[analyst]

For those of us still trying to predict the future of real estate in the face of massive government intervention, it would save us a lot of time if we didn’t continually have to wade through a lot of debates and personal conversations about irrelevant topics. Please move this off-topic discussion to the off-topic forum.

[analyst]

For those of us still trying to predict the future of real estate in the face of massive government intervention, it would save us a lot of time if we didn’t continually have to wade through a lot of debates and personal conversations about irrelevant topics. Please move this off-topic discussion to the off-topic forum.

[analyst]

For those of us still trying to predict the future of real estate in the face of massive government intervention, it would save us a lot of time if we didn’t continually have to wade through a lot of debates and personal conversations about irrelevant topics. Please move this off-topic discussion to the off-topic forum.

[analyst]

For those of us still trying to predict the future of real estate in the face of massive government intervention, it would save us a lot of time if we didn’t continually have to wade through a lot of debates and personal conversations about irrelevant topics. Please move this off-topic discussion to the off-topic forum.

[analyst]

For those of us still trying to predict the future of real estate in the face of massive government intervention, it would save us a lot of time if we didn’t continually have to wade through a lot of debates and personal conversations about irrelevant topics. Please move this off-topic discussion to the off-topic forum.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

Most importantly, do not buy a house now unless you are confident that it is a house you will be happy with until the kids are grown and living independently (a very long time, since you are discussing having more children). While some whole areas may have bottomed (Temecula, for instance), and the lowest-end housing in many areas may have bottomed, the kind of house you will be looking for, in the areas you would look for it, are most likely to continue down for 1-2 years, and stay low for years after that. The only thing that would prevent this from being true would be government intervention on a scale dwarfing everything seen to date, in which case everybody, everywhere will be in trouble. If you are happy where you are today, there is no urgency to buy.

If you do buy now, think long and hard about how much to put down, as this money will be immediately at risk.

If you decide to be a landlord of small properties, buy locally. Distance makes everything harder, and prevents proper oversight of both tenants and property managers.

Your circumstances are better than most, so you have options others would not have. You have a serendipitous financial gain due to the real estate bubble from the sale of your former house. If you now face the prospect of a similar loss from the bursting of the real estate bubble, what is your net? Somewhere near even, I would say.

First, decide to sell the Tempe property for whatever it will bring.

Second, come to conclusion on the value of having a high credit rating. The negative effect does not last forever. And, you will have substantial resources, even after any loss is taken (if you do not put all your money in a new house).

Third, decide whether to avail yourselves of the benefits of any Arizona non-recourse laws (whose applicability is to be confirmed). These laws were enacted specifically to protect people from being taken advantage of by the highly organized real estate industry.

After all the preceding is settled, you will have a clearer view of the factors which bear on your highly personal decision about more children, and the relative importance of the income from working versus the additional time you could spend on family matters.

[analyst]

Most importantly, do not buy a house now unless you are confident that it is a house you will be happy with until the kids are grown and living independently (a very long time, since you are discussing having more children). While some whole areas may have bottomed (Temecula, for instance), and the lowest-end housing in many areas may have bottomed, the kind of house you will be looking for, in the areas you would look for it, are most likely to continue down for 1-2 years, and stay low for years after that. The only thing that would prevent this from being true would be government intervention on a scale dwarfing everything seen to date, in which case everybody, everywhere will be in trouble. If you are happy where you are today, there is no urgency to buy.

If you do buy now, think long and hard about how much to put down, as this money will be immediately at risk.

If you decide to be a landlord of small properties, buy locally. Distance makes everything harder, and prevents proper oversight of both tenants and property managers.

Your circumstances are better than most, so you have options others would not have. You have a serendipitous financial gain due to the real estate bubble from the sale of your former house. If you now face the prospect of a similar loss from the bursting of the real estate bubble, what is your net? Somewhere near even, I would say.

First, decide to sell the Tempe property for whatever it will bring.

Second, come to conclusion on the value of having a high credit rating. The negative effect does not last forever. And, you will have substantial resources, even after any loss is taken (if you do not put all your money in a new house).

Third, decide whether to avail yourselves of the benefits of any Arizona non-recourse laws (whose applicability is to be confirmed). These laws were enacted specifically to protect people from being taken advantage of by the highly organized real estate industry.

After all the preceding is settled, you will have a clearer view of the factors which bear on your highly personal decision about more children, and the relative importance of the income from working versus the additional time you could spend on family matters.

