Using a 1031 Exchange to buy and sell real estate is a great way to leverage the tax code to defer capital gains taxes on the sale of real property.  If you are buying or selling real estate in Bonita Springs and Estero Florida using a 1031 exchange you will need to meet, at minimum, six primary IRS regulations. Both personally and professionally, Chris has participated with 1031 Exchanges in Bonita Springs and Estero, Florida.

Many of Chris’s real estate clients have sold both residential investment real estate and commercial real estate elsewhere in the United States and purchased replacement properties in the Bonita Springs, Florida area.  If you’re thinking of using a 1031 Exchange to fund the purchase of a home or condo in the Bonita Springs or Estero, Florida area, here are a few rules you need to follow:

Real Property Use - Both your old and new properties must qualify as investment or business use. If both types of real estate pass this test, you can exchange nearly any type of real estate.

45 Day Identification Period - You have 45 days from the closing of your sale to list the replacement properties you may want to buy. For example, if you sell a rental property, you have 45 days to list the replacement property you wish to purchase in Bonita Springs, Florida or Estero Florida.

Exchange Period of 180 Days - When you sell your 1031 exchange property you have 180 days to close on the purchase of one or more properties from your 45-day list. So, in theory, you must sell your investment property and choose the replacement properties you’d like to purchase in Bonita Springs then you must close on these properties within 180 days.

Qualified Intermediary - The IRS mandates that you use a QI to prepare the legal documents for your 1031 exchange. The qualified intermediary holds the funds from the sale of the exchange property.  Because the QI must be independent, it cannot be your friend, employee, broker, or even your accountant or attorney.

Title For Your Bonita Springs Replacement Property - You must purchase and take title to your new Bonita Springs real estate exactly as you held title to your old property that was sold for the 1031 exchange.

Reinvestment Requirement - To defer all of your capital gain tax, your replacement property in Bonita Springs must be of equal or higher in value than the one you sold. Also, you must reinvest all of the cash proceeds from your sale.

Consult your tax attorney or tax professional prior to engaging in a 1031 Exchange in Estero or Bonita Springs, Florida.

Bonita Springs Home Stats Nov 1 2014

Are you headed back to Bonita Springs or Estero to buy a home or condo this winter?  Things may look a little different than the last time you were in SWFL.  A year ago the $200,000 and under real estate market was commanding the market. For the last few months the $200-400,000 real estate market has lead the charge.  Check out the statistics on the graph above.  If you’re a seller in Bonita Springs you might want to consider what price range your home is in and if it stands potential for selling.  For example, look at the $800-1,000,000 price point.  Only four units sold in that price point last month.

Bonita Springs Homes Sold Condition

The good news is that we are doing well with the evaporation of distressed real estate in Southwest Florida. Above is the closed sale statistics and how many short sales and foreclosures home sales that really aren't happening these days.

Bonita Springs Home Listings Condition

At this time the current listings show only 1.4% short sales and only 3.5% foreclosures.  Things are looking up and home prices have gone up considerably. If you are thinking of selling and you’re not sure what price your home can fetch.  Call me and I can do a seller’s estimated net sheet with closing costs and your mortgage balance so you know the facts.  You never know. I might be able to help you cash flow and move on.

Bonita Springs Historical Sales

The graph above shows sales by unit number for 10 years during the month of October.  You’ll see the gradual climb of real estate sales which is how all of the inventory was absorbed. End story:  Real estate is back in Southwest Florida.  Now we have to watch for bubble number two. I’m watching and calculating the next soft spot I see forming.

How Bonita Springs Homes Are Financed

Cash is still king but we've seen a slowing of cash purchases.  While we’ve  been as high at 70% cash, we’ve also been as low at 54%.  This month we’re at just under 60% cash sales.  We’ve seen Conventional lending expand and even  a few more VA mortgages, which are great cost savers for veterans.

If you have questions about the Bonita Springs real estate market or you’d like more information on buying or selling in the Bonita Springs and Estero Florida area call or text Chris at 239-273-7430.

Just north of the Caloosahatchee River is a great little park called Caloosahatchee Creeks Preserve (East). Caloosahatchee Creeks East is a little over a mile east of I-75 just off of Bayshore Road. I originally noticed this park when I visited Echo Global Farm last year. After a little investigating I realized there was also a Caloosahatchee Creeks Preserve West, which is west of 75. In short, you could fill a good part of the day touring both locations.

