All Forum Posts by: Tara Kinney

I do see the tax free benefits of the Roth 401K, my issue with doing any real estate inside of a government retirement plan is that I cannot access my own funds without a penalty before I'm 59.  That's 19 years away... I plan to retire way before then...

Great discussions.  As for real estate in my 401K, I guess my biggest issue is that my goal is to replace my current income with passive income via real estate and I am on a 6 year plan to retire.   I would be 46 at that time and thus if my properties or cashflow is tied into my 401K then I would have to take a penalty to take it out.  I say "retire" loosely as I wouldn't quit my job completely but work mostly per diem as I do love what I do, just would like more freedom to travel on my own schedule.   

As for going "all in" with real estate... I'm not a fan of the stock market and hoping for some kind of return, I might have control issues....but that's another discussion...LOL! ;)  I do have part of my current 401K invested in an ETF that is tied to the NASDAQ so that is my form of "gambling".   I'm not into house flipping, but rather buy and hold for cashflow, thus whether the markets go up or down, as long as there are people needing a place to live, my investments should be safe and they are backed by insurance, which is more than I can say for anything I put in a stock market.

I do have an interest in doing some partnerships and have been looking into that possibility in the future, I am very analytical and like doing the property analysis and crunching numbers, however I have no desire to get into the rehab/swinging a hammer side of things so the biggest value I can bring to a partnership is generally being the "lender" or analyzing deals.  

Thanks again...I'll go crunch some numbers and do some thinking on what would work best with my goals. :)

@Bernard Reisz Thank you for the advice! I will talk to my CPA and see if he can lend a little more advice based on the tax implications and if it would help me. Since I am a numbers person, I like to look to be able to compare scenarios to help build my strategy, but I have found it difficult (even hired a wealth strategy consultant) and have not been able to find anyone to give me such examples and scenerios. Perhaps when I build my portfolio I will find a niche in providing this kind of service to others as it seems this is lacking. Much things to consider! You gave me excellent food for thought!

@Bernard Reisz I currently have about $40K in my 401K. My LLC will gross around $180K and i pay myself aN $80K salary. So based on this, would it make sense to get my 401K up to $100K so I can borrow $50K for REI outside the plan, then use the other $50K for REI inside the plan? Then after that, stop contributing to the plan and just save directly for my investments? I’m thinking that by investing in the 401K it will significantly lower my tax burden this year so more money to use towards properties. THANKS!

Strategy Questions:

I work as an 1099 for my "real job". I have an LLC and it is taxed as an S-Corp. I have recently stopped contributing to my 401K to use the money to save for real estate. But....I've been thinking....what will give me more "spending" money to invest in real estate?

As my own employer....I can set up a $2 to $1 matching contribution to my 401K.... so I could put in the max $18K and my LLC would contribute another $36K. Now...I know I do NOT want to hold real estate in my retirement account as I lose much of the tax advantages. However, I can "borrow" from my 401K to invest in real estate and then pay myself back with interest.

My question is: does it make more sense just to pull the money straight out of my LLC to invest in real estate, or should I invest in my 401K with matching and then loan from my 401K? Keep in mind that all the money is "mine" anyway, so by "matching" it's not like I'm "making" more money, it is just reclassified so to speak.

What are your thoughts and suggestions?

I'd steak out the property till the person left the property, break in, (with all your paperwork that proves you own the property) and re-change the locks.  Then wait till he comes back and call the cops on him for attempting to break and enter.   Sorry, but I'm not wasting my money or time going through an eviction process on someone that doesn't have a legal binding lease to be there.  

@Cory Gamble

@Cory Gamble

Does anyone have a recommendation for some wholesalers and property managers in the Des Moines, IA area? Would like to expand my property search a bit and I have a good contractor already setup in that area. Thanks in advance.

Let me know what you have in mind!  I would love to get some reliable contractors in place so I can start doing some rehab on properties.