Karen Shapiro on wed 15 dec 99
Hi Clayarters,
I know this isn't technically a clay question, but I'm faced with a big
dilemma and need some tips from other artists. I am living in a rental which
is being sold -- YIKES! My studio is in this house and I would love to buy
one so I don't get stuck in this situation again (I'm getting too old for
this!).
Problem is, since mortgage loans are based on income (I don't have a lot to
put down and no one is gonna' die and leave me any $), mine looks so sad on a
tax return since "gross income" is sales minus expenses. I do have a great
co-signer, but that doesn't seem to hold much weight here in California.
Anyone have any tricks they would like to share? I'm becoming very anxious
here!
thanks for anything helpful,
Karen in Sonoma
Jim Bozeman on thu 16 dec 99
Karen, Sometimes cities have what they call "target areas" where they are
encouraging people to buy houses. In some cases, you don't even have to put
down a payment; but there is a catch; you must live in the house for a
certain number of years or you will be faced with a penalty. I just bought
my first house 2 months ago. I had to wall in the garage to create my
studio. But now I am going to own it someday instead of continuously paying
rent. And I got an acre of land too! Good luck to you, Jim Bozeman
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Cindy Strnad on thu 16 dec 99
Karen,
Try for a "Farm Home Loan". They're not just for farmers, or even
exclusively for rural areas--suburbs will do. If I remember right, the home
must be your first, however. Even if this doesn't apply to you, ask a real
estate agent (preferably a trusted friend). There are lots of plans out
there with the low-income person/family in mind.
Cindy Strnad
Earthen Vessels Pottery
Custer, SD
Tasha Olive on thu 16 dec 99
Karen, Just a few tips I hope will help.....first try to find a property
that is below market value in it's asking price(VA or HUD repos sometimes
work here)as banks are not as leery of loaning when they have a built-in
equity cushion. If I'm not being clear it's like this.... if you can find a
property that is in a certain price range due to location, size, condition
etc.. but has been repossessed or is a distress sale and so the price asked
is somewhat lower than what it would bring under normal conditions an in
house appraiser will usually appraise at the normal amount then when you go
in ask for the lowest appraised value to loan amount that you can possibly
handle i.e. 70% of appraised value. So if you were looking at a property
that would appraise for $100,000 but the price is only 70,000 and you are
only wanting a loan for 50,000, the bank has a built in net. This is looked
at as a win win for them, if you don't pay they have a pretty good chance of
easily recouping and if you do so much the better. sometimes, with the right
property no down is even needed. also be sure and sell yourself. you
probably have lots of assets your not thinking about that can make you look
better on paper, ARTWORK!!- not just other peoples but yours. they don'task
that you list each piece just an assets list. how many $ worth of art do you
own etc.. and don't forget your business equipment as we all know that
someof that is quite valuable. There are so many little tips and I hope that
some of these have been of some help to you and more that that I wish you
the best in your efforts ...keep us all posted. Tasha
-----Original Message-----
From: Karen Shapiro
To: CLAYART@LSV.UKY.EDU
Date: Wednesday, December 15, 1999 3:48 PM
Subject: Artist house buying - HELP
>----------------------------Original message----------------------------
>Hi Clayarters,
>
>I know this isn't technically a clay question, but I'm faced with a big
>dilemma and need some tips from other artists. I am living in a rental
which
>is being sold -- YIKES! My studio is in this house and I would love to buy
>one so I don't get stuck in this situation again (I'm getting too old for
>this!).
>Problem is, since mortgage loans are based on income (I don't have a lot to
>put down and no one is gonna' die and leave me any $), mine looks so sad on
a
>tax return since "gross income" is sales minus expenses. I do have a great
>co-signer, but that doesn't seem to hold much weight here in California.
>Anyone have any tricks they would like to share? I'm becoming very anxious
>here!
>thanks for anything helpful,
>Karen in Sonoma
>
virginia gibbons on thu 16 dec 99
Check out the government programs for first-time home buyers (if you are a
first-timer). As I remember from my time in the mortgage business there
were some really good low down payment, low interest mortgages available.
Don't despair - the mortgage business is very competitive now. Shop
around. Check out possibilities online to save time. Good luck. Virginia
At 05:46 PM 12/15/99 EST, you wrote:
>----------------------------Original message----------------------------
>Hi Clayarters,
>
>I know this isn't technically a clay question, but I'm faced with a big
>dilemma and need some tips from other artists. I am living in a rental which
>is being sold -- YIKES! My studio is in this house and I would love to buy
>one so I don't get stuck in this situation again (I'm getting too old for
>this!).
>Problem is, since mortgage loans are based on income (I don't have a lot to
>put down and no one is gonna' die and leave me any $), mine looks so sad on a
>tax return since "gross income" is sales minus expenses. I do have a great
>co-signer, but that doesn't seem to hold much weight here in California.
>Anyone have any tricks they would like to share? I'm becoming very anxious
>here!
