All Forum Posts by: Mindy Jensen

Yes-ish. The primary residence exclusion is $250k per person on title. So the (presumably) two people currently on title would get $500k in capital gains excluded. To add their daughter would get another $250k and to add the husband would get another $250k. 

However, this has to be the primary residence of everyone on title in order to qualify and even if that were all true, we're still only up to $1M that way.

I agree with the other commenters, the parents should continue to own it and live in it as their primary, leave it to the daughter when they pass, and she inherits it at the stepped up cost basis. 

I don't live in CA, and wasn't aware of the Prop 13 passing to the next owner if it's parent to child and both live in it as their primary. Thanks to @Dan H.for that.

It isn't a terrible idea to buy a Condo or Townhome as your primary, but there ARE pitfalls to watch out for. First, look into the financial health of the Association. I have personally never owned a condo that DIDN'T have a special assessment - which happens when there is a repair needed but not enough money to pay for it. 

Let's say it's a roof, and the roof has been on for 20 years and now needs replaced. In a healthy Association, they've taken into account that this will need to be replaced, and have planned for it, essentially charging everyone who has lived there over the last 20 years a nominal amount to be put toward the new roof when it's needed.

With an unhealthy Association, they try to keep HOA dues artificially low, and when a repair is needed, they levy a Special Assessment, which puts the financial responsibility on those who live there currently.

What you want to be on the lookout for is the Reserve Fund. While a low fund isn't an automatic red flag, it's definitely something to look deeper into. Perhaps it's low because they literally just paid for all repairs for the next few years. No worries. But if it's low because they don't charge enough, and there are repairs in the pipeline that will need covered, you could be looking at a Special Assessment. 

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I am rather vocally against crypto currency, mainly because I don't understand it. (And no, this isn't a request for explanation.)

I don't believe in the long term outlook for crypto. I DO believe in the long term outlook for USD. 

I want my rent now, in money I understand and can spend. 

I wouldn't be in a hurry to pay off my primary. 7% isn't ideal, but you can get more return in the stock market. (Although if you're looking to use this money for real estate in the next 3 years, I would NOT put it in the market.)

I'd be putting the additional money into a high yield savings account, and keep my eyes out for a great real estate deal. 

If no great deal comes along, you can always throw it all at the mortgage down the road.

I wouldn't touch this property with someone else's 10 foot pole.

I don't do ANYTHING with foundation work.

There are people who do, and that's awesome for them. I know my limits, and this is outside of them.

Learn about the loan products you're trying to market to make sure you're adequately representing your client.

A VA loan is assumable by anyone - not just those who qualify for a VA loan through their service. HOWEVER, it's an almost 100% bad idea for the holder of said loan to allow a non-vet to assume their loan unless they know that person.

The VA loan that gets assumed by the vet transfers the entitlement to the new borrower.
The VA loan that gets assumed by a non vet binds the entitlement to the original borrower and if that new borrower defaults, the original borrower loses that amount of their entitlement forever. 

An FHA loan can be assumed by anyone who qualifies for the loan.

But in all cases, the new borrower will most likely have to bring an enormous amount of cash to closing. There's the down payment, the closing costs AND the delta between what's left on the loan and their offered price.

AND don't forget the time involved to assume the loan. You're going through a process, and it can take 3 months or more. In order for me, the seller, to assume the risk of you not qualifying for the loan, you losing your job at the last minute, you changing your mind, etc, I'd want a higher offer price - which means you're bringing even more money to the table.

The idea of an assumable loan is awesome, but frequently does not pan out. I wonder if there are any stats to show what percentage of properties marketed with an assumable loan actually had the loan assumed?

I'm an agent and have a different opinion. 

I only stage an empty house when there are "odd" spaces that are hard to figure out.

As an agent, I can look at a room and tell you that a Queen bed will fit in here, or that it'll be tight to squeeze a king into the room. I can ballpark a room size by walking into it. I'm sharing my opinion with my buyers when we're in the house.

But I'm not every agent, and there's no shortage of bad agents out there who don't share their opinions, can't ballpark a room size and don't have the experience to recognize that no, a king WON'T fit in this room.

I'm also super frugal, and shocked at the prices for staging. I could almost buy the furniture for what it costs. 

So when I do stage a listing, I use my own furniture and knick knacks. (Full disclosure, I prefer to work with Buyers so I don't do a lot of listings.)

But I've never had a house not sell.

This property is ugly as-is, and some people truly get upset by an ugly house when they're renting it shorter term, as though it's some reflection on them personally.

Good news is that you can paint those ugly rocks and brick the same color, and make it look WAY better. 

Nathan's advice is correct, these tenants should not continue to rent your property.

Going forward, a security deposit is an acknowledged part of the lease. You should make it policy to NOT allow anyone to move in without paying first month's rent in it's entirety PLUS the security deposit. (For months when the tenant moves in after the first of the month, it's best practice to collect an entire month's rent and pro-rate the second month.)

What's done is done with this tenant. You'll probably NEVER collect the deposit. 

Review your state's landlord-tenant laws and give them a Notice of Non Renewal as soon as possible. For a month to month lease, it should be only 30 days notice, but that notice must encompass an entire rental period (one month) so notifying them in May will have them out by end of June. (Or end of June is when you can start eviction proceedings.)

These people are taking advantage of you, and will continue to do so until you remove them from the home. This friendship is already destroyed.

When you do finally get them out, perform a walkthough and send them a bill for every repair that you do. They won't pay, but I'd take them to small claims court anyway, to get it on their record.

Kelvin, with rates having been so low for so long, it can feel like right now we're too high. But we're not. 7% is the average interest rate, historically speaking. (Of course, prices have skyrocketed since the last time rates were 7%...)

The problem with "...am questioning if I should buy now or continue to save in hopes that mortgage rates drop in a couple of months. ..." is that rates might not go down for YEARS - if at all.

Inflation keeps coming in hot. The unemployment numbers keep coming in hot. All factors that could indicate the economy is cooling down are NOT, in fact, indicating that the economy is cooling down.

Can you afford the property at the current rates you will lock in indefinitely or would the payment eventually crush you? 

If it would crush you, then no, don't buy. We don't have any idea when rates might come down, if at all. The Fed does NOT seem inclined to reduce them, and all the people saying they'll come down have absolutely no idea when that will actually happen.

If, however, you can afford to make the payment indefinitely, then now is a great time to buy because should rates come down, you'll be the only one refinancing that property, instead of being in a bidding war with others who were also waiting for rates to drop.