[HLS]

MYITO…

I’d be glad to discuss your situation with you privately.
Please email me your contact info at [email protected]
and post that you did so I can look for it.

One IMPORTANT thing that you need to realize is IF #1 above is your current primary residence (OR if you lived in it for 2 out of the last 5 years) you need to figure something out, esp since you are getting killed in taxes.

One of the huge benefits of rentals is depreciation of the dwelling over 27½ years, based on your COST.

For you to turn a 1996 cost basis property into a rental may not be in your best interest. You cannot depreciate the land. Your dwelling probably has a very low cost, which will result in a very small write off.

With your equity position, you will also be getting a poor return on your equity, and may in fact create more taxable income from this rental, rather than a write off.

IF this is your primary residence, you have a TAX FREE exclusion of $250K or $500K (if spouse on title)
You may be better off selling the property now, and reinvesting in multi units with leverage that could take your cost basis of 1996 ($200K ??) to something closer to $1 million, creating a MUCH larger write off of depreciation, with multi units and MUCH better income.

The only downside is that it does increase your property taxes, but it’s all a write off with a rental, and IF you believe in future appreciation, you may be rewarded handsomely for the risk.

The above scenario depends on your overall financial situation and I urge you to discuss this with your CPA as there are write off limits based on your income, but they are carried forward.

Many people do great by turning a primary residence into a rental, but they are really limiting their risk/reward if they have a large amount of equity, and low cost basis and could do MUCH better.

The tax free exclusion of $250k/$500k is a powerful incentive to want to cash out and possibly use the cash more wisely, even being conservative.

In general, you will be better off with a down payment of at least 20%, and an 80% 1st to avoid a higher rate 2nd.

I’d like to talk to you about your tolerance for risk and overall financial situation. [email protected]

[HLS]

MYITO…

I’d be glad to discuss your situation with you privately.
Please email me your contact info at [email protected]
and post that you did so I can look for it.

One IMPORTANT thing that you need to realize is IF #1 above is your current primary residence (OR if you lived in it for 2 out of the last 5 years) you need to figure something out, esp since you are getting killed in taxes.

One of the huge benefits of rentals is depreciation of the dwelling over 27½ years, based on your COST.

For you to turn a 1996 cost basis property into a rental may not be in your best interest. You cannot depreciate the land. Your dwelling probably has a very low cost, which will result in a very small write off.

With your equity position, you will also be getting a poor return on your equity, and may in fact create more taxable income from this rental, rather than a write off.

IF this is your primary residence, you have a TAX FREE exclusion of $250K or $500K (if spouse on title)
You may be better off selling the property now, and reinvesting in multi units with leverage that could take your cost basis of 1996 ($200K ??) to something closer to $1 million, creating a MUCH larger write off of depreciation, with multi units and MUCH better income.

The only downside is that it does increase your property taxes, but it’s all a write off with a rental, and IF you believe in future appreciation, you may be rewarded handsomely for the risk.

The above scenario depends on your overall financial situation and I urge you to discuss this with your CPA as there are write off limits based on your income, but they are carried forward.

Many people do great by turning a primary residence into a rental, but they are really limiting their risk/reward if they have a large amount of equity, and low cost basis and could do MUCH better.

The tax free exclusion of $250k/$500k is a powerful incentive to want to cash out and possibly use the cash more wisely, even being conservative.

In general, you will be better off with a down payment of at least 20%, and an 80% 1st to avoid a higher rate 2nd.

I’d like to talk to you about your tolerance for risk and overall financial situation. [email protected]

[HLS]

Shari…

Don’t start with me….

I was able to peg what you do from several sentences.
I chew propaganda up and spit it out daily.

Your assumptions of me are 180 degrees off.

I bought my first OO property in 1980. I’ve been a landlord since 1982. I rented a room for less than a year in 1982 until I bought my next home, and I won’t bore you with what’s happened since then.

Other than that, I’ve never rented a day in my life, unless you consider paying for cabins on cruise ships renting.

I can assure you that I’m not bitter, you won’t see me at one of “your” open houses, and I’m probably not like anyone that you’ve ever met before. I don’t fit into any box that you’ve ever seen.

I’m sure that you have never told people that buying a house is gambling. Your income depends on repeating the propaganda that spews from what is purported to be professional, ethical organizations. Your income depends on it.

I’d love to hear some of the lines that came out of your mouth (over the last 10 years) that got you by with nothing more than luck, it certainly wasn’t wisdom or experience.

