Home buyer tax credit may get 9th life

It has been rumored that congress has agreed to a new form of the home buyer tax credit to extend into 2010.

It seems that it will look a little different than 2009. This new tax credit agreement is supposed to ride along with the unemployment benefits bill that is being voted on in the next 24 hours.

Here are some of the possibilities that we could see on the extension:

1) Extend to April 30th, with contracts that began by then, and escrows closed by June 30th, 2010
2) Credit will include more than first time buyers. Perhaps a 2nd time buyer. Rules are vague right now. May be guidelines about how long they owned their previous home. Or limit on the equity they pull out. Or caps on how much income they can make.
3) Oh, and the $8,000 number is rumored to be $6,500 instead.

All in all it sounds positive. Everyone seemed in such a frenzy to buy and close by the end of the year or all hell would freeze over. Now, we can wean ourselves with an extra 120 days to keep shopping. It will also be nice for the housing market, because it will allow some movement in the higher than median price points for some markets. It seemed like there was too much bidding going on in the less than median price point, and nothing but crickets (long quiet days on market) for the higher priced homes.

And dropping the credit seems fair. It's the best way to wean the people off of the system. Oh, you waited? Well, you still have a chance, but your penalty is $1,500. Now, don't wait too long this time!!!

What Happened to the TIC?

It appears the hot market of the TIC has cooled off. Investors jumped at the idea of grouping money together and leveraging partners to have the opportunity to buy a bigger investment. Mostly commercial investments. The idea that someone else found the partners and then managed the property, and then guaranteed the steady return on the investment, was hard to resist.

Unfortunately, the TIC investments are suffering just like other commercial investments. However, it is even harder when you have several investors now that can't agree on how to solve a tough problem.

Vacancies have also risen in the commercial industry in today's economy and the ability to raise more capital or refinance has become increasingly difficult with the current mortgage crisis. Especially when you have mutliple owners and a property that has not been performing.

Lastly, everyone realizes the exit strategy is harder than it sounded. When the chips are down, people want out. And in a TIC, it needs to be unanimous to have everyone cash out, or convince the others to buy you out, or you sell your portion publicly

For more on why TICs are not be producing, and where you should invest if you like the concept, see the presentation below:

TIC vs REO Investing

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