Buy and hold with Solo401k

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Buy and hold with Solo401k

Leslie Griffith
Washington, DC · Member since 2014 · 2 posts · 0 votes

Hi All, I just opened my Solo 401(k) - thanks to Mark Nolan and mysolo401k. 

I have identified a property, and have a few questions with regards to the best way to go forward.

1) The property will be a buy and hold. Is it recommended to set up an LLC owned by the 401(k)? If LLC is recommended, what is the process for setting up the LLC to allow for the purchase of the property? Should the LLC be a property management business?

2) How do I insure the property? I expect that the property has to be ensured under it's own account and cannot be listed under my personal residence policy. Can anyone recommend an insurance company that helps insure properties purchased with solo 401(k)s?

Thanks in advance for your advice and your patience in dealing with the simple questions of a newbie. 

Leslie

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Dmitriy Fomichenko
Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
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@Leslie Griffith

1) You don't need to have the LLC, 401k Trust can hold property title. But in some cases LLC will make sense depending on your particular situation.

2) All transactions involving 401k must be 'arms length' so you are correct that you can not list that property on your personal insurance. You don't need 'special' insurance company, most should be able to insure the property. 

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  • Brian EastmanPro Member
    Self Directed IRA & 401k Advisor · Wenatchee, WA · Member since 2014 · 2k+ posts · 2k+ votes
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    @Leslie Griffith

    These are good questions for your plan provider.  Hopefully they can help you.

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  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
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    @Leslie Griffith

    1) You don't need to have the LLC, 401k Trust can hold property title. But in some cases LLC will make sense depending on your particular situation.

    2) All transactions involving 401k must be 'arms length' so you are correct that you can not list that property on your personal insurance. You don't need 'special' insurance company, most should be able to insure the property. 

    1Reply
  • Leslie Griffith
    OP
    Washington, DC · Member since 2014 · 2 posts · 0 votes
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    @Dmitriy Fomichenko

    Thank you for your response. You are always so helpful in your posts. 

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  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
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    You are welcome @Leslie Griffith.

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  • Mark Nolan
    Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
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    Hi Leslie,

    I will send you and e-mail shortly regarding your questions.

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