Call it three birds with one stone: The federal government hopes to help low-down-payment home buyers, investors who fix up foreclosures, and communities burdened with too many bank-owned and foreclosed homes – all with one potentially far-reaching policy change.

The Federal Housing Administration is considering a revision of its long-standing anti-flipping rules which just might score a hit with our investors. For years, the FHA has had a strict prohibition: It wouldn’t insure a mortgage on a house if the seller had owned it for less than 90 days. The ban was to protect against fraudulent quick flips of houses that inflated their values far beyond market worth.

Those flips often were pure cons: Buyer A would acquire a low-cost house in bad repair, make minor cosmetic changes (some times only to the exterior) and resell within days at a significantly higher price to Buyer B, who was also part of the scheme.

The end game usually went like this: Find a hapless purchaser for the flipped house who would apply for a low-down-payment FHA loan. Typically, that buyer defaulted quickly — leaving the FHA with a foreclosed house on its books and a loss to its insurance funds.

The FHA maintained its 90-day anti-flipping rule through much of the past decade. But now it is considering suspending the policy, at least for the next year. FHA Commissioner David H. Stevens said the agency is considering providing mortgage insurance for some purchases in which the seller had closed on the property less than 90 days earlier.

So what does that mean to you? The objective will be to speed up sales of renovated houses to first-time and other purchasers. With foreclosures at record levels — an estimated 2.8 million filings last year — many communities are faced with excesses of bank-owned properties sitting unsold, often in poor repair.

So get out there and start looking around, see if there are some deals out there you could quickly turnaround. If this passes, it is an excellent opportunity to get those first time home buyers a property before the $8,000 tax credit expires. Use your InvestorCompsOnline account and make sure the property is a deal. Just because it’s cheap doesn’t mean it is a deal. Always do your due diligence!

All the best,
MJ

On Monday, I told you I would be sharing some tips this week that you could use to lower your property taxes. With property values still declining, why shouldn’t your taxes? With a little research and paperwork, they can! Trust me, I know.

Two years ago, my county assessed that my property value had increased $50,000. Needless to say, given the struggles the market was beginning to endure, I was SHOCKED.

After speaking with the county appraiser, I was determined to use “my appraisers secrets for investors” for my own good. I researched the real estate comps in my area, filed an appeal, and ultimately WON! Instead of the proposed $50,000 increase, as a result of my research, my property value was increased merely by $2,000.

So, lets take a look at my next tip to get your property taxes lowered.

STEP 2: UNDERSTAND THE PROCESS

There are two important technicalities to understand, but they’re simple to grasp and shouldn’t daunt you.

The first is your home’s assessed value. This is the basis for your property tax, and isn’t always the same as your home’s market value.

Some local governments assess homes at a fraction of their market value. For example, if the assessment rate is 60 percent, the assessed value of a $1 million home would be $600,000.

The appeal form will likely ask for assessed values, so you may have to do a little math once you’ve used InvestorCompsOnline to collect market values on comparable homes.

Assessment rates can change from year to year too, depending on the area’s funding needs.

It’s also important to know the date your area’s assessments are based on. In New Jersey, for example, homes are assessed by local governments on Oct. 1 of the previous tax year. So if you’re requesting a new assessment for 2010, you’d need to research home prices from around Oct. 1, 2009.

If you’re having trouble finding either the assessment rate or date, don’t be afraid to call your assessor’s office and ask.

On Friday, we will discuss how ICO can help with gathering your “evidence” and what to do after your appeal is in the county’s hands.

All the best,
MJ

Home prices are still far below their highs just a few years ago. One bittersweet perk for homeowners is that property taxes should be lower too.

If your home’s value has tumbled, you may be able to slash hundreds of dollars from your tax bill by appealing its assessed value. That’s because local governments generally don’t reassess homes every year, meaning the values they use to levy property taxes may be outdated. Use your InvestorCompsOnline account to research the real estate comps in your neighborhood to determine your property value.

Just how much you could save depends on your real estate market. But nationally, home prices are still about 30 percent below their peak in 2006.

The appeal process varies depending on your area, but below, and for this entire week, I will be sharing a few steps that could help you get your taxes lowered.

STEP 1: TRACK DOWN THE PAPERWORK

Property taxes are assessed on a local level. Most homes are only assessed by one jurisdiction, whether it’s a town, city or county. But if your home has more than one assessment — for example, if you live in a village within a town — you need to file appeals with both jurisdictions since they operate independently.

You can start by searching for your assessor’s Web site, where you’ll find the form to file an appeal. It will probably be a page or two, and ask for basic information and your home’s parcel or lot number. The latter should be listed on your mortgage or property tax bill, or you might be able to look it up on the assessor’s Web site.

The fees for filing an appeal vary; it could be free, or it may be a flat fee of about $15.

Deadlines for appealing an assessment are often in the spring, so get moving if you’re seriously considering it.

Stay tuned Wednesday, because I will be giving you some insight to the appeal process… from first hand experience! Wait until you hear my success story!

San Diego and Riverside county home values rose in February compared with February 2009, real estate specialist announced Tuesday. Thanks to good real estate comps and the valuation support we provide at InvestorCompsOnline, many of my investors were well aware of this long before the announcement came Tuesday.

San Diego County home prices rose to $322,000, up 13 percent from the previous February, though total home sales were down 0.3 percent to 2,465. Riverside County home prices rose to $197,000, up 3.7 percent from February 2009. Sales in Riverside fell 6.5 percent to 3,199.

Real estate agents in both counties said a lack of inventory is driving up prices on lower-value homes in both markets. Our investors have been seeing this trend in their real estate comps search in ICO and have adjusted their acquisition price and exit strategies accordingly. This is just another example how InvestorCompsOnline is keeping our members ahead of other players in the market with my “appraiser’s secrets for investors”.