Sacramento Rental Owners get FREE Tax Planning Advice November 18th at the Sacramento Rental Housing Association!
You can earn a ton of income from your wise investment choices... but at the end of the day it is what is left in your wallet that counts. Good tax strategy is key BEFORE purchasing your next Sacramento investment property.
Take advantage of the tax laws that can shelter your hard-earned rental income! One of Sacramento's premier tax attorneys explain various ways you can structure the ownership of your properties and estate to minimize taxes.
Todd and I are facilitating this Sacramento Real Estate Investors Forum hosted by the Rental Housing Association Wednesday night! Not only will you get some tax advice you can use to find legal tax loop holes to offset your rental income... We will also give you a Sacramento Real Estate Market update and let you know about upcoming changes in the lending world that could impact your ability to qualify for a new mortgage in 2010.
This meeting is FREE and is always well attended... so you want to make sure to register quickly!
Here are the details...
Date: November 18th 5:30pm - 7:30pm
Location: RHA Office 201 Lathrop Way Suite C Sacramento, CA 95815 www.RHA.org
Please join us at the Elk Grove Real Estate Investors Group next TUESDAY NIGHT -November 17th!
If you come to our November and December meetings... Bring 5 cans of food to be donated to the Elk Grove Food Bank and we will waive the $15 entry fee!
We have a special guest this month for our Elk Grove Real Estate Investors meeting!
Ever wanted to flip properties in the Sacramento area? Get the inside scoop from area investors who are doing it! Find out how out to successfully rehab and/or flip in our local market!
Please welcome us in joining David Granzella and John Johnson of Norcalreia, Vision Real Estate Solutions, Inc., and the Norris Group. David will share how his team has purchased, rehabbed and/or flipped almost 20 properties year-to-date in our current market.
David and John are passionate that we are currently experiencing some of the greatest periods of wealth transfer in history for those that educate themselves, develop relationships of integrity, and empower themselves to take action. David, John, and their contractor will explain how to analyze purchases, efficiently manage rehabs, and help ensure exit strategies. Please don't miss out on this opportunity! Meet our speaker David Granzella David currently owns several companies focusing on real estate acquisitions, and is a consultant responsible for generating multiple real estate transactions in Northern California. David's expertise is in single family residences, wholesaling, and retailing, buying and maintaining rentals. Vacancy rates
Leverage their experience and bring your questions! Join us on November 17th at our Elk Grove Investment Club... Elk Grove REI!
MEETING LOCATION 9275 E. Stockton. Blvd., Ste. 100 Elk Grove, CA. 95624 Networking - 6:30pm Market Update - 7:00pm Main Speaker - 7:15pm
Members are FREE! Guests are $15
Bring 5 cans of food to be donated to the Elk Grove Food Bank and we will waive the $15 entry fee!
Join us and meet other Sacramento Investors who are actively investing in the Sacramento Real Estate Market!
Yes I know... I am a Sacramento Mortgage Planner... but I can't help it! I love Sacramento Real Estate!
Order your FREE Sacramento Real Estate Market Update today! Delivered right to your email!
As you can see below, we have had a rough couple of years here in the Sacramento Real Estate Market! When I ran this report/graph I kinda chuckled!
Seeing our market played out on a graph makes me realize why 2007 was such a rough ride! When the "sky is falling"... it is certainly difficult to find the upside!
So far this year, we have seen more-and-more people gain confidence about the Sacramento Real Estate Market and are out in force buying up as many homes as they can qualify for.
The biggest stumbling block is not that they can't get the loan... they can't find a home! Our inventory levels are low as banks are finding more creative ways of dealing with their existing Sacramento bank owned inventory. Some are renting back to the previous owners, while others are selling lots of 10 homes (or more) at time to cash investors.
Flippers are starting to come back into our market, which to me indicates we are on the road to recovery. In fact, last month we did more deals that involved a seller who had just purchased the home and put it back on the market for a higher asking price, than we did with bank owned homes.
This is a huge shift for us in the last couple of months because until then 99% of our mortgage closings were purchases of bank owned homes. This number is creeping down as we see more flipped homes and short sales becoming a huge part of the Sacramento Real Estate Market!
"The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory. An MAI value greater than 30 typically indicates a "Seller's Market" (a.k.a. "Hot Market") because demand is high enough to quickly absorb available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer's Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall."