Regardless of what the organizations that you pay dues to tell it’s members, you aren’t psychic and don’t have a crystal ball and have ABSOLUTELY no business giving people investment advice or predicting future gains, UNLESS you personally are a poster child for financial security for much longer than the 9 year bull run of local RE.

You want to go toe to toe, I can assure you that I can hold my own. I’m involved in the mortgage business but my income doesn’t depend on it. I wasn’t doing retail loans at the peak, so don’t even think that I put people into crappy loans or earned huge commissions.

Take a hard look at what you are saying, word by word.
That’s what I do, even when nobody is listening.
It’s called integrity.

I look in the mirror every day and like who I see.
I only hope that you can say the same.

[HLS]

Shari…

Don’t start with me….

I was able to peg what you do from several sentences.
I chew propaganda up and spit it out daily.

Your assumptions of me are 180 degrees off.

I bought my first OO property in 1980. I’ve been a landlord since 1982. I rented a room for less than a year in 1982 until I bought my next home, and I won’t bore you with what’s happened since then.

Other than that, I’ve never rented a day in my life, unless you consider paying for cabins on cruise ships renting.

I can assure you that I’m not bitter, you won’t see me at one of “your” open houses, and I’m probably not like anyone that you’ve ever met before. I don’t fit into any box that you’ve ever seen.

I’m sure that you have never told people that buying a house is gambling. Your income depends on repeating the propaganda that spews from what is purported to be professional, ethical organizations. Your income depends on it.

I’d love to hear some of the lines that came out of your mouth (over the last 10 years) that got you by with nothing more than luck, it certainly wasn’t wisdom or experience.

Regardless of what the organizations that you pay dues to tell it’s members, you aren’t psychic and don’t have a crystal ball and have ABSOLUTELY no business giving people investment advice or predicting future gains, UNLESS you personally are a poster child for financial security for much longer than the 9 year bull run of local RE.

You want to go toe to toe, I can assure you that I can hold my own. I’m involved in the mortgage business but my income doesn’t depend on it. I wasn’t doing retail loans at the peak, so don’t even think that I put people into crappy loans or earned huge commissions.

Take a hard look at what you are saying, word by word.
That’s what I do, even when nobody is listening.
It’s called integrity.

I look in the mirror every day and like who I see.
I only hope that you can say the same.

[HLS]

I think that I went down the wrong path with the OP, I was chasing a thought and looking for input, but I see now that it looks stupid. SORRY!~

Did you get past the original question ???

Again, I didn’t say it WILL happen, cuz it won’t.

[HLS]

I think that I went down the wrong path with the OP, I was chasing a thought and looking for input, but I see now that it looks stupid. SORRY!~

Did you get past the original question ???

Again, I didn’t say it WILL happen, cuz it won’t.

[HLS]

First mortgage isn’t the issue..
The issue is Recourse Debt or NON-Recourse debt.

Purchase Money loans are usually NON recourse debt.
(Refi Loans are RECOURSE debt)

Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral.That is, the lender cannot pursue you personally in case of default.

Forgiveness of a non-recourse loan resulting from a foreclosure does NOT result in cancellation of debt income.

Taxable cancellation of debt income.(Note: As stated above, cancellation of debt income is not taxable in the case of non-recourse loans.)

http://www.irs.gov/newsroom/article/0,,id=174034,00.html

CONSULT A CPA for your personal situation.

[HLS]

First mortgage isn’t the issue..
The issue is Recourse Debt or NON-Recourse debt.

Purchase Money loans are usually NON recourse debt.
(Refi Loans are RECOURSE debt)

Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral.That is, the lender cannot pursue you personally in case of default.

Forgiveness of a non-recourse loan resulting from a foreclosure does NOT result in cancellation of debt income.

Taxable cancellation of debt income.(Note: As stated above, cancellation of debt income is not taxable in the case of non-recourse loans.)

http://www.irs.gov/newsroom/article/0,,id=174034,00.html

CONSULT A CPA for your personal situation.

[HLS]

We are on the same page. I don’t fear it however. I agree that it will be good for society (eventually)
The country recovered after the 1930’s too.

An abyss is either bottomless or very far down, so I’m not sure where you think we are….

Baby boomers have had a pretty good life, the last 65 years have been prosperous, with a few hiccups and many people are now living way beyond their means. Many with ONLY a home as their retirement nest egg.

I have a crazy vision in my head and I really want to be wrong about it. It’s hard to see so many people wading in debt and denial.

RE is far from being out of fashion….that’s why those that are buying, are still buying, and others are hoping and praying.
It’s still fun to watch FLIP THIS HOUSE too.

I don’t think a “crash” is imminent,, It’s going to drag on for awhile and be on a house by house, neighborhood by neighborhood basis, but I think that certain areas will be hit VERY hard.

