Property is often bought and sold for business purposes. It makes sense, from a public policy perspective, to encourage the buying and selling of property so that business owners purchase the property that is best suited for their use. Property may include real estate, personal property such as equipment, tools and motor vehicles, or livestock, for example. The government, recognizing that the possible capital gain taxes on the sale of property might prevent some businesses from buying and selling property, has enacted what is known as the 1031 Exchange Rule.
What is the 1031 Exchange Rule?
The 1031 exchange rule is part of the IRS Code. It allows people to replace business or investment property without having to pay capital gains taxes at the time of the sale. It is meant to encourage the productive use of property in trade and business. Property that is bought with the intent of creating a quick resale and private residences will not qualify for a 1031 exchange. The potential tax benefits of a 1031 exchange are significant. Therefore, the IRS has established some strict guidelines about the types of properties and the types of transactions that are eligible for this tax break.
Does My Transaction Qualify as a 1031 Exchange?
If you are trying to determine whether your real estate transaction would qualify as a 1031 exchange then consider:
- Whether the properties involved in the exchange are held for valid trade, business or investment purposes;
- Whether the properties qualify as eligible for a 1031 exchange. Section 1031 b of the IRS Code explains what is and is not eligible for a 1031 exchange. For example, real estate is eligible but stocks and bonds are not eligible;
- Whether the properties are of like kind. For example, both properties are real estate in the United States and not other types of personal property or international real estate.
- Whether you identified the replacement property within 45 days of closing on your current property and closed on the replacement property within 180 days of closing on your other property.
- Whether the proceeds from the sale of your current property must go to a qualified intermediary until you purchase your replacement property. The qualified intermediary enters a written contract with the person who is buying and selling property. The qualified intermediary holds the funds from the sale of a property and acquires the next property and then transfers the property to the taxpayer.
All of the funds must be reinvested in the replacement property. Any cash that is left over after the purchase of the replacement property is called “boot” and will be taxed.
As is the case with many tax breaks, the requirements for a 1031 exchange are strict and the penalties for not complying with all of the requirements can be significant. It is, therefore, important to work with an attorney versed in 1031 exchnages before entering a 1031 exchange transaction. If you don’t have one or are not currently working with one, you can give me a call and I will recommend one that we have that we can recommend. The attorney can make sure that all of the requirements have been satisfied and that the exchange is made pursuant to section 1031 for the benefit of your business.
Terry Iwaniw | Create Your Badge
Get
Follow Me Buttons/a>
Share on Facebook
Tags: 1031 exchange, 1031 exchange rule, 1031 exchanges, investments, irs code
Posted by
terryriw on Apr 19, 2010 in
Mortgages,
Selling 
In a short sale, a buyer pays less than the amount a seller owes the lender.
There are more cases of ’short selling’ in markets where home values are dropping.
Typically, when a homeowner can’t pay his mortgage because he has suffered some sort of hardship — loss of a job or divorce for example — he simply sells his home. But when home values are dropping, this can be a problem. In some cases, a homeowner might find he owes more on his mortgage than his home will sell for. In these cases, lenders will sometimes accept less than the amount owed on the home, assuming the homeowner doesn’t have other assets that can be sold to make up the difference. The lender then doesn’t have to go to the expense of selling the house at auction.
The question you have to ask yourself is: Are you really getting a great deal?
If the house was purchased at the peak of rising home values, then the homeowner might have paid a premium price for the property. If values are dropping today, the lender may only be able to discount the property to current market values. So in that case, you wouldn’t really be getting a bargain at all.
You’ll have to know what similar houses in the market are selling for to find out if you are getting a good deal.
Find out how long the home has been on the market and make sure you get good inspections. A seller who is in financial trouble often can’t keep up with repairs. You’ll want to have a good idea what has been neglected. Short sales are tricky legal propositions. You’ll want to make sure you have an attorney experienced in this sort of sale. You will also want to know who the lender or lenders are and remember the lender will be looking for a better deal than a short sale will offer so the lender probably will not instantly agree.
If you are looking to avoid foreclosure, call us to find out what we can do to help you with selling your home.
Share on Facebook
Tags: home selling, selling price, short sale
Posted by
terryriw on Apr 19, 2010 in
Buying,
Finances,
Mortgages,
Selling 
This is a tactic used by sellers or buyers to help the buyer qualify for a mortgage. It is a lump sum paid at the closing. It pays the mortgage company for reducing the mortgage interest payments for two or three years.
If the seller wants to pay to allow the buyer to be qualified, the seller pays for it. If the buyer has the cash but doesn’t qualify for the payment at current interest rates, the buyer could pay up front for the reduced interest rate that would be charged for two or three years.
