All Forum Posts by: Daniel Dietz

I thin @Dmitriy Fomichenko is on the right track of how things would need to work. 

We have done a similar deal with a Private Lender (a friend, not a full time professional) Our Solo401K bought the property with 'cash', and the 'fix up' funds were essentially a first position loan on that property, but that loan was to the SOLO401K, NOT to us (there are 3 partners, all SOLO401Ks) and there was no personal gaurantees and no other 'recourse'. The Private Lender was comfortable with this as his loan as less that 50% LTV and he knows our past history and performance.

Admittedly, it would most likely be hard to find that same type of lender for most people, but a possibility. 

I hope I explained that right. 

Dan Dietz

I always add a note as to WHY I am reaching out; common interest in SDIRAs or 1031s say. Usually I mention that I just want to connect up for possible future communications, questions or mutually beneficial possabilities at helping each other. A little note goes a long way in having others accept them. I screen the same way usually. 

Dan Dietz

By our figures from the other 25 rentals we have in the area, we should each be able to make a 9-13% return over the long run when figuring cash flow, loan paydown, and 2-3% property apreciation on average. The potential partners I have been talking too also like the diversification of holding less stocks and the stability of real estate prices, at least in our are, compared to stocks also. 

Dan Dietz

I am working on a couple of potential partnerships similar to this right now. The partner bringing the down payment would be a 'silent partner' and do NONE of the work or management. They would simply get 50% of the cash flow and equity growth. I would do ALL of the finding, acquiring, rehab management if needed and ongoing PM for my 50% of the cash flow and equity growth. 

They would get their down payment back either when we sell eventually, or we are working on some options where we could do a refinance say maybe 5 years in and pay them the down payment back. The other plan would be to just wait until eventual sale, say 10- 20 years down the road they would get their down payment back before profit were split. 

In our market cash flow is not exceptionally high, so it would be somewhat hard to pay back 50% of the down from just one partners half of the cash flow.

Dan Dietz

I have heard of the agent getting just the 'showing agents' half of the commision in this case, and not the 'listing agents" half. It sounds like your agent is NOT the listing agent?

Dan Dietz

@Adam Hoffer, how many people do you typically have in attendance at your meetings? Do you have predetermined topics/speakers? I am always up for networking, but quite a drive for me also. 

Thanks, Dan Dietz

@Moses Lucero I *think* you are fine, but I am not an expert, just a fellow SDIRA investor :-) 

When we set up our 3 way LLC which all members are Checkbook Controlled SDIRAs or SOLO401Ks, we specifically checked on this as we ARE involved in a couple of other businesses together which like you have NOTHING to do with the 3 way LLC.

There are at least a few Retirement Fund Lawyers on here. I did not know of them at the time and used a man named Jarom at https://kkoslawyers.com/ who specializes in this type of stuff and had good luck. You'll pay some up front but have good peace of mind too.

Dan Dietz

The only one I have done so far was 5 years ago. I am in contruction and worked a lot with a guy that did about 6-10 flips a year, and he knew I wanted to do one too.

He had two of his for sale, working on two more. He bid on 3 more at the sheriff's auction hoping to line up one in the hopper. He got all three! Therefore he had too much to do at once. So he 'resold' one to me. ARV was 140K, he bought for 75K, sold to me for 85K and carried the whole amount for one year @ 6% interest. Interest only with balloon at 1 year.

We knew each other and truested each other. He borrowed his funds from Private Lenders @ 3% so made a 3% spread for a year of doing nothing and 10K on the 'wholesale'. Win win situation for everyone.

Dan Dietz

@Greg Neuman, check out Paper City Savings in the Plover area, David Cooper is our guy there. They do portfolio loans, so not 30 years fixed, but still good terms. Our last one was around 5%, fixed for 10 amortized for 25, 20 percent down. I have not yet done a refi there, but know they offer them. Let him know I pointed you that way ;-)

@Jeff Dulla, do you do long term fixed rental financing in WI? I have no current ones other than my primary, but am leaning that way to lock in some rates for some very long term holds I am lining up to buy. My local bankers seem to have a lot of 'overlays' that they want to apply to their way of doing things. 

Thanks, Dan Dietz

I would agree with a long term mortgage. If for some reason you end up looking at HELOC, at my local Credit Union they have a HELOC that is about 4% right now that moves with Prime, but can be looked at any time with up to a 10 year rate lock.

Dan