Real Estate in IRAs
Little-Known Secret Allows Real Estate Investors to Create True Wealth
Historically, real estate has given many Americans with a stable investment vehicle that provides both income and appreciation. One of the greatest tools available to real estate investors is government-sponsored retirement plans, such as IRAs and 401(k)s.
Most investors believe that their only IRA investment options are bank CDs, the stock market, and mutual funds.
Few Americans realize that they have the option to self-direct their IRAs and other retirement plans into real estate—and that they can benefit from the tax advantages those plans provide. IRA investments earn tax-deferred/tax-free profits.
Imagine not having to pay taxes right away—or ever—on your real estate deals. Instead of paying 25%, or 30%, or even 50% of your profits to the government in taxes, you keep it.
Additional advantages of the real estate IRAs include:
The power of compound interest
A reduction of taxable income
Asset protection
Estate planning
If you're a successful real estate investor, or if you're just looking to diversify your retirement portfolio, the combination of real estate and your IRA can be very powerful.
Showing posts with label bad good credit. Show all posts
Showing posts with label bad good credit. Show all posts
Monday, December 5, 2011
Tuesday, September 27, 2011
The Brutal Facfs
Brutal facts are not always pretty or inviting, but they are reality. Initially brutal news may take you back and even make you feel beat up. But take heart, it is good for bad news to travel fast. You are better off to hear negative news first, before the information becomes filtered through other perspectives, or the facts fester and become worse.
Brutal facts that are not given attention move from an inflamed infection to relational and organizational gangrene. Inevitably there follows an amputation; someone or something has be severed. This extreme action could have been avoided if the brutal facts had been revealed, recognized and acted upon early. Brutal facts are our friends; so do not dismiss the messenger because the message is bad, he or she is just the delivery person.
The wise receiver of brutal facts will extract the “chaff and keep the wheat”.
A brutal fact may relate to your finances and/or your property situation. What is the reality of your cash situation? Take care of your " financial business" or it will take care of you by tumbling down around you.
So where can we find these brutal facts? Your trusted advidsor, Your spouse, parent or friend that has some "horse sense" is a good starting point. They have a vested interest in you, so normally their perception of the facts is fairly accurate. Listen with an ear to learn, but if you become defensive or argumentative they will eventually shut down. Because they care, is why they want you to be aware.
Why not change on your own terms rather than being forced to change on another’s? This is the essence of brutal facts—there are some things that need to change. You, the work culture, and your family are always in flux, so use this as an opportunity to move from mediocrity to excellence. Embrace the brutal facts, learn from them and become better.
Do you currently have concerns that need to seriously consider? Askl youself, "How do I need to change"? "What trusted advisor can assit with making the right" decision.
Brutal facts that are not given attention move from an inflamed infection to relational and organizational gangrene. Inevitably there follows an amputation; someone or something has be severed. This extreme action could have been avoided if the brutal facts had been revealed, recognized and acted upon early. Brutal facts are our friends; so do not dismiss the messenger because the message is bad, he or she is just the delivery person.
The wise receiver of brutal facts will extract the “chaff and keep the wheat”.
A brutal fact may relate to your finances and/or your property situation. What is the reality of your cash situation? Take care of your " financial business" or it will take care of you by tumbling down around you.
So where can we find these brutal facts? Your trusted advidsor, Your spouse, parent or friend that has some "horse sense" is a good starting point. They have a vested interest in you, so normally their perception of the facts is fairly accurate. Listen with an ear to learn, but if you become defensive or argumentative they will eventually shut down. Because they care, is why they want you to be aware.
Why not change on your own terms rather than being forced to change on another’s? This is the essence of brutal facts—there are some things that need to change. You, the work culture, and your family are always in flux, so use this as an opportunity to move from mediocrity to excellence. Embrace the brutal facts, learn from them and become better.
Do you currently have concerns that need to seriously consider? Askl youself, "How do I need to change"? "What trusted advisor can assit with making the right" decision.
Friday, August 12, 2011
CASH DOWN PAYMENT ASSISTANCE
Most home buyers’ biggest hurdle is coming up with the cash for a sensible down payment. Gone are the days of zero-down loans, so if that was your plan, you’re going to need a new one! Coming up with a down payment for a home is a challenge because it’s not chump change we're talking about, here. The down payment on a $200,000 house, for example, will run you anywhere from $7,000 (on an FHA loan) to $40,000!