Example of a two-year buydown:
The home price is $134,000, if the seller pays to have interest and monthly payments reduced by 2 percent in the first year and one percent in the second year, the seller would pay the mortgage company about $4,000 at the closing.
A detailed example of a three-year buydown
- For a $350,000, 30-year mortgage at 6.75 percent interest, Â the seller (or the buyer) could pay $15,853 at closing.
- The first year interest rate is 3.75 percent and the monthly payment is $1,621 per month. This creates a first-year savings of $7,790, considering that the payment would normally be $2,270 per month.
- The second year rate is 4.75 percent, creating a monthly payment of $1,826 per month, or an annual savings of $6,332 if the payment had been $2,270.
- The third year interest rate is 5.75 percent, resulting in a monthly payment of $2,043 per month or an annual savings of $2,731. (In the 4th through 30th years, the normal payment is $2,270.)
Add up the savings, and you will find they come to $15,853 in this case, which is what it costs to buy down the interest rate and payments for three years.
There is one other advantage to the mortgage buydown: It increases the payment more gradually than introductory-rate mortgages on which the monthly payment increases dramatically after two or five years.
Note: The 30-year interest rate in this example is different than rates presently charged on most 30-year mortgages.
Share on Facebook
Tags: Finances, mortgage, mortgage buydown
Posted by
admin on Oct 11, 2009 in
Marketplace,
Real Estate,
Selling,
for sale
3 Bedroom 3 Story Townhouse For Sale in Wilton’s Corner (IN5606851)
Location: Wiltons Corner
This HUD owned 3 bedroom, 2 1/2 bath 3 story townhouse is ready to move in. It is located in Wilton’s Corner and it has a large livingroom, with a dining area and large eat-in kitchen, there is a deck off of the lower lever family room in the full finished basement that has a gas fireplace with marble hearth, and a mater bedroom with its own master bath.
Information
Contact Information
Terry Iwaniw
Direct: 609-417-1086
Office: 856-795-3111 x263
Pricing
Price: $175,000
Additional Pricing Information: ALL PROPERTIES ARE SOLD IN ‘AS IS’ CONDITION.SELLER MAKES NO REPRESENTATIONS OR WARRANTIES CONCERNING THE CONDITION OF THE PROPERTY AND DOES NOT GUARANTEE THAT THE PROPERTY IS FREE OF HIDDEN OR VISIBLE DEFECTS. BUYER IS RESPONSIBLE TO TAKE ACTION TO SATISFY HIMSELF THAT THE PROPERTY IS IN A CONDITION ACCEPTABLE TO HIM. SELLER WILL MAKE NO REPAIRS. BUYER IS ENCOURAGED TO HAVE A HOME INSPECTION TO IDENTIFY ANY DEFECTS.
Property Location
57 Wagon Wheel Sicklerville, NJ 08081View Map
Features
Bedrooms: 3
Bathrooms: 2.5
School District: Winslow Twp
Square Footage: 1160
Agent Name: Terry Iwaniw
Broker: R & I Realty, LLC
MLS #: 5606851
Will qualify for FHA loan w/o repairs: Yes
HUD will allow escrow for repairs: No
Deposit mount required at time of offer: 1500
Attributes
Appliances
Range/Oven
Full Refrigerator
Washer/Dryer
Dishwasher
Sink Disposal
Microwave
Share on Facebook
Tags: camden county homes for sale, homes for sale, homes for sale in camden county, homes for sale in sicklerville, homes for sale in Wiltons Corner, real estate for sale, south jersey real estate, townhouse for sale, townhouse for sale in sicklerville, townhouse for sale in wiltons corner, townhouses for sdale in camden county
Posted by
admin on Oct 5, 2009 in
Marketplace,
Real Estate,
Selling,
for sale Share on Facebook
Tags: camden county, camden county homes for sale, homes for sale, homes for sale in camden county, homes for sale in sicklerville, investment properties, investment properties for sale, real estate for sale, sicklerville homes for sale, townhouse for sale, winslow township
Are you looking for a bargain home? Then you may want to seriously consider purchasing a HUD owned home. Right up front, I have to state that some of these homes are not in the best condition. Some are in worse condition then others. But you may be able to find a hidden gem. Check out the current list of HUD owned homes we are marketing.
To better understand this you’d have to understand the process by which the Department of Housing and Urban Development (HUD) acquires these properties.
First of all, HUD does NOT foreclose on any home. HUD does not lend mortgage money but it does insure many mortgage loans. So, HUD owned homes are not foreclosed homes, in the strictest sense. HUD owned homes are properties that they acquire by paying off on a claim submitted by the mortgage lender after the MORTGAGE LENDER has foreclosed on the property.
