Jeremy Larkin

photo by IndianSprings Guy

The Woodlands Basic Info

See the original article here posted by my business partner Johnny Schiro.

Located 27 miles north of downtown Houston, and about 25 minutes from the George Bush-Intercontinental Airport, The Woodlands is a brilliantly-designed master planned community: a mix of prestigious residential ($150's to $5M), high-end office space, and new urban retail. The state's most successful master planned community is built on 28,000 acres of forest and about $9.3 Billion of investment capital.

As of January 1^st 2008, The Woodlands vital stats looked something like this:

The Woodlands development started in the early 1974 as one of the nation's first true master planned communities. For the first 20 years, most development was residential with retail centers built primarily to support the village-style living philosophy. In the past 5 years, however, dramatic retail expansions such as The Woodlands Waterway, Market Street, and Town Center have completed the ultimate plan with absolute perfection. Now 34 years later, The Woodlands is considered the standard for master planned communities; its success has inspired countless developments state-wide, but none (to my knowledge) have managed to rival The Woodlands in terms of stability, popularity, and innovation.

Often described as a suburban utopia, I see The Woodlands community as a self-sustaining suburb. The significance? It's primarily residential, yet enough commerce has emerged here to generate a powerful, self-sustaining local economy. Almost 40% of primary household earners actually work in The Woodlands.

Surrounding Area: Suburban North Houston

The Woodlands is one of several communities that make up the Suburban North Houston area. Adjacent neighborhoods include:

• Spring - Just south of The Woodlands, Spring (which includes the Champions area) is an unincorporated community in Harris County. Spring is primarily residential and retail, with homes ranging from just under $100k up to the $1M range. Residential and commercial development activity is still very high, particularly around the FM 2920 corridor.

• Conroe - On the North and Northeast sides of The Woodlands, Conroe is an established, historic community that is not technically a part of Houston. Lake Conroe is by far the most popular Lake in the Houston North area; high-end waterfront residential development has grown significantly over the past few years. More info

• Magnolia - A more rural community, Magnolia & Montgomery border The Woodlands to the North and Northwest. Magnolia is responsible for much of the growth in Montgomery County since 2000, with numerous high-end ranch-style neighborhoods being developed.

• Tomball - On the Southwest side of The Woodlands is Tomball. Similar to Spring, Tomball is a growing residential community with a wide range of home prices, major retail centers, and also the giant Hewlett-Packard campus.

The majority of North Houston has always been residential & retail, with the industrial sector starting just South of the Spring area. The Woodlands, however, has become a popular and prestigious location for oil-related and biotech firms, including several Fortune-500 companies. A few examples:

Anadarko Petroleum Corporation, CB&I, Chevron Phillips Chemical Company, Halliburton, Hewitt Associates, Huntsman Petrochemical Corporation, Lexicon Pharmaceuticals, Maersk Line, and Fox Networks.

For more information about The Woodlands economy, visit The South Montgomery County / Woodlands Chamber of Commerce site. The south and west areas of of North Houston (Spring, Champions, and Tomball) belong to Harris County; for more info, see this article about the Northwest Harris County Economy.

Driving Force: The Woodlands Waterway, and its impact on Real Estate Values

At The Woodlands' closest point to Interstate 45-the primary thoroughfare between downtown Houston and Dallas-shine the bright lights of our local downtown. The Woodlands Waterway Center is a precisely-planned mixture of pedestrian-friendly retail, high-end office space, and luxury in-town residential space has far exceeded most expert expectations.

photo by photoram

With the Waterway addition, The Woodlands is now the hottest commercial building market in Houston, one of the most successful master-planned communities in the country, and this so-called ‘suburb' now boasts over 7 million sqft of office space, 6 million sqft of retail space, and 1,500+ companies paying the salaries of over 42,000 employees.

The residential piece of The Woodlands Waterway includes in-town residence in the form of townhomes, brownstones, and condos. Along the East Shore of Lake Woodlands, new developments of luxury patio homes, townhomes, and custom homes have been extremely successful-selling for as high as $300/sqft.

Living the Village Life

photo by gsloan

It's official, as of Oct. 1 2008, the beloved days of 100% financing are now dead. President Bush signed historic legislation on July 30th that boosts mortgage finance companies Fannie Mae and Freddie Mac and authorizes a $300 billion expansion of Federal Housing Administration loan guarantee programs. The mortgage industry has seen significant changes over the past year, and with the demise of the sub-prime market, the last alternative to 100% financing was securing an FHA loan utilizing their down payment assistance programs. Some examples of these non-profit organizations include: Nehemiah, AmeriDream etc.

The FHA allowed these home buyers to accept gifts of down-payment money from nonprofit organizations. Here's the loophole: Since the 1990s, the FHA had allowed home sellers to "contribute" money to nonprofit's, and for the nonprofit's to then turn around and "donate" the money to home buyers. In effect, sellers could fund buyers' down payments, which was a no-no, but the practice was technically legal because the money was shuttled through nonprofit's. The nonprofit's collected service fees from sellers.

