All Forum Posts by: Sateesh Kumar

Quote from @Dmitriy Fomichenko:

Not possible! IRA funds can be used to make investments only; they can't be used to buy a residence. You can take a distribution from the IRA, pay the taxes (plus penalties for premature distributions), and then use the funds as you see fit. However, you cannot use IRA funds directly in the transaction you are describing.

You can convert it into a self-directed IRA and buy investment property with it. You are prohibited from using the property personally; it must be a rental. You can't rent it to family members either. You can't do any work on the property yourself, you must outsource everything. You can finance the purchase of an investment property in an IRA, but you must use a non-recourse loan, which typically requires a 30-40% down payment. Leverage in an IRA will produce Unrelated Debt Financed Income (UDFI), subject to Unrelated Business Income Tax (UBIT).

There are plenty of investment options to deploy your IRA funds, but again, using your IRA in connection with this transaction will disqualify your IRA.

Thank You! This is very helpful.

Hello,

I am considering buying a fourplex in the Oakland area. I have little over 100k in an IRA from previous employer. Let's say I buy a 4-plex worth 1 million with 20% down payment, I will have to shell 200k out of pocket, would it be possible and is it even a sane idea to use up the entire IRA for the down payment and fund the remainder of down payment from out of pocket? I also intend to owner occupy

I was thinking if there is a small studio or even a garage within the four plex ,that should cover the IRA part and the rent from that studio/garage can be accounted and deposited directly into the IRA account

please advise

thanks

Quote from @Michael Smythe:

@Sateesh Kumar personal goals aside, what return are you making on the Jersey property and can you beat that by selling & investing in California?

The cash flow is good given I am on a very low interest rate besides I am a DIY live in landlord currently .PITI is a little less than 4k while I make a rent of 5k while living for free and there is lot more room to increase rent. I am also anticipating more appreciation in next 5 years due to the Home's proximity to NYC. Having a hard time to find anything remotely comparable to this home in CA
However being a remote landlord feels like a tough pill to swallow hence the confusion.

Quote from @Ayelet Wiedermann:

@Sateesh Kumar, it's tough to give up on a 2.5% interest rate, although of course your unique personal situation comes into play. Many of our clients in similar positions keep the investment and hire a property manager - that allows them a completely hands off investment, while continuing to build equity. Let me know if you'd like to consider. Happy to run through numbers with you to see what makes the most sense.

Thank You Ayelet. Do you serve Jersey City?

Hello,

A job relocation to San Francisco CA early this year is making me ponder if I should be selling my owner occupied duplex in Jersey City and buy something in Berkeley CA due to its proximity to San Francisco and has some fairly decent schools  for my kids and also UC Berkeley .

The low  2.5% interest rate on the Jersey City property turned into a golden chain but I think I am done with managing tenants and property and would like to get more into an Equity play. Kindly provide your input what would be the best place in the CA Bay Area to reposition my equity up to 700k? I am also open to other areas like Dublin, San Jose.

Thanks

Hello

i have been considering FSBO to sell my property for sometime now, I am not a savvy investor and realized I don't quite have the skills to take this responsibility all by myself so will definitely need some help from an agent. I wanted to check how to best take advantage of NAR Settlement to minimize agent fees. Is Redfin a good option. Appreciate your inputs.

Thanks

Quote from @Joe Villeneuve:

Quote from @Sateesh Kumar:

Quote from @Joe Villeneuve:

Quote from @Sateesh Kumar:

Hi Nicholas,H

ow does the state income tax calculated when relocating from NJ to CA. Planning to sell a OO duplex in NJ , I guess timing will be of paramount importance from a taxation perspective. Since half of the property is owner occupied, I think only half of my capital gains will be taxed but I don't want to get taxed in two states by being resident of two states this year when I sell the property. Can you please suggest how I should time my actual relocation so I get taxed only in NJ , appreciate your inputs

Thanks

Sateesh, you sent me a message direct, but when I went to answer it, you had me blocked.  You might want to change that or I won't be able to answer your question.

Hi Joe,
Thanks for letting me know, I sent you a message again today and I haven't done anything to block 

 so won't be able to unblock, let me try to send you a new message hope it resolves the issue.

thanks

Look in the upper right corner of one of your messages to me and see if you may have accidently clicked on the link that says "block" me.

Checked all messages none of them in block status and I am able to send you messages, could it because of other problem ? Perhaps out of storage on your end? Are you able to send messages to other members?

Quote from @Nicholas Aiola:

Quote from @Sateesh Kumar:

Hi Nicholas,H

ow does the state income tax calculated when relocating from NJ to CA. Planning to sell a OO duplex in NJ , I guess timing will be of paramount importance from a taxation perspective. Since half of the property is owner occupied, I think only half of my capital gains will be taxed but I don't want to get taxed in two states by being resident of two states this year when I sell the property. Can you please suggest how I should time my actual relocation so I get taxed only in NJ , appreciate your inputs

Thanks

 @Sateesh Kumar You'll pay tax to NJ regardless if the property is located in NJ. You'll get a credit on your resident state tax return for taxes paid to another state.

 Thanks a lot, this is helpful.

Quote from @Joe Villeneuve:

Quote from @Sateesh Kumar:

Hi Nicholas,H

ow does the state income tax calculated when relocating from NJ to CA. Planning to sell a OO duplex in NJ , I guess timing will be of paramount importance from a taxation perspective. Since half of the property is owner occupied, I think only half of my capital gains will be taxed but I don't want to get taxed in two states by being resident of two states this year when I sell the property. Can you please suggest how I should time my actual relocation so I get taxed only in NJ , appreciate your inputs

Thanks

Sateesh, you sent me a message direct, but when I went to answer it, you had me blocked.  You might want to change that or I won't be able to answer your question.

Hi Joe,
Thanks for letting me know, I sent you a message again today and I haven't done anything to block 

 so won't be able to unblock, let me try to send you a new message hope it resolves the issue.

thanks

Hi Nicholas,H

ow does the state income tax calculated when relocating from NJ to CA. Planning to sell a OO duplex in NJ , I guess timing will be of paramount importance from a taxation perspective. Since half of the property is owner occupied, I think only half of my capital gains will be taxed but I don't want to get taxed in two states by being resident of two states this year when I sell the property. Can you please suggest how I should time my actual relocation so I get taxed only in NJ , appreciate your inputs

Thanks