Assembly Bill 1771, also known as the California Housing Speculation Act, aims to change real estate tax policy to discourage investors from quickly reselling properties like single-family homes.Under the proposed bill, an additional 25% tax would be imposed on the gain from the sale of a qualified asset (including homes) within three years of the previous sale.The tax reduction is dependent on the number of years passed since the initial purchase of the qualified asset, ranging from a 20% reduction for sales occurring between 3.01 to 4 years to a 100% reduction for sales occurring more than seven years after the initial purchase.The revenues generated by this tax increase would be deposited into the Speculation Recapture Community Reinvestment Fund, which aims to support affordable housing, local governments, schools, and infrastructure projects.The bill is introduced by Assembly Member Ward, and the proposed tax changes would take effect from January 1, 2023.Assembly Member Ward argues that short-term investors in the market, including fix and flip investors, contribute to rising housing prices, limiting opportunities for Californians to purchase homes.While the bill may discourage short-term speculative transactions, it is worth noting that California's tax laws still provide certain advantages for investors, including unlimited tax write-offs and depreciation benefits.The bill is subject to legislative approval, and Assembly Member Ward will speak publicly about the bill at the San Diego County Administration Center on a specified date.Please note that this is a simplified summary of the bill and its potential impact on fix and flip investors.

As well as Sellers simply are not informed of the risk of devastating impacts to their credit scores and what equity they may have had in the property if the transaction fails.For a well capitalized Investor and or company and a fully informed seller these can be structured as you note with a Wrap that keeps the seller with  some control or ability to get the property back.

The long-term impact won't be known for a while as investors, homeowners, insurance companies, and the like make changes in the coming months and years.I believe that the Tampa Bay Area will continue to be a good market overall as the foundations are solid. 

To add additional context,  I would personally be more willing to sign my name onto a $6M mortgage collateralized against a $10M asset in an "A" market that has historically low vacancy rates, no deferred maintenance and is located in a stable market with a rent roll that covers the debt services and operating expenses with reasonable cushion for reserves than sign my name on a $90,000 loan collateralized against a $100K property in a C/D unstable market with high vacancy rates and where capex will disproportionately impact operations.

Today I wish I could go back.And what happens in the world has very little impact on a house that you bought down the street.

For the experts out there, how do you think this would impact the terms?

You can 100% refinance into a DSCR loan and close/vest in your LLC, however, I would imagine the rate is likely worse than what you have now with the conventional loan which would impact your monthly cashflow.

Please also pay attention to requirments for posting notices and registration because if you into a sticky scenario this can impact the outcome in court. 

With supply increasing and demand decreasing, how do you see this trend impacting investment strategies moving forward?

.- **Rental Income**: Lenders may use a portion of the rental income to help qualify you for the loan, which can be beneficial.To get the best deal, make sure to:- Check your credit score, as it will impact your interest rate.- Shop around for lenders that specialize in owner-occupied multifamily properties.- Use tools like the BiggerPockets mortgage calculators to see how different interest rates and loan terms affect your cash flow.If you have more questions or need further guidance, feel free to ask Good luck with your duplex venture