All Forum Posts by: Josue Vargas

@Josue Vargas

I used my IRA to create a checkbook IRA LLC to buy real estate to avoid the tax implication of withdrawal.

Here’s an overview podcast by the CEO

https://youtu.be/pz84p8WSNzA

Here's a link to their company that creates the checkbook IRA

https://www.irafinancialtrust.com/

@Josue Vargas if it hasn't been stated already, 1. you can def roll your old co. 401k over to your new co 401k (no penalty no withdrawal), have done that several times in my career. 2 you can roll either or both of these to an IRA or ROTH (depending on income) 3. be aware that an SDIRA must be conducted at "arms length", meaning you cannot "personally" be engaged in, or benefit from, the transaction/property - only the "IRA" benefits. It is a great way to have more control in your investment choices via real estate but not a cash flow proposition. This means, no sweat equity, no monthly cash flow TO YOUR POCKET, you cannot personally purchase or sell the asset, must be transacted by a 3rd party. For example, I handle SDIRA purchases and sales for other RE Agents who cannot transact for themselves. Some use it for buy and hold, others use it to wholesale properties (I'm sure there are other scenarios but these are the ones I see most often) It's a great way to leverage REI for the long-term with your existing retirement monies and not be penalized!

@Josue Vargas. I would leave that money alone. One day you will be glad to have it. Instead if you are investing in a 401k with a new company, I would stop contributing after the match and use that money to save up to invest in real estate. Perhaps you can also live on a stricter budget and find more money from your income to save for a down payment.

@Josue Vargas for about $50 cash flow? That would be way up with single incident of roof replacement or HVAC replacement. Even a water heater replacement will more than one year’s cash flow. Unless you are getting over 15% cash on cash return, withdrawal from 401k would be unwise decision.

I would advise against touching 401k for RE investment even though it may be tempting. You want to create multiple streams of income and they may not produce equally but provides safety net. Leave your 401k alone.

@Josue Vargas I think your cash flow goal per property should be at least $400 a month. $50 there’s no margin of error. You can make A lot more than that!!! Good luck!!

@Josue Vargas - 100% yes. now i would do my due diligence before purchasing my first investment property. so you would definitely need to start working #pronto my friend

there is no "very minor stuff"

the IRS is very specific

you can choose to do it and hope they won't ever check, but know that it's against the rules...

We just took our final draw on our retirement accounts, IRA's and 401k's. I am 34 and my wife is 31. The tax bill is going to be over $100,000 from these accounts alone but we want full control over OUR money. Investing that much capital and waiting 25-28 years isn't in our plan(we weren't re investors when we started them). With internal rates of return on REI being North of 20% in the first year of ownership, paying the penalties/taxes up front far surpasses a) being subject to waiting until "retirement age" to collect, and b) being subjected to future tax rates for said accounts. For us it was an easy decision because we have a plan. These funds will only lead to greater wealth creation faster due to an increase in control. Hope that helps.