All Forum Posts by: Bonnie Low

Hi, Amod. I'm not in your market, but the steps for analyzing any market are pretty much the same. I'd start by looking on Furnished Finder to see what other similar properties are listed for in your area and how much availability they have on their calendars. The key is to make sure you are analyzing LIKE properties. IOW, the amenities, decor and location need to be very comparable. You can also check stats on Furnished Finder to see how much demand there is in your area based on searches.  You can do the same on Airbnb by looking at their 30+ day listings.  Hope this helps!

I disagree. These are not separate goals at all. These ARE the goals, my 401k funds (however I end up using them) ARE the source of capital, I already invest in real estate and intend to do so in the most tax advantaged way possible and, like everyone, I want to minimize taxes. Ultimately, my question was asking for referrals to an excellent financial advisor who I can go into more depth with. Thankfully, I have gotten some referrals from other investors and professionals here who understood the question.

Yes, I'm aware of the Rule of 55, but not sure exactly how to execute on it. When you say LTV inside an SDIRA is somewhere around 50% are you speaking from an IRS rule perspective? I'm not aware of any lenders requiring 50% down.

When you say "when your IRA buys investment property....you can take distribution..." I assume you mean the SDIRA, correct?

 Great question, Juliette. I know a lot of people use an application. I don't. I DO start with some informal conversation to get a general sense of the person. These are basic questions like what brings you to Redding? What type of property are you looking for and do you have pets? Even if this information has been provided in their initial inquiry, I'll ask it again. Then I explain my process in brief and simple terms: background check, lease agreement, collect deposits and ask if they'd like to proceed. I've used both Avail and Keycheck for background check (credit check, criminal record and eviction history) but am currently using Turbo Tenant because they partner with the banking/bookkeeping platform I use, Baselane, and I like to keep it all in one place. I'm looking for a minimum 620 credit score and no late payments in the last 12 months. No evictions. For criminal record you have to use your own judgement and follow the rules for your state. Some states don't allow you to screen out felons, others do. You just have to be consistent and apply the same standards to everyone. 

I've recently left my long time W2 job after my leave of absence expired when caring for my husband. I have a decent 401k that I do not want to leave in the stock market. Is an SDIRA my only option if I want to use the funds for investing in real estate? I know there are restrictions on how you can use the proceeds from your SDIRA investments and I do need the flexibility to pay myself out of the cash flow from real estate investments. Doing a total cash out is not an option. I don't want the tax hit. I just turned 55 and know I'm eligible to take advantage of the Rule of 55 but also know that will only get me so far relative to the tax liability. If you have an excellent financial advisor who understands real estate investing I'd be interested in talking to him/her.

I don't have a dog in this fight because I do both. For my LTRs I use a PM and for my MTRs & STRs I self manage (both local and OOS) so I've seen the pros and cons to both. It is definitely possible to manage your own properties unless you simply don't want the hassle. There are abundant tools and resources and plenty of people to learn from in order to set yourself up for success. Sure, there are horror stories but those happen with professional PM in place also. If you have the proper legal documents in place and a strong tenant vetting process you can avoid much of the risk, though it's never fool proof, even with a PM. 

 If it's required then you need to do it. If the City has put an ordinance in place they're going to enforce it 99% of the time. It may delay you a bit in getting it launched, but having to have a permit isn't necessarily a bad thing. It usually means there will be less competition.

There are plenty of lenders who will finance all or part of your BRRRR projects if the numbers work. You're likely looking at a hard money lender or private lender, but they do exist and some will finance not only the initial purchase but the rehab as well. You probably need to have some of your own money both for a down payment and also for reserves, but you should not have to finance the whole thing out of pocket.