All Forum Posts by: Carl Fischer

@Daniel Dietz

Great question. A couple of questions come to mind-Are your tax advantaged accounts operating as a business and paying UBIT? -probably not but if so I would think it would qualify. Does that even matter?

Is your account/landlord/owner been harmed from the virus- as in not getting rent-maybe. What would the loss be?  

Sorry for the questions but I am going to look at it further. 

@Jim Rusco

I am assuming you are looking to get started. Property manager is important but after you have property or they can throw you some deals. Get into a group in your area from BP members in your area, meetup, or a RE association in the area. Build your network of professionals, contractors, etc and of course contacts. Look for deals and possibly wholesalers. Look for the best person in the area/venue you want to work ABNB, homes, commercial. Maybe mentorship or lend money as a way to break in and get experience. Make sure you like each area you suggest you want in on.

@John Hyre

Thank you for the the Roth stuffing examples. Wholesaling I understand the premise as you described the cases.  If they had paid the UBIT I don’t think it would have been brought to court-but possibly. Intent and scamming is never acceptable when auditing. 

Flipping is another case -if all is done in the tax advantaged account IRA/401k- buys the property, pays the contractors, sells the property and files the 990T irs UBIT tax return. Seems like the Ira has the money, risk, taxes and profit. legit?

@James Smith

Have her Look into a QDRO maybe she can get the account now. Otherwise it is more like a structured settlement and it could be prohibited as well to try to borrow against it.

@John Underwood

I don’t think @john Hyre would say it was illegal but more like taxes would be due.

@Farai Simbabure
You most likely don’t want to turn your rental income into earned income just to have a 401k. If you have Other earned income from a job, an ira is another vehicle you can use that is simpler than a 401k to create and maintain and also allows you to save in a tax advantaged account. No EINs, no separate tax return, and less hassle and expense. 

@Steve K.

It is great you are saving. However, 1.5% return is most likely not going to significantly change your life. Spend some time looking for minimal risk investments in excess of 10% ROI to start. There are also ways to partner in your IRAs, ESAs, HsaS, 401ks, SEPs, SIMPLEs , etc.There is jumpstarting your Ira with a wholesale deal, a "subject to", or owner financing, Have you considered buying discounted notes? think about Putting family accounts together in a deal, look for others in your situation and brainstorm. Get with people who have boldly stepped into deals that will significantly improve your financial position and learn from them. If you fail nothing changes much however if you succeed you gain financial freedom. Read @Dave Van Horn book-he is a master at turning lemons into lemonade. 

@Lucy Smi

Property in Roth IRA can happen multiple ways: convert a house that was in a traditional account when the value went down like in 2010, have your Roth do a joint venture, have your Roth get a non recourse loan, have your Roth foreclose on a property that that your Roth lent money to, etc.

@John Teachout

Positive cash flow is good. Negative cash flow not so much.

BAMs are also good today because you will be paying back your loan with less valuable money. The dollar today will have more buying power than tomorrows dólar or the 2040 dollars. Dumping $2T in the country debt diluted the dollar and could be considered manipulation of our currency.

BAMs are a play in the currency market while tenants make your payments for you.

Borrowing as much as you can at a low rate should be a great move at this time-it may make you thrive not just survive. Think about it.

@Angelica Morales

You have up to 3 years to pay it back. If you do as you suggest -pay off the existing loan, buy a rental property, make passive income,take depreciation and pay back the Ira with the proceeds within 3years it could be a good start in real estate. You would have lost 3 years or so on building your Ira. You would also be responsible for paying the tax on the distribution if you didn’t pay it back . Not horrible but certainly not good but maybe worth it.

The other suggestion would be to buy the real estate in your Ira where your DTI is not considered when the Ira establishes a non recourse loan. Then you have your real estate start and are earning tax free or tax deferred income for life.

Now you have options.