All Forum Posts by: Scott Schultz

@Henri Meli has a good point, borrowing your own money from your 401K is a great option, the cap is $50K (IRS limit) the interest if any is paid back to you into your 401K there may be fees involved, and if you quit or are let go from your job you need to pay the full amount back, not sure how fast, not i think its withing 30-60 days or the withdrawal becomes a taxable event. if you have a ROTH IRA also, you can pull out the principal that you put in interest and penalty free you just cant touch the earnings you put into the account. also if you are a first time buyer look at a WHEDA Loan, if a Veteran the VA still has a zero down program, and if you plan to buy in a Rural area USDA also has zero down. FNMA has some very low down programs as well. seek all your options, you are getting into bed with your loan for 15-30 years, make the most educated decision possible.

one more thing, if you want to manage properties, manage properties for yourself and others and make a viable business out of it, if you want to invest in real estate, pay a manager and focus on buying great deals, and build your portfolio, PM is a Job, I dont want a Job, I just want cashflow. 

regarding tax advantage, I guess we really dont know yet under the new law, from what i have read there may be an advantage to filing a separate LLC return going forward depending what your other income is, but as far as deduct ability it makes no difference whos name its in, heck I had a HELOC on my personal home used the money for all business purpose and the interest is all business expense.

Trusts, from what I understand the law grants all property owners to transfer into a trust and no lender or other entity can legally stop you, or have repercussion if yo do. keep in mind Trusts only provides privacy and possible estate planning aspects, never asset protection. 

i would speak to your CPA about the 401K money, it most likely be a taxable event, so interest and penalty will probably apply, FHA has a 3% down product, so if you need 3% from your 401K you probably are not ready to buy, just my opinion. to clarify when you say multi family how many units are you talking about? 1-4 is considered residential and normal owner occupant loans work, 5+ you are in the Commercial world.

FHA is an option if you dont have much money saved up, but the loan itself is not great, its fine for some buyers, but as a broker i will say they are a pain to get closed usually.

the bank does not have a legal right to sell it to you till after the confirmation of sale, you could work out with them a deal prior related to a bid amount though, but someone else could bid. best would be contact the owner and see if they will delay the sale to get a deal done prior to sale, otherwise buy it at sale, or if no one buys at sale you would have to wait till its REO if no one bids at sale there is a slim chance the bank will sell their bid to you, it not common but does happen once an a while, you would need to go through the bank attorney generally for that, unless you have the right bank contact. good luck.

not sure what you are trying to accomplish by doing this, from a tax standpoint with the new law, i cant see how it would help, holding in your personal name, and it also opens everything up with no "limited liability" also what are you waiting for on forming the LLC? it takes about 5-10 min on WDFI to get your LLC set up, and needed docs emailed to you, if you set the start day as the day you register the LLC you are up and running as soon as the credit card payment is approved.

I would agree its tough to tell in pictures, looks like they were knocking down basement walls and supporting with lolly columns, if the columns are on suitable footings it may not be that bad, but hard to tell in pictures, I own one similar, but i only paid $6K for the house, put $7500 in the rehab, and I get $725/mo rent, house is not falling down so I let it roll, if it starts moving then I will worry about it.  all depends what you are comfortable with, if you are asking on here, its probably not for you. 

it’s  a revenue source for the state, and not a PM function, thebentity may own properties that you do not manage or operate a business you are not involved in at all

I would shop for a Lawn service, or if you are set on using a tenant, DO NOT supply the equipment, if they hurt themselves, or others,  damage property, ect, someone is coming after you because you supplied the equipment, to me its not worth the risk.