All Forum Posts by: Brett Synicky
Brett Synicky has started 25 posts and replied 779 times.
Post: Using a Self-Directed IRA - SDIRA to purchase a Property
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
Quote from @Ryan Arth:
Quote from @Basit Siddiqi:
What are you seeing as the cost to set up an SDIRA and what the custodian charges on an annual basis?
Since depreciation is not factored into a SDIRA account, it removes some of the benefits of rental real estate.
Therefore, i would need to make a considerable amount more(atleast 2.5% more in appreciation / Cashflow) in real estate over the stock market if I wanted to use the SDIRA to invest in real estate.
One of the local providers here charges $50 to set up an account and an annual fee based on funds under management. The fee for $250K is $600/yr. For $1M it is $1500/yr. There are also small fees ($50) for real estate valuations, wires, etc.
Yes, you lose some of the benefits of long term rental real estate, but there are many other things that can be done with the SDIRA. You can own your rentals in your taxable business, using your SDIRA funds for rehabs, builds, small business purchases, etc. Things that are more active. You can also partner with others (or yourself), loan funds to others, etc.
Ryan, using retirement funds to pay for something the retirement plan owner or any other disqualified party is directly or indirectly personally benefitting from would be a prohibited transaction and can disqualify the entire plan. I could be misunderstanding but it seems like that's what you're suggesting. More info at these links:
Also with a checkbook IRA all the fees are flat. Will cost more than $50 to set up but you get control and in a few years or so you'll be saving money since no transaction fees or asset based fees of any sort.
Post: Using a Self-Directed IRA - SDIRA to purchase a Property
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
@Ryan Arth Yeah I'm not advocating for it at all. Keep it simple. Multi member LLC is not near as simple as just having two IRA LLC's and each investing separately or together where it makes sense. There are non-recourse lenders who will loan to two LLC's on title to one property but again, perhaps it's best to just invest separately until each respective IRA has enough money to own one home by itself.
Post: Using a Self-Directed IRA - SDIRA to purchase a Property
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
@Huiping S. Yes that would work. The challenge will be if financing is needed some non-recourse institutional lenders will not loan to two LLCs and instead require one multi-member LLC to own the property so there's only one borrower.
Post: Best SDIRA administrator?
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
Quote from @Kerry Noble Jr:
Quote from @Brett Synicky:
Quote from @Kerry Noble Jr:
Quote from @Brad Hales:
@Kerry Noble Jr I have not heard of Quest. Are they local to the Tampa Bay Area?
I think TX
https://privatelenderlink.com/profile/quest-trust-company/
I stand corrected. There was a company with the same/similar name out of TX.
Post: Using an SDIRA to purchase property in Costa Rica
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
Quote from @Colin Charles:
My family is planning to move to Costa Rica to continue our real estate journey. We are considering using an SDIRA to purchase real estate in Costa Rica. Anyone investing in Costa Rica or is familiar with starting a business in Costa Rica?
Can be for investment only until you distribute the property to yourself you and your immediate family cannot have personal use of it during that time. Get in touch with a CPA/Attorney in CR as well as stateside.
Post: Solo Roth 401k strategy
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
Many people have created property management companies to adopt a solo 401k plan. Correct that Solo 401k is exempt from UDFI which triggers UBIT on leveraged real estate. You can hold the condo however you want, that has nothing to do with the Solo 401k plan. Also a Solo 401k is not an IRA, it's a 401k. Bear in mind that all Roth Conversions have their own separate 5 year rule with the start date being Jan 1 of the year the conversion was made. Get a third party valuation and you may even get a nice discount with a Syndication.
Post: How to calculate a tax braket when conversion from an IRA to a Roth happens?
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
Quote from @Mary Jay:
For simplicity, lets pretend that I have no income from any sources...
Could the IRS then still tax the conversion because I am converting 400, 500, 600K?
Is there an amount that wont get taxed?
Post: How to calculate a tax braket when conversion from an IRA to a Roth happens?
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
@Julius Vincent is a CPA who can help you with this.
@Mary Jay there are some nasty jumps. I'd aim for staying under the next bracket. Consult a CPA.
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10% |
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12% |
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22% |
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24% |
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32% |
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35% |
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37% |
Post: New to SDIRA Real Estate and wonder how to use my SDIRA LLC
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
Quote from @Chris Colosky:
Hi everyone,
So I had to get a SDIRA, fund it, and win a property all within 2 weeks. It was a quick on the market sale of my neighbor's rental as she passed earlier this year. Anyway, I thought I had it all structured and set, but timing is everything. I got the funds in the SDIRA, won the bid, but the LLC and checking account took longer than I could wait, so I purchased the property directly through the SDIRA.
I understand the ease of control using your own SDIRA LLC in performing payments for maintenance, etc. without the added overhead of the custodian, but I am now unsure how I should use it. My questions are should I transfer the asset to the LLC so that the LLC now owns it, but don't know what that really benefits me other than the protection of my personal assets in the event of being sued. If I don't transfer, can I just transfer funds to the LLC to use the checkbook for transactions pertaining to the SDIRA property and not one owned directly by the LLC?
Also, on the flip side, if the LLC owns the property, can I still use the services of the custodian for rental payments, or do I need to now set something up for the LLC itself for processing? Just trying to get a clearer picture is all.
I have researched this over and over on the internet and cannot seem to find anyone with a similar situation. So, I decided to join this forum and see if someone would know. It does seem like a good resource regardless.
Have you tried talking with the IRA provider or whoever helped you set up the LLC? Hopefully you didn't diy the LLC. Typically if you go to company to set up an IRA LLC the set up process isn't complete until the LLC checking account is funded so something about what you did sounds a little off.
Nevertheless, if the ira owns the property then you now have to go through the custodian for all transactions pertaining to the property. The LLC doesn’t own it so the LLC can’t pay for anything. You could transfer title to the LLC but if there’s a loan on the property this may be a little more complicated and potentially costly.
Again, check with the provider of the IRA.
Post: Duplex Dreams Tax Strategist Needed
- Solo 401k and SDIRA Consultant
- Orange, CA
- Posts 805
- Votes 436
Quote from @Account Closed:
Hi
I'm in the process of purchasing a duplex and looking for a reliable tax strategist. I'm new to real estate investing and would love guidance on setting up an LLC and making sure everything is structured correctly for rental income (both long-term tenants and potential Airbnb). I want to be sure my taxes are in order as I transition, so I'd like to hire someone with the right expertise.
Any recommendations or availability for services would be greatly appreciated.
Generally speaking an LLC is overkill, especially for the scenario you're talking about but I am not an asset protection attorney or a CPA. I highly recommend you jump on a call with @Julius Vincent