How To Use Your IRA To Invest In Cash-Flowing Real Estate Penalty Free.

By Troy Corman, www.t2realestate.com

With interest rates on CDs and bank savings rates close to nil, many are searching for ways to both protect and grow their money.

To me, it's a no-brainer. Investment real estate is on sale. Home mortgage rates are at or within a whisker of all-time lows. The demand for rental housing is EXPLODING, and rental rates are going through the roof. Folks are moving to Dallas and the other major Texas cities in droves. So why not take action?

If you have money in your retirement account, you can buy real estate to live in or to invest in, penalty-free.

Investment real estate can be bought, rehabbed and managed through an IRA custodian. There are a few around, and I used a company called PENSCO, out of San Francisco, but there are also Texas companies that do this as well.

Since the money is coming from an IRA, or Roth IRA, you cannot benefit financially from this transaction until you reach your retirement age. The down payment, closing costs, insurance, property taxes and repairs/rehab all have to be financed via your IRA. You are not allowed to co-mingle personal funds with your IRA funds in any fashion.

The monthly rent is to be paid to the IRA custodian, who will then deposit the monies into your IRA account.

The only drawback is that you won't get to take advantage of some of the great personal tax deductions that investment real estate provides, like mortgage interest, depreciation, repairs and insurance. However, there are plenty of distressed properties, foreclosures and short sales to choose from right now and an oversupply of renters. I don't see that changing much in the next year or two.

In most investments, you can never be exactly sure how it's going to turn out. For me, personally, I like to see a tangible building or lot that I can touch and feel. Also, I like knowing that I'm protected from catastrophic loss with property insurance, so my downside risk is small.

As Peter Lynch, the famous stock picker once said, "most people spend more time researching the refrigerator they're going to buy, than a stock they invest in". So please at least look into real estate investing, and protect you and your family's future from the corporate and political shenanigans that affect the stock market.

Let me know if I can help or answer any questions you may have. Best of luck!
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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.

• Connect with Troy Corman on facebook at http://www.facebook.com/troy.corman
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Government Considering Renting Out Foreclosures

WJS.com video posted by Troy Corman, t2realestate.com


The rental home market is booming. Landlords are delighted as rental demand is fueling multiple rental applicants and higher rent prices. Now, the US government is considering getting in on the action by making it more attractive for private investors to buy, rehab and lease foreclosed homes owned by Fannie Mae and Freddie Mac.

The top 5 ways real estate can make you money.
1. Cash Flow - renters pay more each month than the home's carrying cost.
2. Principal Pay Down - rent money pays down our mortgage each month.
3. Equity Capture - we buy homes for thousands less than they're worth.
4. Appreciation - we sell homes in a sellers market when prices are rising.
5. Depreciation - rent homes produce about $10K in deductions per $100K home annually.
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Read the full story in wsj.com.

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.

• Connect with Troy Corman on facebook at http://www.facebook.com/troy.corman
• Follow Troy Corman on twitter at https://twitter.com/#!/troycorman
• Reach Troy Corman at his google+ page

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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