All Forum Posts by: Carl Fischer

@Gail Greenberg @Kevin Felmlee

Thanks Gail and Kevin

@Kim Livingstone

It depends on the reasons for the trust as was indicated. Most people use the trust for anonymity. Is it revocable or irrevocable? What state does it reside in? Etc. 

The trust income tax gets to 40% very quickly approximately after $15k. 

Many beneficiaries take the income as a pass through if it is a single member entity. If not they distribute it in pro rata basis i.e. If you have 25% beneficial interest you get 25% of the income and the income tax associated with that. 

Too many variables to hypothesize. Get help from an attorney and CPA to make sure you understand the goal of the trust and the taxation associated with it. 

@Eric Villafana

Distinguish between capital improvements and repairs should also be looked at. I  Do the taxes so you can take the most deductions. Redoing/amending your return probably won't fix your problem in getting a loan. 

Most traditional  banks/lenders only take 75% of your rental income when you apply for a loan anyway. 

DTI ( Debt to Income ratio), as was eluded to in an earlier post, is one of the biggest factors in obtaining a loan. Look at your monthly expenses on your credit report and try to eliminate or reduce the payments. Get your DTI as low as possible--26% is a standard for getting a loan. Monthly debt payments divided by monthly income. PM me if you want spefic info on how to lower DTI with your specific circumstances. The banks are almost like the government with their regulations and requirements.

Other options include private lending, owner financing, getting a line of credit on your primary residence, and to possibly use your VA benefits.

Self directed IRAs, for investment property, may offer another route because the loans are non recourse and don't show upon your credit. The non recourse loan, with the self directed IRA, is based on the strength of the property and the income it produces not your personal credit.

Your original plan to buy a primary residence is a good one because a primary residence  is easier to finance especially for military personnel. Primary residence rates are also generally lower than investment property. 

Having 1or 2 properties spread around the country  is hard to manage so be careful  with that aspect of your plan. 

Sorry for such a long answer and touching on multiple points. Good luck and I wish you great success. 

@Samuel Lynch you can most definitely transfer your Roth IRA to a self directed administrator/custodian. No penalties or taxes or IRS forms are required if you fill out "transfer" paperwork. A Rollover is also possible but definitely try to do the transfer. The IRS allows one rollover per year. A rollover means your existing custodian sends the money to you and you have 60 days to put it in a Roth account. There is also a 1099 form created and provided to the IRS. The Administrator to administrator transfer avoids the reporting and new administrator/custodian gets the money transferred for you from the existing company

A long shot-Not sure if you did 2016 taxes but if it was not a primary residence and the Portland wasn't a primary residence it may be possible to do a 1031 exchange -dependent on how the proceeds were or are being handled.  if it does not work now look at it in the future. 

@Kerry Mertz

I agree with @Rick Pozos.

Something to add to number one, did you know your SDIRA can partner with another IRA, or with yourself personally? The way this can be structured would be where one IRA owns a percentage is responsible for all profit and expenses for that percent, and the other owner, perhaps your self personally or a private investors SDIRA would own the other percent and be responsible for all expenses and profit for the remaining percent of the property.

I like a small company that has the attorney and CPA in house and can meet with you together. Sometimes the CPA and attorney are on different pages. By meeting together you eliminate opposing positions and you get clear directions going forward with an understanding of risks and savings associated with taxes, asset protection, and estate planning to mention a few. Annual strategy meetings should be in their business model and not meeting at the end of the year to determine last years tax returns but to implement tax saving strategies for the new year. 

Rental property insurance is not called "home owners" policy. it may cause problems with claims as well as IRS. property insurance is deductible but your residence " home owner" policy is not.   Work this issue with your insurance carrier/agent. 

@Sebastian E.

We are a SDIRA administrator, but out of respect for bigger pockets we don't want to blow our own horn. Below are 3 things to consider when selecting a custodian/administrator for a self-directed IRA.

1. Knowledge (They actually know what they are talking about)

2. Customer service (can you reach a person, how quickly?)

3. Ease of transactions

If you have any questions or would like to connect, please feel free to send me a message. I would be happy to share some links to you for our fee schedule.

Thank you

Carl Fischer

@Matt Redmond

Welcome to Bigger Pockets Matt! There is a wealth of information available on the site, you have certainly come to the right place. 

If you have any specific questions about using your Roth IRA to help fund real estate purchases, I would be happy to help. The type of account you will need to open is a self-directed IRA. Be careful when selecting a custodian as not all self-directed IRA's are truly self-directed. Some only provide a list of things you can invest in.

There are a few rules and regulations associated with a SDIRA. I would be happy to connect and answer any questions you may have.

Welcome and good luck!

Carl Fischer