All Forum Posts by: Bret Ballard

@Glenna Wood

Thank you for chiming in, I figured that it being an SDIRA and not an individual might be throwing a wrench into the mix. Sadly I'm not certain they fully understood what I was asking as we had made some progress until one of the assistants asked for information on the 401k provider which threw up a red flag for me and I reiterated it was an SDIRA and that's where we've left off. My brother's job can keep him overly occupied at times, so I'm trying to wrangle him in as well!

The good news is people on here have done it so I know we aren't trying to pave a new path. I'm fairly certain he is setting up a checkbook LLC, but he is working on making those decisions today. It looks like at least your custodian has forms available so there is fair likelihood that his will as well, so with fingers crossed once he is set up we might me ready to start making offers on land!

Hey everybody,

I think I'm stalled on my current path and need to make a pivot to make progress.
Plan: Brother is setting up SDIRA to lend to me for building and selling spec homes. We want to make it legal and protect both our interests while making money together.

Issue: Through searching these forums I think I have confirmed that in TN for private lending all that is needed is a deed of trust and promissory note. I asked the lawyer I have been using (He is with a title company, so in theory understands real estate law) to confirm what we need and draft a promissory. It has been 70+ days and I don't have a clear answer or a way forward from this lawyer, every time I check back I get minimal info and "we will get this figured out quickly and let you know". At this point I'm wondering if I am asking for the wrong things and am paying this firm's staff to go on a wild goose chase.

Need: Am I asking for the correct documents or do I need to be asking for others in order to bring this plan to fruition? Also, a referral for a real estate lawyer in or near Dickson TN that may be better to work with. If I have to go into Nashville I will, and if referrals need to be through DM's please send that way.

Thank you in advance.

Happy to help @Mark Gliebe.

@Mark Gliebe Thank you for the welcome.

Things that went well are:

- The framing crew was awesome. The house is more square than I thought possible with today's crooked lumber it's off by 1/16" over a 40+ foot span. They also were the cleanest subs used; they picked up everything, swept up, and used the dumpster.

- The utility companies were tolerant of my ignorance. Since my builder and I agreed that I would take over once the drywall was up, I pulled all permits so that there was a clear delineation between his obligations and mine. With how much construction is going on around here I could see how the utility workers could be annoyed by someone coming in and having basically no idea what standard procedure is, and they could have just passed me around to the next rep with ease but each person I encountered was willing to explain anything I didn't fully understand.

- The surveyor was adamant that we were happy with the orientation of the house.

- The materials supplier we used actually had the engineered drawings created from the floor plans so we didn't have to track down an engineer to tell us how much of everything to order and they calculated the footers, floor/roof loads and all that stuff that I didn't even think to consider. I don't know if this is common practice or not but it was nice.

- The garage door company we used was able to sell me the door and install it for less than I could buy the cheapest door offered from the local big box stores. Had I tried to replicate the door we ended up with it would have been about 2x the total cost just to buy from Lowes.

Things that did not go well:

- I don't believe there is such thing as a quality drywaller in the area. The crew my builder used is the best he has seen in years and they did truly garbage work. I've since tried to locate others that may be better but have yet to find any that I would even want to use for spec homes.

- Almost everything went slower than I'd like. There were times that a lot of progress was made at once then there would be dead times where it seemed nothing would happen for weeks. We actually were 109 days behind schedule because we couldn't get any block layers that wanted to take the job since we did 16 courses of block for a walk out basement. Had we known it would be such a delay we would have had the engineer redraw for pour formed concrete instead.

- I expected to save more money since I did so much work myself, but we still went over budget.

- We used a "reputable" online cabinet supplier. We should have just paid the negligibly higher price to have true custom cabinets. Turn around would have been quicker. I assumed that buying the higher priced better quality materials we would be getting better cabinets that was a mistake.

As far as where I'm looking for properties right now we are keeping eyes in the areas as far North as Charlotte, South to Bon Aqua, West to Tennessee City and East to White Bluff. When we have more under our belts I have no problems with expanding the footprint.

I do and don't have a builder ready to go. I could use the builder we used for our house, but I get the feeling that he prefers to do only the spec homes that he does for himself so I am definitely looking for other reputable GC's to see if anybody else is a better fit for us.

If there's anything else you would like to know, feel free to ask. I'm happy to help anybody I can.

@Jeff Nabers Thank you for mentioning that. It is one of the reasons we were thinking that setting up an llc or llp with joint ownership for the IRA's to invest in together and effectively mix the assets.

It appears much simpler to use both separately as lending vessels and we don't have to come up with workarounds that route either!

Thank you for the warm welcome @Anthoney Hanks.

Building our own house has definitely been an experience! We had several learning opportunities but surprisingly there wasn't as much friction between us as we expected to encounter based on the stories we have heard from others. I think mostly because we have strikingly similar taste, so choosing finishes was a breeze.

Wonderful, thank you @Jay Hinrichs and @Brian Eastman both for the fast replies and reassurance on direction.

I would like to buy some property and have a spec home built for resale. Then rinse and repeat the process. My brother and his wife each have 401k's from a previous employer that they aren't actively managing and are interested in using for their high risk portfolio/s (both accounts are ~$160k) but they want to be as much hands off as they can.

We see 2 possible scenarios that we are considering that both appear to be legal but unsure on which would make the most sense.

First, they could convert to SDIRA's and separately lend toward my projects where one house is built using loan from Brother's IRA and a different house is built using loan from Sister-in-law's IRA in order to keep their accounts from doing business with disqualified persons.

Second, it appears that it may be possible that they could again convert to SDIRA's then use those to invest into a single LLC or LLP (unsure on which would be more appropriate and would have local lawyer set up if this path is taken) that I (or an LLC I already have) also am a part of and then I(or my llc) manage that company to have the spec homes built and sold.

I feel like I'm at the point that I've researched so much that I'm now forgetting as much as I'm taking in and want to get pointed in the right direction to start down the path of making this a reality.

Hello All,

I've been a lurker on this site for years and need to quit wasting time so I can join all of you making a living through real estate. Over the past year I have relocated to middle Tennessee from Overland Park Kansas, set up a home improvement LLC and had a personal home built.

My short term goals are:

1. Finish the house my wife and I had built for us to live in.

2. Find a piece of property and have a spec home built on it to sell.

3. Begin operating my home improvement/handyman business to supplement income for living expenses and speed up the growth of investing.