HGTV Dream House- Stowe, Vt

[BLESS]

More details from a prior post:

http://www.vermonttiger.com/content/2010/12/a-taxing-gift.html

"As a public service, Vermonttiger presents the numbers:

1. Vermont Purchase and Use Tax on a $50,000 vehicle at 6% = $3,000

2. Vermont Property Transfer Tax on a $1.5 million house at 1.25% = $18,750

3. Annual Property taxes on a $1.5 million house in Stowe = $24,350

4. U.S. Income Tax on $2.05 million (house + cash + car) at 2011 tax rates

a. assume Bush tax cuts do not expire as per Obama compromise plan = $678,000

b. assume Bush tax cuts expire = $772,000

5. Vermont income taxes = $187,400

The lucky winner of the house will pay about $1 million in taxes in 2011 on their good fortune. With the $500,000 cash that is part of the winning package, the winner will only have to come up with an additional half million bucks. Maybe they can rent out some of those extra beds to help pay the taxes."

um. holy crap. Jeez what the hell would I do If I actually won it? My god I dont have 500k.

 

[deadheadskier]

um. holy crap. Jeez what the hell would I do If I actually won it? My god I dont have 500k.

you'd sell it.

I was hanging with the guy who would do just that (already the assigned Real Estate Agent) at a Superbowl party in Stowe two weeks ago. He said he could get 3M for that property EASY.

As of two weeks ago there were 44M entrants. I believe one has a better shot at winning Powerball than the Dream Home.

 

[AdironRider]

I actually run the financials on these types of properties at work these days.

Win the house, keep it and put it up with the best property management company in town. Theyll take close to 50% of the income, but they do all the heavy lifting. Usual rates are 45% management fee, plus they hold 3-5% in a reserve account for repairs, maintenance, pool guy, etc.

These types of properties go for thousands a night. One good week during the Christmas season and you're looking at covering your costs easy. Throw in the remainder of the year here and there and your looking at 50-70k in income with no effort. More once the economy revs back up on the next bubble. Checks just rolling in. 5-7% return while you sleep.

Then leverage like 100-200k of your bad ass now rental property and build your little realistic ski cabin wherever and cover the costs with the remaining income from the rental. Your setup with both pads, plus another 40-60k rolling in before you do one ounce of work for the year, and your housing costs are paid already. Gravy train.

You get to use the place whenever, and the management company takes cares of the rest.

At least thats what I'd do. You could always cash out. But renting it for a while till you made back the initial hit of all those taxes and what have you is the right play regardless. Then flip and get the 1-2 mil the house is worth on top of the 500k.

 

[BLESS]

you'd sell it.

I was hanging with the guy who would do just that (already the assigned Real Estate Agent) at a Superbowl party in Stowe two weeks ago. He said he could get 3M for that property EASY.

As of two weeks ago there were 44M entrants. I believe one has a better shot at winning Powerball than the Dream Home.

so you're sayiin theres a chaaaaance?????

 

[deadheadskier]

I actually run the financials on these types of properties at work these days.

Win the house, keep it and put it up with the best property management company in town. Theyll take close to 50% of the income, but they do all the heavy lifting. Usual rates are 45% management fee, plus they hold 3-5% in a reserve account for repairs, maintenance, pool guy, etc.

These types of properties go for thousands a night. One good week during the Christmas season and you're looking at covering your costs easy. Throw in the remainder of the year here and there and your looking at 50-70k in income with no effort. More once the economy revs back up on the next bubble. Checks just rolling in. 5-7% return while you sleep.

Then leverage like 100-200k of your bad ass now rental property and build your little realistic ski cabin wherever and cover the costs with the remaining income from the rental. Your setup with both pads, plus another 40-60k rolling in before you do one ounce of work for the year, and your housing costs are paid already. Gravy train.

You get to use the place whenever, and the management company takes cares of the rest.

At least thats what I'd do. You could always cash out. But renting it for a while till you made back the initial hit of all those taxes and what have you is the right play regardless. Then flip and get the 1-2 mil the house is worth on top of the 500k.

bad financial move.

