Research on funding: SDIRA/Solo401k, Equity, etc.

Tax, SDIRAs & Cost Segregation
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Research on funding: SDIRA/Solo401k, Equity, etc.

Eddie Starr
Specialist · fremont, NE · Member since 2014 · 161 posts · 42 votes

Looking for some feedback, and maybe some ideas to help flesh out what I'm working at.

I'm looking to reach out to my community, offering free workshops to introduce people to the concepts of investing with their IRAs, 401ks, etc, by rolling them into (as applies, full or part) into and SDIRA or solo401k.

I'm aware of the SEC R&R, and not to be doing any general solicitations. The initial goals of the workshops would be to present information to open them into the concepts of using retirement money for investing, and to provide them with the sites of the companies that are admins/custodians of these type accounts, so they can do additional research, and to also point them to the SEC info.

In holding these workshops, I'm looking at establishing “Pre-Existing” and “Substantive” Relationships; realizing that this is a long-term strategy.

With the idea of it being passive for the investors, my thought is for them to invest in my LLC, and then the LLC buys assets, which I'm thinking to focus on commercial; possibly businesses with strong cash-flow that are also selling real estate as part of the transaction.

I'm also thinking, in the workshops, to possibly include those with equity in their properties. I would provide them some information on HELOCs, cash-out refis, and Equity Loans, and provide them with additional research sources, so that they can decide which applies best to their situation, and work with them under a similar idea as to the retirement investors.

Would like some feedback, and maybe someone I can bounce ideas back and forth on...

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Bernard ReiszPro Member
CPA delivering RE Tax Tools: 1031 Exchange, SDIRA, 401(k), Cost Seg · New York City, NY · Member since 2017 · 581 posts · 563 votes
8y

@Eddie Starr Seems you're developing a great process to tapping into funds. There are - ready for this? - in excess of $27,000,000,000,000 in the retirement account system! Even if only a small fraction of that can be "liberated" it's incredibly powerful.

There are many ways to navigate the securities law issues. 

To make the process efficient and workable you've got to implement a seamless system for raising money from IRA/401k accounts. Many investment sponsors find dealing with IRAs/401(k)s to be a huge nuisance - but it does not have to be that way.

Regarding the LLC structuring for the investments, you seem to be describing deal syndication in which there is a General Partner (GP) and Limited Partners (LPs). There are multiple ways that the structure can be enhanced.

You've brought up more topics than could possibly be done justice in a forum post....real estate investing is so broad, with an incredible array of tools and strategies - it sounds like you'd like to introduce your investors to so much at once. Inviting them to join BP may be a great idea 😄!

@Yonah Weiss appreciate the tag from Mr. Cost Seg - keep saving $$$$ for investors!

[email protected]
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  • Yonah WeissPro Member
    Cost Segregation Expert and Investor · Lakewood, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    8y

    @Eddie Starr, I think @Bernard Reisz might be a good guy to connect with about this.

    2Reply
  • Bernard ReiszPro Member
    CPA delivering RE Tax Tools: 1031 Exchange, SDIRA, 401(k), Cost Seg · New York City, NY · Member since 2017 · 581 posts · 563 votes
    8y

    @Eddie Starr Seems you're developing a great process to tapping into funds. There are - ready for this? - in excess of $27,000,000,000,000 in the retirement account system! Even if only a small fraction of that can be "liberated" it's incredibly powerful.

    There are many ways to navigate the securities law issues. 

    To make the process efficient and workable you've got to implement a seamless system for raising money from IRA/401k accounts. Many investment sponsors find dealing with IRAs/401(k)s to be a huge nuisance - but it does not have to be that way.

    Regarding the LLC structuring for the investments, you seem to be describing deal syndication in which there is a General Partner (GP) and Limited Partners (LPs). There are multiple ways that the structure can be enhanced.

    You've brought up more topics than could possibly be done justice in a forum post....real estate investing is so broad, with an incredible array of tools and strategies - it sounds like you'd like to introduce your investors to so much at once. Inviting them to join BP may be a great idea 😄!

    @Yonah Weiss appreciate the tag from Mr. Cost Seg - keep saving $$$$ for investors!

    [email protected]
    4Reply
  • Alina Trigub
    Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    8y

    @Eddie Starr You've got a great advice from a PRO @Bernard Reisz

    My suggestion is, instead simply talking about it yourself, consider inviting a local professional to your seminar and have them talk about it. Also, if you're potentially looking to offer these people to invest in syndications via SDIRA, disclose upfront the potential of earning UDFI and/or UBTI which will in turn hit them with UBIT.  The way to avoid it is to invest either via SEP or solo-401k which are excluded from such taxation. 

    Best of luck!

    2Reply
  • Bernard ReiszPro Member
    CPA delivering RE Tax Tools: 1031 Exchange, SDIRA, 401(k), Cost Seg · New York City, NY · Member since 2017 · 581 posts · 563 votes
    8y

    @Alina Trigub Appreciate the endorsement from a PRO!

    @Eddie Starr UBIT is one of many subtopics related to retirement account investing that investors should be aware of, as pointed out by @Alina Trigub. However, as always there are multiple ways to mitigate UBIT.

    The most important compliance concept to be aware of is prohibited transactions.

    [email protected]
    2Reply
  • William W. Humphrey
    Accountant · Louisville, CO · Member since 2017 · 80 posts · 34 votes
    8y

    Hi Eddie, I would be happy to provide you with some resources for your educational event(s).  We can even create a private, live webinar for your network.   In fact, there are some downloadable resources on  www.newdirectionira.com that might work for you.  There are lots of options as long as you are staying in the educational realm.

    1Reply
  • Eddie Starr
    OP
    Specialist · fremont, NE · Member since 2014 · 161 posts · 42 votes
    8y

    @William W. Humphrey: That would be awesome. What I'm planning on, at the events, is to be strictly educational. I have, on a few slides I've put together, some "thumbnail deals." This shows how much the asking price of MFH deals, their gross, expenses, and net. I do similar for some commercial deals.

    It's my understanding that as long as I'm not saying "here's a deal, jump on board," I'm ok. I will list a few different SDIRA/Solok firms, as mentioned, and tell them, at the end, to do their research. Of course, I'll mention at the beginning, a sort of disclaimer, "I do investing, and the purpose of this workshop is to educate you on options." Then, I leave it to the attendees to either connect with me for more info, or "...so long, and thanks for all the fish." (Hitch Hikers' Guide to the Galaxy reference).

    @Bernard Reisz: TY for your responses! Yes, I've seen a few vids talking about the potential of the retirement accounts. In my slideshow, I make reference to the "...people had their 401ks become 201ks..." citing a US News Story estimates $2 Trillion were lost in retirement plans. This emphasizes the importance of diversifying. I also, as yet, don't have any investors. I've spoken to a few people at some inter-church events, and have drawn up interest. Now, I'm looking for some guidance, to put things together, and make things awesome, providing some good, basic education, without a ton of jargon to push the "everyman" away.

    @Alina Trigub That's an idea, too. I'm thinking of both webinars, and events in the Spokane, Washington, Coeur D'Alene, Idaho areas. Open for suggestions.

    You already have me doing extra research, to learn about UDFI and/or UBTI. Wow! Bernard, you mentioned ways to mitigate UBIT?

    Again, thanks, all, for your initial comments! I've given votes of kudos for y'all!

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