All Forum Posts by: Nathan Herber

Happy New Year!  Thank you all for your valuable insights which is helpful to weigh the options. As several stated above, I am leaning more toward multiple structures verses a one-size-fits all long/short term strategy.

If I were to cash out partly, my strategy would be only when an LOI is accepted and due diligence has been preformed. Then, hire a cost segregation specialist to apply accelerated deprecation on the property which flows through one's personal income to minimize the loss in taxes.

One small follow up question is a Solo 401k a QRP or is a QRP set up differently in that it offers assets protection?  

Thank you again!

Nathan

Hi Bigger Pockets Community! Merry Christmas and Happy New Year to you and your family.

So, I am going down the rabbit hole of researching moving my 401k and my wife's 403b from a former employer to a Solo 401k and a personal Roth IRA to a Self Directed Roth IRA. My question why did you decide to either cash out your retirement investments (and pay the taxes) or, moved them to a solo 401k and/or SD Roth IRA? I have read most of the regulations such as, UBIT tax, Solo/SDIRA can only be applied to non-recourse loans, solo 401k is more flexible than the Roth IRA, and it's better to set up an LLC for the Solo 401k to create a tax ID number for plan contributions etc.

I have to make a decision to move my retirement funds with my former employer's investment institution by March. My goal is to position my retirement funds so they are ready to deploy toward a deal. My three strategies are:

1. 1. Cash out, pay the UBIT tax and report the additional income that year, and if a deal is made next year, implement a cost segregation on the multifamily property to help reduce the taxable income.
2. 2. Move the funds to a Solo 401k / Roth IRA. I'm more limited to certain deals as a JV, but I can move the funds now with no penalty, taking advantage of the stock market/investment fund's all-time-high, and cash out later (or partially) if a recourse loan deal becomes available.
3. 3. Whole Life: With option #2, I must pay myself back over “x” years. While I’m still getting my head around this concept, the 3rd option is to cash out my retirement and place it into a Whole Life Insurance vehicle (infinite banking concept) to take loans against it for around 5% for real estate investments while the policy accuses/compounds over time, ie. 5 years (super simplistic for the purposes here).

I'm in my late 30's if that plays a factor into your answer.  I'm interested to hear how you came to your decisions and lessons learned.  

Thank you!

Nathan

Thank you Sam! I found out it was a "partnership expense" and it is not passed onto the new owner.

Hello! Yes, this is my first post. I'm reviewing an OM along with an attached income statement in excel.  Under expenses, they list "Partnership Expenses" and then "Extraordinary Expense" of $-5,833.15 for eight months and increases to $-6,733.32 for four months with their 2017-2018 fiscal year. Researching this term, I understand means a transaction that is abnormal, a non reoccurring expense, or a one time expenses such as large scale building upgrades.  However, this "expense" is definitely reoccurring.  Have you come across this line item before and if so, what did it entail?