All Forum Posts by: Gary Kane

Good question...I wondered about this myself as I am looking at a similar BRRRR situation.

Can anyone provide information relative to the policing of activity in a SDIRA/LLC arrangement? How are things tracked to make sure transactions are non-prohibitive? Are there reporting requirements? I can see writing numerous checks during a rehab project...do all of these checks have to get approved?

Good work!

disregard...

@Quynh-Chi Nguyen First and foremost, try to re-establish employment.

Second, as the underlying theme from all the replies, just know that you now have options with your "Old" 401K.
- Leave it.
- Roll it to a "New" 401K (with your new employer that has a 401K plan).
- Roll it to a Self-Directed IRA (SDIRA) with a new custodian, which gives you more control (Stock/Bonds or Real Estate Investments). There is usually no charge.

Note: Vanguard is a great Brokerage firm for rolling into, however they do not provide a Real Estate SDIRA. They would be better for stocks, mutual funds, etc.

Good Luck in your search, keep your head up!

@Zach Zimmer How has the IRA LLC worked for you? There's a lot of contradicting info out there, good vs. bad. What has been your experience? What would you recommend? I want to hold rentals and flip as well. Thx!

Thank you gentlemen for your replies!  I still have some questions but will save those when I can get on the phone with a good custodian (plus attorney and CPA)  :)

I'm fully aware of the benefits of deferred income with an IRA, particularly 401K's. My plan is to 'build' on my existing SDIRA (not setup for Real Estate yet), and defer any earnings and profit, and continue to leverage those assets.

Thanks again...this has been eating away at me so I had to get off my chest. Was up watching the Notre Dame/Texas game (too bad the Irish lost, great game!) so thought I would post.  BP is an awesome venue!

Pay cash with your inheritance, use the HELOC do to the repairs. I would keep it liquid.

Are you going to Rehab/Sell?  Buy and hold for rental income?

Great job, the first one is always FUN ;)

Great learning experience, keep going!

I have been reading (scouring) the forum on SDIRA/SDIRA-LLC/SOLO-401K information, and am absolutely confused! And the more I read, the more cautious I am getting!

So what is the real deal on these setups?  Do I need to worry about the IRS breathing down my back every year with my SDIRA? Or SOLO-K?

And let's clear the air on SOLO-K's...what is the true requirement on being eligible to set up one of these for REI'ing?

1. I am a full-time W-2 employee, with a 401K already.
2. I am not self-employed (earned income), but some say I could be easily (EBay, MLM, etc.).
3. Does selling on EBay REALLY qualify as self employed, able to set-up a SOLO-K? A backdoor?
4. How long do you have to be self-employed before REI'ing.
5. Wouldn't the very nature of doing REI'ing (Rehab and sell) qualify as earned income? Wait, you have no proof of earned income yet, how can you have a SOLO-K...chicken vs the egg syndrome?
4. So the IRS thinks I'm an EBay seller, and now I have all this REI income (Buy and hold, Rehad/Flip, etc.). What will the IRS say?

All my scouring has led me to believe that a SOLO-K would be more efficient for REI. I want a few rentals, and do some Buy/Rehab/Sell for profit, and also do some JV's (lending)...But I want to be legit and not worry about violating any IRS rules.

Need some help...hope I'm not rustling some feathers, just need some clarification.