As soon as the merciless September rains wrapped up I decided to tour this park and help my fearless pooch, Dill, blow some steam off on a walk around Sweetbay Trail. Besides being pet friendly this park is also an ADA compliant facility so it’s great for those who require a flat surface whether it’s for a wheelchair or stroller.

The park has about a 1.5 mile trail with a good portion of if constructed with plastic composite, wood-like boards. Live Oak Trail is all boardwalk and a fair portion of Sweetbay Trail is, too. In the marshy areas, the boardwalk is raised with curb rails so it’s safe for hikers of most ages and fitness levels. From the boardwalk hikers get to experience wildlife and nature at a safe distance. The majority of the trail and boardwalk is well shaded. There are a few benches for sitting plus a large viewing platform which overlooks the marsh areas closer to the river.

This park ended up being a reptile adventure because I was able to spot a harmless black snake plus a couple of five lined skinks on the trail. Skinks like the damp habitat and sun bathe on the boardwalk to warm up so odds are in your favor that you’ll see one. Try as I might to get a picture of the iridescent skinks, it just didn’t happen. I named them Abracadabra and Hocus Pocus because the moment I raised the camera to take a shot they were gone in a poof.

The shortest section of the trail called Fetterbush Trail is just a regular, old nature trail. While there is no boardwalk, it is manicured and the ground is fairly flat and firm. It is not exactly advanced hiking but a fun addition to the boardwalk trail. Best of all, the entire trail system is short enough for you to not lose the attention of children. If you’re just introducing them to nature preserves this is an ideal place to start.

On the way back to the car we ran into a very large gopher tortoise munching on the tall grass. It quickly became obvious that Dill is not amused by gopher tortoises. He’s a thug for a little dog but the minute that tortoise moved he quickly morphed into a little sissy and ran to the leashes end.

This is a great park to visit. There are several picnic tables set up under live oak trees near the parking area plus there are restroom facilities. Had I known about the picnic area in advance I would have ordered my Publix sub online and picked it up on the way. Next time!

Both Caloosahatchee Creeks Preserve East and West are part of the Conservation 20/20 Preserve program of Lee County. They’re open from dawn to dusk. You can learn more about the preserves and the Conservation 20/20 program at www.conservation2020.org

Happy trail and boardwalks!

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Special to Southwest Spotlight

How Many Short Sales & Foreclosures Are There?

So, if you're a potential Buyer of Bonita Springs real estate you might want to know and understand exactly what market you're shopping in.  How many foreclosures are there? How many short sales are there?  Many home buyers come to the Bonita Springs area hoping to find a short sale or foreclosure and they don't understand the market before they walk of the plane at RSW. 

Well, here’s the skinny.  We have very few distressed properties for sale right now.  1.5% of our active listings are short sales and less than 3.5% of our listings are foreclosed.  That means that Bonita Springs real estate buyers are dealing with owners, negotiations go quickly and you can close on a home weeks later instead of months down the road like “the good ole days” of short sales.

You’re likely to experience multiple offers when bidding, especially the closer the home price is to entry level pricing.  Pickin’s are slim and we’re only going into “season”. Under $200K there are only about 4 months of inventory for sale at this time.

If you’d like more statistics real estate advice to get your finger on the pulse of the Bonita Springs real estate market, call or text Chris at 239-273-7430.

Bonita Springs Fl First Responder & First Time Home Buyer Crisis

Housing is officially expensive in Bonita Springs, again.  If you are financially comfortable or financially fortunate, take a step back from your life for just a moment and try to put yourself in the shoes of some of the younger folks in the area; the newly married, young families or those just starting their careers after school or college. 

Here’s what’s going on with Bonita Springs real estate right now.  Under the price pointe of $200,000 there are merely 1/2 dozen homes on the market with three bedrooms/two baths and at least a one car garage.  Only one of those homes has a two car garage. Some of the homes are in such bad shape that they don’t qualify for conventional financing. That is offically a crisis for those who want to live in Bonita Springs.

In particular, I’d like the Bonita Springs residents to consider, for a moment, the first responders who work for the fire department, rescue, ambulance or the sheriff department and their inability to afford to live in the city in which they work.  It’s happening right now. I know first responders who want to live in Bonita Springs and they can’t find a home to purchase due to low inventory … the prices are rising by the minute.  There are bidding wars on houses!

