do not meet institutional guidelines also benefit from the use of private money. Frequently the condition of a property disallows for the initial financing with conventional money; or, the structure of the deal may also be a factor. Unconventional property characteristics or deal structure might include:

Needs Improvement
Needs funds to provide occupancy of income property
Not eligible for sale in the secondary market
Does not meet requirements for conventional underwriting
Held in probate, trust, partnership, LLC or corporation

What is a hard money loan?

Howard Barnes (Connect Realty.com) — Wed, 30 Apr 2008 18:29:04 -0500

A 'hard money' loan, also known as a 'private money' loan, 'equity-based' loan, or 'asset- based' loan is based primarily on real estate collateral.

Private lenders fund the loans rather than institutions such as banks. Since the collateral is sufficient to recover the original investment if the borrower defaults, other borrower qualifications are minimized.

Credit history and credit scores are not as important.

Borrower income is still a factor in many situations, but not as important as conventional lending.

Good News From the Fed

Howard Barnes (Connect Realty.com) — Wed, 30 Apr 2008 15:52:19 -0500

The Federal Open Market Committee cut the fed funds target rate by 25 basis points to 2%. This is the lowest the target rate has been since late 2004. The press statement cited weakness throughout the economy and stress in financial markets. It noted higher inflation, but also said that inflation should moderate in the near term. The statement made no reference to upside or downside risks to growth. Two members voted against the rate cut, favoring no action. The Fed also reduced the discount rate 25 basis points to 2.25%.

Prime rates at the major banks have moved down to 5%.

Networking events in Huntington Beach

Howard Barnes (Connect Realty.com) — Sun, 20 Apr 2008 13:28:05 -0500

Here are some upcoming networking events in Huntington Beach for the next few weeks:

April 22^nd 7:15am

Netwalkers meet at Central Library

April 23 Extended Stay Evening Networking Event

5pm-7pm Afternoon Luau (a lot of fun please join us)

5050 Skylab Circle West, Huntington Beach

Extended Stay will provide Appetizers and drinks

Please bring plenty of business cards

May 6 Surf City Lunch Bunch

Flight Bistro & Social Lounge

8082 Adams Avenue, Huntington Beach

11:30

Cost $15 for members

20 for prospective members

Includes lunch 20 second introduction, and members get to place information out.

Attendance 60+

May 7^th

Ambassador Meeting

4:30 Chamber Office

May 7^th

New Member Reception 5:15-6:30pm

Location: Chamber Office, 19891 Beach Blvd #140 Huntington Beach

Come by and have sandwiches, cookies, drinks and find out how to get the most out of your membership.

May 9^th

Winner Circle Breakfast

7:15am-9am

Seacliff Country 6501 Palm Avenue Huntington Beach

Networking Breakfast

Cost $22 in advance wed prior to breakfast, Cost 27 after wed prior to breakfast.

Cost Prospective Members 30

May 15 Joint Mixer HB Chamber & Westminster Chamber of Commerce

Best Western 5755 Westminster Blvd.

5:30-7:30pm

May 6 Surf City Lunch Bunch

Flight Bistro & Social Lounge, 8082 Adams Avenue, Huntington Beach, CA

11:30

Cost $15 for members

20 for prospective members

Includes lunch 20 second introduction, and members get to place information out.

Attendance 60+

May 20 Dental Oasis of Orange County Ribbon Cutting

7777 Edinger Ave., Suite #232 (Bella Terra), Huntington Beach, CA

5:30pm

May 21 Surf City Connection (Business Exposition)

4-6:30pm

Hilton Waterfront Beach Resort 21100 Pacific Coast Hwy, Huntington Beach

Attendance 350-400

Free to attend

The Benefits of Refinancing

Howard Barnes (Connect Realty.com) — Mon, 07 Apr 2008 19:46:02 -0500

The Benefits of Refinancing

Many people refinanced their mortgages in 2007. And some cash-strapped refinancers decided to borrow even more money, in the form of a home-equity loan. If you fall into this category, be sure to claim all your rightful deductions on your 2007 return.

