This age old expression has been widely used for years.  Its application extends into the real estate arena as well.  It is noteworthy, though, that when it comes to investment and financial freedom, pride should have nothing to do with the decision to own a home.

In previous articles I have commented on the many avenues to wealth that real estate investment affords.  Even when it comes to one’s personal residence, it’s good to think like an investor.  Since a healthy percentage of U.S. voters also own their homes, it stands to reason that many laws would be in place that protect and assist these homeowners.  And that is exactly what has occurred!

Federal tax laws do favor those with a mortgage.  Why over 90% of each typical mortgage payment is fully deductible, while personal rent is not.  In most cases, this will far exceed the standard deduction and provide the homeowner with significant tax savings.  That is simply money in your pocket!

Added to that, take the depreciation factor.  Congress allows you to deduct the “improved value”(often 75% of the purchase price)from your taxes over a period of several years.  Again, that is significantly more money in your pocket each year.

Another exciting shelter the government provides is the exemption homeowners are allowed upon sale of their primary residence.  This is my favorite.  Every couple of years or so, you may sell your home and move.  Any gains(profit)realized from the sale can be yours tax free.

Here is the stipulation:  You must have lived in the property at least two out of the last five years to qualify.  This can be done to the tune of $250,000.00 each time.  Married couples can go up to $500,000.00 without paying any gains taxes.

How about that?!  There really isn’t much more one has to do to qualify for these advantages.  This is a sure way to financial independence if one follows the “buy low, sell high” principle.  Today’s real estate market is positively the best in decades for doing just that.

So, the wisdom of homeownership is clearly measured in dollars and cents.  Pride should not be a consideration in making decisions that will affect your financial future.  However, if you like, be proud that you had made your single best economic move when you decided to buy your home.

If you have tried to get your mortgage note modified and opted to short sell the family home, this may be for you.

In the case of a short sale two facts remain constant.  First, you will sustain damage to your credit rating for at least 24 months.  Second, you will have to move.

There has traditionally been a third inevitability and that is that you would become a renter again.  The latter is least preferable as it means the loss of some distinct tax advantages that come with home ownership.  These will be discussed in a later article.

In the meantime, the question is whether it is possible to maintain homeownership status with severely handicapped credit?  The answer is: “possibly.”  With private money many doors can open up to families with a solid household income.

Financial loans are financial opportunities in disguise.  It can provide the private lender a great return on their money while securing their funds with a note in first position on your new home at a loan-to-value of 65-70%.  In this down market property values present a terrific opportunity for securing retirement funds as well.  Free information on that subject can be obtained by calling 1-888-380-INVEST and requesting a CD on self-directed IRAs.

Private funds also allow for flexible terms.  Maybe your “sweat equity” and a partner’s cash can make a winning combination together.  Either way, the sky’s the limit.

Don’t underestimate the power of the human heart.  People have a nearly inborn need to feel as though they are making a difference in the lives of others…especially those whom they care about.  You may be surprised to find others are more than a little enthusiastic to help you realize your dreams.  Why not share these hopes and dreams with those in your life?  It may prove to be the best financial move you make this year!

Be prepared to provide the “complete picture” for any prospective investor.  Make sure you have accurate numbers and all available facts about the new property.  This will make their decision much easier….and you look better.  As with any business transaction:  Put it in writing!  Provide your lender with a Note and Deed of Trust and have it recorded with the county.  It is best, too, to have your lender named as “additional insured” to protect them against any catastrophic losses.

In conclusion, as the banks get weirder and weirder, it will become increasingly more necessary to get creative with financing.  Private money is a great vehicle to make deals happen.  You will likely pay a higher rate of interest but it may make the difference between having the deal and not having it.  Here’s to home ownership!