Quote from @Tony L Holland:
Just turned 60 and want to move my money out of my workplace investments (mix of 401k, IRAs) with Fidelity. I own 3 homes (2 outright) and one is a vacation home rental that I owe just under a 1/2 mill on. Note: It pays for itself.
I am wanting to use my investment money to buy another beach house that I need to renovate extensively, add a new pool, etc... I'd like to rent it out for a year, two, maybe more and sell it when the market is right which will require the interest rates to come way down which will take time but maybe never if Biden somehow stays in office.
Question, which is best for me SDIRA, or e-QRP. I want to pay for contractors, supplies, installation, etc... I also will need to finance the house. I'm hoping to use my funds for the 15% down payment and all the stuff I need to buy and contractors. I will need to use my money to make Mortgage, Insurance and Tax payments on it until I can get it with a Vacation Rental company (I use Vacasa) I have a good job making over 6 digits that I plan to keep working at for another 5 years unless I sell this house and do really well which is highly possible from my experience unless the market tanks similar to 2008.
Note: I am in Kentucky, Own a home in Lexington, One in Indiana and a Beach house in Florida. Looking to buy another in Florida with this.
Advice?
*not a CPA/Tax professional but it seems there are some good points already from others.
@Tony L Holland for the SDIRA I believe all the expenses and funds have to come from that account. So for your strategy to be optimized you would need a SDIRA with a good amount of funds in it to operate.
Do you possess sufficient equity in your primary residence to obtain a Home Equity Line of Credit (HELOC) for the initial down payment and renovation costs on the new property, with the intention of refinancing after completing the project? Your plan is to seek a property with potential for value addition anyway. Ideally, successfully executing a Buy, Rehab, Rent, Refinance, Repeat (BRRRR) strategy would enable you to repay back the HELOC, leaving the new home mortgage-free still. Consider discussing with your wife the possibility of a temporary borrowing arrangement without maxing out the HELOC.
With recent downward trends in interest rates, there's a likelihood of further decreases in 2024/2025. While predicting rates is uncertain, it's advised to commit to the property but remain flexible with the interest rate, as the saying goes, "marry the property but date the rate." Nevertheless, select a property that aligns with your current needs and preferences in the existing market conditions.
Florida to me can be tough with the rising expenses there. Would you consider another "beachy" state?
