Gene Riemenschneider East Contra Costa Home Sales 01492725

Brentwood Short Sale Strategies.

Save Time, Money, and Energy by having the right Short Sale approach.

Earlier this week I Posted on Brentwood Short Sales in September and provided a report on those homes. The Average Days on Market for those Short Sales was 60 Days. Most people would think 60 Days is not too bad to get a home sold; especially a Short Sale.

What is not included in that Average of 60 Days the Short Sale Home spent on the market is the time it spent Pending. That is the from the time the home was in Contract until they closed on the Short Sale.

I took a look at that number in Brentwood. There were only 19 Short Sales completed in September so those numbers were easy to get. Of those 19 Short Sales they spent from 26 days to 204 days Pending. The Median time Pending for a Brentwood Short Sale in September was 75 Days and the Average Time for those Short Sales was 101 Days.

If you want to Buy a Short Sale or Sell a Short Sale Home it seems to me you would want to know the difference between why one sold quickly and the other lingered in the process. Some of the issues in a Short Sale are beyond the control of the Buyer, Seller or the agents involved. Much of it has to do with the banks. But there are things you can do to speed things up on the Short Sale.

Find out how what you need to know about Short Sales in order to sell your home faster with our Free Report on 19 Things You Need to Know to Short Sale Your Home.

If you are thinking of buying a Short Sale then you should get our Free Report on 15 Facts About Buying a Short Sale Home.

Tax Strategies – Real Estate Investing – Part 14C - The 1031 Exchange II

This is Part 14 of my Real Estate Investing Series. You can view the first 13 Parts here:

Are you planning for your Future? Real Estate Investing – Part 1

Starting at Home! Real Estate Investing – Part 2

Maintain Your Leverage! Real Estate Investing – Part 3

Picking Your Investment Property – Real Estate Investing – Part 4

Location * Location * Location – Real Estate Investing – Part 5

Cash Flow Analysis – Real Estate Investing – Part 6 A

Cash Flow Analysis – Real Estate Investing – Part 6 B

Cash Flow Analysis – Real Estate Investing – Part 6 C

Cash Flow Analysis – Real Estate Investing – Part 6 D

Passive Losses – Real Estate Investing – Part 7

Gross Rent Multiplier – Real Estate Investing – Part 8

Capitalization Rate – Real Estate Investing – Part 9

Comparable Pricing – Real Estate Investing – Part 10

Rates of Return – Real Estate Investing – Part 11

Growth or Income – Real Estate Investing – Part 12

More on Rate of Return – Real Estate Investing – Part 13

Tax Strategies – Real Estate Investing – Part 14A

Tax Strategies – Real Estate Investing – Part 14B

Tax Strategies – Real Estate Investing – Part 14C - The 1031 Exchange I

If you read the Bare Bones Summary on 1031 Exchanges in the last post you probably have some questions.

Let me anticipate and try to nail down a few of them:

• What if I do not identify the replacement properties in 45 Days?
  
  Your screwed pay the Capital Gains Tax.
  
  
• What if the 45th day falls on Sunday, Christmas Day, New Years, or any Holiday?
  
  Better get the replacement properties identified ahead of time.  The 45 Days includes all the above mentioned holidays, Sundays, etc . . .
  
  
• What if I do not close on the replacement property within 180 Days?
  
  See above.  Same rules apply.  Get it done ASAP.
  
  
• What if I pay less for the replacement property than I sold the original property for?
  
  You will have to pay some Capital Gains Tax based on the difference.
  
  
• What if I take some of the equity (cash) from the sale of the original property?
  
  You will pay Capital Gains Tax on a portion of the sale.
  
  
• Can I use some of the equity (Cash) from the sale of the original property to cover some of the expenses?
  
  Yes you can.  Generally speaking you can pay fees directly related to the sale (real estate commissions, and other cost directly related to the sale.).  You cannot use the cash for cost of ownership such as repairs, utilities etc . .  This includes fixing the home up for sale.
  