>thanks for anything helpful,
>Karen in Sonoma
>
taube wilson on thu 16 dec 99
Karen,
I don't have any experience with this, but...
there's a real-estate column that runs here in
the Washington Post called "Real Estate Mailbox"
by Bob Bross. Unfortunately it's not on-line
(I checked the Post's website). Anyway, he regularly
recommends trying to find a "rent-to-own" situation,
where part of your rent each month goes towards a
down-payment, and after a year or two you have an
option to buy. I would guess you'd have to approach
owners of rental properties about this, as I've never
seen such an offer in the paper myself. I'd make sure
I had a really good written contract in place if I
were going to do this. Maybe a realtor in your area
could give you more information.
He also recommends checking with lots of mortgage
brokers, not just large banks.
I did a quick search and found the following site:
http://www.interest.com/sa950802.html
Also, do a search on "lease option" "rent to own" "rent to buy"
(I like the infoseek.com search engine).
Hope you find something,
Taube Wilson
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Tom Wirt on thu 16 dec 99
----- Original Message -----
From: Karen Shapiro
Subject: Artist house buying - HELP
> ----------------------------Original message----------------------------
My studio is in this house and I would love to buy
> one so I don't get stuck in this situation again (I'm getting too old for
> this!).
> Problem is, since mortgage loans are based on income (I don't have a lot
to
> put down and no one is gonna' die and leave me any $), mine looks so sad
on a
> tax return since "gross income" is sales minus expenses. I do have a
great
> co-signer, but that doesn't seem to hold much weight here in California.
> Anyone have any tricks they would like to share? I'm becoming very
anxious
> here!
> thanks for anything helpful,
> Karen in Sonoma
Hi Karen.....Your immediate problem is to prove to the lender that, while
you don't have a big income, you have stabilized your income and it is
enough to cover payments as well as expenses. First, find a bank that
specializes in small business loans, not the typical residential mortgage
lender. This is most important. The business lender will look at your
business acumen and experience and make the decision more on that basis than
pure income.
Then, build your case for them:
1). A business plan that covers at least the next two years. Back it up
with the last 2 or 3 years numbers.
2). Know where your numbers are coming from and be able to talk about them
backward and forward. You may need to involve an accountant to do this if
you're not comfortable with those kinds of numbers....but you'll have to go
in alone.
3) While you're at the accountant's, build a P&L (Profit and Loss) Statement
for the last year, if you're not already doing this. And while you're at
it, do a net worth statement (assets and liabilities).
4) Have a detailed cash flow built to show where your highs and lows are.
You should be doing this anyway. It's essentially the business form of a
budget.
The above, along with a solid co-signer should find you the money. It's a
lot of work, but you should be doing most of it anyway, if you're not.
Another option, if the people selling the house can sell it to you, and use
the house as collateral for a loan to get their money out. You , in effect,
make the payments for them. But that's a long shot.
Hope this helps.
Tom Wirt
Gerry Turner on sun 2 jan 00
Hi Karen------
You've probably had a bunch of suggestions by now. I just got back from
vacation and am reading Clayart from December 15 or 16. Anyway, RE: buying
a house......or any property......I'd suggest trying to go the route of
financing directly with the owner of the property. Here in Wisconsin it's
called a Land Contract. You can offer a low down payment and a higher
interest rate than the banks offer on real estate loans. The advantage is
that the owner doesn't get stuck with a high capital gain on their income
for the years the contract is in force and you get to go with a lower down
payment. In addition you will have some tax advantages from the interest
you will be paying. The first home I owned was purchased this way and ended
up costing much less than rent after the income tax advantage......That. by
the way, was in California but centuries ago. Idon't think the laws have
changed about that though. When my husband sold his parents' summer cottage
he sold it on a land contract here in Wisconsin and it was a very good deal
for us both because of the tax advantage and the extra interest income. The
contracts here in Wisconsin are usually written for 3 to 5 years and can
sometimes be renewed because the sellers still don't want the capital gain.
Good luck. Buying is BETTER than renting in millions of ways.
Gerry Turner------Back in Wisconsin after 10 days of New Mexico. I miss the
farolitos......and the frijoles!
-----Original Message-----
From: Karen Shapiro
To: CLAYART@LSV.UKY.EDU
Date: Wednesday, December 15, 1999 4:47 PM
Subject: Artist house buying - HELP
>----------------------------Original message----------------------------
>Hi Clayarters,
>
>I know this isn't technically a clay question, but I'm faced with a big
>dilemma and need some tips from other artists. I am living in a rental
which
>is being sold -- YIKES! My studio is in this house and I would love to buy
>one so I don't get stuck in this situation again (I'm getting too old for
>this!).
>Problem is, since mortgage loans are based on income (I don't have a lot to
>put down and no one is gonna' die and leave me any $), mine looks so sad on
a
>tax return since "gross income" is sales minus expenses. I do have a great
>co-signer, but that doesn't seem to hold much weight here in California.
>Anyone have any tricks they would like to share? I'm becoming very anxious
>here!
>thanks for anything helpful,
>Karen in Sonoma
>
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