So, why are home unaffordable at entry level in Bonita Springs?  First, we’re about 70% gated and deed restricted homes.  Beautiful to look at, these gates are, but very painful to the pocket book. The average home buyer who is a first responder, besides the other debts of life, student loans, car payments, children, etc. simply can’t afford the debt of the homeowner association fees or condo association fees.  That added $200-400 per month in fees for an HOA besides being expensive actually skew the debt to income ratios for many of todays borrowers and that means that it puts them over a debt limit that qualifies them for a mortgage or home loan.

Another reason there is difficulty is the down payment. Even if a home buyer “goes FHA” which is a loan program that allows very little down, there is a cost for that.  It’s about $200 per month in mortgage insurance, over an above the principal and interest.   Are you getting the picture with the difficulty of affordable housing in SWFL?

Those in law enforcement in Bonita Springs or Lee County Florida often have a military back ground.  A VA loan is very helpful for them but many home sellers and even their listing agent do not understand the program and think that it is going to cost them excessive amounts of money to sell to a veteran leveraging the VA loan program.  The program has changed, trust me I just closed a VA loan with a local mortgage broker.  (It has to be a local mortgage broker, too.)

Last but not least, it would be remiss of me to not make a plea for an entry level single family home right now.  If you own a home that is in the entry level priced segment of our real estate market and you’d like to make sure a first responder or a first time home buyer buys it, please call me.  I know more than one sheriff waiting to get into a home in 34135 plus other first time home buyers just waiting for a chance at owning a home in Bonita Springs, Florida.

If you’ve been holding onto your home because you’ve been upside down, consider this and finish this sentence:  “If I could get $ ____________for my house. I would move.”  Call or text me to see if you’re above water. No strings attached.  I’d be happy to help a first responder or first time home buyer take that home off your hands at a fair price.  These folks just need an honest shot at a house and to not be out-bid by a cash buyer. 

Mortgage Brokers vs. Big Bank Loan Officers

So I walked into the chiropractor and see one of the kids who went to high school with my twins. After we sent a selfie picture of us hanging out in the waiting room off to the twins, “Manny” says, “I was actually looking for a house recently”.  We commiserate on how much the prices have gone up for a single family home and how hard it is to be a first time home buyer in the Bonita Springs Florida area.

“Manny” then says that he gave up trying to buy a home because the loan officer at the Big Bank told him he couldn’t get a loan because of the cash that he saved.  You’re probably wondering who in their right mind would tell someone that their cash was not any good?  I’ll tell you: A loan officer at a big bank. They get paid for loan applications, not closing loans. I was shocked that Manny didn’t get, at the very least, soaked for a loan application before he was turned away.  (maybe he did, I didn’t ask)

Let me start out by telling you, the real estate consumer, that you’re going to the wrong places for your loans.  A loan officer at a bank will tell you want you CAN’T do but an independent mortgage broker will tell you what you CAN do.

There are a lot of federal regulations that determine how mortgages get processed these days and cash does have to be accounted for.  There are ways to skirt the issue by paying down a car loan or some other type of debt.  Heck, with this scenario we aren’t talking about hundreds of thousands of dollars. A professional could have come up with a plan for the funds to be documented for the loan process, plain and simple.

It just really aggravates me that the unknowing consumer can still walk into a bank and get jerked around by whoever the plebe is that they propped up a the loan officer’s desk.  It’s disgusting.

If you are a first time home buyer or even just coming to the area to buy for the first time, call me or your real estate agent and ask for the name of the mortgage broker who CLOSES transaction, not runs consumers around. CLOSES transaction and doesn’t just take loan applications.  CLOSES transactions by offering a little coaching on how to get the buyers finances and credit in order and not just take the easy clients.

For about 15 years I have sold real estate in Bonita Springs Florida.  I’ve seen a lot of buyers and sellers come and go and there is one solid way to separate real estate buyers from time gobbling, tire kickers, the dreaded “Call us if anything comes up …”.  There isn’t a real estate agent in town who hasn’t heard that from a real estate buyer getting out of their car and knowing they’d never see or hear from that person again.

Here’s the deal: If you are a real estate buyer in Bonita Springs and you didn’t jump on an opportunity when you were physically standing in several of the best units presented when you were able to see, smell, touch and feel them, what makes you think you will jump on a super deal, sight unseen that I dig up for you somewhere down the road.

Don’t get me wrong, I’ve sold a boat load of real estate sight unseen.  Read also: Buying Real Estate Sight Unseen  That is not impossible and it’s actually easier than you might imagine, for those who are serious about landing a home or condo when they are not in town.