  The IRS in all of it's wisdom has not clarified rather or not loan expenses are qualified expenses.  If in doubt do not use the funds for loan expenses.  Depreciate the loan expenses.
  
  
• What is a qualified property of like kind?
  
  Real Property for Real Property in the US.  You can sell a house to buy a vacant lot.  You can build on the lot as part of the exchange.  You can buy and upgrade (put improvements into the real property.)  To avoid taxes you must have a greater overall acquisition than sale.
  
  
• What if I already know the property I want but have not sold the property I currently own?
  
  You can do a Reverse Exchange.  Buy first and sell the Exchange property latter, but you better get it done in 180 days.  Consult the pros first.
  
  
• What if I want to sell a rental and buy a property for myself?
  
  You should have the new property on the rental market before converting it to personal use in order to avoid the Capital Gains Tax.  There is no hard and fast rule, but they recommend about 1 year to avoid Tax issues.
  
  
• What if I want to sell several properties and use the equity from all three to buy one property?
  
  You can do this, but the 45 and 180 Day Time Limit begins to run from the sale of the first property.  I recommend that you try and time the sale of all of the properties for the same time (this could be hard).
  
  
• What if I want to sell one property and buy two or more exchange properties?
  
  Excellent move to diversify your portfolio and use your equity.  Just make sure the combined value of the exchange properties is more than the sold property.
  
  
• Can I keep my low California Property Tax Basis on the Sold Property?
  
  NO!
  
  
• What is my Basis (For Income Tax and Capital Gains) on the new property?
  
  The Basis is carried over from the sold property.  Here is a crude example but you should consult with tax pros.
  
  In General you start with Property A as a rental and the Basis (cost) is $100,000.00.  After 27.5 years you have about depreciated it out and sell property A for $500,000.00.  You then do the exchange and buy Property B for $800,000.00.
  
  Your Basis is $100,000.00 (which is already fully depreciated) plus $300,000.00 cost difference (which can be depreciated out) for a new cost basis of $400,000.00.
  
  
  
• OK, Gene you have shown me the nuts and bolts of the rules, but how do I make this work for me?
  
  
  Subscribe to my blog and wait for the next post in this series and I will let you know.

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Tax Strategies – Real Estate Investing – Part 14C - The 1031 Exchange I

This is Part 14 of my Real Estate Investing Series. You can view the first 13 Parts here:

Are you planning for your Future? Real Estate Investing – Part 1

Starting at Home! Real Estate Investing – Part 2

Maintain Your Leverage! Real Estate Investing – Part 3

Picking Your Investment Property – Real Estate Investing – Part 4

Location * Location * Location – Real Estate Investing – Part 5

Cash Flow Analysis – Real Estate Investing – Part 6 A

Cash Flow Analysis – Real Estate Investing – Part 6 B

Cash Flow Analysis – Real Estate Investing – Part 6 C

Cash Flow Analysis – Real Estate Investing – Part 6 D

Passive Losses – Real Estate Investing – Part 7

Gross Rent Multiplier – Real Estate Investing – Part 8

Capitalization Rate – Real Estate Investing – Part 9

Comparable Pricing – Real Estate Investing – Part 10

Rates of Return – Real Estate Investing – Part 11

Growth or Income – Real Estate Investing – Part 12

More on Rate of Return – Real Estate Investing – Part 13

Tax Strategies – Real Estate Investing – Part 14A

Tax Strategies – Real Estate Investing – Part 14B

Now we are going to look at one of the main ways to defer Capital Gains taxes in order to maximize your investments, and possibly reduce or avoid all the Capital Gains Taxes at some point with the use of the Tax Strategies Discussed in Part 14B.

A 1031 Exchange is when you Exchange one Property for Another Property of Like Kind and not pay Capital Gains Tax on the Sale. For this series we are going to focus on the Real Property Aspects of the 1031 Exchange and how it relates to and can help you with Property Investments.

