All Forum Posts by: Gary Parilis

Self-directed IRA is an amazing way to take tax-deferred advantage of the cash I have piled up in my 401k, and funnel it into real estate. I intend to take the plunge immediately, but there are so many providers out there (biggerpockets.com/rei/self-directed-ira-real-estate), what criteria do you use to choose one? I've examined a half dozen websites, and don't see any difference among them. 

Most of them want me to fill out a form to get more info, but I know if I fill out forms with a dozen of these, I'll get buried in spam for months -- a lesson I learned long ago after searching for mortgage rates.

So far, the only site I've seen that provides any concrete, practical information is Equity Trust. They provide a very useful fee schedule (www.trustetc.com/fees). These fees are very small compared to the tremendousvalue of unlocking my 401k for REI... But I don't have useful information from any of the other providers.

Has anyone done research on this? Any advice? Thanks!

Interesting. They didn't tell me that. I was talking with them about a property 1000 miles from my home. I can give you the direct line of the person I spoke with if you want. If so, PM me.

I'm in the process of closing a HELOC for $75k with Fulton Bank for a rental property in PA. I don't find them to be particularly efficient, though. I also spoke with TD Bank about the same thing for a property in FL -- I assume they have presence in PA.

You should ask your friend what you could provide that might be of value to one of his clients. An obvious thing is funding. Your friend might know a flipper whose funds are tied up and would be willing to let you in on a deal in exchange for some portion of the investment. Then you come out of the deal with a relationship, an education, knowledge of that market, and some profit to boot. 

I don't know why @Todd Rasmussen says cash flow tends to be very thin on BRRRR deals. If you're buying in a market in which the ratio of rent to value is high, then you should cash flow well.

@Craig Gray you asked for an in-depth explanation... Some numbers should make it simple:

Start with $75k. Buy for $50k, rehab for $25k, new appraised value = $100k. Now you refinance at 75% LTV. So you get your $75k back, and you've got an investment with no cash of your own in it. Then use that same $75k for the next property, etc.

This example doesn't account for closing costs, etc... And don't necessarily expect to get all your capital back. But you get the idea.

@Jimmy Epolito Are you buying in Florida? I can recommend a lender that will loan 75% LTV, based on the ARV. If you pay cash, you don't need to wait a seasoning period. PM me if interested.

BTW, I'm in the process of getting a HELOC on one of my properties and a cash-out refi on another. My reasoning is I'll definitely be using the full refi amount, and plan to keep the HELOC available for a combination of reserves and investments. I plan to BRRRR, so I can recycle the funds through multiple properties -- paying cash initially for each so I can keep the velocity high (and closing costs low).

Among the few regrets I have in life are  properties I've sold. When we moved from our first home to our second, we were young and risk-averse. I had a hunch I should keep the house and rent it, but sold it. Now 20 years later, the tenants would have paid off the mortgage and the value has more than tripled. Live and learn!

Pretty good!  But they only seem to serve Texas.

There's no need to invest where you live. Your $26k will get you started in a great market somewhere else. The first thing you should do is read David Greene's book Long-Distance Real Estate Investing. Get it today. It's the best real estate book I've read, and it will give you confidence to choose a great market, find a team (the hard part!), and invest there. It also covers lots of real estate stuff that's not specific to long-distance investing.

Saving $26k in a few years is a real accomplishment, and you deserve to make use of it now, not in 3 years.