All Forum Posts by: Jason Stephens

@Jaime Raskulineczthat really sucks. This was my plan. 

Is there no way he can use his funds which are tied up in 401k to get me started?

Good evening, I recently have been looking to get started in real estate investing and now I am up to the stage of finding financing. My father has enough money to finance my deals in his 401k and he's 60 years old. He would be willing to loan me the money in return for an 8-12% return on his loan. His funds would include all rehab costs. How does he convert his money from a 401k into a self directed IRA and are there any penalties involved or costs for him? If anyone can provide knowledge or links to explain how this works would be ideal. Thanks!

Thinking about this more, can anyone jump in with their opinion on doing a flip as my first project in order to build my reserves?  It seems with 65-70k that it will be hard to build a portfolio of rentals.  If I can use the 65-70k and grow that to $150k with flips I would be in a much better position. 

Thoughts on this strategy?

I just spoke with Wells Fargo (they gave me my mortgage for my primary residence). 

They indicated that I would be looking at the following requirements for an investment home:

- 30 year fixed
- 4.75% Interest Rate
- 15% Down Payment
- 6 Month Reserve Requirements 
- $140 a month in PMI if we put 15% down on a $300,000 investment, no PMI if we do 20%.

Does this look about right? With $65-70k this is going to get tight on a $300k house. My concern would be trying to build a portfolio once my money is locked up. They indicated a cash-out refi is hard to get on an investment property as I have to show structural improvements that warrant the ARV of the house and typically they'll lend up to 80% of that after a history of rental income is shown.

Thoughts?  How else have people used similar funds to get started with similar scenarios?

@Steve Vaughanwhat do you mean by Green houses and Red Hotels?

Mark Nolan thanks! I plan on scheduling a meeting with my accountant regarding preparing my funds for use. My questions lie more in the actual strategy needed to accomplish my goals in a market like mine. I'd like to have a 1 million dollar real estate nest egg for retirement as well as 10k in positive cash flow that I can use as income from here until retirement. Anyone have ideas on how to parlay my funds into investments that can make this strategy work?

Thank you for taking the time to respond. I actually have $6000(each) saved for me and my business partner that we plan on putting into our IRAs. In addition, I like the idea of refinancing and getting money back for the next investment. However for a second home, will I be required to come up with 20% down payment? If so, that will cap the purchase price of the home I can buy and may make it harder to cash flow or to buy in a desirable area. If I could buy a rental for cheap and add equity to it by making improvements. Then rent it out for cash flow, and finally cash out refi for my next property. That would be ideal. My concern as stated earlier is the amount of capital required to make it work in my location. Thoughts?

I've been following this forum, as well as the BP Podcast for quite some time and have been toying with the idae of doing real estate investing since well before the 08' crash. 

Some background:

- I am 32 years old
- Live on Long Island, NY
- Business Owner
- Bought existing home 2 years ago for $430k, and it was appraised at $550k earlier this year. We have tapped a $50k HELOC to do renovations.
- Married with a 15 month old daughter

I am looking to accumulate wealth over the course of several years by leveraging my retirement savings. I currently have 50-55k in my IRA, and my wife has another 17k or so in her old 401K.

Goals:
- Build a portfollio of rentals so I have over $1,000,000 in assets as a retirement plan. As a small business owner, I need to make sure that we have assets that we can leverage in the future as we don't get a 401k. 

- Grow cashflow on properties so we eventually have $10,000 + per month in income.

- In addition to buy / hold, we'd also like to do several flips  per year to build wealth and also pay down debt (student loans, etc). I figure once these flips paydown existing debt we can then begin to  leverage the profit from flips to speed up the process of aquiring buy/hold properties. 

I'd like to also build my portfolio in my remote area so I can monitor and stay on top of  the properties.  The home prices have a floor of around $300k in the area for a 3bd, 2 bath. 

With all of this being said, what is the best strategy to accomplish my goals if the only assets available to invest are the retirement funds that we have accumulated.  If I use 5% for a down payment on a $300,000 house that produces $200 a month in cashflow, how do I get from point A to B without burning all of my available cash for investing? How do I continually add more money to the pot in order to grow my portfolio?

Thoughts? Opinions? 

@Javier Diaz have you had any success flipping homes on LI? I am looking to get started in Huntington and would love to learn more about other peoples success stories. 

@Cheryl P. Have you flipped any homes on LI that could provide some encouragement? I am looking to get started in Huntington and am afraid of the real estate prices / holding costs.  Would love to hear of other peoples success to push me along. 

@John Hayes Greetings, I am looking to get started in Huntington, NY and would love to learn more about your success over the last year.  Feel free to give us an update and let me know what methods your friends have used to find flips.   My biggest issue is using hard money and making sure that we can get the house for a big enough spread.