Deducting Your Mortgage Interest

Say your original mortgage was $200,000. On July 1, 2007, you took out a new 30-year, $300,000 mortgage and paid 1 1/2 points, or $4,500, for the privilege. (Each point represents 1% of your total loan amount.) You then used the extra $100,000 from the new mortgage to eliminate some high-interest credit-card bills, pay off your car loans and cover various other personal expenses.

Assuming your home was worth at least $300,000 when you refinanced, you have, in effect, two new mortgages as far as the Internal Revenue Service is concerned. The first $200,000 of your new loan (the balance on your old mortgage when you paid it off) is treated as "home-acquisition debt." And as you probably know, this interest qualifies as an itemized deduction on line 10 of your Schedule A. (Don't forget, however, that if your adjusted gross income in 2007 was greater than $156,400, or $78,200 if married but filing separately, this deduction is subject to the phase-out rules for itemized deductions.)

The remaining $100,000 of your new loan is treated as home-equity debt. The interest on this should also qualify as an itemized deduction on line 10 of your Schedule A. But keep one thing in mind: The IRS only recognizes home-equity loans up to $100,000; you can't deduct the interest paid on principal above that figure.

Also, if the home-acquisition debt plus the home-equity debt exceeded the fair-market value of your home, you generally can't deduct the interest on the excess debt. For example, say your home was worth $240,000 when you took out that new $300,000 loan. You can deduct the interest on the $200,000 of acquisition debt, but you can deduct the interest on just $40,000 of the home-equity debt. So you can deduct 80% ($240,000/$300,000) of the total mortgage interest on line 10 of your Schedule A. (The interest on the remaining $60,000 of debt is generally considered a nondeductible personal expense, though there are a couple of exceptions, like if you used the loan proceeds to finance your small business.)

Talking Points

You can amortize the points related to the home-acquisition-debt part of the new loan ($3,000 in our example) over the life of the loan. Say it's a 30-year loan (360 months). Your amortization deduction would be $8.33 a month ($3,000 divided by 360), for a grand total of $99.96 a year. Every little bit helps, after all.

What about the points related to the home-equity debt ($1,500 in our example)? You can amortize those in the same proportion as the interest, provided that the home-equity debt is $100,000 or less, and the home's value isn't exceeded by the home-equity debt plus the acquisition debt. Claim the amortization write-off for your home-mortgage points on line 10 or 12 of Schedule A.

This brings us to our last potential deduction. If you had previously refinanced your mortgage and paid points, you probably have a good-sized unamortized (or not-yet-deducted) balance for those points. You can generally deduct that entire unamortized amount when you refinance again. For example, say the mortgage you refinanced last year was taken out in a previous refinancing deal done six years earlier, back in 2001. At that time you paid $2,000 in points for your 30-year loan. You should have $1,600 worth of unamortized points left over from the 2001 loan (80% of the original $2,000 amount). On your 2007 return, don't forget to deduct the $1,600 of unamortized points. Claim your write-off on line 12 of Schedule A.

By Bill Bischoff
Bill Bischoff Archive
Source: www.SmartMoney.com

Huntington Beach Market Update March 2, 2008

Howard Barnes (Connect Realty.com) — Tue, 04 Mar 2008 00:05:58 -0600

Market Update for Huntington Beach, California March 2, 2008

Huntington Beach seems to be in buyer market mode at this time.

Detached Single Family Residences

Median List Price This Week $849,900

Average Days on Market 117

Asking Price per Square Foot $ 443

Percent of Properties with Price Decrease 45 %

Percent Relisted (reset DOM) 12 %

Percent Flip (price increased) 3 %

Market Action Index Cold! Buyer's Market

Median Number of Bedrooms 3.6

Median Number of Bathrooms 2.5

Median House Size (sq ft) 2,117

Median Lot Size 4,500 - 6500

Condos/Townhomes

Median List Price $ 469,900

Average Days on Market 97

Asking Price per Square Foot $422

Percent of Properties with Price Decrease 46 %

Percent Relisted (reset DOM) 9 %

Percent Flip (price increased) 2 %

Market Action Index Cold! Buyer's market

Median Number of Bedrooms 2

Median Number of Bathrooms 2

Median Size (sq ft) 1,165

New Real Estate Company rolling out April 1, 2008

Howard Barnes (Connect Realty.com) — Sun, 24 Feb 2008 19:13:40 -0600

Connect Realty is rolling is the new real estate company rolling out on April 1, 2008.

