All Forum Posts by: Loren Whitney

Hi Everyone,

I've found plenty of mentions about using a scoring system when processing rental applications but I can't seem to find anyone's documented scoring criteria or system. My goal is to create a consistent non-discriminatory process to cover myself. Does anyone mind sharing their criteria or point scoring system? I'll be sure to still run things by my attorney.

Thanks in advance!

Hey Sandy,

UBIT shouldn't necessarily be seen as a bad thing. Are you leveraging your retirement now to increase purchase power and strive for higher returns? Do some math and see how your flip opportunities with UBIT compare to non-UBIT opportunities.

Many SDIRA professionals and tax specialists will tell you that Fix/Flip investments are considered 'operating business' transactions and therefore subject to UBIT. While I agree with this statement from a general IRC perspective - try to find someone that reports UBIT on their cash-only fix/flip to the IRS. Does anyone report UBIT on their Fix/Flips when paying cash?

Here is something to look into Sandy - Individual 401K Plans. In many situations, a 401K is exempt from UBIT and becomes very appealing. Do some research and see if this platform suites your needs.

Jon Klaus - Mitt probably didn't start with IRAs but other qualified plans.

Merry Christmas Guys!

Normally it's five years but certain things like 'home purchases' can extend beyond the first five.

Let's not get carried away though. I doubt that Richie's clients want to borrow against their 401k to make this investment.

Richie?

Will and Jon are right on track...

Back up a second though. Where do you fit to gain from this transaction?

If the client's 401k is sitting with a past employer OR he/she is over 59.5, the funds won't have a problem rolling into an SDIRA. Moving the funds is definitely step 1. This process alone can take between 1-4 weeks and depends primarily on the turnaround time of the 401k provider. Spend some timing learning about the logistics so that you can get ahead of the curve.

I'm not an attorney and can't give legal advice but if you're managing an LLC for someone else, I'm pretty sure that puts you in a fiduciary role? Anyone care to comment on that?

Depending on how your deal is structured, it might be much easier for you and the client to use an SDIRA to invest directly. Instead of involving an LLC for the SDIRA, allow the SDIRA to purchase the asset directly (or partner). Doing this would certainly alleviate liability on your part. If you needed operating cash for repairs, etc. - the SDIRA could always front you a buffer of cash to get things done.

Hope this works out for you Richie.

Agreed... Fantastic Feature!

I've listened to over 100+ BiggerPockets Articles and Blogs now!

Josh, you should form some kind of affiliate relationship with the guys that make this App.

I'd also like to chime in on this one...

It's as simple as this:

If you have a personal investment that you own or have control over...

You can't involve your IRA or the IRA of a disqualified person.

That's that.

I know you're not going to try and attempt what you mentioned but I just want to share one extra piece of info that I haven't seen mentioned.

Prohibited transactions are subject to a minimum 15% penalty and can rise depending on the severity of the transaction (up to the IRS). That penalty is supposed to involve all parties related to the transaction. That means you (if you own the property), your IRA, and your LLC. Ouch!

You can partner your IRA funds with your LLC for investments. The IRA just needs to be involved from beginning at acquisition and must have enough cash buffer to float of of it's expenses.

You won't regret it. It was the most expensive app I've ever purchased ($10) but the value is fantastic.

Make sure to setup a free (GetPocket.com) bookmarking account and the web pages you bookmark in your browser automatically sync with your phone.

You can also sync a ton of other file formats, including PDFs...

Enjoy!

I just wanted to share a quick off-topic experience with the rest of the board.

I'm a very busy guy that doesn't take the time to put up my feet and read through the great articles posted in the BiggerPockets Blog.

This might not be news to some of you but I just started using an iPhone App called "Dream Voice". The app helps convert text to voice and has lots of features. I have been successfully syncing all the BiggerPockets articles through this app and listening to them in the car or during a spare moment when I need to relax. It's be fantastic.

Check it out if you're an on-the-go individual that doesn't find the much needed time to read great content.

Cheers!

I prefer to use my iPhone for receipts now. TurboScan is a great app for capturing all types of document sizes.