New member from Lake Havasu City, Arizona

[Waylon Gates]

Hello to everyone on BiggerPockets!!  

I am Waylon Gates and I am a new member of BiggerPockets.  I have been involved with real estate investing since 2009.  I started out as a software company providing foreclosure information to investors and realtors.  The software company died fairly quickly as I realized that there was way more money in just using the information to do deals rather than basically begging people to pay for the information that I had.  

In March of 2010 I bought my first foreclosure.  I had all of maybe $45 to my name.  I borrowed money from two people at crazy interest rates and bought a house at the court house steps.  A simple fix and flip; clean, landscape the yard (in Arizona that means spread some gravel), a couple new light fixtures, and touch-up paint.  Two months later the house sold and I was able to put just under $30,000 in my pocket.  

I had become a real estate investor.  I wound down my computer consulting business and transitioned over the next year to being a full time real estate investor.  I had no idea what I was in for, but I was glad to not be working on computers any more.  

Fast forward to today and I have just over 400 deals to my credit...   No I am not a realtor and only a small handful were wholesale deals (3 to be exact).  I have managed to go from broke to flipping 100's of houses in just a few years.  I have a few rentals, but the vast majority were fix and flip. 

Currently I am changing direction with the market and starting to do some new construction, creating notes, and still flipping a few properties.

I am now wanting to meet and network with others that have the same drive and desire for getting the most out of life.  I find in my local area there aren't very many people that are close to my age (mid 30's) and pushing themselves to the next level.  

Thanks for reading my introduction!

-Waylon

[Mark Nolan]

@Waylon Gates

Following are the similarities and differences between the solo 401k and the self-directed IRA.

The Self-Directed IRA and Solo 401k Similarities

• Both were created by congress for individuals to save for retirement;
• Both may be invested in alternative investments such as real estate, precious metals tax liens, promissory notes, private company shares, and stocks and mutual funds, to name a few;
• Both allow for Roth contributions;
• Both are subject to prohibited transaction rules;
• Both are subject to federal taxes at time of distribution;
• Both allow for checkbook control for placing alternative investments;
• Both may be invested in annuities;
• Both are protected from creditors;
• Both allow for nondeductible contributions; and
• Both are prohibited from investing in assets listed under I.R.C. 408(m) .

The Self-Directed IRA and Solo 401k Differences

• In order to open a solo 401k, self-employment, whether on a part-time or full-time basis, is required;
• To open a self-directed IRA, self-employment income is not required;
• In order to gain IRA checkbook control over the self-directed IRA funds, a limited liability company (IRA LLC) must be utilized;
• The solo 401k allows for checkbook control from the onset;
• The solo 401k allows for personal loan known as a solo 401k loan;
• It is prohibited to borrow from your IRA;
• The Solo 401k may be invested in life insurance;
• The self-directed IRA may not be invested in life insurance;
• The solo 401k allow for high contribution amounts (for 2016; the solo 401k contribution limit is $53,000, whereas the self-directed IRA contribution limit is $5,500);
• The solo 401k business owner can serve as trustee of the solo 401k;
• The self-directed IRA participant/owner may not serve as trustee or custodian of her IRA; instead, a trust company or bank institution is required;
• When distributions commence from the solo 401k a mandatory 20% of federal taxes must be withheld from each distribution and submitted electronically to the IRS by the 15th of the month following the date of each distribution;
• Rollovers and/or transfers from IRAs or qualified plans (e.g., former employer 401k) to a solo 401k are not reported on Form 5498, but rather on Form 5500-EZ, but only if the air market value of the solo 401k exceeds $250K as of the end of the plan year (generally 12/31);
• When funds are rolled over or transferred from an IRA or 401k to a self-directed IRA, the amount deposited into the self-directed IRA is reported on Form 5498 by the receiving self-directed IRA custodian by May of the year following the rollover/transfer.
• Rollovers (provided the 60 day rollover window is satisfied) from an IRA to a Solo 401k or self-directed IRA are reported on lines 15a and 15b of Form 1040;
• Pre-tax IRA contributions on reported on line 32 of Form 1040;
• Pre-tax solo 401k contributions are reported on line 28 of Form 1040;
• Roth solo 401k funds are subject to RMDs;
• A Roth 401k may be transferred to a Roth IRA (Note that from a planning perspective, it may be advantageous to transfer Roth Solo 401k funds to a Roth IRA before turning age 70 ½ in order to escape the Roth RMD requirement applicable to Roth 401k contributions including Roth Solo 401k contributions and earnings.);
• Roth IRA funds are not subject to requirement minimum distributions (RMDs);
• The fair market value (FMV) of assets held in a self-directed IRA is reported on form 5498;
• The fair market value of assets held in a solo 401k are reported on Form 5500-EZ;
• At termination, the solo 401k is required to file a final Form 5500-EZ and 1099-R; and
• At termination, the self-directed IRA is only required to file a form 1099-R.