It is being backed by Jim and Rod Canion who started and ran Compaq Computers until they were purchased by HP.

They believe that the Real Estate Industry is about to change and they believe that technology will never allow the Real Estate Industry to return to the old ways of doing real estate.

They have a vision of real estate where large brick and mortar brokers will no longer be able to function profitably due to:

1. the internet becoming the first spot that buyers and seller go when they are thinking of buyer or selling real estate.

2. downward pressure on commissions as many consumers feel that they do a lot of work driving around looking at properties before they call a realtor

3. the downturn in the real estate business

I understand this very well as I had to close my real estate company in July 2007 due to a lack of deals by the realtors working out of the office. I could not keep the brick and mortar open.

Connect Realty is a virtual real estate company where the majority of the commissions roll back to the realtors due to no brick and mortar overhead.

A realtor can work where ever they have internet access. All paperwork and deals are submitted via the internet. There is no brick and mortar.

It costs $200 per year to hang your license.

There are no junk fees, no transaction fees, desk fees, nor other fees that brokers dream up so they can get their hand in your pocket.

I signed up and if you want to see what they deal is, go to www.connectrealty.com/huntingtonbeachrealestate

If you can not click the link, copy and paste it in your address bar. Click the realtor opportunities. Go down the left hand side of the screen until you see "compensation" and click on that. The compensation plan is there and on the right hand side of the screen is a button called "residual income estimator". Click on that so you can put in your numbers so you can see what your income can be.

If you have any questions, feel free to call me.

If we are going to stay in the real estate game, we may have to change how we do business.

Exchanging Vacation Homes

Howard Barnes (Connect Realty.com) — Sun, 24 Feb 2008 18:36:21 -0600

Until now, the issue of whether a vacation home qualifies for tax deferral treatment under IRC §1031 was the subject of much scrutiny and uncertainty. To the delight of many tax practitioners, on February 15, 2008, the IRS eliminated that uncertainty by issuing Revenue Procedure ("Rev. Proc.") 2008-16, effective March 10, 2008, which provides a safe harbor for exchanges of vacation homes (defined as "dwelling unit" in the Rev. Proc.). Now taxpayers can have a clear understanding of the circumstances under which the IRS will not challenge whether a vacation home will qualify as property "held for investment" under §1031.

Vacation Home as Relinquished Property

For a vacation home to qualify as relinquished property, it must meet the following criteria:

• It is owned by the taxpayer for at least 24 months immediately before the exchange ("qualifying use period"); and

• Within the qualifying use period, in each of the two 12 month periods, (1) the taxpayer rents the dwelling unit at fair rental to another person for 14 days or more and (2) the taxpayer's personal use of the dwelling unit does not exceed the greater of 14 days or 10 percent of the number of days during the 12 month period that the dwelling unit was rented at fair rental value.

The first 12 month period immediately preceding the exchange ends on the day before the exchange takes place (and begins 12 months prior to that day). The second 12 month period ends on the day before the first 12 month period begins (and begins 12 months prior to that day).

Vacation Home as Replacement Property

For a vacation home to qualify as replacement property, it must meet the following criteria:

• It is owned by the taxpayer for at least 24 months immediately following the exchange ("qualifying use period"); and

• Within the qualifying use period, in each of the two 12 month periods, (1) the taxpayer rents the dwelling unit to another person at fair rental for 14 days or more and (2) the taxpayer's personal use of the dwelling unit does not exceed the greater of 14 days or 10 percent of the number of days during the 12 month period that the dwelling unit was rented at fair rental.

The 12 month period immediately after the exchange begins on the day after the exchange takes place and the second 12 month period begins on the day after the first 12 month period ends.

Personal use is defined broadly. Use by the taxpayer or other person having an interest in the dwelling unit and any family member¹ will be considered "personal use" by the taxpayer. Also, any arrangement whereby fair market rent is not paid will be considered "personal use" by the taxpayer. Notwithstanding the foregoing, use by family members will not be considered "personal use" by the taxpayer only if the dwelling unit is rented at fair market rent and the family member uses it as his principal residence.