[analyst]

Most importantly, do not buy a house now unless you are confident that it is a house you will be happy with until the kids are grown and living independently (a very long time, since you are discussing having more children). While some whole areas may have bottomed (Temecula, for instance), and the lowest-end housing in many areas may have bottomed, the kind of house you will be looking for, in the areas you would look for it, are most likely to continue down for 1-2 years, and stay low for years after that. The only thing that would prevent this from being true would be government intervention on a scale dwarfing everything seen to date, in which case everybody, everywhere will be in trouble. If you are happy where you are today, there is no urgency to buy.

If you do buy now, think long and hard about how much to put down, as this money will be immediately at risk.

If you decide to be a landlord of small properties, buy locally. Distance makes everything harder, and prevents proper oversight of both tenants and property managers.

Your circumstances are better than most, so you have options others would not have. You have a serendipitous financial gain due to the real estate bubble from the sale of your former house. If you now face the prospect of a similar loss from the bursting of the real estate bubble, what is your net? Somewhere near even, I would say.

First, decide to sell the Tempe property for whatever it will bring.

Second, come to conclusion on the value of having a high credit rating. The negative effect does not last forever. And, you will have substantial resources, even after any loss is taken (if you do not put all your money in a new house).

Third, decide whether to avail yourselves of the benefits of any Arizona non-recourse laws (whose applicability is to be confirmed). These laws were enacted specifically to protect people from being taken advantage of by the highly organized real estate industry.

After all the preceding is settled, you will have a clearer view of the factors which bear on your highly personal decision about more children, and the relative importance of the income from working versus the additional time you could spend on family matters.

[analyst]

Most importantly, do not buy a house now unless you are confident that it is a house you will be happy with until the kids are grown and living independently (a very long time, since you are discussing having more children). While some whole areas may have bottomed (Temecula, for instance), and the lowest-end housing in many areas may have bottomed, the kind of house you will be looking for, in the areas you would look for it, are most likely to continue down for 1-2 years, and stay low for years after that. The only thing that would prevent this from being true would be government intervention on a scale dwarfing everything seen to date, in which case everybody, everywhere will be in trouble. If you are happy where you are today, there is no urgency to buy.

If you do buy now, think long and hard about how much to put down, as this money will be immediately at risk.

If you decide to be a landlord of small properties, buy locally. Distance makes everything harder, and prevents proper oversight of both tenants and property managers.

Your circumstances are better than most, so you have options others would not have. You have a serendipitous financial gain due to the real estate bubble from the sale of your former house. If you now face the prospect of a similar loss from the bursting of the real estate bubble, what is your net? Somewhere near even, I would say.

First, decide to sell the Tempe property for whatever it will bring.

Second, come to conclusion on the value of having a high credit rating. The negative effect does not last forever. And, you will have substantial resources, even after any loss is taken (if you do not put all your money in a new house).

Third, decide whether to avail yourselves of the benefits of any Arizona non-recourse laws (whose applicability is to be confirmed). These laws were enacted specifically to protect people from being taken advantage of by the highly organized real estate industry.

After all the preceding is settled, you will have a clearer view of the factors which bear on your highly personal decision about more children, and the relative importance of the income from working versus the additional time you could spend on family matters.

[analyst]

Most importantly, do not buy a house now unless you are confident that it is a house you will be happy with until the kids are grown and living independently (a very long time, since you are discussing having more children). While some whole areas may have bottomed (Temecula, for instance), and the lowest-end housing in many areas may have bottomed, the kind of house you will be looking for, in the areas you would look for it, are most likely to continue down for 1-2 years, and stay low for years after that. The only thing that would prevent this from being true would be government intervention on a scale dwarfing everything seen to date, in which case everybody, everywhere will be in trouble. If you are happy where you are today, there is no urgency to buy.

If you do buy now, think long and hard about how much to put down, as this money will be immediately at risk.

If you decide to be a landlord of small properties, buy locally. Distance makes everything harder, and prevents proper oversight of both tenants and property managers.

Your circumstances are better than most, so you have options others would not have. You have a serendipitous financial gain due to the real estate bubble from the sale of your former house. If you now face the prospect of a similar loss from the bursting of the real estate bubble, what is your net? Somewhere near even, I would say.

First, decide to sell the Tempe property for whatever it will bring.

Second, come to conclusion on the value of having a high credit rating. The negative effect does not last forever. And, you will have substantial resources, even after any loss is taken (if you do not put all your money in a new house).

Third, decide whether to avail yourselves of the benefits of any Arizona non-recourse laws (whose applicability is to be confirmed). These laws were enacted specifically to protect people from being taken advantage of by the highly organized real estate industry.

After all the preceding is settled, you will have a clearer view of the factors which bear on your highly personal decision about more children, and the relative importance of the income from working versus the additional time you could spend on family matters.

[Author]

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