The fact of the matter is that there are Realtors in Bonita Springs, like me, who invest tons of time watching out for and previewing real estate for someone who is up north who will, in fact, buy.  We have pointed discussions with buyers who commit to being loyal to us, the real estate agents, who is putting in the time to “keep an eye out” for that deal, that floor plan, that exposure, that fixer upper.  We are usually good at what we do and we don’t mind putting in the work if there is a closing, sometime, somewhere down the road to help us recoup our expenses.  There are actual expenses, too.  This isn’t an inexpensive business to be in and we don’t draw salary. 

We real estate agents get paid for performance so it’s an insult to drop the half-assed “call me if anything comes up” when you weren’t satisfied with the best that your budget allowed after X amount of days or weeks of our hard work.

DeRomo’s Gourmet Market and Restaurant

DeRomo’s Gourmet Market and Restaurant officially opened at The Promenade in Bonita Springs, Florida, this week. The market is a feast for the senses and an absolutely fabulous addition to the market and restaurant scene in Southwest Florida. There isn’t another establishment like it in all of Lee or Collier County!

Contact for DeRomo’s: 239-325-3583 - 26811 South Bay Dr. Suites, Bonita Springs, FL 34134

Of course, an Italian restaurant and market this unique has been so popular you’ll need to prepare for the crowd. The market is shoulder to shoulder, filled with shoppers. It’s a good thing!  The restaurant has wait times during the peak dining hours so plan your visit at off times. Team Griffith went for lunch at 2:00 p.m. and saw no wait time, fast service and we were in and out of the restaurant in about 35 minutes.  We had a 10 month old child and the staff humored her on more than one occasion.

Lunch at DeRomo’s was fast and affordable. We each had an sandwich entre plus the Caprese appetizer and the tab came to $28.  We are water drinkers so there was no wine tab but I assure you that there is a fabulous selection of wines. Our choice was to dine indoors and it was a great experience.

On the way out we perused the market and marveled at the bakery. Get to DeRomo’s and check it out before all of the snowbirds get here!  It’s a great experience and an amazing new business in Bonita Springs, Florida.

Bonita

Here’s the latest and greatest update for the Bonita Springs home and condo market for the month of September 2014.  Bonita Springs real estate sale are continuing along at quite a pace.  For months, the $200-400,000 price range has been out pacing the $200,000 and under price point simply because the bottom is coming up and the entry level real estate is selling off like hot cakes.  At the time of this publication there were only 17 homes and condos for sale under $100,000 in all of Bonita Springs and Estero, Florida (excluding manufactured homes and time shares).  You’ll notice that the $800,000-1,000,000 price point only had one sale recorded.

Historical Bonita Springs Home Sales

This graph indicates what real estate sales have looked like during the month of September for the past decade.  We’ve leveled off nicely.  We are extremely low on real estate inventory right now or there would have been more units sold.

The condition of homes sold in Bonita Springs has improved month to month.  The rising real estate prices have produced less home sales because fewer home owner are “under water”.  Foreclosure tend to fluctuate but they have also been diminishing as a whole.

Looking forward, the condition is improving and there are fewer homes as short sale or foreclosures in Bonita Springs and Estero. We will continue to make progress and by spring the short sales will be a sliver of the real estate market.

Home buyers in Bonita Springs and Estero continue to pay for their real estate with cash as a primary source of payment, followed by conventional financing.  There are little to no owner financing properties in Bonita Springs.  Owners have no motivation to finance a home when there are lines of buyers fighting to pay cash, especially in entry level real estate.  The same goes for lease-option real estate.  The prices are going up so home sellers have no motivation to expose themselves to risk in an upwardly trending market.

 Download and print the market report graphs here: Sept 2014 Bonita Springs Market Report

Bonita Springs Bargain Hunters Beware

We're just heading into our winter tourist season and the entry level housing inventory is super low.   If you're on your way back to Bonita Springs Florida for the winter and you're planning on buying, be warned: Housing inventory is low, houses sell in hours in some circumstances and they often sell with multiple offers.  My last entry level priced single family home listing sold in days with several offers. Before you go out shopping make sure you've done your research, gotten prequalified, read a blank contract and have your team in order.  You're going to need to be able to rock and roll if you find a house to offer on because odds are you won't be the only person with that plan, this winter.