All Forum Posts by: Gary Parilis

Thanks, @Chaits J.

Seems to defeat the whole purpose of a BRRRR if they won't use the ARV.

I have the exact same question. The lender I usually use isn't familiar with the delayed financing rule. I could educate him, but would rather use someone who's knowledgeable.

Maybe ask for three RECENT references. Anyone can come up with three people to say good things.

Some basic math suggests to me you'd be paying around $200-$500/month yourself. I'd recommend doing a little research on rents: rentometer.com, Zillow, and Craig's list. Not just to see how much you'd be paying during the house hack, but to see how much rent you'll be collecting after you move out eventually. $2200 vs. $2800 is a big difference in cash flow.

It's easy enough to look on for similar listings online. But I can tell you, compared to other properties in Orlando, this is too good to be true. 3 BR properties that look like this, without a lake, easily go for about 2x that much. This is a FSBO (for sale by owner), so they're not expecting to pay a realtor's commission. But if you try another post, with "Orlando" in the subject, realtors in that market will see it and reply to you. I can recommend someone if you PM me.

If your Dad has been in the workforce for many years, he probably has a sizable 401k. I'd recommend he investigate rolling 401k funds into a self-directed IRA. That allows him to invest in real estate with tax deferred funds. Potentially much better than taking distributions, which are taxed, to invest.

All of this assumes he wants to invest in real estate, as @Jacob Sampson says.

There are advantages of a cash-out refi (mainly interest rate that is both lower and fixed), but a refi will have more closing costs. In your case, you'll only be pulling out around $20k, so spending thousands on closing costs isn't worth it. I'd go for the HELOC.

Sam, why can't you get equity out of that house? You can do a cash-out refi or get a HELOC. You would have gotten a lower rate while it was a primary residence, but you can still borrow on it.

@Brian Eastman I forgot to mention in my reply above that I definitely am looking for the checkbook model. I intend to run my own business, but under the umbrella of the SDIRA. (And I understand the prohibitions against self-dealing and having family members, etc. involved.)

I sent you a separate message to follow up individually. Thanks!

@Brian Eastman Thank you for your thoughtful and thorough response. Actually I knew the distinction about custodian -- typing that was a mistake. But thanks for clarifying. I also appreciate your carefulness to limit your answer to what's responsible and ethical (and legal, I suppose :-). I deliberately asked for criteria, not recommendations of companies. Otherwise, I might get a whole lot of "I like company X" response, when really what I want is to know what variables to consider to make a decision for my own situation!

So... An example of the kinds of things I want to know about is... Are there different kinds of fee structures? Equity Trust charges based on the size of your assets, and the percentage diminishes sharply as the number increases. What do others do? Do they charge based on some other criterion? 

Also, is there a significant cost associated with rolling funds over, or can I do that as I need to? For example, if I rolled over $300k from the start, I would have those funds easily available for deals, but meanwhile it would be collecting dust while while I look for a deal, instead of appreciating in my 401k. Can I move funds to the SDIRA , ad hoc, as I need them or is there some cost or prohibition on too many of those rollover transactions?

Also I'd love any advice for how to systematically evaluate providers -- other than visiting 50 websites that all seem to be about the same!

Thanks!