All Forum Posts by: Berry W McIntyre

Not all retirement accounts, I meant 401k

Has anyone ever used a Qualified Domestic Relations Order to pull all retirement accounts without penalties?

From my understanding, Its what a judge uses to separate qualified (non-IRA) retirement accounts in a divorce. The judge signs a Domestic Relations Order and then the qualified plan administrator makes it Qualified (that is, it meets ERISA standards to be a QDRO).

There is nothing in the IRS regulations or the DOL rules (who administer ERISA) that mandate QDROs are only for divorce. In fact, they can be used for spouses in addition to former spouses. This is not a loophole, It is a specified  portion of the law.

From the DOL Website, we read that a “domestic relations order” includes the approval of a property settlement. This is made under state domestic relations law (including community property law).

Translating lawyer-to-English, this means that the state's family law regulations MAY allow transfer of property from one spouse to another as a marital property right. Another way to say it: if I have a 401k, state law may permit me to get a domestic relations order from a judge giving my spouse the right to withdrawal part of the money. Since the withdrawal is part of a QDRO, by definition it comes out penalty free. In addition, my spouse can roll it over to a spousal IRA and treat it as his or her own.

Couldn't this is be used to fund a real estate investment using my 401k through my spouse without pentalties?

Also made a correction to the calculator with the cash flow at $223

Talking with a property manager of the area they said since I'm close to Fort Jackson, this has potential for military families. They feel pretty confident about renting out for $1600. And yes, so far I'm heavily invested in mutual funds and ETFs. However I also have 401k, Roth IRA and 529 accounts.


@Jaysen Medhurst, I was able to qualify for a HELOC, If you don't mind looking at the terms.

Assuming an appraised value of $225,000

1st mortgage set up at $180,000 80% loan to Value (LTV)

HELOC (Home Equity line of credit) set up at $33,750 15% (LTV)

Combined loan amount $213,750 (95% of the appraised value)

Interest rate 1st mortgage 3.875% 30 year fixed rate conv loan

HELOC interest only ARM: WSP + 1% (3.25% Current WSP index + 1% = 4.25%)

Principle and interest payment would be $846.43

Full monthly obligation including Home Owners insurance ($100 per month) and Taxes ($100 per month) : $1,046.43

The interest only payment on the HELOC assuming the full draw of $33,750 at 4.25% would be $122 (shown above)

Total monthly obligation between both mortgages : $1,168.43

~$25,000-26,000 would be the cash available from the HELOC at closing

What this refinance accomplishes:

• ~$25,000+ out in cash for the real estate investment opportunities
• Escrow refund – should be a wash with what we are estimating we would be setting aside to start your escrow (~$1,200) and that is your money to do with as you please
• Creates a HELOC that you can tap into on an as need basis (during the draw period which is the first 5 years). As you pay down the principle on the HELOC, you can draw on it as needed up to the full cap (which in this case is $33,750).

Keeps you set up with a conventional first mortgage with no Private mortgage insurance.

My question is, is their any potential in these options? What would you suggest?

I was going to purchase my first rental property and I want to make sure I dont create a nightmare situation. These are my HELOC terms:

Assuming an appraised value of $225,000

1st mortgage set up at $180,000 80% loan to Value (LTV)

HELOC (Home Equity line of credit) set up at $33,750 15% (LTV)

Combined loan amount $213,750 (95% of the appraised value)

Interest rate 1st mortgage 3.875% 30 year fixed rate conv loan

HELOC interest only ARM: WSP + 1% (3.25% Current WSP index + 1% = 4.25%)

Principle and interest payment would be $846.43

Full monthly obligation including Home Owners insurance ($100 per month) and Taxes ($100 per month) : $1,046.43

The interest only payment on the HELOC assuming the full draw of $33,750 at 4.25% would be $122 (shown above)

Total monthly obligation between both mortgages : $1,168.43

~$25,000-26,000 – would be the cash available from the HELOC at closing

What this refinance accomplishes:

• ~$25,000+ out in cash for the real estate investment opportunities
• Escrow refund – should be a wash with what we are estimating we would be setting aside to start your escrow (~$1,200) and that is your money to do with as you please
• Creates a HELOC that you can tap into on an as need basis (during the draw period which is the first 5 years). As you pay down the principle on the HELOC, you can draw on it as needed up to the full cap (which in this case is $33,750).
• Keeps you set up with a conventional first mortgage with no Private mortgage insurance.

How does this look guys? Oh Btw, the CoC is 12.2% and $280 cash flow

Hey Guys

Im going to break the ice on analyzing my current home. I've been paper investing my whole life and have been pretty satisfied with my ROI over the years, but with that, I am now interested in getting into real estate.

Starting with my own home, it is appraised at $225k. I refinanced last year at 180k, taking some cash out to put into investments and removing PMI. 20% has already been paid down obviously.

I want to start with my current home, because most of my money is in paper investments. They have done very well, but I rather not cash them out unless its a last resort to fund my first real estate venture.

What would you do?

 https://www.biggerpockets.com/...