All Forum Posts by: Bill Brady

A ROTH is different from the Traditional in that you can, indeed, take the principle out after 5 years penalty free. Just read up on this yesterday.

This is all good information....thanks BP fam.

Got it. Yah...I'm definitely not thinking about cashing out. I'm thinking more about taking out a loan against it instead.

Great info Steve...thank you. Out of curiosity, how did he take a 45% hit? Was it a cash out and he took the tax hit or was it something else?

Those were my thoughts too...didnt know if I was missing something else. Thank you so much for the reply.

I've tried to find the answer to this question over the past few days and have been unsuccessful. Everywhere I've read, including on BP, it's a "YES!!!...you CAN use your 401k to invest in RE" (rollover SEP-IRA, borrow, cash out, etc.) but nowhere can I find out if you SHOULD use it. I'm curious as to whether the longterm impact on taking money out of your 401k would somehow negate any return on investment you receive from a cash-flow positive rental.

If all numbers work out with a 15% CAP rate, $1000 cash-flow, 40% cash on cash return, etc....is there a true downside to using your 401k as a down-payment on a property? Are their any horror stories out there?

That's the word on the street :) Thanks, Bill!

Whew...good information. They were actually on my list to call. I think I'm going to stay away from the big banks the next time around...they don't seem to want the business as badly as the smaller guys.

Thank you, Charles...starting the process on that and we'll see where it takes us. Have you ever come across a scenario like this?

....I don't have $30,000 PLUS 25% that I can put down....

Hello BP Family!

I found a great opportunity in a city just outside of Atlanta (Smyrna) for a duplex which ends up being about 4 minutes away from my house. Great location and, by my calculations, expected rent, 8.4% vacancy, maintenance, etc...the monthly cash flow would be about $800 - $900 per month.

Problem: The accepted offer on the duplex is $107,000 with 25% down. The bank ordered appraisal via Bank of America came back at $77,000.

So, yes....I'm frustrated because of the low appraised value of the house but that's not my issue. My issue is that I don't believe the $500+ appraisal was done correctly. Out of 6 comparables, the closest one was 1.22 miles away. The next was 4.85...the next 6.5...the next 8.65 miles away and so on. For those that know Smyrna (closer to Vinings area), you know that a "comparable" property in Austell cannot come close to a similar value.

FURTHERMORE, the appraisal took 20 days to complete. By the time I received the low-ball appraisal, it put me outside of my contracted financing contingency which now puts my $2000 earnest money in jeopardy.

I feel like I'm up the proverbial creek....any advice?