All Forum Posts by: Chad Hovermale

Hi, Jake.  Welcome to BP. I would consider it "speculative" .  If you have money to speculate,  or you lockopportunity to invest for cash flow , then maybe buy.  If you can't afford to wait for the city to get the project going, then walk away.  There will be property on the West side to buy in a few years from 'investors'  that couldn't hold on to the good deals they picked up on speculation.   I would have more fun losing the money at Gun Lake.  :-)

Good luck.  There will alsways be deals that.  You're in the right plus to learn how to find them and make them work.

If the equity option doesn't cashflow, then I would pass on it.  You can't use equity to replace the furnace or buy the next place.  It depends on your goals,  your current balance sheet and cashflow, tolerances, skill set, and lots f other stuff.  But... cashflow.will cover your butt more often than equity. 

greetings from Grand Rapids

try Garr Russell in GR

https://garranteedbusinessfunding.com

We have contracted drywall in Grand Rapids for 14 years.  We also install drop ceilings in residential and commercial units.  There has been some great advice on this thread about fire ratings, so I won't repeat it.  Here is what I would do if it were my rental unit (just my opinion, there are lots of ways to do it):

1. insulate for sounds (use wool if required by code as a fire rated partition).

2. install resilient channel (sometimes called RC 1 channel).  This is different from hat track and z-firring because it is engineered to lessen sound wave transmission.

3. optional sound board.  Its a tectum product that it lightweight and deadens sound, but it will make the drywall more difficult to install.

4. 5/8" type x drywall.  Finish it smooth so that it is easier to patch if you ever need to cut out a section to access pipes, mechanicals, etc.  If you do the mechanicals right before you cover them up, there is a very small likelihood that you'll need to access them later.  Many of the systems will still be servicable through chases in between floor joists accessible through unfinished storage, laundry, or mechanical rooms.  Finished drywall is half the expense of grid ceilings, is more easily painted, and prevents renting residents from accessing your mechanical systems.

That's more than two cents worth.  :-)  Good luck!

@Auspria Wade 

We use Quest IRA for our self directed Roth. I highly recommend browsing their webinar archive.

http://www.questira.com/

https://www.questira.com/all-events/webinar-archiv...

And their prohibited transactions advice.

https://www.questira.com/education-center/ira-proh...

We operate a drywall business and prefer to leverage our trade contacts and employees in order to do our own property upgrades and maintenance. The IRA prohibits hands-on management and sweat equity. With all of the tax advantages that real estate ownership offers beyond the qualified retirement plans, we've recently wrestled with the value of using our IRAs for retirement investing.

That said, the self-directed IRA is a great option to use to meet many real estate investing goals. Quest IRA has been a great resource for education resources, and they are well staffed and ready to answer questions every time that I call them. One of the principles traveled from their Lansing office to make sure that our last closing went smoothly. Their service orientation is reassuring.

Happy investing!

Welcome, Matt!

I'm going to add a plug for Kentwood on the SE side. We live and invest in Kentwood, and we love the schools which our children attend. Also, there are a crapload (is that a compound word?) of duplexes in Kentwood which have, IMO, a good balance of ROI vs. hassle. There are many terrific small markets in the GR area, and everyone has their niche; but, I would encourage anyone moving to the GR metro area to consider Kentwood for living or investing.

We are always working on some sort of renovation project in one of our units.  It would be a pleasure to show you around (BTW, I'm not a realtor) Kentwood and show you a typical duplex unit.

Good luck!

Chad

Thank you for your replies!!

For all of the IRA experts.

In your opinion, if I purchase an option to buy a property with funds from my IRA and manage the property during the option period inside of the IRA, would I be prohibited from purchasing the property at the end of the option period with personal funds or a mortgage with my name on the deed?

Chad

Hi, BiggerPockets Community!

I purchase buy and hold duplexes in Grand Rapids. We also have a drywall contracting business. We look for properties that we can improve by adding value using our construction trade contacts. We currently have a property under contract and have enough in a Roth IRA account with a custodian to pay 30% down. It isn't enough for a non-recourse loan through the IRA, and I'm considering taking out the money that we have made in contributions to put toward the property so that I can have my name on the deed instead of the IRA's. This allows me to make improvements and self-manage.

Given the tax benefits of owning real estate outside of a retirement account, are the restrictions of purchasing through a Roth IRA worth the tax benefits of a Roth IRA for buy&hold investors?

Chad