One thing that I wonder though is even someone with an 800 credit score, at some point will they walk ?
What is their credit score worth if their home is worth 50%-60% of what they owe, and they owe $1M ?

Think San Diego, LA & OC not just IE.
Cribs in the Hood were $400K++ c’mon !!

My goal a year ago was to find the first house that had been foreclosed on or short sold twice in this cycle. I figured it would be mid 2008 for that to happen.

I saw this mess coming long before the subprime loan market disappeared and the fall from grace of jumbos.
These two unexpected factors have added to my concerns..

It’s almost impossible for a homeowner to protect themselves from the continued loss of net worth, AND the false sense of what their house is “worth” without taking huge risks, not prudent for most people.

1928 was a good year, things changed for the worse in ’29 and few saw it coming.

At this point, my only thought is wanting to know what kind of toilet paper is used in govt so I can buy stock in the company that makes it. I firmly believe that they have no idea what to do to fix this mess and are crapping in their pants daily. The need for TP in DC has got to be huge.

[HLS]

We are on the same page. I don’t fear it however. I agree that it will be good for society (eventually)
The country recovered after the 1930’s too.

An abyss is either bottomless or very far down, so I’m not sure where you think we are….

Baby boomers have had a pretty good life, the last 65 years have been prosperous, with a few hiccups and many people are now living way beyond their means. Many with ONLY a home as their retirement nest egg.

I have a crazy vision in my head and I really want to be wrong about it. It’s hard to see so many people wading in debt and denial.

RE is far from being out of fashion….that’s why those that are buying, are still buying, and others are hoping and praying.
It’s still fun to watch FLIP THIS HOUSE too.

I don’t think a “crash” is imminent,, It’s going to drag on for awhile and be on a house by house, neighborhood by neighborhood basis, but I think that certain areas will be hit VERY hard.

One thing that I wonder though is even someone with an 800 credit score, at some point will they walk ?
What is their credit score worth if their home is worth 50%-60% of what they owe, and they owe $1M ?

Think San Diego, LA & OC not just IE.
Cribs in the Hood were $400K++ c’mon !!

My goal a year ago was to find the first house that had been foreclosed on or short sold twice in this cycle. I figured it would be mid 2008 for that to happen.

I saw this mess coming long before the subprime loan market disappeared and the fall from grace of jumbos.
These two unexpected factors have added to my concerns..

It’s almost impossible for a homeowner to protect themselves from the continued loss of net worth, AND the false sense of what their house is “worth” without taking huge risks, not prudent for most people.

1928 was a good year, things changed for the worse in ’29 and few saw it coming.

At this point, my only thought is wanting to know what kind of toilet paper is used in govt so I can buy stock in the company that makes it. I firmly believe that they have no idea what to do to fix this mess and are crapping in their pants daily. The need for TP in DC has got to be huge.

[HLS]

Last time that happened, (1%)
30 YR rates were close to 5%
15 YR rates were 4.75%

In an effort to save a sinking ship, who knows what the “system” will offer….

Why aren’t more people scared about what is going on ??

[HLS]

Last time that happened, (1%)
30 YR rates were close to 5%
15 YR rates were 4.75%

In an effort to save a sinking ship, who knows what the “system” will offer….

Why aren’t more people scared about what is going on ??

[HLS]

[email protected]

Please post here if you send me an email.
I don’t check that box unless I need to.
It’s not my regular which I will respond from.

Happy to help if I can.

[HLS]

[email protected]

Please post here if you send me an email.
I don’t check that box unless I need to.
It’s not my regular which I will respond from.

Happy to help if I can.

[HLS]

It’s not an easy emotional situation.
From a business standpoint without emotion it is.

If carrying costs are $4000 a month to own, and you could rent for $2000 a month, you start with $2000 upside down,
Thats $24,000 a year + lost interest. (perhaps the numbers are larger)

To people that say you will be happy in 5 or 10 years, you will need an increase of $125,000 to $250,000 just to be even, and that’s over what you owe, not what the house is worth today. IT MAY or MAY NOT HAPPEN.

You will also need $50,000 a year++ to maintain, which is currently not affordable.

Is it better to be a happy or content renter living an affordable lifestyle
OR
a miserable, stressed out homeowner with no extra money to enjoy their lives because they are a slave to their mortgage ??

Many people got caught in the myth, this mess is far, far from being over.

I truly believe that foreclosures will have a good chance of being overlooked in the future. The system will NEED home buyers. Even if that doesn’t happen, there will be ways to get back in to homes.

[Author]

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