That might seem like an insurmountable amount of coin to come up with, but it’s actually more doable than you might think. Some buyers will simply save up their own cash, even if it takes many, many moons. The good news is that if you still need some help to boost your down-payment savings, there are resources you can harness to power your home-buying pursuit:
1.The FHA Bridal Registry. Yes - you read that right! The FHA Bridal Registry Program enables wanna-be home buyers to apply their families’ wedding gifts toward their down payments. And although it’s named a “bridal registry” program, you don’t have to be a prenuptial couple to use it. You could also use this program to collect gifts for graduation, the arrival of a baby or some other major life event in which people want to give you gifts. The FHA Bridal Registry works like a traditional registry, but is more flexible. The registrants visit their choice of FHA mortgage lenders and set up what essentially is a custodial savings account for the sole purpose of funding their down payment. The couple’s (or individual’s) family and friends can either deposit funds directly into the account or give the cash or check to the couple or individual, who then deposits it into the account. The account’s flexibility also goes beyond that of traditional down payment gift rules that are applicable to FHA loans, which are detailed below in insider secret #2. With the FHA Bridal Registry Program, the only gift documentation required is “lender and borrower certification of the funds.”
2.Family gifts. Most lenders will allow home buyers to apply gift money from family members toward their down payment - within guidelines, that is. First, the lender will require a letter from the giver verifying that it in fact is a gift and not a loan. (They generally frown upon it being a loan because it would add to the buyer’s debt and change their debt-to-income ratio.) And second, the person giving you the money must be a relative. The reasoning here is that a friend will most likely expect you to repay the money, whereas a relative won’t. FHA loans will allow the gift to make up any portion or all of the buyer’s down payment, many conventional (non-FHA) loan programs will restrict the proportion of a buyer’s down payment that can come from gift money. The lender may also have specific ways they want to see the money go into and out of your accounts. Before you accept a gift toward your down payment, be sure to check with your mortgage broker or loan rep to be sure that you’re dotting all the right i's and crossing all the right t's.
3.Your Employer. Some companies offer assistance programs to employees. Most are government, university, large company and financial industry employers. One example is safety workers: n some areas, safety workers like firefighters and police can have access to down payment grants from their employers if they buy properties in the city where they are on-call as first responders. Also, many large colleges and universities, very large companies and banks and lending institutions offer down payment help and have below-market-rate mortgages set up for faculty members and staffers. Check with your Human Resources department to see if any such program is available to you.
4.City/County/State Programs. Some states, counties and cities still offer programs that lend or give home buyers some assistance for down payments. These programs vary widely in scope - for instance, many target buyers with low and moderate incomes, while some seek to help the buyers of foreclosed or fixer-upper type homes. Some don’t have to repaid - meaning they are given as grants and are forgiven entirely if the buyer lives in the property for 30 years, but must be repaid if the buyer sells or rents the home out before the 30 years elapses. The programs pretty much all have some sort of homeowner education component that requires applicants to take personal finance and homeownership preparedness classes before they can receive funds. To learn more, visit your city, county and state websites to learn about programs that might be able to help you.
5.Your Retirement Funds. Many financial advisors would advise against this, but if you have a 401K or Roth IRA account and some years to go before retirement, you might be able to tap into it or even borrow against your own funds for your down payment. Currently, you can take up to $10,000 out of your Traditional IRA with no penalty to put toward the purchase of your first home, but you will be taxed. You can take as much as you want out of your Roth IRA contributions with no penalty or taxes, though, and as much as $10,000 from your earnings penalty-free for your down payment. The rules get a little tricky, here, so definitely check in with your tax and financial advisors. And while you can’t similarly draw from your 401K, many retirement and pension plans will allow you to borrow the money against your funds, then repay it to yourself – at interest. So the choice there comes down to paying your lender back with interest or paying yourself with interest. That choice should be you! But first, get some advice from your CPA or financial planner. This option might not make financial sense for your particular situation.
http://www.trulia.com/blog/taranelson/2011/08/5_insider_secrets_for_coming_up_with_cash_for_down_payment?ecampaign=cnews201108B&eurl=www.trulia.com%2Fblog%2Ftaranelson%2F2011%2F08%2F5_insider_secrets_for_coming_up_with_cash_for_down_payment
Thursday, July 28, 2011
4 Steps to Minimize the Risk of Owning a Home
Not so long ago, in a not-so-distant land, owning a home was thought of as the safest "investment" around. Fast forward to the present day, and home ownership seems super scary to many people who can afford homes, and would like to own them, but are paralyzed by the fear of buying a lemon, or having a mortgage catastrophe.
