I currently have two clients where a cash incentive is being offered to the seller in order to do a short sale. In one of those instances I represent the buyer and Bank of America is offering the seller $12,500. In the other occurrence, I represent the seller and Chase bank is offering them $20,000 on top of a $3,000 HAFA incentive (government incentive). It all started with Chase when I got a call from a gentleman that I had done some business with in the past and he mentioned that he received a letter from Chase bank stating that they would pay him $20,000 as an incentive if he agreed to do a short sale. He was 4 months behind in payments but is a primary home owner with a legitimate hardship (Unemployed). I went over to his house to get my documents signed to list the property and took a copy of the letter that Chase sent him. When I got back to my office, I called them and they confirmed that the incentive was true and that what I had to do was to complete a long application and the supporting docs (taxes, bank statements....) and that I only had a period of about a week to do so (there was a specific date for the deadline). I quickly gathered all the docs and faxed them into Chase. They reviewed everything and said that not only does my client qualify for the $20,000 incentive but also for the HAFA $3,000 move out assistance incentive. This is the type of positive help that real struggling home owners need (not the scammers out there). I am still waiting on the final written approval but it all seems to be moving fairly quickly (it’s only been about a month). As far as my other client (the buyer), we have been waiting for about 4 months now for Bank of America to approve the short sale and it is moving much slower, which has become the norm for Bank of America. 

The reason that banks are doing this is because here in Florida, the average foreclosure can get tied up in the courts for 2 years or more. During those 2 years the property is accruing more expenses in the form of taxes, association dues, attorney fees, maintenance, code violations for uncut lawns...... Not only are the costs to the bank going up during those 2 years, but the home owners abandon the properties and remove the appliances, A/C systems and sometimes trash the property. Just think of what a small roof leak can do to an abandoned property in 2 years. I think these incentives are one of the smartest things banks have thought about doing during this whole housing crisis. Not all banks are participating and even some banks that are, will not offer these incentives to investors. Another issue getting in the way of short sales is the requirement of a cash contribution or promissory note by mortgage insurance companies and I hope they figure out a way around that.

So as you can see these circumstances are changing the market and every day we see less and less foreclosures and more and more short sales, especially in Palm Harbor, Fl, my primary market. I have experience on both sides of the market as I have also sold and still sell REO's (foreclosures) for Chase bank and Kondaur Capital Corporation. Let’s all hope that banks are more willing to work with sellers that have legitimate hardships so we can improve the economy one property at a time.

So maybe your IRA is not doing so well in this volatile market? Well you have options. One of the options you have is moving your IRA to a company that handles self directed IRA's. With a self directed IRA you are in the drivers seat and in control of your IRA. You can choose to invest your IRA in real estate and take advantage of the historic low prices of real estate these days. With a self directed IRA, you are diversifying your portfolio and your investment will be secured by property. With todays prices bottoming out in area today, you can feel confident that you are making the right investment. There are 1000's of properties that you can buy today that will provide between a 7-10% return on your investment. I manage quite a few of these for my clients and they are extremely happy with the return they are getting. Most people think that they cant touch their IRA's until retirement which is true but that does not mean that you can't direct your investment. I have a few clients who have chosen to use a self directed IRA to buy real estate here in the Tampa Bay area  of Florida in two different ways. Most choose to buy real estate at todays low prices and rent the properties and the majority are getting a 10% return on their investment. The income goes directly back into their IRA's and after 10 years the property has paid for it's self and with the prices of real estate about to start going back up, it's a no brainer. I have another client that chooses to buy homes and renovate them with his self directed IRA. Then I list and sell the property for him and the profits go back into his IRA. While this tactic is a bit more risky, if done right it's incredibly lucrative as you can do it over and over again. Some things to watch out for in order to not get stiff penalties are....

• You may not use the property personally
• You may not purchase property from your family, your self or your business
• The income and expenses are distributed directly by your IRA (Not by you)
• You are not allowed to personally guarantee a loan in you leverage the property

I deal with a company here in the Tampa Bay area that can give you several options to invest your IRA, including real estate. I specialize in Palm Harbor FL which is one of the most desirable areas of Florida to live in but service all of Pinellas and Hillsborough counties. So if you are looking for a good way to diversify your portfolio give me a call or post a comment below. Not only can I put you in contact with a self directed IRA company but I can find the right investment for you and manage that investment as well. I would love to hear of any investment ideas that you may have. So if you know of any good investment ideas please post them below so that others and myself can take advantage of them as well.

Eric Chavarria P.A.

I am a beginner surfer and living on the west coast of Florida is no fun for long board surfing or is it? Ok, so we don’t get 6 ft waves unless a hurricane is in the Gulf (Lets hope they don’t come this year because of the oil spill, but that will be another blog). Anyway, we actually get some fun small waves in the summer. In the winter the cold fronts make waves a little bigger. Either way, the waves that form on Honeymoons’ Main Beach are extremely long and fun to surf. Besides the fun waves, we have a paradise of trails for bird watchers. I was walking through one on the trails with my girlfriend Krystin and we saw a huge Osprey carrying a fish in its talons,it was amazing. Then we saw another one perched on a high branch which made me wish I had brought my DSLR camera with a long lens instead of my girlfriends point and shoot. Either way, I think it should get more national recognition than it does. I put together a little video to show some of the activities (I was not able to go on the trail that day since they were having a prescribed burn.)Check it out and let me know what you think.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.