Came across citations for not pulling permits on electrical,plumbing,roofing and car port. As being a first timer in flipping a home I wasn’t aware of this. Now I want to make things right and fix this issues and pay for citations,pull permits and also get it inspected.
However I do not have the funds to proceed with this and I really want to get out of this situation. If anyone knows how I can’t get a loan of atleast $7,000 it would be appreciated.
Thanks for the great explanation. 401k loans have worked for me to acquire two properties that I paid cash for. Without a cash offer with a fast closing, I would have lost out on these great deals. For those who don’t have 50k sitting around, 401k loans are a great opportunity to help you get that great deal.
I use no interest for a year credit card loans all the time for rehabs or random things that cost under 15k. Or try Sofi loans. Maybe a 401k loan? I’ve done that a few times.
How did they find out you didn’t have permits?Sorry to hear you’re going through this. I’m sure a lot of us aren’t aware of all the permits that are required on some work we’ve done. Or bought properties that the previous owners didn’t acquire permits. Good luck!
Here are the general considerations regarding 401k loans.
401k Participant Loans
If your 401k plan allows for 401k participant loans, the maximum loan amount is equal to 50% of the balance up to $50k. The repayment terms for a 401k participant loan are equal monthly/quarterly payments of principal and interest (typically prime plus 1%) over a 5 year term (longer if used to acquire your principal residence).
Please note that if you take a full $50,000 and then pay back the loan, you can't take another $50,000 until 12 months after the first loan was fully paid back.
Per the loan offset rules that went into effect with the 2018 Tax and Job Act: if you leave your job and the loan is current at the time you leave your job but then the loan goes into default because you left your job, you will have until your tax return deadline (including any timely filed extension) to make the loan current by depositing the outstanding balance into an IRA (and thereby avoid the taxes and penalties that would otherwise apply).
Please keep in mind the multiple loan rules:
Under those rules, the sum of the balances of a participant's outstanding 401k loans under a single 401k plan (using the highest outstanding balance of each loan over the last 12 months) can't exceed 50% or $50,000 whichever is less. Thus, if you took a $50,000 loan and paid it back within 6 months, you would need to wait another 6 months before you could take another $50,000 loan.
Thanks for the great explanation. 401k loans have worked for me to acquire two properties that I paid cash for. Without a cash offer with a fast closing, I would have lost out on these great deals. For those who don’t have 50k sitting around, 401k loans are a great opportunity to help you get that great deal.
@George Blower Hey George,how do I go about getting a 401k loan?
Hi Michael: pls contact the administrator of your existing plan to see if the plan allows you to take a 401k loan. If not and you are self-employed with no employees you can set up a Solo 401k, and if you are eligible to rollover the funds (e.g. from a former employer plan or non-roth ira), you could rollover to a solo 401k plan that allows to take a 401k participant loan.