Here are 4 simple steps to minimize the risk that you'll become the main character in a homeownership horror story.
1. Stick with a fixed-rate mortgage. Recent data shows that adjustable rate mortgages, or ARMs, are increasingly popular, rising from 9 percent of the mortgage market in the fourth quarter of 2010 to 12 percent in the first quarter of this year. This might seem crazy to some, but in financially aggressive crowds, the lure of low, 3 percent(ish) interest rates on ARMs is enough to overcome any qualms. As well, today's ARMs tend to have lower lifetime interest rate caps and require payment of principal, so they don't adjust as violently as the subprime interest-only and option ARMs that contributed to the foreclosure crisis.
If the thought of your mortgage payment changing over time gives you the shakes, you don't want to live in a state of interest rate obsession for the next few decades, or you simply crave the simplicity and predictability of knowing what your housing payment will be for the next 15, 20 or 30 years, then stick to
a fixed-rate mortgage. The rates are higher, but with a fixed-rate loan, the risk of scary payment changes are not only lower, they are non-existent.
2. Put - and keep - a home warranty in place. One of the most frightening things about going from renter to homeowner is the prospect of being solely responsible for the care and feeding of your home and all its systems and appliances. Responsibility for both the costs and the actual logistics of repairing things like a leaky roof, a broken hot water heater or a haywire electrical fixture looms large in the minds of first-time buyers, in particular.
A home warranty plan kicks in when escrow closes, and depending on the coverage you select, will cover your home against the breakdown of major systems and even some appliances, like furnaces and water heaters. In some cases, you can even upgrade the coverage to protect against roof leaks and some plumbing issues. When a covered item breaks down, just remember to call the home warranty company first - for the cost of a service call you can get the item repaired or even replaced, if necessary. I remember the home warranty company replacing a $900 water heater in my first home; what a GOD send!
Talk with your agent - you might even be able to negotiate for the seller to pay for the first year's cost of the warranty. Just remember to renew it when it expires every year, to keep a cap on your risk of unexpected repair costs for the duration of your tenure as a homeowner.
3. Get repair bids and estimates, not just inspections. After you find the home of your dreams (or the home of your budget!) and get into contract, you'll have a contingency or objection period ranging from 7 to 17 days during which you can obtain all the inspections you want. Most buyers start out with a general property inspection, a pest inspection and a roof inspection, then get more specialized inspections if the property calls from it. Pest and roof inspectors will generally provide an inspection report AND a repair bid for any work they find needs to be done.
But the overall home inspection could very well list a dozen needed repairs, upgrades and maintenance items, without providing any information about how much those repairs will cost. If your inspection report surfaces work you'll need to have done to fix things (or avoid bigger fixes down the road), work with your agent to schedule actual repair contractors to come in and give you bids on the work before your contingency or inspection period expires. That will position you to negotiate around repair costs with the seller, or to know what you're getting yourself into, cost-wise, if you take the property as-is.
4. Buy on the 10-year plan. Warren Buffett once famously advised stock investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." The same advice is good for buying a home in today's real estate market. Take on a mortgage you know you can sustain, buy at a price you can comfortably afford and avoid having to sell because you need to move for some urgent reason, or because the home no longer meets your needs.
You can take this last step to hedge against losing money on your home by planning your space, career and lifestyle needs out 5, 7, even 10 years in the future - everything from how many bedrooms and garage spaces you'll need to where you'll want to be located, geographically - and selecting a home that will meet those needs for that foreseeable future. As a general rule of thumb, the harder hit the area was in the recession, the longer you should plan to hold it.
complements of
http://www.trulia.com/blog/taranelson/2011/07/4_steps_to_minimize_the_risk_of_owning_a_home?ecampaign=cnews201107D&eurl=www.trulia.com%2Fblog%2Ftaranelson%2F2011%2F07%2F4_steps_to_minimize_the_risk_of_owning_a_home
Here are 4 simple steps to minimize the risk that you'll become the main character in a homeownership horror story.
