All Forum Posts by: Jim Williams

Actually, I can partner with my IRA, just have to keep income and expenses separate per percentages. But I just wasn't sure how how buying 3 units and having financing would affect things from an IRS point of view. I can even have financing, but I was wondering if i can avoid UBIT taxes. Wasn't sure if they would consider the loan as part of percentage I have or would they say the financing was a percentage of the overall transaction, not just my percentage.

When I say me, I am talking about my LLC, and my IRA is an LLC owned by my IRA. Also, wasn't sure how being 3 units would affect use. I guess I was thinking that since IRA owned a certain percentage I could say they own 2 units and me one. I know I could not use it if it was just one unit. Probably too many gray areas, but I'm always looking right to the edges. May not be a good idea with the IRS.

If my self-directed ira contributes 45% cash to buy a 3 unit property, and i contribute 20% cash, plus a mortgage in my name for my remaining 35%(title states IRA 45% undivided interest, me 55% undivided interest), does the loan need to be non-recourse? Can i use one of the units?

Yeah. Commercial takes more cash down, has higher interest rates, and shorter amortization periods. They don't pencil out that way. Plus, I only have 20% in exchange funds. My lender says only Freddie will lend on them and only 4.

3 duplexes & 2 houses, all in Alabama. No existing loans.

I am buying 10 homes at once, all same city in AL and have income that does not reflect in tax returns. I can only get 4 loans thru Freddie Mac, so I was wondering if anyone has any ideas of alternative financing. Seller will close doing a wrap for 2 years, but I will still need loans eventually.

Jim

Les - I was thinking in terms of non-performing.  As for partials, I really have not run numbers nor looked at strategy for  that, though i should. I would probably agree with you about rents being higher, but that is not always the case.

Bob - I am familiar with non-recourse. Though I have not talked to them about this particular scenario, Island View Mortgage states on their website that they do as low as $25k. Good point about UDFI, I forgot about that.  

I'm thinking of a scenario, and looking for opinions, for buying discounted mortgages.

My thought is to get a note under contract and then negotiate a deed in lieu(unless the seller already has one in place) with property owner before closing. I would then either rent back to owner or get rented if vacant. The next step would be to refinance my cash out and move on to another deal.

Is it realistic to find these with enough equity to refi and enough rent to carry a positive cash flow? Is it better to go thru brokers, or just partner with someone who has experience in these. My note buying experience is limited, but my real estate background is over 25 years working and investing in real estate. This is just a new thought as opposed to straight out flipping.

I have $110k in self-directed IRA, but would prefer doing deals at less than $50k. I'm also not area-bound, but the numbers really need to make sense.

Opinions will be greatly appreciated.

Jim

Just curious about self-directed IRA's and wondering if anyone is familiar with this idea.

I set up a 401k with my self-directed IRA funds, which purchase stock in a newly-formed C-Corporation, The Corp than buys, say, 10 homes. This can be considered a business(from what i understand), thus allowing you to take an income, if there is one after all expenses, including a separate prop mgr.

Yes you would pay taxes as ordinary income, but the appreciation, once you sell, is what remains in the IRA. I would also be using non-recourse financing, so i wonder if the income i get would help offset unrelated debt financed income(UDFI).

It's a little confusing, but i am trying to use my self-directed IRA to create income for me outside the IRA, as well as keep profits in the IRA.

I would love to hear from anyone who has experience or knowledge in this. Or a recommendation of someone who does know.

Thanks

Jim Williams

just a thought. i don't see why someone cannot put a 2nd on their property, in my favor, for any given amount and no reason why.

jim

i have a friend who needs to borrow $10k and will give me a percentage of profits($25,000) from sale of piece of property, which should be in 4 months. i will have property as collateral.

we want to keep it as a loan, as opposed to buying into his partnership, so as to not bring about any taxable situations, but i am a little worried about usury laws.

i would love any ideas on the best way to do this to protect us both.\\jim williams