What does it take to flip a house? Flipping a house requires a level of knowledge, expertise, and savvy project management skills. It requires access to cash, and lots of it. It demands time, energy, vision, attention to detail, and the right team to make a profit on flipping a house. Besides flipping a house, you will also see houses, especially REOs, being bought at ridiculously low prices and then being put back on with minimal work at $30-$40K higher.
In this market, I have seen a house go on the market for under $130,000 and then be put back on the market, with minimal effort, for $215,000. I have also seen a house by Mills College purchased three months ago for $70,000. They upgraded everything including plumbing & electrical, painted inside and out, landscaped and remodeled the kitchen and bathroom. They did a great job and it’s now on the market for $298,000. The listing agent told me today that she has had a ton of phone calls. Will it sell? Yes and probably at asking or close to it.
My client asked me if I thought it was worth it to by a flipped house? I think yes, if, it’s done correctly. Often times, people get into the flipping game and think they have a good eye for style and unfortunately, they don’t and the remodel ends up looking like crap. So, when is it worth it? There are three factors in deciding if a flipped house is a good purchase - If the work on the house is done by a quality contractor, the location is good and the comparables in the neighborhood justify the price.
Believe me, it’s nice to move into a place that needs minimal work!
Wednesday, May 20, 2009
Monday, May 11, 2009
2009 TAX CREDIT
Just to be clear, here are the basics for the 2009 First time home buyer tax credit:
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
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