All Forum Posts by: Mike Dawson

I'm a little stuck and could use some opinions on the matter. Every article or post I read seems to contradict the last to some degree, and each answer seems to create 2 questions. I am under the impression that forming an LLC would be beneficial for the following reasons:

1) Access to business credit and the different products available(I know they're more expensive, but I like having options),

2) "Legit" business appearance(perhaps that will help with PML/HML, or any situation where someone/entity only wants to work with recognized businesses),

3) Asset protection,

4) Lends to better bookkeeping, keeping personal and business separate.

I was almost sold on a WY holding company, with child companies in my home state(NC) where I will be operating. Then further reading showed that structure might not offer me additional protections over what I could get by just having that structure in my home state where I will be doing most of my business. Then, more reading seems to suggest that since I have no assets to currently protect, a parent/child LLC structure might be unnecessary, and even a single LLC might be.

My business plan is to buy/hold a mix of rental types, moving toward apartments when I can. Fix/flips, wholesale, and PML/HML(with an SDIRA/solo k) are also possibilities. My friend has rentals, and we've spoken about partnering on properties here and there.

If I set one LLC up now and run all business through that, is it possible to "convert" it to a holding company later if decide I need to? It would be nice to have some good credit built up instead of having to form a new one and start over.

Thanks for any insight.  

Oh I see. So for at least right now, a self directed IRA seems to be the way to go. Appreciate your help.

 Thanks!  Perhaps I shouldn't have been so quick to say that.  I'm not sure if I qualified in 2022 for that designation.  I only worked 2 months with my employer.  This year, all of my income should be from RE. But I don't have a business formed atm.  I am working on various business related items like business accounts, credit, supplies, etc., so next year should be a different story.  

Thanks! Yep, the other investor is of no relation, and all interest would flow directly back to the IRA. I forgot a piece of information though. If the investor would be mentoring me while the loan exists, would that be ok? I'm not paying for it.

  I really don't know the bulk of the types of transactions I'll be doing, unfortunately.  That doesn't help with planning very well, but I'm still trying to find my path within real estate.  

The more I look, the more questions I seem to have.  I'll try to keep it concise.  Thank you for any help you can offer!

Quit my job last year. I have a TSP still in place which I would like to rollover to a SDIRA(possibly with checkbook control). However, I'm seeing info on solo401 being attractive to self employed individuals. I qualify as a REP, but don't have a business in place. Also, in the future, I may decide to have employees so I'm not sure how that would jive with a solo401.

My first order of business is to use my funds I roll over to JV with a seasoned investor on a 40 unit MF. I would be loaning the money for the DP, while the seller finances the rest. Investor and my IRA(or SDIRA/LLC) would be on the deed, and only make interest on the money loaned. No rents, equity, or other profits from property come back to me. At refi, his obligation to my loan would be satisfied, and the IRA(or IRA/LLC) would be removed from the deed, ending the transaction. After the money is repaid, I'd like to engage in some personal loans, tax liens, and other deals like the one mentioned before.

Does anything about the first scenario throw any red flags?

Any opinions on whether I should consider a solo401 over a SDIRA?

Regarding the SDIRA, can you add an LLC later on if it's decided the extra control is worth pursuing?

Thanks for reading, and I look forward to any help.

So much for saving on transaction fees charged by IRA custodians...

For example, would using the bank account debit card count as a transaction?  

 What types of fees do I need to be aware of when shopping banks?  

It was bid on last week, so I didn't have to worry with the bank, and it bought me more time to consider. I will be upsetting that bid today. Hopefully the guy won't be ininterested in a war and was just looking for a good deal if the bank was the only interested party.