All Forum Posts by: Carl Fischer

@Matt Camilliere

Can you do both? Won’t the extra cash flow help buy appreciating property? If properties don’t have positive cash flow don’t buy them. Leave that to speculators be an investor not a speculator. Buy low- sell high-positive cash flow in between!

@Curtis Hallenbeck

Do you need the cashflow outside of your retirement account to assist with bills? If you are not in immediate need, another option you could consider is using a self-directed IRA. This type of account allows you to keep the funds within your retirement plan but also lets you invest in real estate with your IRA. There are many ways to go about investing in real estate from the IRA outright buying the property, the IRA obtaining a non-recourse load to the IRA lending funds in the form of a note to another investor who is buying a property. The options are seemingly endless for different ways to use a self-directed IRA to invest in real estate. My father taught me how to invest in real estate as a young man, and I have been using my SDIRA to buy properties and lend money for more years than I should admit. I have had alot of success in growing my retirement accounts over the years and I believe that is because I have more control over what my SDIRA is investing in. I am able to use my own skills and expertise in selecting real estate and private lending deals! If you would like to connect and chat some more, I would be happy to answer any questions you have.

@Markese Straughter

I understand your concern, and that you want to find a custodian that is honest, transparent, and secure. The fact that you are an investor who is asking these questions makes you an excellent candidate for a self-directed custodian, as it shows that you are willing to do the work and research required of a self-directed retirement account holder. I am in the self-directed business, and therefore I cannot make any specific recommendations so as to adhere with BP guidelines.

Finding the right custodian can be a tedious process, as there are many to choose from. Many lists will include custodians that run the gamut, so understanding that you have to put in the time to determine the factors and services that will work best for you is the first step. BiggerPockets provides a list of self-directed IRA custodians for you to reference on this site. You can check out that list here. Once you have chosen several providers that you believe to be a good fit, speaking with people who have been around for a while, getting recommendations, reading referrals, and doing your due diligence is all very important. Being able to speak with providers will help inform your decision by giving you a true sense of the custodian’s service, knowledge, and team. I also suggest you call around, and see how easy it is to get ahold of someone who can answer all of your questions. Best of luck.

@Jason M.

Welcome to bigger pockets. It sounds like you are already on your way to becoming a successful real estate investor. Keep learning and growing! Read books, listen to podcasts, attend online and in-person events, and network with local investors and non local investors alike! I split my time between Philadelphia and Cape Canaveral. I would be happy to connect and share some books and investing groups you could look into. There are some really good resources on BP in addition to the forum, you should check out their podcasts, articles and other tools to help you determine which property to invest in. 

@Nicole Heasley Beitenman I want to commend you on your decision to pursue self-directed retirement investing. To further build on the previous comments, you should choose what custodian/administrator fits you best. As a first-time SDIRA investor, I feel as though you should work with a company that is responsive, customer service oriented, and with a strong core of educational material. 

When it comes to SDIRA investing, the transactions, themselves, do not change largely from investing with any other entity. However, there are specific rules and regulations you need to follow to ensure you do not disqualify the account. You want to make sure that proper record of the transaction is kept from the start and that the investing entity is clearly the IRA and not you personally. When investing into alternative assets using your retirement funds, you as the account holder cannot provide nor receive a direct benefit from the IRA's investment. Examples of these types of prohibited transactions include, but are not limited to: you, or anyone of lineal ascent or descent from you, living in the property, working on the property, collecting rent or paying for expenses personally, et cetera. It all comes down to structure. I would be more than happy to discuss this in further detail whenever you'd like.

@Dallas Waldon

Great idea to move your funds over to a self-directed IRA. This seams like a great option for you, given your experience in these investments and it also saves you from having to deal with any tax consequences from a distribution.

Unfortunately using your business to advertise the land owned by your IRA would be considered a prohibited transaction. Your business can not provide your IRA with any advantage where it would normally pay someone. The IRA can not pay your business for the service either.

@Adrian N.

A true solo(k) should have 100% checkbook control. Many investors really like this type of account due to the many advantages it can provide. As you mentioned in your post about using education materials to stay away from prohibited transactions, that's a great plan and most institutions offer a variety of educational materials. I think it is best with a solo(k) to take it to the next level and work with a professional such as a CPA or your advisor, to ensure that all your transactions are proper and are not considered prohibited. A professional can also ensure that you perform the proper tax reporting and record keeping on the transactions. Your mention of using the solo(k) for down payments on real estate investments could end up being prohibited depending on the details and structure of the investments. 

Often with a solo(k) the structure will be something like this, the financial institution will provide you with a 401(k) plan document and adoption agreement, you should be able to select certain plan defaults. Then you will set up a checking trust account for your new 401(k) plan. You then have complete checkbook control over that account to invest as you choose to. 

Regarding the transfer, that will likely be up to your current 401(k) provider. Many will allow for a direct rollover where the funds are rolled directly to the new plan. Some providers do not like to do a direct rollover and instead do what is called an indirect rollover or a 60 day rollover. There are some rules around this transaction and if not done correctly could lead to taxation and penalties as you suggest. I would recommend you speak with both your current 401(k) provider and the new solo(k) provider to ensure both are willing and able to facilitate a direct rollover. 

If you would like to connect, I would be happy to further assist you with any other questions you may have.

@Himanshu Singh

It’s great you are asking questions. I like using my Roth for real estate and real estate related products such as notes or tax liens. I do believe diversity is important but you should only invest in assets you know and understand. “Hope” they go up in value is not a good strategy.

@Anthony Wick

If what you say is true and it may very well be true then it won’t provide much income at all to provide for the spending increase. As always, they Now have a paragraph to change and include the rest of the real estate owners. 
Politicians are good at parsing out small groups and getting the rest of the people not affected, to vote against the small group. Ultimately you will be paying if we keep electing career politicians instead of civil servants. 

@Marquice Mccloud

Congrats on the first step in your journey as a real estate investor. It is great to have such ambition and to get started at such a young age! My parents instilled that desire in me when I was young and I followed in the same path, along with many of my siblings. It has helped me grow in experience, skill and wealth both in my retirement accounts and outside of my retirement accounts. As the other posts have suggested its very important to be educated and to build a network of people you trust and who also trust you. My company is based near Philadelphia and I attend many real estate investing groups and events in the general area. There are many great real estate investing groups you can look into. Some have small membership fees and some are free. I would be happy to connect and share with you some of the groups I attend and even speak at occasionally.