All Forum Posts by: Daniel Dietz

We used NASB for our residential non recourse rentals in our SOLO401Ks. Not sure if they do commercial but they were great to work with.

Dan Dietz

Hello All,

We are considering doing some upcoming rental purchases using the TIC (Tenants In Common) ownership structure instead of the traditional partnership or LLC structure. Our main reason for wanting to do this for "future buyout opportunities" using 1031 structures to defer taxes.

We currently invest in partnerships where one partner, the private money partner, brings all the down payment and the other partner (me) does all of the finding, funding, ongoing PM and business management and split things 50-50.

We are trying to figure out a way that the PMP could 'cash out' down the road in say 10 years or so and I could keep the property in my rental portfolio and give them the opportunity to roll their share over via 1031 into another investment either with me or into more of a NNN type opportunity.

Would this set, say if we own things 50-50, allow for a clean 1031 even if they wanted to invest again with me?

I have been paying attention to what @Dave Foster says on here and it seems that setting things up right from the get go might make it a lot more flexible on the back end.

Thanks, Dan Dietz

Hello All,

We are considering doing some upcoming rental purchases using the TIC (Tenants In Common) ownership structure instead of the traditional partnership or LLC structure. Our main reason for wanting to do this for "future buyout opportunities" using 1031 structures to defer taxes.

We currently invest in partnerships where one partner, the private money partner, brings all the down payment and the other partner (me) does all of the finding, funding, ongoing PM and business management and split things 50-50.

We are trying to figure out a way that the PMP could 'cash out' down the road in say 10 years or so and I could keep the property in my rental portfolio and give them the opportunity to roll their share over via 1031 into another investment either with me or into more of a NNN type opportunity.

What I am wondering as we go down this road is what are lenders going to expect differently with this kind of structure since they would only be lending on a 'portion of the property? What tips or advice might you have in how to deal with this? What are the drawbacks of this structure?

We have used both traditional lenders and portfolio lenders in the past and are open to going either way for this too.

Thanks, Dan Dietz

I am redoing my own homeloan right now and my lender was very easily able to tell me exactly how many months each buy down level would take to pay off. It really helped put it in focus. I was willing to spend 3 points to buy down almost .375% because it was about a 7 year payback, but I plan to stay for at LEAST 15 years or more. Same would hold true for rentals.

There is an excellent book here on BP about Long Distance Real Estate Investing, as well as quite a few podcasts if you scan the titles of them to narrow it down.

I have always heard when you are wondering if you should sell a stock or not is to ask yourself "If I did not already own this stock (or mutual fund etc...) and I was looking to invest money TODAY, would I but this one, or something else". It make a huge amount of sense.

One other thing to think of is do you want to 'have all your eggs in one basket'.... meaning what it the company had a huge negative event happen? It could affect your job AND savings.

To me it was a no brainer, once I ran the numbers we can make a 15-25% return day in and day out in RE, where as the stock market maybe 10% over time but with a LOT of volatility.

I keep about 25% of my assets in the market for diversification, but often wonder if I should go all in with RE. 

I would concur with the 3 professionals above, and I use @Dmitriy Fomichenko as my provider, and highly regard the other's opinions too.

More importantly, I have sold property in my self directed account, with no penalty or taxes currently due. With that said, ALL proceeds DO have to go directly back to the into the self directed account to remain penalty and tax free.

I had a friend that, after seeing what we were doing with our SDIRAs and SOLO401Ks, basically took a 'year sabbatical' from his job just so he could roll his 401K over. He had about 700K in it, so enough to give it a good go. Yes, he did run the risk of 'not having a job to go back to', but he is constantly head hunted in his industry and was not really worried about that. That could obviously be a big deal to others though. Just one way around it.

Hello @Richard M Rajchel and welcome to BP.

We use Paper City Savings in the Stevens Point area and our lender is David Cooper there. As long as you have the right deal, meaning a DSCR (read up on that if you are not familiar with it) of 1.2 or better things go super smoothly.

Out last one was 20% down, 5.3% fixed for 10 and amortized over 25. Low fees too compared to some I see out there. Tell him I sent you :-)

Dan Dietz

@Dennis Nikolaev, it is a bit different as traditional Turn Key the investor is the sole owner. In our model, we retain 50% ownership in exchange for doing all the work, not making a 'profit' on the sale to the end buyer/investor.

It might seem like a lot, but with our attention to detail and 'incentive' to make a profit as our 50% of the deal depends on it, we seem to be able to offer similar returns as to them owning the whole thing.

Dan Dietz