Fair rental is based upon all of the facts and circumstances that exist when the rental agreement is entered into. All rights and obligations of the rental agreement are taken into account.

Note special rule for replacement property. If the taxpayer files a return reporting a transaction under §1031 based on the expectation that the dwelling unit will meet the qualifying use standards and subsequently determines that the dwelling unit does not meet the qualifying use standards, the taxpayer, if necessary, should file an amended return.

Exchanges of vacation homes outside the Rev. Proc. 2008-16 safe harbor. An exchange of a vacation home may still qualify under §1031 even though it falls outside the parameters of Rev. Proc. 2008-16. Any such circumstance will be subject to greater scrutiny and therefore should be carefully planned and reviewed by the taxpayer's tax advisor.

Always hire a property inspector when buying real estate

Howard Barnes (Connect Realty.com) — Sun, 17 Feb 2008 12:23:24 -0600

Always before buying a home, hire a professional to come and inspect the following major house systems to insure that they do not have any problems or deficiencies: the heating and central air conditioning, plumbing, the roof, electrical systems, attic, visible insulation, walls, windows, ceilings, floors, foundations, and the basement.

Even if expenses are tight, set aside money to hire the inspector, for he or she may catch the slightest evidence of water damage that you would otherwise have had to later pay thousands of dollars to repair the damaged walls, structural beams, ceilings, and/or foundation.

Water damage may occur for multiple reasons. For one, if the temperature drops below negative ten, your water pipes can freeze or even burst, resulting in six inches of water covering your floors. If you own a pool and it begins to leak, you will definitely ruin your lawn and most likely flood our basement. Or perhaps your washing machine will overflow or the sewer pipes will back up, both will result in a flooded basement. Maybe water will seep from the ground into the basement, which will damage the foundation and interior. If your roof leaks during a heavy rainstorm, it will likely be damaged, as well as the attic, ceiling, and maybe even furniture. When the kids overflow the bathtub, water seeps into corners and wood, which could stain and eventually lead to mold growth and structural damage. If a nearby stream, river, or lake overflows, your living room may be flash flooded.

Insurance companies often cover water damage problems. So, if you currently have water damage, contact your insurance agent to see if the issue is covered. If you are not dealing with water damage, consult an agent anyway to make sure you know which of our possessions are covered in your insurance plan and which are not.

Before buying a home, make sure you and your inspector have examined for the following major issues: water seepage and wet basements, roof leaks, and weak water pressure. To prevent water seepage and wet basements, make sure any house foundation cracks are sealed and all surface water runs-off away from the house. If the house has small cracks in the foundation or has porous walls, heavy rains could cause severe and expensive structural damage. And by simply redirecting water surface run-off, water damage problems can be alleviated.

When investigating the roof, take extra time to examine the flashing, areas where the roof plane changes. For example, if the roofing was poorly laid around the chimney or plumbing vent, there may now be water damage. When you have a home or if you already have a home, check the flashing and the interior of your roof at least once a season to catch constant leaks early and to prevent mold growth or damage to the insulation.

Poor water pressure could be the result of either deficiencies in your water service supply, or it could stem from the more costly problem - your piping needs to be upgraded. The plumbing problem may be as simple as blocked faucets aerators that are partially closed or defective. If your home is older, you may have galvanized piping (steel pipes with zinc coating), which will likely mean that time has allowed your pipes to either corrode or gathered deposit build-up. In this case, you should think about replacing the blocked sections of piping.

One of the largest water issues of today is mold. Mold has become the cause of numerous insurance claims because they can be harmful to one's health and destructive to homes. Normally molds are not indoor problems, unless mold spores land on a dark, moist spot.
Molds produce allergens, irritants, and potentially toxic substances, such as mycotoxins. When in contact with mold, sensitive people may experience allergic reactions, fever-type symptoms, runny nose, red eyes, skin rashes, sneezing, asthma attacks, sore throats, and/or irritated lungs. Usually only allergic and irritant type reactions from inhaling molds are reported

If you have just bought a house or currently own one, take the following steps to prevent mold damage of your home and to prevent health issues.