At some point in time, this mortgage lender decides to file a claim against the FHA insured mortgage. They submit their claim to HUD and when HUD pays off on the claim, they acquire the property. The mortgage lender can’t get the benefit payment AND keep the asset. So, in return for receiving the payment they relinquish the property that they foreclosed on. Not all mortgage lenders will file an FHA claim. Many will try to sell the property if they weren’t able to sell the property at a sheriff’s sale/auction. That is the reason that some HUD acquired homes get into the condition that they are in. Mortgage lenders, while trying to sell these properties, do not do such a great job in keeping them maintained. They are usually vacant and anything of value has been removed. It is a rarity to walk into a HUD acquired property and find a refrigerator and/or dishwasher in the house. More times then not the mortgage lender turns over the property to HUD as it is.
So now, HUD has acquired the property. What happens next? Well, HUD sends its appaissor to the property to inspect and value the property. The valuation is done in it’s present condition. It is done this way because HUD will NOT do any repairs to the property except what is minimally needed to preserve the house from further damage. If there is a broken window, they will board it up. If the carpeting was removed, they will NOT replace it. If there is an oil tank in the ground, they will NOT remediate. There are certain cases where HUD will allow the purchaser to set aside (escrow) a certain amount of money to have minor repair issues to be done so that the home could qualify for an FHA loan. The appraissor also notes any and all damage that they can see and assign a dollar value to the repair. This isn’t done so that HUD knows how they’ll have to pay for repairs because HUD does NOT do repairs. What this total repair values denotes is if the property would be able to qualify for an FHA loan or not. HUD designates homes at 3 levels -
- Insured: There are no FHA required repairs needed to be done in order to qualify for an FHA-backed loan.
- Insured w/Escrow: The FHA required repairs total less the $5000 and HUD will allow the purchaser to borrow the extra money and put into escrow in order to insure that these repairs get done.
- Uninsured: The repair total is greater then $5000 and the home would not qualify for a standard FHA-backed loan. However, the purchaser would be able to apply for a 203K (Construction loan) or a Streamline K (similar to a 203K but with a $35000 limit) loans. These have different requirements and the purchaser needs to discuss these type of loans with their mortgage loan representative.
So, now you have a better idea of what you have to work with. The next series of steps involve submitting an offer (which is different then submitting an offer to a private owner) and after that you’ll need to know the steps you’ll have to follow after HUD accepts your offer.
If you are interested in purchasing any of these HUD owned homes, please don’t hesitate to give me a call.
Terry Iwaniw
REALTOR Associate
R & I Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://www.snewjerseyhomes.com/
http://snjrealestate.ning.com
Connect On Facebook – http://profile.to/terryiwaniw
Share on Facebook
Tags: homes for sale in camden county, homes for sale in gloucester county, hud homes for sale, HUD owned homes
Posted by
admin on Jun 17, 2009 in
Housing,
Real Estate,
Selling,
for sale
|
Linda & Terry Iwaniw | Resales & Investment Realty | 856-795-3111 x262
|
|
16 N Nashville Ave, Ventnor City, NJ
|
|
7 Bedroom Home includes a 1 bedroom apt on the lower level in
Ventnor City For Sale
|
|
|
7BR/3BA Single Family House
|
|
offered at $369,900
|
| Year Built |
Unspecified |
| Sq Footage |
Unspecified |
| Bedrooms |
7 |
| Bathrooms |
3 full, 0 partial |
| Floors |
2 |
| Parking |
1 Car garage |
| Lot Size |
2,800 sqft |
| HOA/Maint |
$0 per month |
DESCRIPTION
| What a wonderful opportunity to own a classic seashore home and get a little help with the payments with the lower level apartment. This single family house boast 6 bedrooms and 2 full baths, living room with fireplace, full kitchen and dining room. The ground floor apartment has 1 bedroom + small guest room, 1 bath, kitchen and living room. Outside has an upper deck and lower patio for plenty of outdoor entertaining. This outstanding value is located only 1 block from the bay so you can watch stunning sunsets and just a few blocks to the beach. Don’t pass up this chance to live at the shore year round or have a great large summer house for a summer full of fun. Owners said “Bring ALL OFFERS”. |
|
|
| see additional photos below |
|
|
|
|
|
|
|
ADDITIONAL PHOTOS
 Photo 1 |
 Photo 2 |
 Photo 3 |
 Photo 5 |
 Photo 6 |
 Photo 1 |
|
|
|
|
|
Contact info:
|
 |
|
Linda & Terry Iwaniw
|
|
Resales & Investment Realty
|
|
856-795-3111 x262
|
|
For sale by agent/broker
|
|
|
|
|
|
|
|
|
|
Posted: Jun 16, 2009, 9:31pm PDT
|
|
Share on Facebook
Tags: homes for sale, homes for sale in atlantic county, real estate for sale, real estate for sale in southern nj, seashore homes for sale, south jersey real estate, ventor city homes for sale
Fireplace
Stumble It!