Do you like the graphs above? Then you will love our 10 page FREE report for the Sacramento Real Estate Market! Did I mention it is FREE and it will be sent right to your email?
5 Reasons to Sign-up
All my market research is real-time. What's happening right now in the market.
Get more detailed market information than you can't find anywhere else.
Learn about price trends, supply and demand and leading indicators.
Better real estate market information helps you make your decisions with confidence!
It's FREE! Just register! Let me know which neighborhoods you're interested in and we'll get you my Real-Time Market Report today!
If you would like to sign-up you can fill out this form to register for our FREE Sacramento Real Estate Market report!
Happy Hunting!
Find this blog post interesting?... Share it with someone!
President Barack Obama signed into law a $24 billion economic stimulus bill providing tax incentives to prospective home buyers. According to the Associated Press, the bill is expected to contribute $22 billion to the economy, offering qualified home buyers up to $8,000 in tax incentives until April 30, 2010!
The current bill will offer First Time Home Buyer's $8,000 in tax incentives, if they have not owned a home in the last 3 years.
The extended tax credit has also established a new incentive for Move-Up Buyers! Qualified home owners could receive up to $6500 in tax incentives to purchase a new primary residence between November 6, 2009 and April 30, 2010.
Here are some important things you should know...
First Time Home Owners income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return.
The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $125,000 for single taxpayers and $225,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
Move-up Buyers need to make no more than $125,000 for single buyers and $225,000 for couples
"The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and the first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains."
To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.
I recommend you talk to your CPA for a more plain English version!
You can not purchase a home from your family members or your spouse's family members.
You can purchase any new primary residence for a purchase price less than or equal to $800,000.
You must have lived and owned your current home for at least five consecutive years of the eight years prior to the purchase date.
You can down size your home.
You can build a home, but the first occupancy must be after November 6, 2009 and on or before April 30, 2010
Non-resident aliens can qualify for the tax credit if they meet all requirements. Ask your CPA for specifics!
Newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $6,500. This tax credit is a dollar-for-dollar reduction in what the taxpayer owes to the IRS. Any leftover tax benefit would be mailed to the home buyer in the form of a check.
This is exciting and I am sure it will stimulate the currently non-existing Move-up Buyer market! Hopefully the banks will release some more of their inventory! There are hungry buyers out there who want to get into a home before Christmas!
Have question about the tax credit? Post a comment and I will try to point you in the right direction!
Happy Hunting!
Happy Hunting!
Find this blog post interesting?... Share it with someone!
I was so glad to hear this morning that Active Rain is hosting another RainCamp.... thanks Facebook! AND... it is within driving distance from my office! I was so tempted to book a flight for their first event in Seattle... I am soooo glad I waited!
It is so nice to know that not only will I be learning a lot about blogging and Active Rain... I will get to meet my Active Rain friends face-to-face!
Short sales in our area are increasing more and more every month and take up a large percentage (and growing) of the homes for sale right now in our Sacramento real estate market.
I wanted to write this post to give you an idea of how obtaining a mortgage for a short sale will differ from a private party or bank owned home.
When you make an offer on a foreclosed home, you are dealing directly with the bank because they are the current owner. The bank has already completed the foreclosure process, set the sales price, and are actively waiting for offers to come in so they can sell the home and get it off their books.
A short sale is a little different in that the bank does not technically own the property... they only have a mortgage lien against the property. When you make an offer on a short sale home, your offer goes first to the homeowner for their approval and signature. Then the accepted offer is sent to the bank(s) that hold the mortgage lien(s) for the home in order to obtain a short sale approval.
The short sale approval is a document that gives the homeowner permission to sell the home for a specified amount and the bank agrees to release the mortgage lien even though they will not be paid in full. This process can take days or months... it really just depends on the bank(s) that currently hold the mortgage lien(s) for the home.
When you make an offer on a bank owned home, you usually know right away if your offer is accepted. Making an offer on a short sale is a little different in that the bank has to get clear about the current value of the home through broker price opinions and appraisals. They also need to review the current owner's hardship and financial documents to make sure the owner qualifies for the short sale. This is what takes so much time and can test your patience as the home buyer.
If you are patient and do your homework upfront, purchasing a short sale can provide you a great way to get a deal in today's market with less competition.
