All Forum Posts by: Todd Kruger

@Angeli Noordin

Most lenders will confirm-prior to closing, that you paid for your own down payment. When you were conditionally approved I am sure the lender asked for your last 2 months of bank statements and confirmed you personally had the $6,900+ to close. Where did this cash go?

I urge you to reconsider this closing! If you go forward and “find” the DP$ your lender will likely once again confirm prior to closing on the source and seasoning of these funds.

You are playing with 🔥 here. This is NOT a solid start to your REI future.

Most traditional lenders will not lend to a SDIRA.  In the event they would they would normally ask that you guarantee the loan and this would be a restricted transaction.  For this reason you are unable to put down 20% and obtain a loan for the remaining purchase price.  It just cannot be done and be an accepted transaction.  

I do not have my SDIRA in the stock market-NO THANKS! I can make 20-30% return in REI and don't want to take any risk or the crappy returns the market provides.

@Steven May

Steven, the best thing I personally did 20 years ago when I became a REI was to open up my self-directed IRA. I remember having $20k in there and multiplying it multiple times every year to have the nearly $4m I have in my account today.

There are easy ways to grow your nest egg to afford your first flip. I have and continue to do a great deal of hard money loans to other flippers. Make sure these loans are in as short of terms as possible. A lesser amount of pts & rate are preferred over a long term loan. You make more $ at the end of the day if you can turn the same $ more often. 2-3x/year instead of only once. After you have enough in your account, always own one flip in your SDIRA. All proceeds get redeposited in that account and grows tax deferred until you begin to withdrawal upon retirement age.

Very soon the one possible flip turns into multiple homes at the same time.

Very important: research what is a prohibited transaction if you choose to do this. You will need to be “hands off” of these investments. Meaning you will need to have someone other than you, a wife or family member running these projects.

This path can be a tremendous ROI

@Faith Kirk

I have made this very mistake more than once! Whatever you decide, make sure you are willing to accept the possibility of losing out unless you accept their counter.

Best of luck!

@Boris Grinberg

Thank you Boris! I don’t like to sell anything I don’t have to-my current flip business is predicated on this model.

This is my first 50+ unit deal and I am not scored to see what the future holds and how I can manage this better to maximize everything.

I always considered this to be a legacy deal and the reasons behind this original post is to just maximize everything out of the deal.

I appreciate your response!

@Anthony Rosa

Anthony, great info. My complex consists of 7 individual buildings each with a different physical and legal address and consists of 6 different parcels, so your idea seems possible. I had my bank’s loan structure allow for partial releases so I could keep all my options open going forward. Thank you!

@Ola Dantis

Thank you!

@Jay Hinrichs

In your opinion is it better to have a lesser return with $0 cash in a deal and bring on maybe 1 or 2 investors and get an intimate return on cash or retain 100% of a deal and getting a 19% cash on cash return?

@Jay Hinrichs

Very valuable advise, i agree 100%. I appreciate that!

I purchased this with the intention of owning it myself for the 5-7 years and moving on and up in a larger deal via 1031 exchange.

I am just making sure there is not a smarter option I am not considering.

Thank you

@Ben Leybovich

I agree, selling shares is more realistic if anything. Thanks!