1. Stick with a fixed-rate mortgage. Recent data shows that adjustable rate mortgages, or ARMs, are increasingly popular, rising from 9 percent of the mortgage market in the fourth quarter of 2010 to 12 percent in the first quarter of this year. This might seem crazy to some, but in financially aggressive crowds, the lure of low, 3 percent(ish) interest rates on ARMs is enough to overcome any qualms. As well, today's ARMs tend to have lower lifetime interest rate caps and require payment of principal, so they don't adjust as violently as the subprime interest-only and option ARMs that contributed to the foreclosure crisis.
If the thought of your mortgage payment changing over time gives you the shakes, you don't want to live in a state of interest rate obsession for the next few decades, or you simply crave the simplicity and predictability of knowing what your housing payment will be for the next 15, 20 or 30 years, then stick to
a fixed-rate mortgage. The rates are higher, but with a fixed-rate loan, the risk of scary payment changes are not only lower, they are non-existent.
2. Put - and keep - a home warranty in place. One of the most frightening things about going from renter to homeowner is the prospect of being solely responsible for the care and feeding of your home and all its systems and appliances. Responsibility for both the costs and the actual logistics of repairing things like a leaky roof, a broken hot water heater or a haywire electrical fixture looms large in the minds of first-time buyers, in particular.
A home warranty plan kicks in when escrow closes, and depending on the coverage you select, will cover your home against the breakdown of major systems and even some appliances, like furnaces and water heaters. In some cases, you can even upgrade the coverage to protect against roof leaks and some plumbing issues. When a covered item breaks down, just remember to call the home warranty company first - for the cost of a service call you can get the item repaired or even replaced, if necessary. I remember the home warranty company replacing a $900 water heater in my first home; what a GOD send!
Talk with your agent - you might even be able to negotiate for the seller to pay for the first year's cost of the warranty. Just remember to renew it when it expires every year, to keep a cap on your risk of unexpected repair costs for the duration of your tenure as a homeowner.
3. Get repair bids and estimates, not just inspections. After you find the home of your dreams (or the home of your budget!) and get into contract, you'll have a contingency or objection period ranging from 7 to 17 days during which you can obtain all the inspections you want. Most buyers start out with a general property inspection, a pest inspection and a roof inspection, then get more specialized inspections if the property calls from it. Pest and roof inspectors will generally provide an inspection report AND a repair bid for any work they find needs to be done.
But the overall home inspection could very well list a dozen needed repairs, upgrades and maintenance items, without providing any information about how much those repairs will cost. If your inspection report surfaces work you'll need to have done to fix things (or avoid bigger fixes down the road), work with your agent to schedule actual repair contractors to come in and give you bids on the work before your contingency or inspection period expires. That will position you to negotiate around repair costs with the seller, or to know what you're getting yourself into, cost-wise, if you take the property as-is.
4. Buy on the 10-year plan. Warren Buffett once famously advised stock investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." The same advice is good for buying a home in today's real estate market. Take on a mortgage you know you can sustain, buy at a price you can comfortably afford and avoid having to sell because you need to move for some urgent reason, or because the home no longer meets your needs.
You can take this last step to hedge against losing money on your home by planning your space, career and lifestyle needs out 5, 7, even 10 years in the future - everything from how many bedrooms and garage spaces you'll need to where you'll want to be located, geographically - and selecting a home that will meet those needs for that foreseeable future. As a general rule of thumb, the harder hit the area was in the recession, the longer you should plan to hold it.
complements of
http://www.trulia.com/blog/taranelson/2011/07/4_steps_to_minimize_the_risk_of_owning_a_home?ecampaign=cnews201107D&eurl=www.trulia.com%2Fblog%2Ftaranelson%2F2011%2F07%2F4_steps_to_minimize_the_risk_of_owning_a_home
Monday, June 7, 2010
Sprint into Action! Real Estate Investing
I pride myself in sprinting into action to get things done. Yes, I make goals and reach them. However if you just keep making and creating goals and doing nothing it will never happen.
So I ask these questions
Have ever wanted to invest in real estate?
Have you ever wanted to purchase your first home?
Do you have good/bad credit?
Do you have enough down payment?
How soon do you want to achieve you goal?
I say SPRINT INTO ACTION, find someone that assist you and do it.
So I ask these questions
Have ever wanted to invest in real estate?
Have you ever wanted to purchase your first home?
Do you have good/bad credit?
Do you have enough down payment?
How soon do you want to achieve you goal?
I say SPRINT INTO ACTION, find someone that assist you and do it.
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