All Forum Posts by: Daniel Dietz

Quote from @Haylie Saler:

How come in the final analysis with the rental calculator, the chart shows that in year 30 the profit when sold is way higher than the actual value of the property?

  it took me a while to figure this out also!

that line in the calculator is the total profit . When you run the numbers to figure it out it is a combination of increased equity appreciation , increased Equity of the loan pay down , and the total cash flow over those years . So it is really a three-part puzzle .

Quote from @Marco Bario:

Quote from @Greg R.:

Quote from @Joe Villeneuve:

The problem you will have if you do get someone to lend you the money for your DP is you won't get a mortgage on the property...for a number of reasons.  Your best bet would be to get a partner to come in with the DP money...just don't give them 50% of the deal for that.

If I were asked to come on as a partner to cover a down payment, why wouldn't I just buy the property myself and get 100% of it. What is the person with no cash bringing to the table?

Maybe they're bringing the deal, and maybe they provide property management. The down payment could also come in the form of debt secured by another asset rather than equity. 

I think Marco hit the nail on the head. We have done several of these type of deals, and have Partners waiting for us to find more.

in our case the partner brings 100% of the down payment oh, and has no other responsibilities as far as management or operation. We find the off Market deals, since we have such a shortage of them in our area, analyze, secure financing, take care of the buying situation, manage any renovations needed, didn't do all the ugly Property Management and accounting.

in other words, they bring their cash needed, we bring the time and knowledge needed oh, and it is a win-win situation.

My partners and I have done quite a few non-recourse loans for our sdira and solo 401K. I talked to a lot of lenders in that space and never came across a higher L TV then 70%.

with that being said, they have done a couple with 90% LTV with a private lender who is a family friend. That is the route to go if you want to get above that 70% LTV

Hello,
I have not yet invested in a Syndication, but am planning on selling some SFHs soon and heading that direction. I understand most of the rules, structures etc......

I own those SFHs in both a JV and LLCs with a partner. Once I sell those I will qualify as an Accredited Investor, but my partner will not.

Can I use funds in those respective accounts to invest in Syndications that require me to be Accredited? I realize that IF this is allowed we made new to change our Entity Documents.

Thanks, Dan Dietz

I am involved in a few of these. Our advice was to form "LLC #3" that is owned by both your and your partner's LLC. It is slightly more expense, but it is WAY better for record keeping, liability, etc....& #2 then get a K-1 from newly formed LLC #3.

Quote from @Glenn Himan:

Hello BP family - I'm planning on creating my living trust and need some guidance & attorney recommendations. What questions should I be asking and what price range would I expect to pay for this type of service? Would I need to change title on my investment properties to the living trust as well as all my business & personal bank accounts? I would greatly appreciate if anyone can share their experience & insight to this entire process. Thank you very much in advance!

  I would check out Matt Sorensen at kkos lawyers. He is partners with Mark Kohler. They have a ton of good YouTube content if you want to get a feel for their approach. We have been very happy with their service and the work they have done for us

One other note is that I *think* you are confusing UBIT, unrelated business income tax (when you have an 'active' business), with UDFI, unrelated debt financed income (when you leverage your retirement accounts). My *understanding* is that a SOLO401K has a 'loophole' that typically does not require the same reporting and resulting possible tax that a SDIRA does. Maybe one of the experts can confirm or correct that?
Dan Dietz

@Joseph Hammel Professional People, such as Providers, Lenders, Realtors etc.... are not supposed to 'advertise' on here, so you mostly need to look at their signature lines. There might also be a list somewhere like there is for Realtors but not sure on that.

A few that I have had good experiences with or heard good things about would be @Brian Eastman who commented above, @Dmitriy Fomichenko who I have used, @Carl Fischer, @George Blower, @Justin Windham and I am sure I forgot a few others. Most Providers cant/don't provide advice or guidance since they are not CPAs or Attorneys.

As far as CPAs and Attorneys in this field goes the ones that I am most familiar with, and use are @Mat Sorensen (who has the best selling  book on the subject) and Mark Kohler of KKOS Lawyers and Accountants. They have AWESOME YouTube content, podcasts, and other online content along with seminars they put on. They are ALSO Plan Providers, but you dont have to use their Plan to use their other services.

Dan Dietz

You are getting some good advice here. I was in the exact same situation of wanting to roll over a quite substantial ROTH IRA into my new SOLO401K planto more easily leverage inside of the SOLO401K vs the IRA. I dont know HOW the IRS ever came up with that rule, but it is what it is.

One thing that I *think* you can do with your current ROTH IRA is to withdraw all of your contribution (basis), which you are allowed to do tax and penalty free.

IF you have qualifying self employment income to support large contributions, you can effectively 'roll over' the 'basis part' of your ROTH IRA to your SOLO401K. This method obviously only makes sense if you have a VERY large ROTH IRA basis AND want to leverage it.

I would also suggest reading back through the forum questions here on BP where several great providers and experts have given so much great guidance over the years, and checking out Mark Kohler of KKOS Lawyers and Accountants Youtube channel. TONS of great info to guide you.

Great discussion here. I wondered about that too when it happened. We tend to use moderate leverage of about 70-75% LTV and have places that are mostly less than 30 years old and in good repair when we bought them, so not a lot of cap ex or expensable repairs either.

I just got our taxes back and was looking over this very thing. In some VERY rounded real world numbers it looks something like this:
* 28 units worth about 2.5M with loans of about 1.7M
* Taxes showed about 100K in 'profit' BEFORE depreciation
* About 90K in depreciation leaving about 10K 'taxable'

So this means we owed NO tax on that 90K, NO FICA on any of it saving about 15K. ALSO, We also 'let' our renters pay down about 100K in loan balance (tax free), and the properties conservatively went up in value about 100K.

So the summary is we gained about 200K of equity tax free (this WILL be taxed 'some day' when/if we sell, or 'forgiven' if we hold until we pass) AND we had about 100K of 'current income' with only paying a few thousand in taxes on all of that.

Hope that helps. Dan Dietz