All Forum Posts by: Sunny Burns

My recommendation is to continue to fund the Roth IRA, and as others have said, withdraw your contributions to do your real estate investing.

Just to clear up all the Roth-IRA Withdrawal rules that everyone is spouting, Here are the actual rules as cited from this Vanguard Article: https://investor.vanguard.com/ira/ira-distribution-rules

Below are the highlights:

"Withdrawals of Roth IRA contributions are always both tax-free and penalty-free. But if you’re under age 59½ and your withdrawal dips into your earnings—in other words, if you withdraw more than you've contributed in total—you could be subject to both taxes and penalties on the earnings portion of the withdrawal."

Also interesting thing I found out is, if you did for some reason withdraw from your Roth-IRA, you have 60 calendar days to return the money and it will be considered an "Indirect Rollover" that will not affect your contribution limit for that year. For Example, if you withdrew $20k of your principal from your Roth-IRA for a down payment, you could potentially return that $20k by day 60, and still contribute the $5500 for that year.

@William Walker what is M2M? 

Hey Whitney sorry never rolled in rehab costs into the purchase. But we did cash-out refinance $67k 11months after closing. Sorry couldn't help you there. 

Did you speak with Rosemarie in north vale? She did our refinance. 

@Jeff B. I believe through 1099 income an "employee/contractor " can open an IRA, doesn't have to be W2 income, any earned income. That's how we first opened my Sons Roth IRA through Vanguard when he was 8 months old.

@Account Closed is it illegal to have an 11 year old mow your lawn?

After being inspired by a recent post, I've been trying to find more ways to fund my Sons Roth IRA by giving him earned income. The eventual goal being to transform it into a Self-Directed IRA and have him buy his 1st rental property through it at a young age.

Anyway this morning I had to deal with a leaky pipe on the property and I took him out to help, he was my measuring tape holder and apprentice. I wonder if the IRS would be cool with me paying him $10/hr if it's well documented.

By the way since my regular handyman is on vacation, I posted a video  http://youtu.be/cJ765R5e1-M detailing the problem with an offer of $100 on Craigslist. And In 20 minutes I have a local coming to repair the issue. 

Steve Vaughan really appreciate your refreshing statements on what kids should have and should be taught to hold Important - sounds like awesome parenting to me! Curious to know if you will push your kids towards college? I have two sons as well, one is almost two and the other is a week old. I have a masters in engineering myself, and a good government job doing it. But honestly the more and more I get into REI and other entrepreneurial endeavors the less inspired I am to send my kids to college. Would be curious to hear your and Drew Eldridge 's thoughts on this.

Dane Peterson glad it's been working out for ya 4.625% seems high? Is the rate higher because it's a second home? The bank last week was saying 4% and when surfeited back in October we got 3.49% for our 30year.

David Dachtera good point about the self directed IRA. I was able to start a Roth IRA for my now 1 year old when he was only 10 months old. Hopefully if there are other opportunities for him to earn some income and it can grow enough to be some sort of down payment for a rental property that would be amazing. Great suggestion Drew Eldridge awesome post! Super inspiring. Why do you think your first son is having no give and take with this, just innate personality differences, the age when you introduced it? What do you think?... I only ask because I have two sons, and I don't want one of them to write a book called "Rich Son, Poor Son"

Hey, @Dane Peterson we got rejected... not sure why, but our branch manager told us to reapply, but with Potential future signed leases. So we basically got a friend to sign that they would take over our lease should we purchase a new property(since we are owner occupying one of the units); then we also got 3 other "leases" that say they would move in with us should we buy that next quadplex.

But again this could be different as we are looking to owner occupy again and only put 10.5% down.

So that was a week ago, waiting to hear back. Also there was no mention of an application fee... I feel like we paid that last time for the mortgage application not for the preapproval.