Even though the bank takes their time making the decision to approval the short sale... they will often ask the buyer to close escrow in a matter of weeks once the short sale is approved.
Right now the real estate market can be a little hectic. Mortgage lenders are picking apart perfect files and closing escrow in less than 30 days can prove to be a real challenge.
In order to make sure your loan goes through as quickly as possible here are a couple tips:
•1. Make sure you work with a mortgage professional who asks you for a complete loan file upfront! A complete loan file should at least include (tax returns and W-2s, 2 months banks statements, most recent retirement statements, and 30 days worth of pay stubs). You need to make sure you are working with someone who will take your loan seriously and thoroughly review all of your documentation looking for red flags. Your mortgage professional will want to do as much work upfront as possible so there is no time wasted tracking these items down once you are in contract.
•2. Keep a file for new information as it is received! You will want to create a file where you can hold any new bank statements, paystubs, or retirement statements as they come in. Your mortgage professional will needs these items once you are in contract. The quicker you can get these items to them, the quicker your loan can be submitted.
•3. Respond quickly to your real estate agent or mortgage professional when they ask you for something! Even though you are in escrow... life still goes on as normal. You need to make it a priority to get back ANY items requested of you as quickly as possible. Remember your real estate team can only work as quickly as you allow then to! Every day wasted just makes your real estate transaction that much harder to close.
If you have patience, understand the short sale process upfront, and respond quickly when asked...short sales can prove to be a pot of golden opportunities for a homebuyer!
I hope this information has helped you understand the short sale process better. Please post a comment if you have any questions on this topic and I would be happy to answer them!
As always... Happy hunting!
Erin
Happy Hunting!
Find this blog post interesting?... Share it with someone!
If you don't put out your open house signs... Would anyone show up? The same goes for your Blog!
I started writing our blog about 2 years ago. In the beginning, I viewed our blog as it's own separate entity and did very little to cross promote it with our other marketing efforts.
I think a lot of that had to do with my confidence level and I felt I had not quite found my voice. It can be intimidating to start blogging. Every post that I wrote and every comment I received made me realized I did have something to contribute to the community. At some point... the training wheels popped off and I was off to become a full blown blogger!
The beginning of this year I realized I had this huge library of content that could be leveraged in our other marketing efforts. Our blog was no longer about the points I could collect or about the Internet ranking I could achieve. It is about a valuable resource of articles (and rants) that I could LEVERAGE to get more clients.
Looking back... How could I miss the biggest pot of gold in my possession?
We produce an e-newsletter that is sent out to our database. I don't know what I was thinking, but I would write a brand new featured article for each e-newsletter. At some point I realized... duh... Why am I recreating the wheel here? Why not use something I had already listed as a blog post?
At first, I would copy and paste the blog post right into the e-newsletter. This worked fine, but I quickly realized that I could kick it up a notch by adding a teaser paragraph instead of the entire article. This way it would force our readers to click through to our bog to get the rest of the information.
This did 2 things...
First it allowed me to track within Constantcontact.com (the website we use to send our e-newsletters) which articles were of interest to our database. You see, if you just copy the entire article into the e-newsletter, you have no idea if they read that particular article or not. Constantcontact.com will tell you they opened the email, but I had no way to identify which articles were the most popular. If you add a teaser paragraph and a link to the rest of the article, Constantcontact.com will track every time a reader clicks on each link. Now all of a sudden I knew how many people read our articles and who specifically clicked a particular link!
The added bonus for restructuring our e-newsletter?... Every time a reader would click a the link, it would drive more traffic to our blog site. Think about it... One of the ways Google rates your blog is based on the number of visitors it gets. This is a great proactive model you can use to push more traffic to your blog!
I have recently changed this featured e-newsletter article into a promo piece for our blog. I list 4 or 5 blog posts with links to each! My goal is to get people trained to go to our blog to get the information directly. I encourage folks to sign up to receive these posts via email on this promo piece.
I also create e-newsletters with other referral partners who work with the same target market. I use this same model and offer content that benefits their database. This creates even more traffic to our blog and that original blog content is being send to hundreds of people! In the past I would write that same post and it would sit there waiting for someone to drop in and read it.
If you have not figured it out yet... this model can be used in many different ways. I have added my blog posts to Twitter and Facebook and have seen huge jumps in my blog stats.
