Monday, June 19, 2006

You The First Time Home Buyer

You the first time home buyer have a lot of work ahead of you. I want you to make it the smoothest possible transaction with the least hurdles. I advise my clients about 6 months before you plan to buy to get a free copy of their credit report. On average 50% of all credit reports have errors on them of one sort or another. This can mean you will end up paying more for a mortgage than you have to because your credit score is inaccurate. Once you get your credit report, look it over very carefully and dispute any and all errors. This can take up to 3 months to correct. (But well worth your time) Once the corrections have been resolved it is now time to talk to a good mortgage broker. I suggest talking to your real estate agent for at least 3 suggestions of whom they would suggest. I then would interview them all, to find out which one can give you the best deal and also fits your personality the best. You want someone that you can easily talk to and get a long with.

During this entire process I suggest you are getting ALL the listings in the area that you are looking. This will help you become an educated buyer. This helps you become that way by knowing what houses are a good price for the square footage, and the number of bedrooms and bathrooms. By the end of the 2nd month a buyer will be able to look at the new listings and say WOW! Those are a good price, and know that you will have to jump on a property before it is gone.

At this point I would have you start carrying your check book. This is because once you find the home you like; you have to act quickly to ensure you don’t lose it. I’ve seen buyers lose 2 or 3 homes before they have learned this lesson. If you are not prepared to buy the day you go out to look at houses they you are not ready to buy a house. But, when are ready and have a check in hand and a pre-approval letter from a mortgage lender then that is the time to call me Todd Clark at (503)524-9494.

Todd Clark – broker
Kastings & Associates (503)524-9494

Monday, June 05, 2006

1031 Exchanging - Making Money Through Investing

A 1031 exchange is a way to exchange one investment property for one or more investment properties of equal or greater value without having to pay the capital gains tax.

The advantage to the 1031 exchange is that you can increase your portfolio and value of your properties without ever having to invest more that your original down payment from your first property. One investor may buy a property as a rental property and consider that a great investment as long as it brings money in each month. But let’s look at another example and see how the 1031 exchange can increase your portfolio.

The first example is of a person who bought the rental property and rents it out for 15 years making money from the rental every month. If that investor bought a $250,000 property with $45,000 down minus the mortgage interest deduction and the money earned from the rental income will earn 19% on his money the first year. But each year the percentage earned on the $45,000 will decrease. By the end of the 15 year your percentage earned on your $45,000 will decrease to only about 3%. But if you were to do a tax exchange every year, your $45,000 would continue to earn 19% every year and your taxable income will continue to decrease. If you are an Oregon or SW Washington resident please feel free to contact me and I will gladly meet with you and show you how you could earn 19% every year instead of in just the first year.

Todd Clark – broker
Kastings & Associates