Jene Kostyla: in order to get financed with most self employed people they write down their incomes to very little so they don't have to pay the IRS. if you can qualify on the income you post on your 1040's for the last2 years then buy what you want if not then stay where you are and add on
Tory Clapper: The problem right now is the economy, being self employed and with the credit crunch becoming worse getting a mortgage is going to be really hard. I would try to secure that first and then figure out which home you want.
Providencia Serpe: When you rent out property you must depreciate the property. You depreciate the improvements (buildings, etc) never the land itself. Your basis for depreciating rental property is the lesser of your adjusted basis or the fair market value the time that you rent it out. Your adjusted basis is what you originally paid for it, including any non-deductible and non-prepaid closing costs, plus any improvements since you bought it! . If it's going to be 2 years before you might rent out the property, you better get your crystal ball out, as well as consult with some local experts and get their best guess on what values will do over the next 2 years. The problem being, from a tax perspective anyway, is that if the FMV drops below your adjusted basis inclusive of improvements done now, you won't be able to depreciate the improvements at all. Remember, your basis for depreciation of rental property is the lesser of your adjusted basis or the FMV at the time that you make the conversion from personal residence to rental property. Of course, if the place needs repairs now and will significantly deteriorate if you don't do them now, such as the roof that I just put on my place as it was leaking badly, you may not have any choice in the matter. And, if you are still on the fence-post about the conversion anyway, it may make more sense to do things now and have a more enjoyable place to live and not fret abou! t the modest tax benefits from the depreciation deduction. Whe! n you do make the decision, be SURE to get a formal appraisal from a licensed appraiser BEFORE you put it on the rental market. You will need that at some point as the IRS has been questioning depreciation basis on rentals lately due to the collapse in the market in much of the country. You damned sure don't want that to rear its head in 15 years when you do to sell the place and have to justify your depreciable basis numbers from 15 years earlier!...Show more
Lionel Tanen: Please don't look for Contract for deed homes. I heard that 98% of people that do this, don't follow through for one reason for another and paid inflated prices the whole year plus a down.May I make a suggestion? I will be honest with you, I am a REAL ESTATE BROKER so I will get that out of the way, and I am asking you to stay in your home and remodel it to better suit your needs.Don't remodel it too much if you REALLY want to move, so the next people can choose what they might want in a faster mov! ing market.STASH the CASH for your 12 months, cash that you may have invested in a deed contract, stick that away. Do many of the repairs yourself if you can.I get the feeling that if you do this? In a year you can own whatever your heart desires.Right now, those with CASH are king. They are buying low, but it just might get a little lower. And at the end of the year say your businesses do well OR not, you will own your home and be happy you didn't add more to it.Plan on spending instead of the $15,000...... Say half of that if you have to. Or go without some of the upgrades. JUST one more year of a self employed person doing well will really help your ability to secure a GREAT mortgage rate, the equity in the house thing that will ONLY improve the house, do them, not so much customizing.I think you will find in a year, your credit (self employed status) will look better, you won't have a lot of upgrades the next person may not need, AND your house may be worth more for yo! u to UPGRADE on all accounts.That's what I would do. I wish you all the! best and you made the right choice to own your home....Show more
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