All Forum Posts by: Taylor L.

Fidelity isn't set up to handle this type of account. You'd need to work with a custodian that is set up for self directed IRAs. There are a ton of them, I'd recommend searching the BP forums and doing your research before moving forward. There are a lot of details and potential pitfalls to SDIRA investing.

@Chris Seveney 100% agreed, a bank bailout and insuring depositors aren't the same thing. I think it's reasonable to discuss sticking with the $250k FDIC limit or not. Regulators are trying desperately to avoid a contagion effect, so insuring depositors above the limit is almost certainly intended to avoid additional bank runs.

The broader point is that this happened because of interest rate risks not being properly mitigated. What other parts of the financial system are not adequately hedged?

Have you ever found yourself the target of a telemarketing campaign by syndicators marketing securities? These tend to be newer teams which do not have established investor bases or track records. As a result, they're desperate to raise capital and aren't all that worried about legal marketing strategies.

I've recently found myself the target of one of these such teams. I did not ask to be placed on this list, I have more than enough deal flow of my own. Several 'private number' calls, followed by voicemail drops. They finally called me from a non-private number and I asked to be taken off the list. We'll see if the calls actually stop.

To syndicators thinking of cold calling numbers on the DNC Registry in order to market securities - do not do it. Someone will complain and you'll get in an awful lot of trouble. Your goal should be to grow your investor database of people who are genuinely interested in doing business with you, and who are asking you for the opportunity to invest in your deals.

Was it your personal account or a business account? Giving someone else access to your personal account is typically a violation of ToS.

@Michael Wagner's Storage Rebellion is one of the best places to learn the ropes of how the business works. There are quite a few free or inexpensive resources you can get that'll teach you the basics of where value can be found & created in storage, I'd recommend picking up a few books and browsing YouTube for basic storage investing lessons. 

 Thanks for sharing Rob. What were the original debt terms on the deals that are struggling?

BRRRR - Buy, Rehab, Rent, Refinance, Repeat

Sounds like a typical Richmond owner :)

I'd look at it more in terms of Return on Equity. Cap rate is an often misapplied metric and doesn't actually show your returns when it's all said and done because the cap rate calculation does not include debt service. 

What is your current return on equity? How about your return on time? i.e. how many hours per year do you spend on this property, compared to the dollars you earn per year?

It's hard to beat the capital gains tax exclusion, but on the other hand it's also hard to beat the 3.375% mortgage rate.

Do you have a specific deal or type of deal where you'd reinvest the capital? Would that be more consistent with your long term goals?

Every knowledgeable CPA I've discussed this with has said you can't split up depreciation in that way for purely tax-related reasons. Depreciation must be split based on percentage of ownership. We've looked into it for our deals because some of our investors value depreciation more than others, but the answer has always come back no. Before you move forward be sure to get a tax professional to weigh in.

Even then, the split is incredibly unfair. You're taking all of the financial risk for a tiny portion of the upside.