Examine your home for mold. When found, wash it off hard surfaces, and allow them to dry completely. If you find mold on absorbent materials, such as carpets, tiles, or ceilings, replace them.
Keep your air conditioner, refrigerator, and dehumidifier's drip pans accessible to keep clean and dry.
When you are showering, cooking, or using the dishwasher, keep exhaust fans running or windows open in the kitchen and bathrooms.
Always keep the vents of your dryers and bathroom exhaust fans flowing outside.
If you've experienced a flood, replace the affected absorbent materials such as carpets and drywall.
Find a hygrometer at a hardware store to measure the humidity level and maintain a relatively low level of 30-50 percent.
Use mold-killing products to clean your bathroom and kitchen.
Add mold inhibitors to paint when you are painting your home.
Never carpet your bathrooms. If you have carpet there, ripe it up and replace it with vinyl, laminate, or tile.
If the problem is overwhelming or heath problems are acting up, consult a professional.

Humidifiers - the secret behind the perfect atmosphere

Howard Barnes (Connect Realty.com) — Sun, 10 Feb 2008 23:18:49 -0600

Wintertime brings chills in the air, rosy cheeks from the cold, ice on the roads, and the obvious evergreens' beauty. But I do not want to bring winter into my home, so I shut up my windows and crank the heat up, which means my skin begins to get dry, my throats start to hurt, and static electricity abounds. Do you have a similar story? Our problem - we lack a healthy humidity in our homes. Humidity refers to the amount of water vapor in the air. When the humidity level becomes to low, our health is affected. When the humidity level is to high, we feel sticky.

In addition to the already stated symptoms, low humidity can cause static electricity, cause or aggravate respiratory problems, dry out nasal passages, and make you more susceptible to colds or the flu. Painful shocks from person to person can also be directly linked to low humidity. When hardwood floors lose moisture, they can separate at the seams. Houseplants will wilt and even die. Wallpaper may start peeling at the edges. Low humidity can cause various problems.

Low humidity levels are often blamed on the winter season, which is usually the case; however, our artificial heating systems only enhance the problem. Humidity levels should remain at about 30-50 percent.

How do you reach that target zone? Humidifiers are an easy solution. They not only increase the humidity in a safe, water vapor form way, some can even help save on your heating bills.

Your body feels heat by a combination of two ways: one - temperature; two - humidity. So, the more humidity that's in the air, the warmer you will feel. If humidity is added to dry heated air, you can actually turn your thermostat down and be just as comfortable.

In order to choose the right humidifier, you need to take a few things into consideration. Obviously you will look at the cost, the cost to run the humidifier, and the cost to maintain the machine, but that is not the only consideration. You need to know the size of room that the humidifier needs to reach. This will help you know how large of a capacity the humidifier needs to be; in other words, how many gallons per day of operation. You can calculate your needs by measuring the square footage of the room you want to humidify, then use the below chart to determine what size humidifier you need.

Then you need to consider what type of humidifier that you need - Warm Mist? Steam Vaporizers? Cool mist? Console Humidifier? The warm mist humidifiers are a heating system that releases warm, clean moisture into the air. This humidifier will slightly elevate the temperature of the room. You can also add medication to this machine, and it will simple put it into the air.

Steam humidifiers can be a risk in that there is actually steam exiting the humidifier, which is an obvious danger to children. This humidifier uses two electrodes to turn water into steam. The vapors are then released into the air to moisten the air as well as heat it.

Cool mist humidifiers can operate in one of two ways. Impeller humidifiers use a quickly rotating disc to shoot cool vapors into the air. Evaporative humidifiers use a fan to move air through a filter saturated with water, which then propels cool, moist air into the room. Both the evaporative and impeller humidifier releases moist and cool air into the room, in contrast to the other humidifiers that release heat.

Console humidifiers work like evaporative humidifiers but they humidify the whole house.

So, in conclusion, when contemplating which humidifier you are going to buy, remember the three main questions.

1.How much does the humidifier cost? How much will it cost to operate, and how much will maintenance costs be?

2.How large of an area does the humidifier need to cover?

