All Forum Posts by: Carl Fischer

@Connor Koehler

If you are pooling other peoples money to buy securities then I would have a securities attorney review it. If it is selling or buying real estate most likely not an issue. Are you soliciting for money? Do you have a syndication and Private Placement Memorándum? Should you have them? 
you can always publish it and see if the SEC questions it and if so correct it as necessary. You can also ask the SEC straight up. 

The lack of information you provided makes it hard to determine an answer. 

@Todd Goedeke

I’m not sure if people form 401ks and don’t have a salary but it is not the intention of the irs and DOL.  it could be considered a sham if you do not follow the rules and have a viable business/401k. Check with your cpa and tax accountant for the details and if they would support and defend such a position upon audit. I would understand the risk and reward before I made the decision. 

@Christopher Ajayi I want to start out and let you know I am both a provider of these account, but importantly I have been investing in real estate most of my life. It looks like @Gary Parilis gave a great summary, an touched on some very important parts of setting up and maintaining a Checkbook IRA/LLC. Have you done some self-directed investing previously? These types of self-directed IRA investments can be risky if you are still learning the rules pertaining to self-directed investing. I recommend you work with a team of professionals you trust to help you set up the LLC correctly, to invest and document such transactions accurately in the eyes of the IRS, and finally to set up your IRA with an administrator or custodian that you trust. Keep in mind that this is a specialized type of investing, so you will want to ensure each professional is well versed in self-directed investing. When it comes to the administrator/ custodian, not all offer the option for a checkbook IRA/LLC. There is a list or available administrators and custodians that bigger pockets created here. 

Regarding the discussion of a solo 401(k). Yes there are some great advantages to this type of account, but not everyone is eligible for a solo 401(k) the primary requirement to be eligible is that you must have a business that pays you a salary.

@Jeremy Rhodes

Hang with @Daniel Dietz great information.  

@Aaron Andersen

I’m not sure it is good to be partners. I’m not sure why your partner needs you. Scale together and help each other -but do your own deals. 

@Jeremy Rhodes 

Hang in there and learn. Use a cpa to help you learn-get up on the learning curve faster. It pays to own real estate even if you are a high earner. You need strategies and a plan. Look for seasoned investors to work with in your inner circle. Build relationships before you need them. 

It looks like the trust owns 25% and either the father or the son owns the other 75% -and most of the time the documents will identify -addresses or Social Security number so you know if it’s the father or the son. I would guess that the father owned 75% personally and the trust owned 25% of it so when they split it between the three kids it would be 1/3 1/3 1/3. Check with whoever drew up the paperwork or the estate attorney or the fathers Cpa

@Larry Richardson

No I wouldn’t do it. You can’t get a benefit from your plan and your plan can’t get a benefit from you. 
Think about it -if you built a house and did all the labor yourself and the 401k bought the land and all the materials and then sold that house deeded in your 401(k) the government wouldn’t make any money off of that deal.  In essence you made a huge contribution to your 401(k) in sweat equity. 
these tax advantage plans are great wealth builders and should not be anywhere near prohibited transactions. Don’t mess up a great thing. 

@Matt Arden

Definitely talk to your CPA about it some entities can be fined for not filing tax returns. 

@Devin Redmond

Sounds fine except you doing all the maintenance and management which would be prohibited unless you went the ROBS route.  That is another whole set of issues. Dependent on cost and income it may be worth pursuing. My bet is it won’t but I don’t have all the details. 
I would lean towards hiring a manager to run the project and do the maintenance ie hands off.