3 Million in the market making a modest 5% return will make you FAR more money than you'd ever get trying to rent that property.

The house they tore down to build that sucker sold for 1.8 million and was a 'dump' in comparison. As mentioned I know the listing agent for this thing should the new owners decide to sell it. 3M is what it would go for.

 

[troy]

I actually run the financials on these types of properties at work these days.

Win the house, keep it and put it up with the best property management company in town. Theyll take close to 50% of the income, but they do all the heavy lifting. Usual rates are 45% management fee, plus they hold 3-5% in a reserve account for repairs, maintenance, pool guy, etc.

These types of properties go for thousands a night. One good week during the Christmas season and you're looking at covering your costs easy. Throw in the remainder of the year here and there and your looking at 50-70k in income with no effort. More once the economy revs back up on the next bubble. Checks just rolling in. 5-7% return while you sleep.

Then leverage like 100-200k of your bad ass now rental property and build your little realistic ski cabin wherever and cover the costs with the remaining income from the rental. Your setup with both pads, plus another 40-60k rolling in before you do one ounce of work for the year, and your housing costs are paid already. Gravy train.

You get to use the place whenever, and the management company takes cares of the rest.

At least thats what I'd do. You could always cash out. But renting it for a while till you made back the initial hit of all those taxes and what have you is the right play regardless. Then flip and get the 1-2 mil the house is worth on top of the 500k.

Doesnt VT have insane capital gains taxes on flipping real estate. Someone recently told me that its like 75% the first year and progressively scales down after like 5 years or something.... is this true?

 

[troy]

bad financial move.

3 Million in the market making a modest 5% return will make you FAR more money than you'd ever get trying to rent that property.

The house they tore down to build that sucker sold for 1.8 million and was a 'dump' in comparison. As mentioned I know the listing agent for this thing should the new owners decide to sell it. 3M is what it would go for.

Realtards will tell you what they want you to hear 100% of the time. Do not trust em unless your willing to spend sometime in the poorhouse. Most of them are hurting bad and almost all of them are an unemployable mess. If it wasnt for the government they would all be flipping burgers at your local joint by now...

 

[deadheadskier]

Realtards will tell you what they want you to hear 100% of the time. Do not trust em unless your willing to spend sometime in the poorhouse. Most of them are hurting bad and almost all of them are an unemployable mess. If it wasnt for the government they would all be flipping burgers at your local joint by now...

Best friend's Friend. Honest dude who has made a fortune selling mountainside real estate in town. Realtors in Stowe are doing just fine, even in this economy. Two former co-workers and friends are also real estate agents in town.

 

[AdironRider]

Doesnt VT have insane capital gains taxes on flipping real estate. Someone recently told me that its like 75% the first year and progressively scales down after like 5 years or something.... is this true?

This is why you hold and rent it out for 5 years and gross millions in rent. Take the house then immediately flip and you are going to take a bath. You effectively pay taxes twice. Once when you win, then again when you sell it and get hit with the capital gains. You do that all within the same year and thats going to hurt.

You can always leverage that 3 million in equity you have into plenty of other stuff. Thats the beauty of real estate. That still holds true with properties of this caliber.

 

[mister moose]

Doesnt VT have insane capital gains taxes on flipping real estate. Someone recently told me that its like 75% the first year and progressively scales down after like 5 years or something.... is this true?

Yes, it's true. It's a declining amount over 6 years starting at 80%. If you sell in the first 4 months, all the gain on the value of the land (which sounds significant) will be taxed at 80%. Your basis is zero, so take the value of the land and pay it to the state. That's Vermont taxation for you. If you wait a year it drops to 50% of the gain, 3 years, 30%.

http://www.vermontrealestatetoday.com/newsletter/vtrealestatetaxes.html#Land Gains

If the house before was a tear down at 1.8MM, you're looking at a lot of tax as that's what the valuation on the land is going to be.

And that's just the Land Gains Tax.

