All Forum Posts by: Daniel Dietz

@Chip Chronister we have used, thanks to @Dmitriy Fomichenko's list, NASB a few times. The terms vary a little bit but in general at least 40% down, 15-20 year amortization, and 5-6% rates.

Our last one was 40% down, 5.75 for 20 years.

A few of the restrictions are things like no "converted duplexes" meaning old houses divided up, no pre 1940 buildings, and things like that. Essentially since the property is there ONLY recourse, they want to be able to unload them easily if they need to foreclose.

Dan Dietz

@Aaron W. I am by no means an expert in this area, but have studied up on it quite a bit as we are starting to bring on equity partners too.

My *understanding* is that a lot of it depends on if those investors 'had a preexisting relationship with you" (Think friends, family, co-workers, people you network with etcc...) VS "people you seek out through marketing efforts to invest in a security".

So far we have only done one investor per property, and they are all people we knew ahead of time. We do have a couple of people, who are friends to each other, who are thinking about coming aboard. The one way I have heard can work well, and what they will be doing if they join us, is for *them* to form their *own* LLC, and then *that* LLC, which is one entity, would invest with us.

Dan Dietz

@Joseph Crunkilton I have seen on here that a lot of people do it with some type of operating agreement or JV agreement too.

The reasons we choose the LLC was for thoroughness And liability protection too. The operation agreement covers SO many things - buy sell agreements, ability to sell shares etc.... It is under $1000 set up for a really good one, and about $100 per year to maintain.

From what I have read/herd of TICs is that on the borrowing front they can be much trickier, to my understanding. I suppose it would be different if you both had enough cash to buy out right.

Dan Dietz

What we did in this situation is set up a NEW LLC, that our existing one is 50% owner of and the Capital Partner is 50% owner of. The CP brings ALL of the down payment, and we do ALL of the finding, funding, PM etc..... Everything is split 50-50 .... cash flow, equity growth or losses. The CP can get their down payment back if we do a refi and there is enough equity or when we eventually  sell some day.

For financing we just use a Commercial Portfolio lender which is a local credit union. I finally found a local lender that will do a 30 year fixed rate for a partnerhsip (Fannie I believe) BUT it has to be in our personal names for the first 6 months and THEN we can transfer the Deed to the LLC.

Dan Dietz

I have to agree, from my *limited* knowledge, with @Account Closed above.

I am JUST now redoing my personal residence (2.625% and $1500CC!) with a lender I found through a referral from my local REI. We are going to work on the properties held in LLC partnerships once my personal is done in a couple of month.

What he is telling me is that the property that we want to refi with no cash out that is currently in a 3-way LLC CAN be done, but we need to do it in ALL of our personal names OUTSIDE of the LLC to start. Then after 6 months, we CAN transfer to the LLC but the OWNERSHIP must match to a large degree. My understanding is that this is ONLY with Fannie Loans, and has been available for a couple of years now.

Of the 6-8 small local banks they are the first one in this area that do ANY kind of 30 year fixed rate for rentals.

Dan Dietz

Can I give @Brian Eastman's post 2 likes? ;-) He hits the nail on the head. When my partners and I started investing in real estate, our Retirement Accounts were where we ALREADY had 80-90% of our assets. So the 'question' was "how do we best make use of THESE funds". For us, it was CLEARLY real estate.

Now if someone had 'cash on hand' and asked "should I invest DIRECTLY in real estate or PUT it into a Self Directed Account and THEN invest in real estate, I would lean heavily towards directly investing. One other thing to consider though is the power of a ROTH Self Directed Account over a long time, and how much tax free wealth that can bring over time.

Dan Dietz

We have used NASB several times, Jason Zook is who we worked with there. Great and fast service. I would not hesitate to use them again. 

As you might know terms are a LOT different than conventional. I think right now a 15 year is 40% down and about 5.75% or so. Low closing costs thogh so that is a plus.

Dan Dietz

Hello All,

There is lots of talk on here about Passive Losses and if there are deductible or not and if so, to what amounts.

To my understanding, if you are NOT a 'Real Estate Professional' (which I am, but have never had more than the 25K limit in losses to worry about using it) you are limited to offsetting "passive losses' with 'passive gains'. There is an exception if your income is less than 100K you can write off up to 25K of passive losses.

What I am looking for is clarification on how those passive losses and passive gains 'offset each other' BEFORE they go to your personal tax return.

What I mean is this; let's assume I have a few rentals that I bought recently with modest down payments and maybe even did a Cost Segregation Study on one so with depreciation figured in those are going to give me a passive loss of 50K. Now lets ALSO assume that I have a few more that I bought a while ago with large down payments or cash so with low/no interest to deduct THIS set of properties show a passive GAIN of 30K.

So now the question is; Do I only get to us 25K of that 50K loss, or do the properties 'offset' BEFORE going over to personal tax return - meaning 50K loss + 30K gain = 20K loss? Hope that makes sense :-)

Thanks, Dan Dietz

I will let some of the experts chime in on this, but just wondering the reasoning behind wanting to go from SOLO401K -----> SDIRA? It seems like most people are wanting to go the other way to make leveraging simpler and contribution limits higher.

Thanks, Dan Dietz

@Troy DeLong one other source you might want to check out is KKOS Lawyers and Accountants, Mark Kohler is one of the Principals there. One of their specialties is Self Directed Law. They set up our LLCs for both our 3 way made up of SDIRAs and another 3 way LLC made up of SOLO401Ks.

Mark Kohler, and his partner Mat Sorensen have some great content on Youtube in regards to both Self Directed accounts along with Entity structuring, etc.... Mat also has what I believe is the best selling book on Self Directed Investing