All Forum Posts by: Amy Webber

@Dmitriy Fomichenko 

@George Blower 

Thank you both for all of your posts.  I have spent a good part of the last month reading .... and would appreciate a logic check from you and the community to see if I understand what I think I do !  If it seems that I have a reasonable understanding then then I will start researching individual providers for a good combination of cost and service and get this show on the road.

Thank you to all those who help with my logic check!

Amy

Objective: To roll over our existing IRA's into solo401ks. We would like to have access to the solo401k loan option and be able to increase contributions to our solo401k option over the $5500 per year that we can currently put into our individual IRA's.

Eligibility - Yes - We have self-employment income via two real estate LLCs and do not have any W2 employees in either entity.

Note - our active vs passive income varies (physical repairs/property management/passive rental income).

We would depend on our accountant to guide us in determining how much we would be able to put into the solo401k in any given year based on the active vs passive income here.

I am also a partner in a two owner GIS consulting LLC with a non-related partner. There are no W2 employees. My understanding is that this would have no bearing on my eligibility for a solo 401k at this time. However, IF there were ever any full time W2 employees at this LLC then that may change my eligibility for future contributions. I might have to freeze my solo and stop contributions. This would not affect my husbands solo401k and his solo could keep cranking along.

Rollovers - My understanding is that it IS possible for each of us to roll over our respective IRA into solo 401k accounts. My IRA into my solo401k account and my husbands into his - money stays in separate accounts - just like it is now.

Once funds are transferred into the solo 401ks, we would each be able to take out 401k loans up to 50% of balance or max of 50k each. These would be 5 year loans at a "reasonable interest rate" with normal scheduled payments required to avoid triggering a taxable event.

Company breakdown 3 LLC's / No W2 employees at all

LLC #1 - Real Estate Rentals/Flip

Owned by my husband and I - no W2 employees

We would depend on our accountant to verify how much of our income would be active vs passive and to determine what we could contribute to our solo401ks in any given year.  We would expect the contributions to vary from year to year.

LLC #2 - Real Estate/Commercial -

Holds 1 small commercial office building

Owned by my husband and I - no W2 employees

I manage the office building tenants and my husband handles most repairs needed for the property.

LLC #3 - GIS Consulting - My non-family business partner and I (50/50) - no W2 employees

Some W2 income for me but we are currently investing most revenue back into the business.

@Adam Drummond

That sounds good!  Hope it all goes smoothly. The rates at GFCU are under 5% - our last one in December was 4.5% I believe but they reevaluate the loan at 5 years for renewal.  I would be much happier with financing locked in for 15-20 years - esp at todays interest rates.

@JD Martin I agree!

The quality of the sweet tea is definitely a prime consideration when dining out ! It does matter - the sugar has to be mixed in just after the tea is brewed or it does not taste right :)  Of course, I am from Greenville while my husband is not.  He agrees with Jay regarding sweet tea!

@Adam Drummond

Hey Adam,  We have not used either of those but have had wonderful service from Greenville Federal Credit Union.  We work with Dee Brown in commercial lending at the Pelham Rd office.  We have done 5 year commercial loans with 20 year am with them as well as a line of credit on several properties.  They are also amenable to lower amount loans.

Good info regarding the other two,  will look forward to hearing what your experience is with those two banks/CU especially if they do longer term loans.  We have looked at the 5 year commercial as a way to move forward and then we want to put longer term financing in place if we can.  Harder now since neither of us are clocking in at a W2 anymore.

Out of curiosity, was United Bank (formerly Palmetto) one of the ones that you called?  I have been meaning to check in with them but have not done that yet.  

@Paul Halphen Sorry to hear about the troubles with Crescom - sounds like you are having the  same problems the fellow I mentioned earlier.  He told me it had always been renewed with a phone call before and more along the lines of his banker got everything ready, called him in to come sign his renewal papers and it was done.  Not this last time though .. his regular guy was gone ... Hope you get it all worked out or find a better place to work with for you investing.

Thanks,

Amy

@Jay Hinrichs - yep 

I am amazed that the OP did not sell the property back to Morris.    I certainly agree with you that that option for a do-over would never have been made if the OP had not the posted story along with the documented videos.  

Reminds me of the saying "fool me once, shame on you but fool me twice then shame on me"

I looked up the Morris you tube videos after recently listening to their BP podcast from some time ago.  Then I searched the forums and quickly found out all I need to know about their business practices.  Not going there ever ... 

@Todd Fry  Wow -   Well let's just say I completely agree with the post by  @Ray Sizzum 

If Morris will still take the property back after all this - sell it back and then use the lessons learned to improve your second deal - Good luck to you - it sounds like you will need all that you can get - Keep us posted and I truly hope that its a good story about the better deal the second time around.

Be careful with Crescom - we picked up some properties last year from a Greer State Bank investor when Crescom decided to not follow through on renewal of a commercial loan in process from Greer State Bank.  He had been doing business with Greer State Bank for over a decade and was stunned.  Have heard a number of people wishing that Greer State Bank was still around as they miss the customer service.  Just FYI - best of luck whatever you decide.

You might want to ask that attorney about adverse possession laws in your state as well.  Just living there and paying the taxes for x number of years may make the current deed null and void.  Not an attorney no legal advice given.

@Donald Brinkley Google "Destructible: how to drill open a standard door lock"  there is a pretty good demo on vimeo.

@Taylor Brugna

Thank you for your reply :)  We have been proportioning the interest between the properties in the past.  Moving forward I will use the liability accounts as you suggest but I want to make sure that I understand the requirements of the debt tracing rules moving forward.  

Thanks !