You decide to sell an investment property, but still want to keep your investments in real estate.  (Why you might want to do this we will cover latter.)

Here is the Bare Bones of What you do:

1. Consult with a Real Estate Professional and your other advisers first.  This can be a lot more complex than I am describing here.  A short consultation ahead of time can help you avoid problems down the line and make sure you obtain the goals you want.
   
   
2. Sell the Property you want to sell.
   
   
3. You do not touch the funds.  The funds go to a Qualified Intermediary (That you took care of in Step 1).
   
   
4. Within 45 Days of the sale of the property you must identify possible replacement properties.  Generally speaking you can identify the replacement properties in 3 ways:
   
   1) Pick any Three properties you think you may want to buy to replace it.
   
   2) Pick as many replacement properties as you want, but the value of all those properties combined can be no more than 200% of the value of the sold property.
   
   3) Pick as many replacement properties as you want, but you must buy 95% of the value of those properties.
   
   For most small investors # 1 will be the way to go.
   
   
5. Purchase the replacement property within 180 of the sale of the first property.
   
   
6. The Replacement Property must cost more (to avoid taxes).
   
   
7. All of the equity funds from the sale of the first property must be used to purchase the replacement property (to avoid taxes), except for qualified expenses.

That is it in a Nut Shell, but you should have a bunch of questions and there are many other minor rules and details I will cover in the next post in the series.

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Brentwood Short Sale Homes for September 2009.

This Brentwood Short Sale Homes Report focuses on Short Sale Home Sales in Brentwood California in September 2009 and Active Short Sales. If you think you might need to Short Sale Your Home or if you are considering Buying a Short Sale this in formation is for you.

If you thinking of Buying a Short Sale Home you can get our Free Report Fifteen Facts about Buying a Short Sale Home. Or if you might need to Sell Your Home in a Short Sale you can get our Free Report Nineteen Things You Need to Know About Short Selling Your Home. This report will help you decide if a Short Sale is a solution for you.

Currently there are 63 Short Sale Homes for sale in Brentwood. This is about 40% of the Market so if you are thinking of Buying A Short Sale it is not a market segment you can ignore in this tough market. The Average Asking Price of a Short Sale Home is $355,063.00 and the Average Median Price of A Short Sale Home is $330,000.00. The Average Asking Price per SF for these Short Sale Homes is $154.00.

The actual sales numbers for Short Sale Homes in Brentwood is somewhat different. In September there were 19 Short Sale Homes in Brentwood. The Average Price of a Short Sale Home in Brentwood was $288,421.00 and the Median Price of a Short Sale was $263,000.00. The Average Days on Market was 60 for Short Sale Homes and the Average Price Per SF for Short Sale Homes was $126.00; the Average Asking price for those that sold on a SF basis was $121.00.

Prices for Short Sale Homes in Brentwood compares well to overall sales in Brentwood. The Average Price in September was $301,088.00 and the Median price was $283,600.00. A total of 72 homes were sold, so Short Sales were a fourth of the market. The average days on market was 23. Listed price per SF was $127.00 and the sold price per SF was $129.00.

In Search of the Elusive Blue Pumpkin!

Last week I wrote about Blue Pumpkins and how great they are for cooking. Some people thought I was joking. Well Sunday I hauled my Five Pumpkins off to the Pumpkin Patch. The farm on Clayton Valley Road is currently in it's Pumpkin Patch mode before being turned into the Christmas Tree Farm.

The boys got to play in the Hay Maze, the Bean Pools (Giant Plastic Tubs filled with Beans) and do rubber duck races at the water pumps. The littler boys went on the Train Ride. Dad bought them all some Kettle Corn and then we picked out the Pumpkin.

We got one Orange one (to carve) and two big Blue Pumpkins for cooking.

A good time was had by all and Dad was allowed to fall asleep peacefully in front of Sunday Night Football as his reward.