William (Bill) Bronchick’s “No B.S.” Real Estate Investing Blog

I will be hosting a new show on radio every weekend on real estat investing, wealth building and success.

Tune in to 630 KHOW in Denver on Saturday from 4-5PM and Sunday from 3-4PM or listen online at www.khow.com.

A recent tax court case disallowed a vacation property as a “like kind” property for a 1031 exchange.  As a result, the IRS came out with a ruling to clarify when a vacation property is allowed for an exchange.

To be under the “safe harbor”, you must rent the property a minimum of 14 days a year.  You can use the property for personal use no more than  the greater of 14 days or 10% of the days you rent it out.  Of course, like many IRS deductions, how could they prove you used it for personal use unless they hired a private investigator!

http://realtytimes.com/rtpages/20080306_irsvacation.htm

Barak Obama as part of his “Tax Fairness of the Middle Class” wants to raise the capital gains rate from 15 to 28%.  The last time the government did something so rash was 1986 and look what happened.  This would be a nail in the coffin for real estate, not to mention the economy and the stock market.  Think about his - if this is about fairness for the middle class, is Obama saying that anyone who owns investment real estate is a rich person?

Someone asked me recently to boil down the three keys to success in real estate investing.

 I believe the three most important are:

• Attitude
• Action
• Education

Attitude is very important in any business, particularly real estate.  A slow, steady, get-rich SLOWLY mindset is needed.  You can’t get rich quick and you  must have patience to succeed.  If you get the itch to buy your first property simply to buy a property, you will likely lose money.  Instead, pass up the mediocre deals and make your first transaction a real winner.

Action is equally important.  You can’t just talk about real estate or desire to be successful, you need to TAKE ACTION in the direction of your goals.  In fact, you must take MASSIVE action in pursuit of your goals.  It may take 100 offers or more a month to find that elusive “killer deal”, which means more than 3 offers a day.  Don’t just wait around for people to call on your advertise, make calls out of the paper, talk with realtors, knock on doors.  A great deal is sometimes luck, but luck favors the person who is out in the field making things happen.

Education is the third key to success, but not just any knowledge.  Napoleon Hill in his book, “Think & Grow Rich” speaks of acquiring SPECIALIZED knowledge.  You need to become an expert in your field of endeavor, whether it be rentals, foreclosures or property flipping.  The more tools you have in your toolbox, the more likely you will succeed at closing deals, Abraham Lincoln said, “Give me six hours to chop down a tree and I’ll spend three hours sharpening the axe”.

Housing and mortgage issues are surging to the forefront of the Presidential primary campaign and the differences among the three major candidates are huge.

Here’s a quick overview of where the candidates stand:

http://realestate.yahoo.com/info/news/washington-report-where-the-candidates-stand;_ylt=AgOWuqufHIrOmLPTEZwWvrakF7kF

“Flip this House” TV star Armando Montelongo was indicted by a Travis County grand jury on a theft of service charge according to the Austin American-Statesman newspaper.

http://www.statesman.com/news/content/news/stories/local/02/22/0222montelongo.html

Armando Montelongo Jr., 36, faces up to two years in state jail if convicted. The indictment, handed up Wednesday, charges that from January 2006 through February 2007 Montelongo failed to pay home appraisal fees in Travis County.

This is not the first problem with “Flip this House” stars.  Last year several media outlets were investigating claims that Atlanta businessman Sam Leccima, another Flip this House star, had bilked investors out of their money.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/06/01/entertainment/e125327D35.DTL

A company claiming to have to the rights to the moon is selling “lunar deeds” at just $29.95/acre.

 http://www.lunarlandowner.com

Through a loophole in the U.N. international laws, the “Lunar Embassy” claims to be the legal owner of the moon and is selling deeds.  Of course, this might be LUNACY? (pun intended).

According to a report by Zillow, one in three homeowners have negative equity.  This is bad news for homeowners, but good news for the investor who is working the foreclosure short sale angle.  A short sale is where the lender agrees to take less than is owed on a property in lieu of the full amount.  If you are an investor, there’s a huge supply of these deals.

Learn more at the Foreclosure Investing Boot Camp.

As part of the “economic stimulus” package, Congress has passed a bill that will temporarily raise the conforming loan limit to allow Fannie and Freddie to purchase or guarantee many jumbo mortgages originated between July 1, 2007, and Dec. 31, 2008.

The increase, to as much as $729,750 in high-cost areas, will also apply to Federal Housing Administration loan guarantee programs. Because the increase will be capped at 125 percent of the median home price for an area, the conforming loan limit will remain at $417,000 in markets where the median home price is $333,600 or less.

http://www.inman.com/inmanstories.aspx?ID=66047

With the slowdown of sales and refinances in the past year or so, title insurance companies have been cutting rates to remain competitive in a market that has reduced in demand.

http://www.inman.com/inmanstories.aspx?ID=66010