Reposted for 2013
Indianapolis, Indiana between: 1950-1959.
182 homeowners built 182 homes using self help or sweat equity. "Sweat Equity" is a term used to describe the contribution made to a project by people who contribute their time and effort. It can be contrasted with financial equity which is the money contributed towards the project.
This is an African-American community where the men of the families were all WWII Veterans; whom all had to work full time jobs 40 hrs per week, have good credit, plus put in a minimum of 20 hours per week building their own home and assisting their neighbor the women was not allowed to contribute financial or labor wise.
I stumbled up on this fact when attending a community meeting with my wife whose own parents built in this community which sits on the Historic Register. Now that it is 2007 most of these homeowners' are in their mid 80's some in there 90's, some have passed.
What a wonderful heritage to leave your heirs the American Dream an inheritance that will last the ages. Not so in some communities and this is a fact currently in this community 30% of the homes have been lost to lack of knowledge, that's 54 homes at a whopping $4,050,000.00 in lost equity.
Majority of these homes were all free and clear. Lost, for unpaid taxes; not wanted by the children who had already bought homes and did not want the responsibility of another home. Some were foreclosed on others sold to investors for pennies on the dollar. Diminishing, the value of the other homes in the community, and losing the inheritance that could have leveraged the playing field when it came to having a better way of life for themselves and their children.
What to do when you have inherited a home?
Rule No 1.
Try to get the title transferred before deaf of the owners so that the taxes can remain the same. If there is a mortgage left make sure that you have adequate insurance to cover it in case of death
Rule No 2.
If there is 2 or more individuals involved in the heirship of the property and one wants out, have the property appraised to find out its fair market value.
Rule No 3.
Inherited properties can be refinanced to pay off existing mortgages, heirs, liens or past creditors as long as the individual who is refinancing does not receive any cash.
Rule No 4.
Inherited property requires no seasoning on selling or refinancing unlike property flips whereas a person or entity may acquire a property for a quick dollar artificially inflating the value. Inherited property was not acquired by the sell of the property but by a loved one who left the home so that the heir may have a better way of life so the property can be appraised at the full market value and sold at that value.
Rule No 5.
Inherited properties fall outside of the scope of the intended scope established by HUD in 2003 and is not considered property flipping and can save a lot of heartache and help put the heirs on the road to financial freedom.
This article was originally published on May 14th, 2007 with ArticleBase.