Whose kicked off the tax credit island…

• Home buyers who have owned a home in the last three years but have not owned and occupied a home for 5 of the last eight years do not qualify
• People who go into contract AFTER April 30th 2010, do not qualify.
• People who go into contract before April 30th 2010 but do not close before June 30, 2010 (ie-Waiting for short sale approval) do not qualify.
• People (Single) who earn over $125,000 per year are not eligible for the full credit
• Couples who are joint filers who earn over $225,000 are not eligible for the full credit.
• People who purchase a home over $800,000 are not eligible.
• Homebuyers who owe more than the amount of the tax credit are ineligible to receive a return.
• Homebuyers who purchase a home and receive a credit that move out within three years cannot keep the tax credit and must repay it.
• Homebuyers who purchase from a “close” relative are not eligible. (*Step-relative/non-blood relative purchases are eligible)
• Homebuyers who will not occupy the home don’t qualify.
• Non resident aliens do not qualify.
• Washington DC residents may not qualify.
• People whose financing comes from tax exempt mortgage revenue bonds do not qualify.

If you have further questions, please contact rafael@thehomemap.com

There is actually a TV show om the DIY network dedicated to man caves where they feature a Tuscan Wine Cellar, Poker Cave, Irish Pub, and Home Radio Studio. (DIY Network Man Cave Show)

Urban Dictionary defines Man Cave as: A room, space, corner or area of a dwelling that is specifically reserved for a male person to be in a solitary condition, away from the rest of the household in order to work, play, involve himself in certain hobbies, activities without interuption. This area is usually decorated by the male that uses it without interferance from any female influence.

Here are some great Man Caves:

Retro Music/Game Theme:

Luxury Man Cave

Pub Man Cave

Studio Cave

Car Themed Man Cave

Harley Cave

Ultimate Man Cave

As you can see there are a lot of people out there who will pour whatever it is they are passionate about into their retreat. If you know of any other great Man Cave examples, post them so that the rest of us can keep dreaming.

This phenomenon can be described as inflation, which has not stopped since we left the gold standard in 1971:

This is why you hear older generations talk about paying $.25 cents a gallon for gas and a nickel for a loaf of bread. The truth is, prices rise as the value of our currency drops.

Look what happened in Germany when they saw crazy inflation:

Prices doubled every 28 hours for 20 months!

So for the sake of illustrating my point let’s imagine that your home is on a tropical remote island in the middle of somewhere beautiful and warm.

This is paradise, life is good… except for one problem. There’s a greedy band of pirates that go by the name of “Inflation Pirates.”

Year after year you work hard to keep up your island. You store surplus resources like food and water and work hard to ensure you live comfortably. The problem is that you are not safe from the inflation pirates. You can ignore that they exist, but once a year when they come to raid your island and pillage your assets there is no forgetting them. The thought of pirates coming and taking over your home should bother you (like when the Raiders take over Qualcomm stadium for their game against the Chargers.)

As in any pirate invasion they come onto shore, make themselves at home and without asking permission raid through your island and take whatever they want.

Ultimately there is one prized possession on your island and that is your treasure chest. That is where you keep the really valuable things, your most prized possessions and assets. As this is where your most valuable assets lie, you are going to want to protect these assets which you worked so hard to accumulate.

Since you don’t have canons, swords, guns or any other weapons you need to outsmart the pirates in order to protect your treasure chest. Since this island has many hidden sea caves, the best way to protect your treasure chest is to build a ship.

Build  a ship? Yes… or buy a used one from one of your neighbors who just wants to get rid of it and doesn’t realize how valuable it is.

In preparation for the annual pirate raid you would build a ship (or buy a ship.) It could be a small simple ship that uses minimal resources or it could be a giant ship that uses a ton of resources. The ship is only a vehicle. What is important is staking your claim to a sea cave. It must be safe, secure and discreet with calm waters and you ship must be able to safely sail in and stay docked. This way when you notice signs of the pirates coming, you can calmly load your treasure chest on your ship and sail into your sea cave and patiently wait while everyone else who didn’t plan for the attack panics.

Let’s Recap:

1. You gather all your treasure and put it in a treasure chest (aka Bank Account.)
2. You scout the island for a great cave… location, location, location (determine your needs.)
3. You build a ship (Qualify to buy a home or make sure your home is on a fixed rate loan.)
4. You check the sea for pirates (make sure you can afford a home)
5. When you sense danger approaching, you take action (buy a home while rates are low and prices are cheap or plan for the long term payoff of your current home.)
6. You put the treasure chest on your ship, we’ll call it the S.S. Homeowner aka the Homeowner Ship. (Take a risk and take action.)
7. You set sail to your Homeowner Ship and sail to your chosen sea cave. (Find a home or build up your community.)
8. Since your going to have to spend some time in the cave you might want to add some vines and branches to cover the cave’s entrance (landscape and make comfortable.)
9. Wait for pirates to leave (be patient.)
10. Be grateful you had a plan in place to protect your treasure while your island was under attack by the inflation pirates.

What does any of this pirate, island, treasure nonsense have to do with homeownership and inflation???

Homeownership is like having a nice ship in a safe cove when the inflation pirates raid your town. As everything gets more expensive there is one way to hedge against rising costs and inflation and that is homeownership. For most people their housing expense is where the majority of their income goes, when prices rise so does rent. However, as a homeowner… if you have a fixed rate mortgage, you know that no matter what happens with our economy your housing expense will remain stable.

Many years from now we will look back on this time and remember this opportunity. “Remember how cheap houses and interest rates were in 2009?” Those who bought or already owned a home will be grateful that they had some protection over the uncertainty of our economy. We all know that the ship our economy is sitting on is on a crash course with trouble. Our national debt is rising, the value of our dollar is falling against global currencies…. etc, etc. etc.

If you ask me, I think it’s clear that the inflation pirates are off shore. Pick your cave, make sure you can afford your ship and keep a positive outlook because inflation is coming… it hasn’t stopped coming for almost 40 years.

While inflation pirates raid the island and those pessimists who thought that “this could never happen to my island” face their consequences, you would be comfortably waiting in your safe, secure cave. You could be grateful you took action and prepared for the future while the “I live day to day” neighbors in your village have to live with their choices to do nothing.

-Captain Rafa