All Forum Posts by: Daniel Dietz

Look up Mark Kohler on Youtube and search his videos for Series LLC. He covers it pretty well as far as pros and cons. He has LOTS of good stuff it you are looking at how to structure and set up things. We have used them for two LLC setups, one for a 3 way with all SDIRAs and one a 3 way with all SOLO401Ks and would highly recommend them.

Dan Dietz

Check out Mark Kohler on Youtube. He is a lawer and CPA who has tons of good stuff, and a specific one on the "S-Corp Payroll Matrix".

Dan Dietz

We use Paper City Saving out of the Wausau area of WI, Dave Cooper in the loan officer. Unfortunately (for you) I am pretty sure that they only lend in WI. Might be worth a call and possibly he would have a name in your area (looks like you are Ill.?)

We are able to get a 25 year amortization and 10 year lock on our portfolio loans, with a max 1% rise after that up to a total of 6% by year 16. I would push for better terms on the refi

I can tell you what I did during my divorce, and *maybe* it could help them too.

I am in a community property state. I did not have any rentals other than in my SDIRA at the time of divorce, but we had most of our assets in our retirement accounts and house equity. She also has a government pension that she was about 15 years from collecting at the time.

The judge in our case let us come up with our own plan, as long as we both agreed and it seemed 'equitable' to him and state statue.

We had about 300K equity in our house, and 400K in the value of the retirement accounts and her pension (there is a formula to figure 'current value' for lack of a better word).

We worked out a deal because since I had no pension, that I would get 250K of the retirement accounts (my 200K +50K of 'her half') and she would get only 150K of the retirement accounts (her 200K - extra 50K that I got)

With the house, we did the opposite; She got 200K of the equity (her 150K + 50K of my equity) and I only got 100K of that (my 150K - 50K).

So 'we came out even' so to speak. I wanted to do that mainly because I can only stick a certain amount a  year away into my IRA, so I felt a little behind in investing for retirement. She also had a few hundred thousand and a paid for house that she inherited as well as her pension. There WERE papers we had to sign before closing to make all of this work as the house closing was BEFORE we finalized the divorce.

How this *might* apply to your friend is could she get the husband to sign over his half of the equity in the rental, assuming that she would have an equal amount of assets to give to him in 'exchange' for that? If she could get the title/deed solely in HER name ahead of time, that *might* make things a lot easier for a 1031.

I am about an hour north of Madison, but know that they have a very active REI Meetup group. We also have a monthly in Baraboo that gets a couple dozen. @Hussain Harun runs our Baraboo one and could probably fill you in on the Madison one too.

Dan Dietz

Thanks for all the comment so far. I appreciate the feedback and words of caution. Definitely something I want to learn and understand better, even if that is NOT the route we go. That is what is so valuable about the BP Forums - lots of good honest feedback from people in the know, and various view points to make a person think from all angles.

I found some good link online dealing with this, IRS rulings, etc... and will share a few after I can find time to read them.

Dan Dietz

@George Blower thanks for the response. 

My understanding from the book and reading up on the concept is that do an 'Adjusted Valuation' on the 'Main 3-way LLC' which IS who owns the proprieties . The non-recourse loans and title/deed are in the name of Main 3-way LLC, as is the checking account.

Each of the three partners, who are each members's SOLO401Ks, own equal 33.33% OF Main 3-way LLC. Each of those SOLO401Ks have no other assets other than a little cash left for year fees etc.... That *seems* to me very similar to 3 individual people each owning 33.3%, as far as how the stock in Main 3-way LLC is held and treated.

So my *understanding* is that each of the Individual SOLO401K's 'shares' in that Main 3-way LLC are not really worth 'book value' IF we tried to sell them on the open market, since none of them have a controlling interest. I might be completely off base on all of this too :-)

Thanks, Dan Dietz

@Carl Fischer  @Brian Eastman @George Blower @Justin Windham @Dmitriy Fomichenko what is your opinions on this method, and do any of you have a good recommendation for this type of Appraiser?

Thanks, Dan Dietz

Hello All, I
I am looking for feedback on two things;

1)The 'concept' of getting a 'valuation adjustment appraisal' on our 3-way LLC that is made up of 3 SOLO401Ks that own rental properties and are currently NOT in 'the ROTH bucket'.

Our general thought is this; We own approximately 400K of property with 250K of loans against it, so 150K equity. Since it is a 3-way any give ownership share dose NOT have  controlling interest and thus less 'saleable on the open market', which in theory makes it worth less to a new potential owner.

In the book "Keep It - Advanced Tax Strategies for IRAs" by Joe Luby (I highly recommend this book) you can have your LLC appraised for an "adjusted valuation" that takes this into account. The idea is that if you would need to take say a 30% discount to 'book value', the LLC shares are now worth 280K instead of 400K, leaving you with a NET of only 30K in equity.

Obviously this would make a HUGE difference to the taxes due upon conversion to a ROTH bucket within our SOLO401K plans. Probably a saving of around 40K in taxes.

2) I am looking for a reference to an Appraiser who has experience in this kind of things, and can work in Wisconsin.

Thanks, Dan Dietz