All Forum Posts by: Matt Ruttenberg

Quote from @Matt Ruttenberg:

Quote from @William Thompson:

Most of us spend years hustling to build a real estate portfolio… but here’s a question I don’t see asked often:

What happens to your properties when you’re gone?

As a CPA, I’ve seen a lot of investors put off estate planning until it’s too late. The truth is: having a Will alone vs. setting up a Trust can make a huge difference for your heirs, especially if you own multiple rentals or out-of-state properties.

Here’s the quick breakdown:

Wills

-Cheaper/easier to set up

-You can decide who gets which property

-BUT: everything goes through probate (public, time-consuming, sometimes costly)

Trusts

-Avoid probate → properties transfer directly to heirs

-Keep your portfolio private (not public record)

-You can set rules (“rental income goes to my kids until they turn 25”)

-More expensive to set up, and you have to retitle properties into the trust

Key tip for investors: If you own property in more than one state, probate could be required in each state. A Trust can help avoid that mess completely.

Curious for the community:

-Do you have your rentals in a Will or a Trust?

-Has anyone here gone through probate with real estate before? How did it affect the family or the portfolio?

Would love to hear different perspectives—especially from those of you who already built estate plans around your RE holdings.

 Great post!  Another strategy here is if you have pre-tax dollars, you're able to fund a life insurance policy inside of their retirement plan, then buy the policy out with a trust.  This is not a taxable event.

Individuals, trusts or relatives are allowed to buy out the policy.  

Thanks for adding that — that’s a solid advanced move. I’ve seen that strategy work really well when coordinated between the CPA, estate attorney, and insurance advisor. Out of curiosity, have you used that structure for clients or in your own portfolio planning?

Most of us spend years hustling to build a real estate portfolio… but here’s a question I don’t see asked often:

What happens to your properties when you’re gone?

As a CPA, I’ve seen a lot of investors put off estate planning until it’s too late. The truth is: having a Will alone vs. setting up a Trust can make a huge difference for your heirs, especially if you own multiple rentals or out-of-state properties.

Here’s the quick breakdown:

Wills

-Cheaper/easier to set up

-You can decide who gets which property

-BUT: everything goes through probate (public, time-consuming, sometimes costly)

Trusts

-Avoid probate → properties transfer directly to heirs

-Keep your portfolio private (not public record)

-You can set rules (“rental income goes to my kids until they turn 25”)

-More expensive to set up, and you have to retitle properties into the trust

Key tip for investors: If you own property in more than one state, probate could be required in each state. A Trust can help avoid that mess completely.

Curious for the community:

-Do you have your rentals in a Will or a Trust?

-Has anyone here gone through probate with real estate before? How did it affect the family or the portfolio?

Would love to hear different perspectives—especially from those of you who already built estate plans around your RE holdings.

Currently we have 28k in savings and we are looking into getting into multi-family investing. This is something that we do not want to touch if we can avoid it. With needing a 20% down payment I have kicked around the idea of cashing out my 401k (my work plan does not allow for a loan). My 401k is only 4 years old and is sitting around the 40k mark in value right now. I am aware the penalty will drop me down to $28k after penalties and taxes. The way I look at it there is more potential gains in the real estate side of investing rather than my 401k. I am 35 and I could start my 401k over with and use the cash flow from properties and savings going forward to re-invest in more properties. The other option is a HELOC, but then this would be two payments 1 to cover the mortgage and 2 to pay on the HELOC. Has anyone been in this situation. Open to any information that I may have missed here as this would be my first property. Thank you!

Just to clarify, are you saying I can put 69k a year into the 401? That would obviously be the route to go. 
is there a limit to how much of the account you can use to invest? Say, I bring 250,000 or 500,000, how much or what percentage is useable? 
and if the 401 “makes” more than 69,000 based on investment returns is that fine ? 

I just turned 50, I've worked a great W2 for 26 years in tech sales/mgmt and managed to save $3M across 401k ($2M) and Stocks ($1M). I want out of the W2 world but the golden handcuffs (and 3 teenagers) keep me tethered. My wife and I bought our first STR in April (Smokies) and it's going well but we realize we want to start focusing on single or multi-family. I've spoken with my financial advisor and ran the numbers where spending 5 more years in my W2 sets us up for the future but it's taking all my attention and I can't focus on real estate, plus I'm miserable. So, I'm now considering working 1 more year and during that time, ramping up into several multi-families and eventually owning 10 doors over the next 3 years. I know we won't come close to covering our living expenses of around $130k per year initially but I need to make a change. I want to avoid dipping into my retirement because I've run the numbers and even just pulling out $500k for down payments absolutely kills the compound interest and makes a material impact on future net worth.

So if you were in my position, how would you use creative financing to build up to 10 properties in the next 3 years and not sell stock or touch retirement? 

To all the millionaires out there, where do you think is the best place to put your money to let it grow while still being able to pull it out when needed? Personally, I prefer being able to access my money without penalties since it's mine. Do you favor a Roth IRA, high-yield savings account, or life insurance as an investment tool? How do you balance growth and liquidity?

I have about $60K in 401(K) accounts and approximately $100K in equity in my home. I want to invest but I don’t have any liquid cash besides what is in these accounts. I am not against taking money from 401K for real estate as long as my rate of return in real estate is higher. I’m concerned that $60K ($50K after penalties) won’t get me far in starting a short term rental though… I’m also hesitant to do a cash out refinance on my home loan because we have a great interest rate at 2.625%. Does anyone have any tips or advice for getting started in my current circumstances?

Hey BP Community - My employer does not match 401k contributions so I'm considering abandoning the contributions altogether and instead investing in something like the SPY ETF on a regular basis. I'm curious if anyone else has tried this approach and to hear your thouhgts. I can no longer contribute to a ROTH IRA and am looking for ways to accumulate more liquidity long-term to continue purchasing rental properties. I have a small real estate portfolio and a long investing horizon as I'm in my early 30s.

Thoughts on why to stop 401k:

- no match benefit

- returns are very low avg. annual ~5.5% last 3 years net of fees

- can only borrow up to 50k from 401k 

- limited access to capital until retirement age 

Thoughts on why it could be good to invest in ETFs or general securities example instead(SPY) :

- higher returns 9% avg annual last 3 years net of fees 

- access to capital - securities backed line of credit (could be used as another form of liquidity to continue purchasing real estate) 

- long-term mitigated tax liability - if you never sell the underlying securities and instead use the line of credit as a form of liquidity to purchase assets

It seems like this could be a long-term strategy with limited tax liability. I don't hear many people talking about this as an alternative if your employer is not matching 401k and you want to be more active in your investing approach long term. Do you think this could be a good strategy where are the pitfalls here?