How To Get Paid $34,000 To Buy A Minneapolis Duplex

said on February 20th, 2009 categorized under: Buying A Duplex

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House of money with golden keyIn all the excitement over the first time home buyer $8000 tax credit, I’d almost forgotten that really, there’s even more money available for first time Minneapolis duplex buyers.

How are you going to get paid $34,000?

Easy.

This year, of course, the government will pay you up to $8000 to buy your first home; regardless of how much you pay in taxes.

However, there are four other major financial benefits to owning multi-family income property: rental income, principal reduction, tax savings and appreciation.

What does this mean?

Well, for illustrative purposes, let’s say you buy a $200,000 Minneapolis duplex and finance 96.5 percent of it on an FHA loan at 5 percent interest. This means your monthly payment, without taxes and insurance will be $1036.

Of course, you live in one half.  And let’s say the other side is rented for $1000.

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Comments Off on The Simple Version of the $8000 First Time Home Buyer Tax Credit

pencil isolated on whiteDean Schifflerof Burnet Home Loans sent out a handy chart to the agents in our company today. It really helped clear up the mud around the first time home buyer tax credit offered in the economic stimulus package.

Here, in essence, is the tax credit defined:

  • Amount of credit: Lesser of 10 percent of cost of property or $8000.
  • Eligible Property: All principal residences.
  • Income Limit: Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Credit phases out above those caps.
  • First-time Home Buyer Only: Defined as someone who has not owned a principal residence in the last three years.
  • Repayment: No repayment for purchases on or after January 1, 2009 and before December 1, 2009.
  • Recapture: If the home is sold within three years of purchase, the entire amount of credit is recaptured on the sale. This applies only to homes purchased in 2009.
  • Termination: December 1, 20009. In other words, you have to have closed on the property by this date.
  • Effective Date: All revisions are effective as of January 1, 2009.

I hope that helps.

Congress Forces Rush to Buy First Minneapolis Duplex

said on February 12th, 2009 categorized under: Buying A Duplex, Legislation

6 Comments »

The Runninging businessman.According to the Los Angeles Times, yesterday’s compromise between the House and Senate versions of the stimulus package now features a $8000 first time home buyer tax credit.

While details have yet to emerge, and this has yet to be signed into law, this credit is significantly lower than the proposed $15,000 credit featured in the Senate’s version of the bill. What’s more, only first time home buyers are eligible for the break.

Unlike last year’s $7500 first time home buyer tax credit however, the $8000 does not have to be repaid. Properties purchased between January 1 and August 31, 2009 are eligible for the break.

As always, owner occupied single family homes, duplexes, triplexes and four-plexes are eligible for the credit.

Fair warning first time duplex buyers:  you have to close on the property by August 31.  It sometimes takes as long as 45 days to get a loan through final underwriting, a period which may be longer still if there is a rush of people trying to qualify for the tax break. 

It would be wise to think of your deadline to have a completed purchase agreement as being no later than July 15, preferably July 1.

You have 4.5 months. The longer you wait, the more competition you’re likely to face from other buyers.

I can think of four duplexes right now that could be a terrific buys. Get in touch with me. I’d be happy to show you where they are.