For Facebook, I have created several groups and fan pages that allow me to attract my target prospective clients. This way I can offer links to each group that is of interest to that particular niche market.
See... It is kinda like sitting an open house and not putting out the signs. Is the house great...yes! Are you good at what you do?... YES! But if you don't put out the open house signs... there is no way folks would know that you are in there waiting for them! In order to have a successful open house, you need to have a sign at every corner, send out an email to your database, and list it online and in the paper so that people actually show up!
The same thing goes for your blog. If you write the best post out there and it just sits.. how is that doing you any good? But if you post it on social networking websites and send it out to hundreds of people via your database (and other people's database)... now you have got yourself some action!
Did this post make you think differently about your blog? Leave a comment... I would love to hear from you!
Erin
Happy Hunting!
Find this blog post interesting?... Share it with someone!
I have read many blog posts recently regarding the subject of pre-approvals. It seems that many folks in our industry have a different idea of what a pre-approval is.
The problem is there are no uniform rules when it comes to pre-approvals. Not all pre-approvals are equal... it really comes down to who is providing it.
So as a Realtor... How do you know which pre-approval is the strongest? Many Realtors will say that if the pre-approval comes from a large bank, then the pre-approval must be stronger than the one that is provided by a mortgage broker. I battle this often when I go head-to-head with another offer that has a large bank pre-approval.
The truth is many times the big banks don't require the client's financial documents in order to pre-approve the borrower! They just pull the credit report and ask the client what their income is. Many Realtors will assume that the big bank logo holds some kind a merit... I have to disagree!
I know Realtors who insist they get a pre-approval from a correspondent lender which is a bank line. Although we are a mortgage brokerage, our company (as well as many other mortgage brokerages) have the ability to fund as a correspondent lender (act as a bank). The cold hard truth is there are no short cuts when I place a loan as a correspondent lender than if I placed it as a broker. I may save a day or two when I request the funding as a correspondent lender... BUT UNDERWRITING IS EXACTLY THE SAME!
On a side note... I know of mortgage "professionals" in my area who hand out their pre-approval template to their Realtors! It shocks me that either side (Realtors and mortgage "professionals") participate in this! This pre-approval template allows the Realtor to enter anything they want into the letter so they can print it and present it with their offer! It is amazing there are still people like this in our industry.
We happen to be on the complete polar opposite of these folks. Some might say our process is way too strict and it takes too much time upfront. We feel the more homework we do before the client is in contract the better... especially in this market!
Here are the steps we take for EVERY pre-approval we write.
1. The client must provide us with a complete loan file What does this mean anyways? They must provide us with 2 years tax returns, 2 months bank statments for all accounts, the most recent quarterly/monthly statement for all retirement accounts, a copy of their ID's, divorce decree (if recently divorced) and any other client specific paperwork that is requested UPFRONT!
Many folks want to know why they can't just tell me their income numbers over the phone. What I think people don't understand is even though their pay stub reflects $6,000 a month... that may not be the income number that ends up on their loan application. Lenders are picking files apart right now, scouring through tax returns looking for write-offs and business expenses that could further reduce the borrower's income. This goes for rental income as well! Just because you deposited $1,000 in your bank every month... the underwriter 9 times out of 10 will insist you be qualified based on the rent you claimed on LAST YEARS tax return.
So if the mortgage professional does not ask for a complete package upfront... How can they truly analyze the borrowers ability to qualify for a loan without all of the information?
2. Once we have all of the information from the client TWO members of our team review the file before we ever enter any data into the automated loan approval system. If you are a Realtor and a mortgage professional is telling you they have an automated approval... Remember this approval is only as solid as the information entering into the system.
If the mortgage professional is entering the $6,000 income I used as an example above and it really should be more like $4,000 according to the tax returns... then that automated approval does not mean jack!
We go the extra mile and have two sets of eyes look at every file we get a pre-approval for. This way any sticking points on a particular file is more likely to be caught upfront.
3. Once we decide on the most conservative numbers to use, we run an automated approval. As long as there are no shift in assets, loss of income, or a new tax return is filed, or guidelines change... our pre-approvals are solid because we actually pre-underwrite the file.
You would be surprised how may listing agents call the mortgage professional who gave a pre-approval letter for one of their offers and the mortgage "professional" does not even now what an automated approval is! If this happens to you... file that offer directly to the trash!
