The Ugly Secret About Some Of The People That (pretend to) Buy Ugly Houses.

By Troy Corman, www.t2realestate.com

For the life of me, I can not figure out what benefits real estate "wholesalers" provide to this world other than screwing poor, weak or ignorant home owners out of their money. Sure, they feed "real" real estate investors fire-sale real estate deals, but it's often at the expense of some ignorant or desperate seller who doesn't know any better.

A professional Realtor has a fiduciary duty and loyalty to you, the client, to provide professional advice and to represent YOUR interest. A realtor's goal is to get you the maximum price for your home that the ENTIRE free market determines.

When you list your home in the MLS, it's marketed to thousands of potential buyers, on tons of web sites. A wholesaler generally markets your home to a few dozen real estate investors in some club, or puts it on what's called "bandit" signs that you've seen littering telephone poles and street corners.

You see, the "wholesaler" doesn't really care about you. He's going to sell your home for less (often much less) than it would sell for on the multiple listing service, or mls. After all, he's only going to pay you the low-ball-offer you agreed to on a no-telling-what-king-of-contract he's conjured up. And then, he's going to pocket the spread between his offer to you and what a legitimate home buyer or investor is willing to pay. So the more your home sells for, the more he makes - instead of YOU.

So Mr. Wholesaler is likely to tell you your home needs thousands and thousands worth of repairs and improvements - which maybe it does. But he's often going to over-exaggerate this amount, so he can steal your home more effectively.

So beware. If you're in a desperate situation, please consult a professional Realtor for help. He or she will be much better versed in what's best for you - whether it's short sales, loan mods, and can sell your home faster because he or she is marketing it to a much larger buyer market.

So please, don't let wholesalers take advantage of you or your loved ones. Get a real estate professional to represent YOUR interest, so that you and yours can GET WHAT'S BEST FOR YOU AND YOURS!
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Texas Home Prices Peak In June and July.

By Troy Corman, t2realestate.com
As you can see from the chart above, Texas home prices have peaked at almost the exact same levels each of the last four years, during June and July. As we enter Memorial Day Weekend, look for temperatures and home-buying activity to heat up. In the Dallas - Fort Worth metro, well-maintained and well-priced homes in desirable DFW neighborhoods and school districts will be in high demand. Also, as mortgage rates have reached the lowest levels of the year, smart buyers will take advantage.

If you're a home buyer and worry that you'll be competing with other buyers, just look at the Texas home price appreciation in the chart below. Courtesy of the Texas ATM real estate center, the chart reports the one-year, five-year and twenty-year appreciation levels. As you can see, San Antonio is actually experiencing price appreciation this year. A builder friend says upper-income Mexicans are moving their families and businesses out of Mexico to escape the violence and drug cartels. And they're coming to San Antonio and buying nice homes and often buying brand new homes.

Austin home prices have appreciated over 150% according to the twenty-year chart below. They continue to attract those in the technology industry as well as southern Californians, and retirees who like the Austin terrain.

All the major Texas cities are predicted to explode with growth during the next twenty years. Our affordable cost of living and zero-income tax policies make Texas extremely desirable to those escaping the failed high taxation and anti-business policies on the west and east coasts. When pro-growth measures finally take hold in Washington, look for Texas to lead the way.

Charts courtesy of Texas ATM Real Estate Center

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Five Ways Real Estate Can Reduce Your Taxes.

By Troy Corman, www.t2realestate.com

I don't know of any investment vehicle that can compete with the great tax deductions that rental real estate investors enjoy. Rental real estate investors get to deduct insurance, advertising, repairs, interest expenses, property taxes and depreciation of buildings and appliances. On a $100,000 home in a Dallas area suburb, tax deductions are roughly $10,000 on an 80% loan, just including taxes, mortgage interest, insurance and depreciation.

Below are a few additional real estate tips to help reduce your income tax liability.

1. Rent deposits should not be counted as income if you plan on deducting that money back to the tenants at the end of the lease.