 

[deadheadskier]

Yes, it's true. It's a declining amount over 6 years starting at 80%. If you sell in the first 4 months, all the gain on the value of the land (which sounds significant) will be taxed at 80%. Your basis is zero, so take the value of the land and pay it to the state. That's Vermont taxation for you. If you wait a year it drops to 50% of the gain, 3 years, 30%.

http://www.vermontrealestatetoday.com/newsletter/vtrealestatetaxes.html#Land Gains

If the house before was a tear down at 1.8MM, you're looking at a lot of tax as that's what the valuation on the land is going to be.

And that's just the Land Gains Tax.

So, if you immediately sold the house for 3M, you'd only walk away with 600K? The state would take 2.4M?

frickin' criminal.

 

[Puck it]

So, if you immediately sold the house for 3M, you'd only walk away with 600K? The state would take 2.4M?

frickin' criminal.

It is the People's Republic of Vt.

 

[bigbog]

.........frickin' criminal.

Like some members of Maine state gov't....many aren't far from that status.........

 

[bigbog]

I'm guessing that the architect/builder as they were designing the house was more than likely figuring that the future owners of this multi-million dollar house would more than likely be paying to store their skis at the mountain, and not at the house.

Which goes to show...not only that the rich are different, their architects are as well..:roll: A stone's throw from the mountains and they're handing over their skis to be tuned/waxed by someone else...(just wrong..;-))

...Also, they did mention how the rafters in the garage could be easily used to make an upstairs storage area if the owner desired

Now that's neat....

 

[BenedictGomez]

It is the People's Republic of Vt.

What do you expect in a state where the people continuously elect a Socialist? The only (admitted) Socialist out of 537 national politicians. And then, of course, the people of VT bitch about taxes and how much things cost. Lol. Willing and gleeful slaves.

 

[riverc0il]

What do you expect in a state where the people continuously elect a Socialist? The only (admitted) Socialist out of 537 national politicians. And then, of course, the people of VT bitch about taxes and how much things cost. Lol. Willing and gleeful slaves.

Um... I know you are talking about Sanders, but just for the record, Jim Douglas was Gov from 03-11 and he is a Repub. VT is a very split state politically, split pretty evenly at both sides of the extremes. Govenor has FAR more to do with setting state law than US Rep or US Senator. And with the record straight, the Mods can step in and shut down the politics.

 

[bobbutts]

frickin' criminal.

It is the People's Republic of Vt.

What do you expect in a state where the people continuously elect a Socialist? The only (admitted) Socialist out of 537 national politicians. And then, of course, the people of VT bitch about taxes and how much things cost. Lol. Willing and gleeful slaves.

What do a bunch of guys with enough free time and money to Ski or Ride all season long and additional free time to post on a board like this have to complain about anyway?

You know why the Taxes are so high in the first year? So speculators don't come in and artificially inflate the market like they did in FL, Las Vegas, ATL, etc. You guys should just stick to skiing.

 

[x10003q]

What do a bunch of guys with enough free time and money to Ski or Ride all season long and additional free time to post on a board like this have to complain about anyway?

You know why the Taxes are so high in the first year? So speculators don't come in and artificially inflate the market like they did in FL, Las Vegas, ATL, etc. You guys should just stick to skiing.

Stop kidding yourself.
It is just a money grab from people who do not have the right to vote in the state.

 

[bobbutts]

Stop kidding yourself.
It is just a money grab from people who do not have the right to vote in the state.

I lived in FL when the bubble broke and saw it first hand.. If some regulation had been in place to control the run-up, I'm convinced the crash would have been less damaging.

 

[BenedictGomez]

Um... I know you are talking about Sanders, but just for the record, Jim Douglas was Gov from 03-11 and he is a Repub. VT is a very split state politically, split pretty evenly at both sides of the extremes. Govenor has FAR more to do with setting state law than US Rep or US Senator. And with the record straight, the Mods can step in and shut down the politics.

Douglas? He may have a R next to his name, but he sure as heck isn't a Republican. Not much better than Dean frankly, who chased all the "evil" businesses from the state. VT has been screwed over and used/abused for years now. It's sad.