New Fiscal Crisis Bill Protects Investors Wholesaling Properties

While many are calling the new fiscal crisis bill less than a win for either political party and many individuals may not love the outcome, the last minute deal appears to have been a great win for the U.S. housing market and those wholesaling properties.

For a start, being able to avoid the worst hit from the fiscal cliff has quickly restored confidence in the U.S. as a real estate investment destination and will help to minimize any future concerns around anymore fiscal deadlines.

Everyone may end up paying slightly higher taxes in one way or another, but for most, this appears to be limited to around $100 a month, which isn’t likely to negatively affect the housing market or ability to borrow and qualify for home loans.

More directly, several tax break extensions help real estate maintain its position as a great investment vehicle and one of the best solutions for finding shelter from higher taxes. This will continue to ensure those wholesaling properties can count on a long line of prospective buyers for their properties and won’t have to revise down their volume goals for flipping houses in 2013.

There was a lot of concern that the mortgage interest deduction would go away but it didn’t. That means homeowners and investors alike will be able to continue to deduct any interest they pay, retaining one of the best benefits of owning a home versus renting.

Similarly the deduction for mortgage insurance payments has been extended, a critical move as government agencies raise their fees.

Perhaps the best news stemming from the fiscal crisis bill for many struggling homeowners is the extension of the 2007 mortgage debt forgiveness act which allows those completing short sales, deeds in lieu of foreclosure and principal reduction loan modifications to avoid paying massive tax bills on any balance their lenders wipe out. This will help to stem the flow of foreclosures and fuel those wholesaling properties with more discounted property deals for flipping.

Finally, and one of the most important moves is the preservation of tax breaks on capital gains for those selling homes. With higher taxes being levied on higher income earners and more taxes for the ‘rich’ likely on the way, this ensures the appeal of real estate as an investment and tax shelter.

In fact, all put together the fiscal crisis bill likely makes real estate investment even more appealing for everyone in the U.S. and foreign buyers as well. This guarantees plenty more profits on the way for investors wholesaling properties in 2013 and will help keep the housing market on track to posting record gains and growth over the next 11 months.

If anything, real estate wholesalers ought to be ramping up their expectations for volume this year and be ready to scale their businesses to handle more demand.

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