2. On the sale of your rental property held for more than a year, you'll only pay capital gains - or 15%, versus the regular income tax rates (that are likely to head higher). You should also deduct commissions, title charges, recording and transfer charges, and settlement costs.

3. The costs of building your own property web site, as long as it's an ordinary and necessary advertising expense is deductible. Others include newspaper ads, signs, banners, and postage for direct mail.

4. Sell your homestead to yourself with a S-corporation. With this method, you are able to satisfy the requirement of occupying a home 2 out of the last 5 years to avoid paying capital gains. Say for example, you wanted to rent out your previous home to tenants for a long time period. Well, you could simply set up your own S-corporation and have it buy the home from you personally, and book the profits tax-free - as long as you've lived in the home 2 out of the last 5 years.

5. Refinancing your rentals. Once your rental home has appreciated in value or you've paid down the loan quite a bit, you can refinance the home at a higher loan amount, pay off the old loan, and put the excess cash in your pocket, tax-free. Of course, you'll have to pay closing costs associated with the new loan, but it's free income.

If you have multiple homes, you might consider refinancing into a portfolio loan. A portfolio loan would include multiple properties on one loan and could make it easier to qualify for additional fannie mae and freddie mac mortgages.

Lastly, there's never been a better to buy rental real estate. Foreclosures have subsided but are expected to swell sharply in late 2012. At the same time, mortgage rates are at an all-time low. Plus, ask any landlord, the rental business is booming! And real estate is a great hedge against a weak dollar and inflation, which is sure to surface sooner or later as Helicopter Ben has printed trillion$ with a "t". In fact, farm and rural land prices are setting new records in many parts of the country, right now!

Just remember, studying and learning will not get you to the promised land. You've got to take action. As they say, words without deeds is dead. I'd love to help you if I can, as I've been buying, fixing and renting Dallas area foreclosures since 2005. You can usually catch me on my cell at 214.690.9682. Best of luck!

Troy Corman is the founder of t2 Real Estate LLC, a Dallas real estate firm providing specialized knowledge with a hands-on approach. Specialties include residential real estate brokerage, land and acreage, and commercial real estate services. Contact us today at 214.827.1200 if you need to sell, buy or get your DFW property leased.

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Trying To Pick The Housing Bottom Can Result In Stinky Fingers!

By Troy Corman, t2realestate.com

Will home prices fall another 1%? 2%? 5%? Will mortgage rates go from below 5% to 6%, or 7%, or 8%?

Should you continue to wait, and wait, and wait before you buy? And if you do wait, will home prices go down - or will both home prices AND interest rates rise, making it more expensive all the way around?

No one knows if we've hit the bottom. And no one will know for sure, until the bottom is in the rear view mirror and prices have consistently moved up.

One thing we do know is that homes are affordable. And rates are near all-time lows. And the economy and job market are improving.

Frederick B. Wilcox said it best. "Progress always involves risks. You can't steal second base and keep your foot on first".

Don't try to pick the bottom. Or you just might get caught, with stinky fingers!
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Why I Don't Like Dallas Homes Built In The 60s And 70s.

By Troy Corman, www.t2realestate.com



When it comes to Dallas homes with slab foundations built in the 1960s and 1970s, buyer beware. Our very expansive soils can wreak havoc on the tract, starter homes built in the 1960s and 70s. I've been bitten more than once on these homes where I've had to pay major dollars to prepare broken plumbing pipes. Plumbing problems are not fun. As the foundations shift, they can put enormous strain on both cast iron and pvc pipes under the home. This can mean plumbing problems which can cause even more foundation problems as the ground below the slab gets washed away.

I recommend that you always have leak tests done on homes of this vintage and pay very close attention if any foundation work or plumbing work has been repaired in the past. If foundation work has been done, insist on getting the plumbing leak test results which should accompany any foundation repairs.

Cast iron that was used in the 1960s and 70s is not as thick as the cast iron used in the early 1900s. That's why I prefer homes built in the 1950s or older on pier and beam foundations or homes built in the 80s or newer. That old adage, "they just don't build 'em like they used to" often holds true when it comes to DFW residential construction.
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Should You Invest In The American Dream Or Your 401K?

