All Forum Posts by: Brett Synicky

Don’t Let 2024 Slip Away Without Setting Up Your Solo 401k!

The end of the year is fast approaching, and so are your opportunities to make the most of your financial future. A Solo 401k isn’t just another retirement account—it’s a powerful tool to:

✅ Maximize your tax savings
✅ Supercharge your retirement contributions (up to $76,500!)
✅ Take full control of your investments (invest in non-wall street assets like real estate and so much more)

Here’s the catch: You likely need to establish your Solo 401k before December 31st to take advantage of its benefits for 2024.

The clock is ticking, but it’s not too late to act. Set yourself up for a strong financial future and start 2025 with the confidence that you’ve taken a smart step toward retirement security.

Let’s get started today! Contact Brett Synicky at Sense Financial for a complimentary consultation. Don’t wait—your future self will thank you!

Click here to set up your private consultation at a time that works for you!

Quote from @Tessa Mac:

Hello all!

I have two 403b accounts from previous employers and am interested in using this money for a down payment on a property. 

I’ve seen info about 403b loans (doesn’t seem like this is possible since I’m no longer with these employers? Either way it doesn’t seem like the right move to me) or rollover to self-directed IRA and then using that for that down payment. The only other option I see is cashing out the 403b and paying income tax and 10% early withdrawal fee (I’ m 32).

What is the best way to use this money from 403b accounts from previous employer for real estate?

Thanks in advance for your input!

You can roll the 403b’s into a self directed Ira or solo 401k if you qualify. Either of these options would allow you get a non-recourse loan and buy real estate.  Something to note is that you and your immediate family be able to use these properties personally in any way and you should have a 3rd party property manager. Study disqualified parties and prohibited transactions. 

Quote from @Anand Ariyappan:

Hello Community!

I am looking for a good non recourse lender who can help refinance the properties I own on my self directed Solo IRA account. I understand from my account broker that these properties can't be refinanced through regular banks or financial institutions. The firms who can do non recourse loans are very few and only they can do such deals.

Appreciate if any of you been in this situation and recommend a bank/broker who can help me here. The property is in Texas, if that help. 

Thanks,

Andy

 Here's a compiled list on bigger pockets:   

Non-Recourse Lenders

Quote from @Brad Herb:

I have an opportunity to invest in a syndication. Initially I was planning to withdraw Roth IRA $ to invest. However, the sponsor said there is an option to invest in the syndication with a SDIRA. I am interested to know the advantages and disadvantages of using a SDIRA. Do the tax advantages outweigh the SDIRA related fees (ie setup, custodian, transaction, asset specific, administrative)? I appreciate any input. thanks!

While an SDIRA will have UBIT on leveraged real estate, a solo 401k is exempt from UDFI (unrelated debt finance income) generated UBIT. If you’re self employed (or can be) with no full time w-2 employees outside of you and a spouse you should consider the solo 401k instead if SDIRA. It has Roth component and traditional built in.  Only downside is Roth IRA cannot roll into a 401k.  

Furthermore, you should explore checkbook control versus having the custodian make all the investments.  Hope this helps. 

Quote from @Bill Le:

Quote from @Brett Synicky:

Quote from @Rochelle Gerber:

I may leave a current employer and therefore I believe I will be eligible to turn my 401k into a real estate investment product. Pros and cons? ability to use the whole amount and how so ?

You’re most likely going to consider SDIRA or Solo 401k.  Both will allow your retirement dollars to invest in real estate and much more.  The IRA will have UDFI tax on leveraged real estate where the 401k will not.   IRA annual max 7k vs 401k $69k.  Solo 401k requires self employment with no full time employees other than you and a spouse.  Hope this helps. 

Interesting tidbit here. I didn't know that difference between IRA and solo 401k. If your max contribution for SDIRA is $7K a year, do most people just opt to keep mostly with stocks/bonds until they reach a certain point where they can invest? Seems like it would take a really long time before you can buy real estate if you're only allowed to contribution $7k a year.