As you can see, there is a big difference from the mortgage "professional" who hands out a pre-approval template to their Realtor compared to our 3 step process... YET THEY ARE BOTH CALLED PRE-APPROVAL LETTERS!
I think it comes down to who is providing the pre-approval letters! Don't be shy to call the mortgage professional and interview them! I welcome these calls! I find I can often times talk the listing agent into accepting our client's offer because they are not neccessarily looking at the highest offer... they just want to pick the one that is in the hands of someone who can close!
Happy Hunting!
Find this blog post interesting?... Share it with someone!
This bill, authored by Assembly Member Cathleen Galgiani, protects consumers by ensuring that they have the right to choose their own real estate service providers when purchasing foreclosed properties.
AB 957, known as the Buyer's Choice Act, prohibits sellers of so-called REO properties - typically foreclosed properties owned by banks - from requiring the buyer to use a particular title company, escrow settlement or other real estate service provider. This unethical, anti-competitive practice drives up costs for homebuyers and takes business away from locally owned companies.
If you follow our Blog, you will know I have written countless posts about our escapades with bank owned title companies.
I chuckled when I found the first blog in my archive... Arnold must have been listening!
Overall I think this new law is a good thing... but the reality is I don't think it will change anything!
My biggest beef with the Bank Owned Title Companies is they give the banks a big discount on their fees... BUT they just end up passing them on to the Buyer.
Here is an example of one of our clients who got gouged by a Southern California title Company:
Escrow fee: $891 (Wow.. that seems a little steep..Shouldn't it be more like $400?)
Title insurance: $1674 Buyer Messenger Fee: $35 (Did you send the Buyer a secret message I did not know about?)
Sub escrow fee: $62(What?.. Didn't they already pay you a hefty escrow fee?)
Loan tie-in-fee: $200 (tie into what? There is only one loan?)
Processing Fee: $150 (You mean the escrow fee did not cover it?)
Courier Fee: $24 Buyer Archive fee $50 (Wow.. now you are getting creative!)
Wire Fee $25
Archiving Fee #2 $50 (OK... now you are pushing it!)
This is from a real closing statement! When I got the estimated HUD statement before my client's signing... I had to laugh... because it is all I could do!
I have tried calling the bank owned title companies to ask them to explain these fees. Every time I have called to discuss these crazy fees, the bank owned title companies (mostly located in Southern California) pretty much tell me to stuff it (my interpretation) and tell me they don't have to explain any of their fees to me.
Not only are the bank owned title companies making their money off the Buyer's backs... they are miserable to work with! I am not kidding here... ABSOLUTLY MISERABLE!
So let me get off that soap box and back to my point!
If you have made offers on Sacramento foreclosed property lately... you know there is a lot of competition right now in certain price ranges.
The Banks control a huge percentage of our Sacramento inventory and right now they make the rules. Buyers who ask for seller's concessions or repairs get their offer filed directly to the trash... in multiple offer situations.
So if you are one of those 10 offers sitting in front of the asset manager (works with the bank to sell their foreclosure inventory) and you are giving them grief about using their title company... where do you think your offer will be filed?
It is like asking a bank to modify their standard addendum they require all Buyers to sign that takes away many of their rights and their first born child (not really)! The Banks are never gonna do it!
That is my stance as of now...
Arnold.... It is the thought that counts!
Happy Hunting!
Find this blog post interesting?... Share it with someone!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Learn what is going on with our local market from top selling Realtors and Mortgage Planners who specialize in the Elk Grove area!
Todd and I are facilitating this Sacramento Real Estate Investors Forum hosted by the 
Please join us at the Elk Grove Real Estate Investors Group next TUESDAY NIGHT -November 17th!
I was so glad to hear this morning that Active Rain is hosting another 
Short sales in our area are increasing more and more every month and take up a large percentage (and growing) of the homes for sale right now in our Sacramento real estate market.
If you don't put out your open house signs... Would anyone show up? The same goes for your Blog!
So as a Realtor... How do you know which pre-approval is the strongest? Many Realtors will say that if the pre-approval comes from a large bank, then the pre-approval must be stronger than the one that is provided by a mortgage broker. I battle this often when I go head-to-head with another offer that has a large bank pre-approval. 
The 
If you have made offers on Sacramento foreclosed property lately... you know there is a lot of competition right now in certain price ranges. 
;)
;)
