All Forum Posts by: Matt Fisher

@Mark Nolan I've looked into the ROBS option, but I didn't think it fit well.  It sounds as though it's better suited for larger 401(k)s and mine is only 5 years old (but I had company match to 8% and I put in more at times).  Also, as I understand it there are some additional startup costs.

@Franklin Romine Thanks for your input.  I had thought the same thing.  I could quickly utilize it and in creative RE, that's the difference between no deal and big profit!  Cash is king.

Thank you @Account Closed nailed it.  I think I can do better than my current (stock) investments, but more importantly, I'll be leveraging a potential pot of money that I didn't realize until lately that I had at my disposal. At this early point in my investing career it's more important to feel like I have multiple funding pools to draw on for my first investments.  There is so much stress initially (from lack of real-world knowledge) that having less pressure on funding makes it that much easier to get started. 

Eventually, I will have access to 'better' funding mechanisms, but for now, I'm much more comfortable cutting my teeth with my funds.  And even if I don't keep up with the stock market, I'm learning first-hand and investing in something that I have some modicum of control over.

@Randy Johnston (added to include the mention tag-didn't work in previous post).

Thanks @Randy Johnston

Those are great ideas.  It's easy to see those conflicts of interest when they're clearly laid out, but harder to recognize without others that are experienced with them!  Lots to learn...

Thanks Brian and Dawn,

Thats the kind of info I was looking for. I would like to use the loan to bootstrap my business and I wasnt clear about that in my first post.

I'd really like to find creative ways to use it while I'm "cash poor but enthusiasm rich".

Thanks for all the great advice-I appreciate it.  And I will seek professional advice when I do it.

...But it doesn't really get at what I was asking for... Brian's comment clarified that it couldn't be used for "my" RE projects (i.e. my LLC's), but I could add RE to my 401(k) as an investment. So in what ways have people invested in RE with their Solo 401k?

There just isn't a lot of info out there about this and it's challenging to search for. I assume SFR's are a simple, bread and butter way but I'd be interested in hearing other ways people have used this in RE deals. Have people bought properties and rehabbed/flipped them?

Again, just trying to get a sense for HOW they're used and what types of transactions people are doing with them.

My wife and I are beginning to pool funds to begin a real estate investing venture.  I have a 401k from a former employer that I would like to leverage to our new business.  I have been researching "Checkbook Control" Solo 401(k)s here and on the web... I like the idea of being able to cut a check from my 401(k) to use in my business!  It's easy to find info on WHAT they are, however it isn't exactly clear HOW I can use those funds in real estate endeavors.  

I would like to hear how you have used these funds in your RE investing.  As always, the more creative the better!  Conversely, are there any prohibited transactions I should watch out for?

Matt

I am beginning to develop a business plan for a real estate investing business in Iowa and I would like advice about how I should structure our business entity.

I'm meeting with an attorney soon to discuss the business start-up (and then a CPA). I have a much better understanding of entity formation from a liability point of view, but taxation risk/benefits are beyond my realm of expertise.  I would love to get some great feedback so I can go into that conversation more educated from the tax point of view. 

This is a challenging topic to Google... There is so much information that may or may not relate to our specific situation-it's difficult to separate the wheat from the chaff!

Key information:
This will be my full-time occupation.  My wife works for the state full time and has a modest salary and great benefits.  We have limited expenses and can live off of her salary alone. She will help wherever she can and is contributing with start-up costs.  Although we call each other husband and wife, we haven't 'officially' been married but we've lived together for 10 years.  She has a ring though, LOL. I've spent the last few years researching real estate investing but worked too much to do it. We recently relocated for her job and it has given me the opportunity to go 'all in'!

The focus of our business will be on marketing to find great deals in the Des Moines metro area.  We will do rehabs as financing allows and occasionally wholesale. Eventually, we will reinvest funds into long term rentals (probably sfr's, at least initially).  I plan on doing some construction aspects myself and will manage our rentals.

We will likely self finance or go through a commercial lender for our first deals. Eventually we will roll over profits into other deals (maybe through 10-31 exchanges?) and begin to pursue private funding.  My hope is that by maximizing early reinvestment (and living lean) I will be able to jumpstart our equity.

Some Questions:

Does our marital status matter?

Will doing work on rehabs and/or rentals affect how I should structure an entity?

Would it be beneficial to be a licensed contractor (which is fairly easy in Iowa)?

Are there any key points I should be considering re: how we finance deals?

What should we be thinking about in case of dissolution?  I hope that's not the case, but we need to cover our bases!

What am I missing?  I don't know the right questions to ask!

Thanks in advance! 
Matt Fisher

Lucas,

It is absolutely not necessary to go to college to get involved in RE.  Also, I think it would be very challenging to go and not get into at least a little debt unless you have a better college job lined-up than I did!  Work comes at the expense of grades and if you go, you gotta get good grades!

I spent 10 years going to college (some of it working full time, going part time) and got a MS in Biology.  I worked for 10 years in a conservation related field and then left.  In hind sight I'm not sure that I look at college as advantageous to me...at least from a financial point of view.  But in many fields that diploma is the only way to even get in the game. 

I think the most important thing I learned from college was how to find the resources I needed to get x, y, or z done.  In our technology age, you don't need college to do that.   If you're very certain of what you want to do, go.  Especially if it will benefit your future RE investments (That desire is one thing that hasn't wavered for me since I was your age).  But if you're on the fence about what you want to do, you might look back and find college wasn't the best choice. 

If you are going to get involved in RE you need cash and smarts... Getting a degree in the right field WILL bolster that for sure. Especially if you get a degree in a field that will mesh with RE Investment. If you get a good job, you will be cash-flowing much better than a high school student!  That will be a tremendous asset.  Also, you may have more credibility with lenders, potential sellers, etc.

I hope that helps!
Matt

Galvanic corrosion occurs wherever two different metals touch. Like the others said, galvanized pipes are usually the suspect.