All Forum Posts by: Kevin Yeats

She just rolled the money FROM a 401k INTO a SDIRA.  Why would she want to roll money back into a 401k?

Mr. Lane

A KEY question that everyone (broker, lender, banker et. al.) will ask is "How much money will you (not the seller) contribute to the deal?"

Most lender have some "skin in the game" requirement even on seller financing deals.

Sandy,

You have a great idea .... but to answer your question, you really need to construct a spreadsheet with a lot of "what if" questions.

The two chief factors in the decision to convert are your current tax rate vs. what tax rate you will pay later.  With the winds of politics (make that a hurricane), future tax rates are very uncertain.  Will you be able to control your future income in a way to drop you into a lower tax bracket?

Second, what is the expected growth (rate of return) on the money in your IRA? What are possible high rates of return and low rates of return?

Keep in mind that you don't have to convert ALL of your IRA into a Roth in one year. You could partially convert over several years.

I suggest talking with several people, including accountants and perhaps a financial planner (not a product pusher), on this decision.

I knew a woman who had a sizable balance in her IRA and converted ALL of it to a Roth in one year so she could spread the tax payments over 5 years (the rules back then). This on the advice of her accountant. She was a single with no dependents and in the highest tax bracket. She got hammered in taxes. Kicker in this situation is that she had NO PLANS to continue working and remaining in that high tax bracket for more than another 3 years. If she would have waited, she could have paid nearly 0 taxes on a partial conversion .... or at least paid taxes at only the lowest rate. Moral: double and triple check the advice you receive.

Good Luck

If this other tenant has made threats of harming either someone else or herself (even threats to kill herself), the authorities can invoke the Baker Act against her which can result in an involuntary institutionalization or other steps.

PLEASE beware that this does NOT constitute legal advice .... just my (limited) understanding.

I fullly agree with marie.  Follow her advice.

Tyler,

The key number in your message is .... 28

I have to say congratulations!

There are plenty of people at retirement age who do not have $500,000 liquid (or illiquid) on their personal balance sheet.

But that 28 number has a downside ... you have a long way to go in your life and lots of things can happen in your personal life and in your real estate business that will alter your business and goals.

First, to earn $10,000 per month ($120,000 per year) on $500 K is a 24% return ..... possible BUT you probably can't count on that much return EVERY year in any investment (OK ... somebody will dispute that assertion).

I suggest that your (soft) goal for the next several years would be to double your capital to $1 million by doing what has worked for you.  You could also investigate private lending and the rate of return that you can earn by lending to other RE investors.

Good Luck and congratulations on having a goal and working on a plan to get there.

I know a stated income lender.

I agree with the earlier comment about having the properties in an LLC

NOTE:  This is my opinion and NOT legal advice.

Corey, do you have the numbers (or the source) for this list?

It would be interesting to see how bad these states are as compared to each other and compared to the national average.

 All the greater reason to prescreen each tenant.

Part of what you have not taken into account is the timing of receipt of your profits.

By selling with seller financing, you delay receipt of a portion of your profits which the seller may desire if he/she would rather have an income stream such as in retirement.

A flipper, by contrast wants to most money (cash) from the sale as possible to then move on to the next project.

Question?  Contact me at the email address below.

I agree with Charlie .... PASS.

This could be anything from buying from someone who does not even own the property ... to the seller (owner?) knowing that the occupant runs a meth lab on the property ... to an illegal squatter .... to who knows what.

Look harder .... work at building a network of people who keep an eye out for properties that may come up for sale.

Develop an elevator pitch describing what you do and the types of properties that interest you.  Give that pitch to everyone that you know with the follow on question of "Who do you know that owns that type of property and may have interest in selling .... perhaps someone who wants to downsize (and empty nester) or someone who just inherited a property or perhaps someone going through a divorce and needs to sell their home?

Good luck but pass on the property that you described.