Area	Size of Humidifier in Gallons
500 sq. ft. or smaller	1.5 - 2.0
530 - 600 sq. ft.	2.2 - 2.5
700 - 800 sq. ft.	3.0 - 3.5
900 - 1000 sq. ft.	4.0 - 5.0
1000 - 2000 sq. ft.	7.0 - 9.0
Over 2000 sq. ft.	10.0 or higher

3. What type of humidifier do you need?

Warm Mist? Steam Vaporizer? Cool Mist (Impeller, Evaporative)? Console?

Things to remember:

Keep the humidity in your home between 35 - 40 percent by consulting a humidistat.
Place humidifiers on an inside wall, away from obstructions and as close to the cold air return of your furnace as possible.
Regularly clean your humidifier to prevent the buildup of minerals and to prevent bacterial growth.
If your house is too humid, the warm, moist air in contact with the cold, dry surface will create water droplets because the water in the air condenses.
Place your humidifier on a hard, level surface that will not be damaged by spilled water. DO NOT place your humidifier on the carpet or a cloth.
Warm mist and Steam vaporizer humidifiers boil water. Keep children away from these units.
Make sure to check which type of water you should put into the humidifier. Some require certain kinds.
Never put anything in the humidifier that is not recommended by the humidifier manufacturer.
Do not store or leave your humidifiers for long periods of time with water in it. Undesirable odors from fungus and bacteria growth will develop.

Avoid foreclosure with a deed-in-Lieu

Howard Barnes (Connect Realty.com) — Sat, 09 Feb 2008 14:19:56 -0600

A common way to avoid your property being taken away by the lender on account of non-payment of your mortgage is a deed-in-lieu of foreclosure.

Deed-in-lieu is a process in which the borrower failing to satisfy the loan obligation hands over his property to the lender. The lender may then sell the property in order to retrieve a part or whole of the amount borrowed from the sale proceeds.

What is the process all about?

The process involves the signing of legal documents - the Agreement in Lieu of Foreclosure and a Warranty deed, quit claim deed or a grant deed. The first document reveals the terms and conditions of the deed-in-lieu, and is signed by both the lender and borrower. The second document, which is the deed, conveys legal ownership of the property to the lender.

The lender marks the borrower's note as "paid" and provides the latter with two forms - one which states that the debt is canceled and the other which refers to the waiver of the right to a deficiency judgment (the lender's right to ask for the unpaid debt amount if it is not recovered totally by the property-sale).

The agreement for deed-in-lieu is executed through an escrow company which receives the borrower's note (marked as "paid") from the lender. The escrow then records the deed used for transferring legal ownership of the mortgaged property and sends the note to the borrower. The borrower is thus released from the liability of the mortgage payments.

Does a borrower need to pay tax in the process?

Once a borrower gets a release from the loan, he needs to pay the deed tax on account of the deed-in-lieu. In this process, if the lender cancels the debt, the deed tax is calculated on the basis of the unpaid loan amount along with any accrued interest which is forgiven. However, if the borrower goes for a deed-in-lieu and pays a certain amount towards the unpaid debt, the extra cash serves to reduce the amount of unpaid debt which is the basis of the deed tax.

It may happen that the lender pays the borrower a certain sum of money in return for the deed-in-lieu when there is some equity in the property. In such a case, the cash offered to the borrower is added to the unpaid debt in order to determine the basis of the deed tax.

A deed-in-lieu may have a negative affect on a borrower's credit report thereby lowering his score. Even then, it has certain advantages both for the borrower and for the lender. Most often, the borrower gets the chance to free himself from the indebtedness associated with the loan. And, at the same time, he can avoid foreclosure which has greater negative impact compared to a deed-in-lieu. The lender, on the other hand, can avoid spending his time and money in completing the foreclosure.

Keeping your dryer like new!

Howard Barnes (Connect Realty.com) — Fri, 08 Feb 2008 19:00:50 -0600

Have you ever pulled clothes out of the dryer and found a large blue spot on your favorite pair of jeans? You reach into the pocket and you find a pen that had not been taken out before you washed them.

Perhaps you have experienced a similar situation, or maybe you were the culprit of the tar stained dryer. Either way, the following article will help you clean remove stains from your dryer and washer.

