All Forum Posts by: Amy Pfaffman

Thanks to both of you for responding. I have a few follow-up questions. I set up both a traditional and a Roth IRA back before I started real estate investing. Do you know if I can transfer from my traditional to my Roth without earned income? I know it's possible under normal conditions.

Also, I have another business that accounts for about 5% of my annual income and is not in the excluded categories. Is that enough to count as earned income? What are the lower limits of earned income?

Hi everyone,

Since it's year end (or the new year when you're reading this), I was thinking about contributing to my existing Roth IRA or at least moving some money from my traditional IRA to my Roth. I wanted to be sure I was operating within the law, so I looked up the rules, and it says to contribute to an IRA, I need "earned income," which specifically excludes rental income, dividends, interest, and retirement distributions. That's all my money. I tried Googling it, but I end up with a sea of results about self-directed IRAs, which is a totally different topic. For those of you like me, earning all your money from rents, what are you doing when it comes to retirement savings?

I think I'm seeing both sides of the issue here. It's true that we all need a place to live, and that costs money. It's very unlikely it'll ever be CF positive while you're living in it. In my case, I have an in-law unit that rents for $1295, and my expenses are just about $950, but I have tons of equity in this house that would otherwise be used for investing and earning income. We all have to decide how much we want to spend on where we live in balance with investing that money to make more money.

I haven't read the book, but I've read his others, and I'd definitely say I'm lazy. I've bought my properties off MLS, and I just buy and hold, and it's paid off well for me. I'm no longer hustling on a daily basis at a job or chasing after RE deals. I was lucky to have $300K to invest, and I made the most of it.

All good points here, but it seems to me it's a matter of when, not if. There will be people who don't get their jobs back and will have to sell their houses. True, there may not be as many foreclosures, but there will still likely be a surge in sales, driving prices down. So personally, I plan on holding onto what I've got (since I've got tenants paying in every unit) and buying more when things bottom out, wherever and whenever that bottom is.

Hi Phillip,

To answer your question, I was buying in Atlanta in 2016 and 2017 and spending between $35K and $50K. It appears the properties have basically doubled in value, which is good news for those properties but bad news for buying more, so I'm starting to invest in Birmingham, AL, where I can buy a 3/1 for $20K.

Investment Info:

Single-family residence buy & hold investment in Birmingham.

Purchase price: $21,800
Cash invested: $21,800

Just bought this as my first property in Birmingham. 2/1. Needs a little work.

What made you interested in investing in this type of deal?

Good ROI.

How did you find this deal and how did you negotiate it?

Found on Zillow. Worked with a buyer's agent.

How did you finance this deal?

Boyfriend lent me the cash.

How did you add value to the deal?

I will be fixing it up to rent ASAP. I plan on doing minimal cosmetic improvements like paint.

What was the outcome?

TBD. Too soon to tell.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Worked with buyer's agent Catherine Pewitt.

My story is very similar to yours. I started almost three years ago, I have six SFH in Atlanta and am closing on two more SFH in Birmingham, AL, this week. So far, it's been good for me. I'm getting great returns, but I have had to buy five new roofs out of the six Atlanta houses and a roof repair on the sixth. There is some appeal to me to having just one roof after all that. I think my long-term plan will be to do a cash-out refinance on the six in Atlanta and use that to buy a multi, assuming I can get even better returns.