Thursday, February 5, 2009

So, What Are You Waiting For?

Right now, there's a window of opportunity for a handy, enterprising person or couple who want to own a home. It's not going to be here for ever.

There's a neat home here owned by the City of Covington with off street parking and a winter-time view of Mutter Gottes, the Ascent, and even Cincinnati's sky line. It's for sale (more info here). Now, I'm going to assume that a qualified buyer (no flippers considered) might be able to negotiate a better price, say $32,000 for this property. Not unreasonable guess or presumption in this market right now. That frees up money for them to go get another property renovated.

The property needs work, but a smart owner is going to want to do more. Here's why:


Big incentives.
First, there's a CARD loan/grant of $6000. It's available upon receipt of CoO and yours to keep if you stay in the house for 5years.

Next, there's as much as $25,000k in low or no interest money from the City available for qualified buyers/renovators.

Next there's up to $15,000 (under consideration as a true credit, currently it's "only" $7500 and it's really just a 0% interest loan) in refundable tax credit. It seems that this would apply to a full rehab of an uninhabited building as well as just the intial purchase, since a full rehab is de-facto "building a house" (check with competent authority on this).

That's as much $46,000 in potentially free or low/no interest money that you can dump into a property that you can buy for less than the brick is worth.

Financing may be tricky initially, but many banks will allow you to use any of those subordinated loans as part of your collateral during rehab.

Here's the kicker, right now, with no special deal, you can then refinance at 5.15%. That's a mortgage of about $540/month on $100,000. Ad taxes and insurance and you're into a neat place for $700/month, with equity. how much are you paying in rent plus renter's insurance?

But wait! There's MORE! If the Feds find a way to drop rates to 4%, you might be refinancing at around $440/month. That's a lot of house for not much money. You may not have to come up with much of a down payment, either. If you're handy, you don't even need to borrow as much as I theorize, either.

But here's the thing. This won't last forever. It'll take some time to acquire the property and arrange the loans, and your negotiating position right now is as good as it's going to get. It won't take long for others to figure this out.

Get on it!

There's contact info here. If you have other questions, we can probably give you some guidance. If you need step by step instructions, that's what this blog is for. For what it's worth, I'm of the opinion that the property in question is an easier project than ours.

N.B. We are not your tax or financial advisor, nor your mortgage broker. You are responsible for doing your own homework and seeking advice from a qualified professional on all tax, accounting, mortgage, and investment matters. Don't rely upon us or this blog.


Anonymous said...

Hon, I think they're waiting for the rest of the branches in the back yard to fall. Oh, and maybe for those lazy neighbors to put up that darn fence.... ;-)

The Wife said...

UPDATE: The property sold for $1.