All Forum Posts by: Edmund Ricker

@Derek Loda

Are you fixing and flipping which will create ordinary income or are you rehabbing and renting?

@Lucas Mills

My first advice would be to attend your local REIA and network with other investors.

There are other avenues of REI that you could look at that are completely passive. You could consider being a private lender. You loan your money to other RE investors who need short term cash to fund their deals. This can be done with retirement and/or non-retirement funds. It would take a while to get to the point where it is going to generate 3k per month, but it is possible.

If you are pre retirement age, then you wouldn't want to invest with the intention of using the earnings to fund current living expenses.

There are many avenues and it may take a combination of different ones to reach your goals.

You could also consider partnering with one or more other people so that you are not coming up with all of your own money to fund your deals.

Good luck on your journey!  Hope this helps.

Ed

@Guevara M.

What is widely used in other rental property in your area?  

Will granite countertops allow you to charge a premium rent?

How long do you plan to hold the property?  There is always resale value to think about

I personally would select a laminate countertop that looks like granite.  I have granite countertops in my personal residence and while they are nice, the next home I buy or build need not have them.  I consider myself pretty plain and I just don't see where the extra cost is justified.  

However, if granite is the norm or is expected in your area, I would consider it.  I would also look at other stone-like alternatives.

Good luck on your journey.

Ed

@Val Deleon

Another option is to gift the property to her.  This may or may not be a good option depending on your overall estate plan and your personal financial position.  It would avoid you paying capital gains, but your basis in the property would carry over to your daughter and she could potentially face capital gains, if/when she sells the property.

Also consider moving into the property and living there for 2 years.  This could make you eligible to exclude most of the gains through your marital exemption.  However, you would most likely face some depreciation recapture upon the sale of the property.

I would suggest you consult an attorney and tax preparer to come up with a transition strategy that will fit your goals and personal financial position.  It is difficult to provide solid advice without knowing your complete picture.

Good luck on your journey.  Hope this helps.

Ed

@Tony Anthony @Chris Gerbig @Garrett Diegel

I am contemplating getting my real estate license just so I can control my deals.  I plan to be a buy and hold investor and have no intention of wholesaling or flipping at this time.

I am looking at depressed houses in rural areas and I may use the license just to give me the freedom to look at property when I have the time.  Also, I may be putting in quite a few offers on lower priced properties.  These types of transactions will not net an agent much compensation and I would be taking up a considerable amount of an agent's time.

I don't think that this is fair to someone who is trying to make their living with a real estate license.  For this reason I may get my own license.

I haven't made a final decision, but I am leaning toward taking the Maine Sales Agent course and taking the test.

Good luck to all of you on your REI journey!

Ed

@Lemont Williams

Contact me by email or PM.  I would be happy to help you out of a jam and not rake you over the coals.

Ed

@Gary Dezoysa

We do not have licensing requirements for builders in Maine, YET, so I can't attest to licensing rules and costs in CA. However, I used to work in the residential construction space as a laborer. While I don't know that a new home could be built for 30% less than ARV, I am sure there is savings to be had.

I think the bigger advantage to being your own GC would be time management of the project and quality control.  Just my two cents.

Good luck on your journey.

Ed

@John Woodrich

I own and have read @Mat Sorensen's book and it does contain detailed references to case law and statute numbers.

@Justin R. the book actually does talk about co-investing personal funds along side your SDIRA.  It can be done, but it must be done carefully.  Everything must be split proportionally according to initial investment.  For instance, your SDIRA and you personally invest 50k each into a project, for a grand total of $100k.  Each of you owns 50% of the project.  Everything must be split along these lines so as not to effectively change the ownership %.

In this scenario, you would also be prohibited from doing any work on the project.  Sweat equity would NOT be allowed.  You would have to pay others to do everything.  For many this is a deal breaker, for me I just consider it a condition that must be considered and followed to stay compliant.

Now this is an oversimplification and I AM NOT AN ATTORNEY!  This is a situation where consulting an attorney well versed in these matters is crucial.

I would pick up a copy of The Self Directed IRA Handbook. It is very informative and well worth the read.

Hope this helps.

Ed

@Sean Haardt

I would definitely recommend getting an inspection because an appraisal and an inspection differ.

The appraisal can point out things that must be fixed to secure financing, but an inspection goes deeper in depth and looks at all areas of the house.

For me it is a "no-brainer" and money well spent.

Good luck on your journey and I hope this helps.

Ed

Hi @Mark Adams

I would begin by looking on the internet for tax preparers in your area and setting up interviews with three of them.  I would explain your goal of buy and hold investing and how many units you want to amass in your portfolio.

I would ask:

Do you specialize or work with other buy and hold investors?

Do you own real estate?

Do you have references?

What is your fee schedule?

How long have you been in business?

What credentials do you have and how do you maintain them?

What is your preferred method of communication?

There are a ton of questions you could ask, but here are some basic ones. 

I live in Southern Maine so feel free to reach out if I can help.

Good luck on your journey and hope this helps.

Ed