All Forum Posts by: James Sebastian
James Sebastian has started 5 posts and replied 54 times.
Post: Has Anyone Used a Self-Directed IRA for Real Estate Investing?
- Posts 56
- Votes 27
Savannah's post sums it up well. I'm 5 years into a SDIRA for real estate. I have a partner who does the work and I provide capital and help with strategy/planning. Go with a Roth if you can, that negates some of the downsides people cite about doing real estate in an IRA wrapper. And watch for UBIT/UDFI if you are borrowing and leveraging. I do single family through the Rocket Dollar custodian because I got a sweet deal with them when I set it up. Low cost and relatively low service has worked so far.
Post: Self-managing in Indiana from out-of-state
- Posts 56
- Votes 27
So I have essentially the same question as the original poster, and I understand the well-meaning advice, but this is more a case of trying to stay legal while renting to a friend of my daughter... Does the statute require an Indiana resident property manager, or simply the disclosure of contact information if there is a manager? Thanks!
Post: BOI Report deadline and the enforcement of penalties are back as of 12/31/2024
- Posts 56
- Votes 27
Looks like there has been another indefinite stay of the filing requirement as of Dec 27. It appears they are posting updates at
Post: Can you deduct interest (primary house) from a home equity loan to buy a rental?
- Posts 56
- Votes 27
Check into "interest tracing" rules. My understanding is that interest on a loan is a business expense against a property purchased with the proceeds of that loan, regardless of what asset the loan is against.
Pretty much everything but honey bees, the nest will die out over the winter and the overwintering queens will start out fresh next year. So poison them if you want, plug up the hole in early spring, and call it good. I'm on the call list for honeybee swarms and about August I start getting calls for yellowjackets like this.
Post: GENERATIONAL WEALTH: Do you worry about your kids?
- Posts 56
- Votes 27
Quote from @Peter W.:
Quote from @Steve Vaughan:
Quote from @Peter W.:
I don’t really worry about it. If no disasters happens I will end up with a large chunk of money to pass on, but the reality is they won’t see it until they are in their 40s or 50s at which point they will have already learned most of their lessons about money and work ethic.
Most people do this. 'Kids' inherit in their 60s.
A book that resonated with me regarding wealth transfer was Die With Zero. It does our kids the most good, placed strategically, especially if it helps reduce or eliminate debt, up until about age 34.
Bill Perkins, the author, mentioned giving his 80 yo grandma $10k. Go enjoy yourself he said. All she wanted or needed was a sweater. Extreme example of gifting to those that don't need it.
I still remember $1000 given us when my wife's grandma died 22 years ago. It lasted us for months and was so helpful. We were a young family of 3 kinda just starting over.
My parents gifted me something for the 1st time when I was 34. $5k to help with our home purchase. It wasn't easy for them and meant so much to us. We still have the house and paid it off a few years ago. A seed that grew and honestly meant more than $200k would today.
The point is- if we have the means and the kids are humble and worthy, gifting a bit at their big younger milestones will have a 20x-40x+ the impact vs a pile in their 60s.
My grandma left me 50k when I was in middle school, ended up being part of college, my wedding and honeymoon, downpayment on primary, down payment on my first and second rental properties, and I still have 50k left over.
I’ll probably help them with down payments for their first houses, college, I will probably even find their retirement accounts in their early 20s. I’ll have enough to retire when I am 50 but will likely work to 65 to give them more. But even then they will probably end up with the bulk of it when I pass.
This is GOLD! I've ruminiated on this topic a bit, we are 50 now and in good financial shape and stand to inherit in 10-20 years when we absolutely will have no need for more money. But with 4 kids in their teens/twenties now, seems like that money would be far better used if one of them has entrepenurial ideas (and energy and time). Could be a low-cost loan or seed money equity stake rather than a gift to be more "fair". Otherwise I guess for me generational wealth just looks like passing it down too late to be useful until it either dilutes a bunch or ends up in the hands of a spendthrift who blows it all. Anyone have experience with this dilemma?
Post: Title theft, will mechanics lien prevent this?
- Posts 56
- Votes 27
So I was listening to a Seeing Greene podcast today (OK, I'm a few behind) and there was a discussion of title theft, then liens were mentioned later... Would it be possible to file a mechanic's lien on your own property and would this be a way to discourage potential title thieves?
Post: Banking / Finances for TIC with two LLC's
- Posts 56
- Votes 27
We have a similar situation (partnership between two LLCs) and our attorney recommended forming a partnership LLC with the two individual LLCs as members. Then the individually held properties were quit claimed into the partnership LLC. One caveat: doing this created a situation where it was difficult to get loans because one of our LLCs is a "checkbook IRA"- seems the nonrecourse lenders mostly don't like having a non-IRA partner involved.
Post: 401k withdrawal to invest
- Posts 56
- Votes 27
Might also be able to roll into a self-directed non-Roth IRA, I think must not still be working for that employer. If that's a possibility, maybe no immediate tax and able to loan to you. But taxes someday when money is withdrawn. Not strictly my field, do your own research.
Post: Investing with a SDIRA?
- Posts 56
- Votes 27
Also note that if you have a Roth IRA, then there is no tax ever on capital gains or income on the property (assuming you avoid UBIT and such)