Removal of... from Dryer
Ink Stains	Saturate a rag with rubbing alcohol. Wipe the dryer drum, changing rags until no more comes off. Then dry a few old towels to make sure that nothing will come off onto your cherished fabrics. -------- Or -------- Place 2 cups of bleach in a bucket and then fill the bucket halfway full of water. Take some old towels and place them in the bleach water until all the liquid is soaked up (the towels should be very damp, not dripping). Place the towels directly in the dryer to remove the ink and run an entire cycle. Repeat if necessary. When the ink is removed sufficiently, place another old towel in the dryer and run it to make sure that all ink is removed.
Tar	Spray WD-40 around the edges of the hardened tar and work it in to try and loosen the substance. If the tar is still soft and sticky, hold an ice cube in a plastic bag over the tar to harden it, and then try to chip off as much as possible. Prewash spray may also help.
Gum	Spray WD-40 around hardened edged to try and loosen gum. If gum is still warm and sticky, hold an ice cube in a bag over the gum first to harden it. Then chip off as much as possible. Pre-wash spray may also help.
Crayon	Use a cleaner such at Top Job, Mr. Clean, Soft Scrub, etc to remove as much as possible. Do not use a flammable cleaner. Apply the cleaner to a sponge and wipe the interior. Do not spray or pour the cleaner in the dryer. After removing the crayon, wipe the residue off with paper towels or rags. Then dry a few old towels to make sure that the residue has been extracted.
Starch or tinted article spots	Wipe the interior with a cloth moistened with a diluted bleach solution. Use a sponge or clean cloth, dipped in suds, to remove the bleach solution. Rinse the walls well. Dry a few old towels to sure the residue is gone.

To Remove... from Washing Machine
Hard Water Stains and Soap Scum	Add ½ gallon of white vinegar to the washing machine. Let the machine run through an entire cycle.
Fabric softener Buildup	Add ½ gallon of vinegar to the machine and let it run through the entire cycle. Do this once a year to keep your machine clean and running smoothly.
An Odor	Place 2-4 cups of bleach in your washer (no clothes are necessary), and then set the washer to fill up with water. Stop the washer cycle after the water is in and let it sit for 15 minutes. Then let the washer cycle through as normal.
For General Cleaning and Care	Place ½ gallon of vinegar in the machine and let it run through the entire wash cycle. Do this once a year to keep your machine clean and running smoothly.

Water Damage Lookout - Get your home inspected

Howard Barnes (Connect Realty.com) — Fri, 08 Feb 2008 18:43:39 -0600

Before buying a home, hire a professional to come and inspect the following major house systems to insure that they do not have any problems or deficiencies: the heating and central air conditioning, plumbing, the roof, electrical systems, attic, visible insulation, walls, windows, ceilings, floors, foundations, and the basement.

If you have just bought a house or currently own one, take the following steps to prevent mold damage of your home and to prevent health issues.

Examine your home for mold. When found, wash it off hard surfaces, and allow them to dry completely. If you find mold on absorbent materials, such as carpets, tiles, or ceilings, replace them.
Keep your air conditioner, refrigerator, and dehumidifier's drip pans accessible to keep clean and dry.
When you are showering, cooking, or using the dishwasher, keep exhaust fans running or windows open in the kitchen and bathrooms.
Always keep the vents of your dryers and bathroom exhaust fans flowing outside.
If you've experienced a flood, replace the affected absorbent materials such as carpets and drywall.
Find a hygrometer at a hardware store to measure the humidity level and maintain a relatively low level of 30-50 percent.
Use mold-killing products to clean your bathroom and kitchen.
Add mold inhibitors to paint when you are painting your home.
Never carpet your bathrooms. If you have carpet there, ripe it up and replace it with vinyl, laminate, or tile.
If the problem is overwhelming or heath problems are acting up, consult a professional.

IRS Audit - tips to save you money!

Howard Barnes (Connect Realty.com) — Tue, 05 Feb 2008 00:08:14 -0600

The IRS is out in force trying to collect tax dollars that we do not even owe.

I was chosen for an audit and the audit went over for 4 months. It ended Thursday last week.

