All Forum Posts by: Adam A.

How about borrowing from a Solo 401K to invest in RE and pay it back in at the end of the first year?  For example, flip costs $50K and profited $20K for a total $70K.  Paid the loan @ 5% by the end of the first year about $41K (monthly payment about $1K).  Would I pay UBIT on $20K, $29K (20K profit + 9K left over paid off first year).

I hope I explained it right.

@Mark Nolan The provided information is a general IRS guidelines and I appreciate your input. My comparison is whether the red tape and expenses of ROBS with no employees is worth it vs. Solo 401K income distribution given my above example.

Thanks.

No matter how you look at it, there will always be new ideas, challenges and competition in any industry.  This is not bad but only the opposite as it motivates creativity and opens new levels.  

Zillow is not the problem but only part of it.  Is having too many real estate agents creates saturation and smaller pieces of the pie? Or, more collaboration to share the pie? It surely goes both ways.

As mentioned above, personalized customer service and going the extra mile are the keys to have more referrals. Buyers, rely on agents for a source of trusted information which can't be found by FSBO.

At the end of the day, when I see a house offered FSBO, I call my real state agent to work out the details.

Just my 0.02 cents.      

How about a more realistic scenario on a 75K RE:

1. Didn't sell after 3 months and decided to rent it @ 1K monthly for a year.

2. Flip it with 20K profit within 2 months.

How much taxes will be paid in both Solo 401 and ROBS if income/distribution to be generated?

Thanks Adam.

Greetings,

After browsing and reading BP I still don't a clear idea which route to go.  In my situation, my wife will be a retired teacher by June 1ST @ 52. She has 403b and 401a plans which she can rollover from VALIC and STRS. 

We would like to rehab RE to rent and/or flip whatever the property and the market dictates. At the same time GENERATE income.  We would like to use part of the money for RE investment while the rest rolled over in mutual funds.     

My understanding and partial summation of the pros and cons and please CORRECT me if I'm WORNG:

• Solo 401 cheaper to set up ($500-$800) and maintain ($100-$200 annually) vs. 4K -5K and 1K+. 

• Solo distributions under 59 1/2 years subject to 10% penalty + income tax.  ROBS salary distributions/salary are tax deductible.
• ROBS not a good idea to rehab and rent since it generates a passive income which is an additional 20% tax. Solo is good to hold and shelter up to 59K/ year.

While trying to sort out everything to figure the better direction, does the Solo 10% penalty + income tax outweigh the headache of ROBS, Corp C, taxation, annual testing and maintenance?

I've been an entrepreneur since college without having any full time employees and don't anticipate on starting now.  However, RE is new to me and I'm glad I found BP.

Thanks in advance.