So some of you may be asking yourself, "How does this new housing legislation effect me?" Well it means as of Oct. 1 2008 down payment assistance programs are no longer available for use. This bill increases the minimum down payment to obtain an FHA loan from 3% to 3.5%. Until July 2009 first time home buyers will qualify for a 10% tax credit (up to $7500). The bill also introduces a "risk based" mortgage insurance valuation system instead of the old flat rate 1.5% mortgage insurance premium tacked onto your mortgage loan. You can read the entire H.R. 3221 bill here.

Below are the FHA loan limits in the Greater Houston area and surrounding counties.

FHA is still one of your best bets out there for someone who is looking for a minimal down payment. There my be some better options out there for the individual or family who can afford to put down 5%-10% towards their down payment. Contact The Icon Group today or view our buyer center or fill out our loan application at our mortgage center at www.houstonicon.com.

It's not too late to get in a qualify for these down payment assistance programs but time is running short. Contact The Icon Group today!

With declining mortgage options for credit challenged individuals, our company seems to be running across more and more of these types of investment opportunities lately and we are in need updating our lease option investors list for notification purposes when these opportunities arise.

A lease option is a low risk/medium return investment that is very hands off from an investors standpoint. The properties are typically brand new single family builder inventory homes, or on rare occasion resale homes. This program is a win win for all parties involved in the transaction. The buyer gets into the house they really want and works towards purchasing the home, and the investor get an instant tenant who has a vested interest in taking care of the property with decent cash flow. These type of deals average @ a 50% - 100%+ cash on cash return with @ a 10% cap. For a complete explanation including advantages and disadvantages to this program please click here

Typical numbers for this type of deal:

Market Value: 170k

Investor Purchase Price: 145k - Typically 10% -15% Discount

$1600 per month rent, 2 year lease

$3000 option deposit from the buyer/tenant - refundable if the buyer/tenant purchases the property

$1600 lease security deposit from the buyer/tenant plus first months rent upon move-in/closing

All deposits refundable to buyer/tenant upon purchase, option deposit goes to investor if buyer doesn't purchase and the lease security deposit is subject to the terms of the lease

If this type of deal interests you or you would like further information the please email Jeremy at larkin@houstonicon.com and I'll answer your questions and add you to our list of lease option investors. Once we post these investment opportunities we will take the interested investors on at a first come first serve basis.

Explaining The Housing and Economic Recovery Act of 2008's $7500 Tax Credit "In Layman's Terms"

Many of you reading this may be familiar with the recent passing of the Housing and Economic Recovery Act of 2008. You may click here to read my previous blog posting to get a basic understanding of how this newly passed law effects you. One of the major provisions provides a $7,500 tax credit to qualified first time home buyers, as well as those who have not owned a home in the last three years. I would like to explain this a little bit further so you, as a first time home buyer, can better understand how you can benefit from this.

I'm going to answer this question in a Who, What, When, and How format:

WHAT is the tax credit?

Essentially, the tax credit is an interest free loan of up to 10% of the purchase price of a home or $7500 whichever amount is smaller. Unlike previous tax credits issued by the government in years past where the credit didn't have to be paid back, this one must be paid back over a period of 15 years at $500 per year. The $500 will be deducted from, or added to your amount on your tax return when you file. You, as a first time homeowner, don't have to take the full amount of the tax credit but are allowed to use up to $7500. You do not have to start paying back the government until 2 years after you claimed the credit on your tax returns. An important note on the repayment, if you sell the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven. Essentially, the tax credit is tied to the home you bought that qualified for the tax credit.

So WHO is eligible for this tax credit?

First time home buyers purchasing any kind of home whether it's a builder's home, resale, or custom "built on your lot" home are eligible for the tax credit. The law defines "first-time home buyer" as a buyer who has not owned a principal residence during a three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

There are income requirements as well. To qualify for the full amount of the tax credit there is a $75,000 modified adjusted gross income (MAGI) limit for singles and $150,000 limit for married taxpayers. There are scenarios where you can be slightly above those limits, but it depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phase out limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.

Modified adjusted gross income (MAGI) as defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or (AGI). AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.

WHEN can I qualify for this tax credit?

If you purchased a home between April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs. This means the qualifying date is retroactive as well. Meaning if you purchased a home in between April, 9th 2008 and July 2008 when this bill actually passed in congress you still qualify for the tax credit. You can claim the credit on either your 2008 or 2009 tax-return regardless of when you purchased the property, so long as you purchased the property between April 9, 2008 and before July 1, 2009.

HOW do I go about claiming my $7500 Housing and Economic Recovery Act of 2008's tax credit?

Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.

Now you may be asking yourself, "what purpose does the government hope this tax credit will achieve?" Well per my sources Congress's intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.

If you are a first time home buyer please visit our website at http://www.houstonicon.com/ . Right now we are offering $1000 Lowe's gift cards to our Houston area new clients. Please visit our new construction page on my website for more information concerning this offer for new clients and first time home buyers. You will also find tons of information about Houston area new construction home builders and more information about our $1000 Lowe's gift cards by visiting one of our past blog entries concerning this subject. If you are interested in saving $15,000-$25,000 on your next new construction purchase, then check out our informative website to find out how. Or if you would like to speak with one of our expert real estate consultants Jeremy Larkin or Johnny Schiro directly then please call 281-296-6226.

If you have any questions please contact me at my website or email me at larkin@houstonicon.com

Sources and information quoted furnished by: NAHB and CNN Money