All Forum Posts by: Michael Slockers

@Brian Eastman @Dmitriy Fomichenko

I talked to my plan sponsor. I was mistaken. Thank you guys very much for the clarification.

To add to the discussion, this is where I was confused:

I do have an LLC with an intention of turning a profit. Right now I'm operating at a loss. Having an LLC with the intention of turning a profit (hopefully Q1 or Q2 2016), I CAN start a 401k plan. I cannot make contributions to the plan until I am making money in the LLC. You guys are correct about that.

The point I was confused on, is that I CAN roll money from a traditional IRA or another 401k into this solo-k. Please validate this is correct, but again, that was my confusion, and I am pressing on to continue with this rollover, now understanding I cannot contribute additional funds until I am making money in the LLC. (note to clarify: my LLC is not a rental holding company. It is active income, not passive.)

@Robert Farris: I would suggest you add the "investor" back to your profile; anyone with the intention of owning 50 rentals is clearly an investor. And the first step is to consider yourself an investor along with making your goals. Good job!

 Thanks Dmitriy. Can you please expand on this thought? Why would rental income not count as self-employment income? 

Also I was unaware that only self-employment income can be used to contribute. I've been told that even if the business is not currently making a profit, it is still eligible for 401k contributions. Even Amazon.com does not make a profit, but does pay 401k I'm sure to it's employees.

Would really like to hear more information to clarify this matter. And thanks again!

Depending on your level of disposable income, and whether or not you have an LLC (you are listed as an investor so you could start an LLC), you could start a solo-401k and begin contributing to it in addition to (or instead of) your 401k. There are some great advantages to doing it this way. Ping me if you want any details, I'm in the process of doing this myself and have spent a fair amount of time researching the right mechanisms to get it done.

Allegiance Title does Assignment Contracts. They also do double-closing if there is outside money to cover the A-B. They won't use B-C money to cover A-B contract.

Hoping to bump this and get some response - does anyone have a  CPA they recommend who has expertise in real estate investments?

I'm looking for the same. Preferably a CPA who owns rental property.

Generally speaking, what are the pros & cons of cheaper housing for rentals versus more expensive?

It seems there would be an averaging effect to justify a larger quantity of less expensive (lower rent) properties, both on the expense and the income side.

Another similar question: would you rather have 10 houses worth $400,000 that bring in $X per month gross, or 3 houses worth $400,000 that bring in that same $X per month gross?

I'm specifically talking about single-family, because I could see a clear difference for 10-unit apartments, etc.

 Thanks for the replies!

I have definitely considered this idea - selling some off and keeping the gems.

I don't have a property manager solution at this time but I'm confident I can't manage it myself in the midst of everything else I have going on. I do have some options, but just not certain of any of them at this point.

Any other suggestions on questions for seller in order to start my due diligence?

I'm in agreement with your questions in principle. Sounded more like an advertisement for your experience/service than anything. 

Ultimately I doubt if most investors would pass on a solid deal even if from a new investor like myself. I don't have an office. I don't have a real estate license yet. But I may have other skills that aren't listed on your list. Isn't negotiating and finding great off-market properties a key skill for a wholesaler? If any wholesaler brings me a great deal in my market, I'd be happy to pay them for the opportunity to do business on that great deal.... even if we met at a local shop or in spite of some of the other deal breakers you mentioned.

I'm getting a little tired reading all the posts using terminology such as "would-be-wholesalers" and "wanna-be-wholesalers". Don't all individuals have an opportunity to take a run at real estate or any other endeavor?

Yes, there are probably some shady folks out there. Watch out for them. Listen to your gut. 

In the one conversation I've had with him so far, he is selling because he is retired, but still has the "job" of managing these properties via his phone. He wants to chill out with his million bucks (minus taxes).

I do find it a little curious that he is willing to take a million dollar payout and take the huge tax hit. Should that make me suspicious? 

He is open to questions and willing to answer them honestly, so it seems. Obviously I'll trust but verify, but I appreciate everyone's input on best questions to ask and issues to understand.