All Forum Posts by: Cary Trusty

@Wayne Brooks

Its essentially (54 + 24) 78 hours vs 1- 90 hour class.

@Adam Gerig

Good point. They haven't posted what the new class fees will be but given its more hours, I bet the cost will go up. Also, under the new law, it appears I would be required to take a 30 hour (post-licensing) course within my first 2 years but don't have to if I transition before July 1st.

I'm curious for those that have done it how long it took to apply for the broker license and get it returned.

@Shawn Holsapple - Have you transitioned already?

Thanks everyone!

I'm looking for some advice from our investors and agents in the Indiana and Indianapolis market. I've thought it over and feel that obtaining my salesperson license (soon to be broker license) is the right move for me.

I have reviewed the scenarios via RECP's website (http://www.recp.org/RECP/Resources/FAQs/RECP/ContentAreas/Resources/FAQs.aspx?hkey=eeb3a5da-9d4b-4bff-bec2-70a512b96eed) and I'm open to feedback on whether or not I should wait til after July 1st 2014.

For those just curious, Indiana has made some law changes that go into effect July 1st that removes the salesperson license while moving to a Broker vs Managing Broker structure. As the link shows, I would have to pass the 54 hr pre-license course (by passing 3 tests), pass state exam, apply for salesperson license, pass a 24 hr broker transition course, pass 25 question exam, and apply for the new broker license (all before July 1st).

I'm not married, no children, 28 years old -- so I have time :-) If I can finish in 3-4 weeks, I would gain access to the MLS (BLC) about 2 months sooner.

Is there anything else I'm missing?

@Dave Toelkes

Thanks for the reply as I didn't know this is how the tax is applied. My question is in reference to my ability to avoid the tax based on the 2 year primary residence out of the past 5 years and the exceptions available to receive a pro-rated exemption amount.

Based on salary, if I can't find any exceptions that apply to avoid the tax all together, I should pay 15% on the entire gain.

I'm looking for some feedback to get an idea on how much I'll need to put back for taxes on capital gains from the sell of my first home.

Scenario:

I purchased my home March 15th, 2013. I moved in the week after, and since I don't plan on selling for the next month or two, I should be over a year and a day (to have long term capital gain rates applied) but less than 2 years to pass the Use test to be exempt for the $250k capital gains. At this point, I'm looking at the possible exemptions to qualify for the reduced capital gain exemption. The only opportunity I see is that I purchased the house with a family in mind (long term girlfriend and her daughter living with me), and that relationship didn't work out. The devil's advocate in me would say that wouldn't count due to 'relationships come and go' and they possibly only look at marital situations (Publication 523 > Unforeseen Circumstances seems to point that way). Therefore, that would bring me to the fact that my ex should have been a Qualified Individual (she used it as her main home) and she did go on unemployment. I wonder if that would qualify as an Unforeseen Circumstance.

Finally, my mother lost her job, sold her home, and moved in with me while on unemployment as well. I don't think that could help my situation at all though.

Thoughts?

FWIW - Capital gains I'm estimating at this point between $15-30k. Not a huge amount but being new to REI and being my first accidental (long-term flip), I'd like to get a good handle on the capital gains tax.

I bought my house in March 2013 just north of Greenwood as part of a short-sale via a 203k renovation loan.

2012 Tax Assessed value: $250k (FWIW)

Short Sale list price: $180k

Accepted offer: $170k

Renovations: $30k

Purchase price: $200k

Appraisal: Any takers?? -- $200k. I guess the part I'm shocked about is why would the house appraise for exactly $30k more which was the price of labor/materials alone? Shouldn't the house be worth more than just the labor/materials? In any event, I saw the same thing here. I was told by my Realtor (who does appraisals for REOs) that its common they don't go much over on the purchase price it seems (especially for renovation loans). Blah.

@Brian Parsons

You just missed out (and I'm not sure if this user is on here). I went to the IN REIA meeting last night and there was someone that stood up and introduced himself as someone that has been helping people use their self-directed IRAs for 15+ years for REI (he sat right next to me) but sure enough, I forget his name. I'll see if I can track him down and send you a message.

I've seen a youtube video recently about how banks typically have an average % that they will accept below their asking price for a short sale or foreclosure. I'm new to the game but figure there is some truth to that. One important thing here is asking for closing costs to be paid is asking for an additional 1-2% off your (already) lower offer. 95.5k (highest bid) - 1.5k (closing costs) / 110k = 85% of asking price. Since they just lowered by 10k, it would have been 78% of their previous asking price. In the video, the instructor stated Citi bank (on average) won't accept lower than 84% of their asking price. Obviously, this is an average and some would go higher or lower.

Now outside this speculation, I closed on my first home March '13 on a short sale from Bank of America. 170k (offer) - 3k (seller credit) / 180k (asking price) ~ 93%. They accepted my offer within the first 30 days. In my case I probably could have presented a lower offer on my end.

Just some food for thought.