Preferred Properties of Texas

The Preferred way to buy & sell property for over 25 years

(254) 965-7775
  • Home
  • Search
    • Search All Listings
    • Exclusive Listings
    • Featured Listings
    • Texas Farm & Ranch Real Estate
    • Market Reports
    • Login / Register
  • Cities
  • Blog
  • About Preferred Properties of Texas
    • About Us
    • Testimonials
    • Our Google Reviews
  • Contact

Changes to 1031 Exchange Deadlines

July 15, 2020 by chorton Leave a Comment

From the pre-coronavirus world 15 was a significant date, representing the deadline to U.S. citizens and taxpayers to file federal income taxation. Nonetheless, in the present environment, that deadline has been pushed to July 15, 2020.

The deadline is Also important for people using section 1031 of the U.S. Internal Revenue Code, which permits capital gains tax deferrals on investment property sales. The IRC section entitled “Exchange of real property held for productive use or investment” enables traders to “trade” their original assets into “property of like kind.”

Prior investors, to the outbreak Involved in this exchange could have 45 days from when the land was sold to come across a substitute house. Investors will be asked to pay taxes to the capital gains in the initial sale if this replacement property was not discovered.

Together with the Effects of Covid-19, the IRS Extended that 45-day deadline for “in-flight” investors at the center of the exchange process whose first home sales dates dropped between April 1, 2020 and July 14, 2020. These investors must discover that replacement house.

So, before, an investor that offered Their advantage during the first week of April as a part of a 1031 exchange could have been required to find a replacement flat complex or duplex with mid-May. More than two weeks in the current environment that investor has experienced.

While this extension might seem Beneficial for 1031 exchangers, the position is a double-edged sword.

So, Most Investors, So Few Properties

1 issue faced by and Other 1031 exchange investors entails demand and supply.

Our company has Determined that there’s approximately $10 million worth of 1031 exchange equity seeking out replacement properties. This equity originates from a few sources. The first entails investors that may have closed on their properties in late May starting the timer to find a replacement advantage. The source includes investors whose deadlines are in mid-July, although whose first properties sold in April. These things have found their replacement possessions. What this means is investors competing for the identical supply.

Speaking of supply, the available Property assets for exchange or sale has not changed much. Due to the outbreak, availability has decreased. In 1 scenario, the source of duplexes and rental homes has diminished by 20%. Much like lack is evident amongst net-lease and other real estate properties.

Nevertheless, sellers, are worried to dispose of their real estate due to the recession. They are holding on to their own possessions, awaiting the sidelines for the economy. Out of the market, sellers are pulling their properties in different instances.

Investors fortunate Enough to locate replacement properties are currently discovering enormous ranges between their offerings and what vendors are willing to accept. When creating their offerings, leading to lower bids whereas buyers have been eyeing current financial uncertainties sellers are requesting for pricing. This disconnect is leading to deals and sales that is stalled.

Bank Blockages

We’ve found that approximately 80% of 1031 exchange trades need a mortgage to meet the essential requirements for a thing. The good news is that banks have been currently sitting on solid capital reserves. The terrible news is that accessing that capital is growing more challenging.

Now’s banks and financing Associations are up for their own elbows that are figurative at a glut of loan forbearance jobs and refinancing software. These associations are also working for businesses and individuals together with Covid-19-related applications, such as cash and the Payback Protection Program and credit aid methods. This means less time is available for lending employees to underwrite and issue mortgages that are original, leading to longer time frames for blessings. If the deadline is bypassed by those time frames, the creditors might be on the hook for further taxes.

Furthermore, strict lending requirements imply Investors need leading credit scores (with a FICO score of 700 for several lenders) to qualify for the mortgages. Lower agreements also have been a problem, meaning equity demands. Adding to the uncertainty is that creditors can retrade, or pull, up financing until closure.

 

Getting To The July 15 End Line

Having introduced several the Problems exchange investors are facing, here are a couple of solutions.

