All Forum Posts by: Daniel Johnson

Quote from @Carlos Ptriawan:

Quote from @Pete M.:

Lots of good info from @Daniel Johnson here.

I do this and get access to 65-70% of my portfolio as an SBLOC I can pull on to fund my RE investing (private notes, syndications, buy-and-hold). Have had zero issues with margin calls, but that goes back to how it's invested. Interest rates have gone up sharply this year, but still cheaper, faster, and easier than hard money for funding RE if you have assets to back it up.

Full disclosure: I work as a financial advisor managing investments and helping set up things like this with clients. You can do it on your own. Nothing I've written should be taken as financial advice specifically for you.

 wow, which lender/bank could provide 70% portfolio loan like this?

Schwab has a Pledged Asset Line, depending on the underlying securities will provide leverage up to around 70%. Interactive Brokers provides margin on their accounts. Typically maxing out at 50% with very reasonable rates, but I believe you can also do portfolio margin and go higher than that. 

If I were setting it up, I would go with Schwab. Good quality support, and lots of different services. 

Each broker will have their own margin requirement rules. It will be spelled out in the account opening paperwork. 

Nope, you cannot borrow against an IRA/retirement accounts, except for a 401k loan.

No need to have a relationship with a “wealth advisor” or anything like that. You just have to have your equity holdings at a custodian/broker that provides the service. Charles Schwab has Pledged Asset Lines, which carry a lower rate than a Margin account. However, Interactive Brokers has a very popular margin feature with very competitive interest rates.

Be careful when applying leverage to investment portfolios, because if the value of the account declines below a certain level, there will be a margin call, meaning that you will need to pony up cash to prevent the broker from selling your holdings. 

This is a very powerful tool that can be a great alternative to hard money lenders. 

@Christian Longacre - thanks for the shoutout! I really appreciate it!

I think that a knowledgeable financial planner can add some great value(biased!), but it is particularly important for real estate investors to have a CFP that understands what they are doing in real estate. I personally own 13 properties and along with my wife self manage most of them. I’m able to directly relate with my clients, as well as coaching and encouraging them on their wealth building journey through real estate. 

Hey @Denise Darval-Chang - I think this is a great question. I can give you my perspective on it. A really good financial planner is going to help you cover nearly all of the services you mentioned, with the caveat, that some of the services require licensed professionals to execute. In the case of an estate/trust attorney, most financial planners won’t be licensed attorneys. For tax preparation, it is definitely possible to find a financial planner that prepares taxes as well as does tax planning work. 

I would recommend you find a fee-only financial planner that checks most of the boxes that you mentioned here. In addition, a financial planner that has deep knowledge around real estate, if that is something you are needing advice on.

A few good resources include XY Planning Network and NAPFA, I am personally a member of both organizations which support fee-only financial planners. Hope this helps!

Come join our networking group at Fiddlin' Fish Brewing Company. We meet and talk, ask questions, and learn from one another about what we are doing in our investing businesses. If you are new, keep an eye out for me. I will be wearing a Black/White IH(Industry Hill) hat. Also, feel free to message me for further information.

Hey @Gary Langlais and others! Believe it or not, there are fee-only, non-asset management focused financial planners out there. XY Planning Network and NAPFA are great places to search for potential options. You are unlikely to find someone locally that has this setup, but there are a few of us across the country that are RE investors and flat fee financial planners! Hope this helps!

Come join our networking group at Fiddlin' Fish Brewing Company. We meet and talk, ask questions, and learn from one another about what we are doing in our investing businesses. If you are new, keep an eye out for me. I will be wearing a Black/White IH(Industry Hill) hat. Also, feel free to message me for further information.

Come on out and join our networking group for Coffee on Thursday the 13th starting at 6:30 am. We will gather at Sayso Coffee, which is located at the West Salem Public House location. We will grab coffee and meet in the back behind the coffee shop.