All of my on-line business purchases paid by credit card we disallowed unless I had a printed receipt to go along with the credit card receipt.

It is very important to print and keep the receipt for everything that you buy on line.

As well, to save yourself a lot of time and effort if you do get audited, keep all of your expenses in a ledger by day with the receipts attached in chronological order.

It is easier to do it now rather than to do it when you are being audited as this is the number one thing the guy wanted to see.

As well, they always check for two years so if you get a letter saying they will be auditing you for say 2004, they will do 2005 as well. They never do one year only.

A lot of my receipts were printed on thermal paper. I was audited for 2005 and then it moved to 2006.

The printing on the thermal paper receipts has disappeared. It is very important photocopy all thermal paper receipts so that you can read them years from now when you are audited.

It is not much fun to pull out your receipts and have them blank. In an audit, blank receipts do not count.

Hope these tips help any of you who get selected for an audit.

Get cheap urls and on line web storage for your back up files

Howard Barnes (Connect Realty.com) — Sat, 02 Feb 2008 21:08:43 -0600

I have found a very good source for buying url's.

The site is www.HotCheapDomains.com

I am sure you all know that a url is a .com or .net or .org web address

The prices are cheap.

One of the best items they have is an online storage.

You can back up your files on their secure servers and you do not have to worry about your hard drive crashing.

If you need to share some very large files with clients who do not have large email accounts, you can upload the file and then send your client a link.

Your client will be able to click on the link and then they will be able to download the large files.

This is a very effective way to transfer large files.

It is getting very busy out there

Howard Barnes (Connect Realty.com) — Thu, 31 Jan 2008 22:42:43 -0600

The lower rates seem to have spurred some activity.

My phone is ringing off the hook.

Looks like the drought is over.

Hard Money Lending for commercial properties

Howard Barnes (Connect Realty.com) — Sun, 27 Jan 2008 11:29:40 -0600

I have a source for Hard Money for commercial loans.

If there is a current appraisal we can close within 5 days up to $5,000,000

65% loan to value on refi, 60% loan to value if notice of default or if in BK.

If you have clients with equity who need some breathing room, this is a good program.

Loan is for 12 months with no prepay penalty.

Do you want to try to sell your home yourself?

Howard Barnes (Connect Realty.com) — Sat, 26 Jan 2008 12:28:57 -0600

If you think you want to try to sell your home by yourself, you should go to:

www.BuyMyFSBO.com

You can get information on how to sell your home youself.

You can get a free online market evaluation so that you have a good idea of hwat your home is worth.

Many of my clients tell me that this is a good for sale by owner site.

Why I like Huntington Beach as an investment location

Howard Barnes (Connect Realty.com) — Fri, 25 Jan 2008 18:11:25 -0600

The dynamic coastal City of Huntington Beach, with its sunny Mediterranean climate and idyllic setting, is home to more than 195,000 residents. Internationally known as Surf City, Huntington Beach boasts eight miles of scenic, accessible beachfront, the largest stretch of uninterrupted beachfront on the West Coast. Tourism remains a vital part of the economy, as over 11 million visitors flock to the city during the summer, on weekends and for special events.

Our parks and recreation features one of the largest recreational piers in the world, public parks, riding stables and equestrian trails, a marina, and a wildlife preserve, and an eight-mile biking, inline skating, jogging, and walking trail along the ocean. The crown jewel of the recreation system is the wide expanse of beautiful and spacious beaches, where large crowds gather to watch professional sporting events as the U.S. Open of Surfing, AVP Pro Beach Volleyball and the Surf City USA Marathon.

The quality of life in Huntington Beach is enhanced by its reputation as one of the ten safest cities by City Crime Rankings and the quality of the community services offered to its citizens. The Huntington Beach Art Center and the Huntington Beach Playhouse provide a wide variety of fine arts, and the excellent library system and numerous museums provide a strong cultural foundation. The educational system, with five city high schools and 35 elementary schools, is excellent. Huntington Beach is home to Golden West Community College. It is also a short distance to UC Irvine, Cal State Long Beach and Cal State Fullerton.

The city is located 40 miles south of Los Angeles and provides easy access to Long Beach and all of Orange county.