All Forum Posts by: Michael Garofalo

@Jonathan Dempsey, I do not believe you can borrow against the IRA as you would the 401k. Here's a good article, there are some short-term loopholes but it's definitely a different animal: https://www.thebalance.com/ira-loan-options-315561

Alejandro,

I have done this before to come up with cash for a down payment. It's a great option so long as you aren't planning to leave your job anytime soon. If you were to take out a loan for 15k and then leave your employer, you'd likely be responsible for paying off the loan within a short period of time (60-90 days is probably standard). Also consider the tax implications, as you'll be repaying that loan with post-tax dollars, and then you'll get taxed again once you are eligible for withdrawals. 

All that being said, I think it's a fantastic option. Doing this would also protect you in the event of a stock market downturn (your portfolio would feel less of an effect since the total holdings are lower).

@Jenna Harris, you're most welcome. Best of luck, and feel free to PM me if you have more specific follow-up questions or details to share.

Everyone has different philosophies, but me personally, I prefer having total control over the tenants that get placed in my property. If my local landlord/tenant laws allowed it, I would not plan to renew her lease and put in the legwork to find the right person. Tough to speculate or know exactly what's going on with her situation. But general rule of thumb: I would never inherit a tenant unless I could be provided adequate evidence that the individual would pass all of my specific screening criteria. 

Hi Jenna,

I posted a reply to a similar question a while back, and others chimed in with some valuable input. Checkout the thread here: https://www.biggerpockets.com/forums/49/topics/566...

In a nutshell, yes I believe you should absolutely create an LLC for asset protection. You can get commercial financing on your LLC, the terms just won't be as favorable as traditional financing and you can request attaching what's called a "personal guarantee" to the note if the business is just starting out.

I got started listening to the podcasts and haven't looked back--that would be my advice because they are jam-packed with valuable information. If you listen to them regularly, you'll start to hear common themes with knowledge that you can apply for your overall investing strategy. Of course the forums are helpful when you have specific questions but the podcasts do an incredible job of providing exposure to all different avenues of real estate investing.

Welcome to BP, @Martell Ta! 

No problem. More seasoned investors may have a slightly different opinion, but I would define a cosmetic rehab as anything involving flooring, appliances, painting, and vanities/attached items (such as  the toilet, bathtub, other components that make up a kitchen). A full gut would entail more complicated electrical, plumbing, and structural work, and you'd basically be rebuilding from scratch, starting from the studs.

My personal recommendation would be to stay away from anything with severe foundation issues, and also make sure you understand the condition of all the big ticket items such as the roof, HVAC, water heater, and electrical/plumbing systems before making an offer. If you have any other questions or need additional insights, definitely feel free to PM me!

Hey Aaron,

Each rehab is different and a lot will depend on the trustworthiness of your contractor (unless you are able and willing to do the work yourself). For starters, a good high-level estimate would be $25/sq ft for a full interior/cosmetic rehab, and $50/sq ft for a total gut (this would include labor and average materials, not top of the line). That being said, estimating rehab costs is an art, not a science, and there are many variables at play. Just remember that unexpected challenges and issues may arise as you get into the construction, so always keep that in mind and plan accordingly (for both scheduling and budgeting purposes).

@Katie L., thanks for correcting me on that. They are a popular option in the DC area, but I was not aware there were restrictions on them at the state level. Definitely good information to know.