First, in case it has not happened Now’s the opportunity to start an in-depth search for this replacement property. Investors must also be realistic regarding making offers. It is a seller’s market, and now is not necessarily time for discussions in efforts to lower the asking price if a bidding does need to pen out to make sense.

Second, it is important that investors Open a dialogue with their creditors to ascertain their funding eligibility, and to understand the approximate time frame for loan application and approval.

Even though the 1031 exchange extension has Provided some breathing room, it’s important that investors never waste any additional time in discovering that replacement property or trimming down a loan to finance it. The final clock is ticking. Attempting to waive this timer may indicate a hefty tax bill as soon as the July 15 deadline rolls up.

Complete disclosure. The Information provided here is not financial or investment, tax advice. You Should consult a certified professional for advice concerning your specific situation.

Filed Under: Blog, Commercial Properties for Sale, Investing, Land for Sale, Ranches for Sale Tagged With: 1031 exchange, invest, investing, investment property, Preferred Properties of Texas, real estate, real estate investing, realtor

5 Tips for Buying a Home

October 7, 2019 by chorton Leave a Comment

Looking to buy a home? Here are five essential tips for making the process as smooth as possible.

Get your finances in order.

Start by getting a full picture of your credit. Obtain copies of your credit report. Make sure the facts are correct, and fix any problems you find. Next, find a suitable lender and get pre-approved for a loan. This will put you in a better position to make a serious offer when you do find the right house.

Find a house you can afford.

As with engagement rings, there’s a general rule of thumb when it comes to buying a home: two-and-a-half times your annual salary. There are also a number of tools and calculators online that can help you understand how your income, debt, and expenses affect what you can afford. Don’t forget, too, that there are lots of considerations beyond the sticker price, including property taxes, energy costs, etc.

Hire a professional.

While the Internet gives buyers unprecedented access to home listings and resources, many aspects of the buying process require a level of expertise you can’t pick up from surfing the web. That’s why you’re better off using a professional agent than going it alone. If possible, recruit an exclusive buyer agent, who will have your interests at heart and can help you with strategies during the bidding process.

Do your homework.

Before making a bid, do some research to determine the state of the market at large. Is it more favorable for sellers or buyers? Next, look at sales trends of similar homes in the area or neighborhood. Look at prices for the last few months. Come up with an asking price that’s competitive, but also realistic. Otherwise, you may end up ticking off your seller.

Think long term.

Obviously, you shouldn’t buy unless you’re sure you’ll be staying put for at least a few years. Beyond that, you should buy in a neighborhood with good schools. Whether you have children or not, this will have an impact on your new home’s resale value down the line. When it comes to the house itself, you should hire your own home inspector, who can point out potential problems that could require costly repairs in the future.

https://lendedu.com/blog/best-homeowners-insurance/

Search Homes For Sale

Filed Under: Blog, Buying a home, Homes for Sale, Real Estate Advice Tagged With: advice, buyer agent, buying a home, first time home buyer, invest, real estate, real estate advice, tips

Preferred Properties of Texas

Preferred Properties of Texas

The Preferred Way to Buy and Sell Property
for Over 25 Years
(254) 965-7775 Office
Contact Preferred Properties of Texas
Listing Alerts Market Reports Your Home's Value

Search our Blog

  • Blog
  • Buying a home
  • Commercial Properties for Sale
  • Events
  • Home Improvements
  • Homes for Sale
  • Investing
  • Land for Sale
  • lots for sale
  • Newsletter
  • Ranches for Sale
  • Real Estate Advice
  • Selling Your Home
  • Uncategorized

Preferred Properties of Texas

(254) 965-7775|Contact Preferred Properties of Texas
Preferred Properties of Texas

TREC Consumer Protection Notice  •  TREC Information About Brokerage Services
Privacy Policy  •  sitemap   •   admin   •   ©2021 All Rights Reserved  •  Real Estate Website Design by IDXCentral.com