1. Fewer properties– Investors were allowed up to 10 investment properties in the past but since mortgage restrictions have tightened up, investors are now only allowed to finance a total of 4 investment properties.
2. Extra Fees– Freddie Mac and Fannie Mae will be imposing additional fees to investor loans due to the current real estate market.
3. Capital Gains– As a result of the recently passed Housing Stimulus Bill, investors who convert their investment property into their primary residence may have to pay taxes on a portion of their capital gains. For more information: H.R. 3221
4. 1031 Exchanges– Investors still have flexibility when making a “like kind” exchange of two properties. For more information: Section 1031
5. LLC Restrictions– Freddie Mac is no longer refinancing loans for properties in an LLC. For more information: Loans and LLC’s
*If you are an investor in Colorado Springs, refer to your tax accountant to find out how the new changes in legislation may affect you.