By Troy Corman, www.t2realestate.com

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With affordable home prices and some of the lowest mortgage interest rates in history, The American Dream is on sale. Our economic uncertainty has bred tremendous fear, and in turn, tremendous opportunities.

So why are so few taking advantage? Because you and your brethren have been programmed to sock away money blindly into a 401K or IRA managed by some distant stranger who is making your investment decisions for you. I find that a frightening option, especially since stocks tend to have much bigger drops than housing in times of despair. I've heard of many stocks dropping to $1 from $100 or more a share, but I've yet to hear of any real estate that was worth $100,000 at one time dropping to $1,000. That's why I think if the doomsdayers are correct about another downturn, the stock and commodity markets will take a much bigger hit than real estate, and those 401Ks could end up in 201K territory again.

An alternative strategy is investing in home ownership in lieu of your 401K. We'll break down a plausible scenario below. Benefits include:

A. You get to LIVE a better life, in better living quarters - EVERY DAY - NOW;

B. Unlike the 401K, the profits you receive when selling your owner-occupied home are TAX-FREE (after living in the home for 2 years);

C. Home ownership reduces your taxes. On a $200K home purchase, financing $190K, at 5% interest, you'll deduct $9,436 in interest expenses, and $5,000 in property taxes (based on 2.5% rate at $200K tax assessment) annually. If you're in the 28.5% tax rate, that totals $4,114.26 in annual additional after-tax dollars you'll keep;

D. After 5 years of payments, instead of owing $190,000, you'll owe $174,181;

E. If you buy your $200K home at 10% less than market value, it's worth $220K at purchase, instead of the $200K you paid;

F. If your home averages 3% appreciation for 5 years, the home would be worth, in 5 years, $255,040 (based on a $220K starting valuation);

G. Let's suppose you put $500 a month into your monthly housing payments, instead of your 401K, or $30,000 over 5 years;

1. $30,000 invested monthly over 5 years in your 401K with an annual 5% return would total $34,788 before taxes at the end of 5 years, or $24,873 after taxes based on the 28.5% tax bracket.

2. $30,000 invested in the your home purchase over 5 years - plus the down payment of $10,000 and closing costs of $7,500 (estimated) equals an investment of $47,500, plus a roughly $1,200 monthly expenditure on housing.

3. Now let's say you sell the home after 5 years for the $255K price and owe $174K. Taking out Realtor commissions and closing costs, you're left with $63,295 tax-free.

Would you rather have $34,788 stuck in a 401K you'll have to pay taxes on, or $63,295 tax-free that you can use or invest with now? Seems like a no-brainer to me.
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Fannie Mae To Pay Up To 3.5% - Covering Most Of Buyer's Closing Costs On Homepath® Properties.

By Troy Corman, www.t2realestate.com

On January 28, Fannie Mae announced sweeter incentives to attract qualified buyers to their foreclosed homes. Savvy Dallas home buyers stand to benefit. Fannie Mae will pay up to 3.5% of the sales price for a home buyer's closing costs on it's Homepath homes.

To qualify for the Homepath incentives, the home buyer must live in the property as it cannot be used as a rental home. The home buyer can choose between the Homepath home closing costs assistance, or the home buyer can receive assistance for the purchase of new appliances.

Dallas home buyers who purchase Dallas Homepath homes, can also qualify for Homepath Mortgage plans and Homepath Renovation Mortgage Financing, which requires as little as 3% down for a down payment. Some Homepath mortgage plans also do not require mortgage insurance, which further reduces the monthly mortgage payment.

Dallas foreclosure Realtors report a sharp uptick in home buyer traffic (not yet reported by media outlets, since closings generally take 30-45 days from executed contract date). If the economy and home buyer confidence continues to improve, look for increased competition and more buyers fighting over Dallas Homepath homes and Dallas foreclosures in general.

To view Dallas Homepath homes for sale, visit http://www.homepath.com/

To get help from a Dallas realtor who has personally purchased six Dallas foreclosures, and knows the ins and outs, contact Troy Corman at 214.690.9682.
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