 Usually yes, however there are crowdfunding opportunities like sparkrental.com that allow for low entry.   

Quote from @Audris Tien:

Hi @Deb, just wondering what self-directed IRA firm you are using to do this for private lending? Thinking about doing the same (for my solo 401K) and considering Rocket dollar, equity trust, broad financial, etc. Wondering if you had any feedback for those firms or if you have something else you'd recommend!

 Make sure to check company reviews and educate yourself on the difference between checkbook IRA and Custodial SDIRA. While every IRA must have a custodian creating a special purpose LLC can allow you to bypass the custodian when making investments and performing transactions which can save time and money. Furthermore unless you have a Roth IRA (can't move into Solo 401k) there really isn't a good reason to establish an SDIRA and a Solo 401k since you can do everything in the Solo 401k.

Furthermore, the Solo 401k really is a superior product than an IRA. No UBIT on leveraged real estate. 10x higher annual contribution limits. Pre-tax and Roth built in. Participant Loan. Cheaper and easier to maintain. Just to name a few.

Be sure to educate yourself on the prohibited transaction and disqualified person rules that apply to both plan types.  

@Rochelle Gerber The Solo 401k is for the business owner and their spouse only.  You cannot have a Solo 401k with full time w-2 employees outside of the married couple.   You can have employees that work less than 500 hours per year but they are ineligible to participate in the Solo 401k plan.  That said, a Solo 401k can easily invest in wall street by opening a brokerage account.  

Quote from @Philip Anderson:

Hi everyone!

I am looking to find my first multi-family. I would like to know what resources people recommend to find a market that would be a good place to do that. I am also open to recommendations from seasoned pros if they are willing to share. I would like to find one soon and start the journey. I have approx 450k to start with. I have been studying CAP rates, GRM and COC. I just would like to know how to apply those and find a good market so i can learn what the local CAP rates are, etc.

I own a single family LTR and have been managing that for 7 years.  That cash flows 900 a month. I will be investing my SDIRA for this new multi-family investment.  Anyone that has experience in using a SDIRA for their investment property, I would also welcome any tips or tricks when it comes to that aspect of the investment. 

BTW, I live in CA but am looking to invest outside of CA.

Thank you!

Hi Philip, do you have a Checkbook IRA?  It will be much easier on you if you can peform transactions without having to go through the red tape of going through the custodian every time you need to pay a bill.  As @Arn Cenedella mentioned be sure to udnerstand the tax implications regarding UDFI.  If you qualify for a Solo 401k that would be exempt from that tax on leveraged real estate.   Happy to have a chat further, on investing using your SDIRA.  Just DM me.  

This is all true except the no expenses or depreciation part, you actually can do that in an IRA (just doesn't help you personally today) on leveraged real estate because that portion of the income is subject to UDFI/UBIT tax which is calculated after deducting the first $1000 and accounting for depreciation and expenses as it relates to the % of the mortgage. But she's more likely a candidate for solo 401k which is exempt from that tax on leveraged real estate.

Either way for many people it's a good idea to own real estate inside of and outside of your retirement account to take advantage of the tax benefits personally.  But his is not the conversation though since the OP is talking about existing retirement funds that are currently invested in wall street.  So the question for her to decide is do I want to continue investing my retirement in wall street or do I want to move some/all the funds into alternative assets like real estate that can far out perform the stock market.   

You can get a loan to buy more real estate, nobody will lend you money to buy more s&p 500. All the rental income, appreciation and profit when selling is tax free! Yes it's true you're not benefitting from the tax benefits today, but that's not the point of a retirement account. It's tax deferred or tax free in a Roth. It's a tax advantaged account so there are no taxes in the IRA/Solo 401k today.

The rules are not hard to follow and of course you'll need to plan for RMD's unless Roth but if you start a few years out this isn't tough. It's myopic to look at real estate as only being a good investment outside of your IRA/401k. There's much more to consider than the negatives you mentioned.

Quote from @Rochelle Gerber:

Just to clarify, are you saying I can put 69k a year into the 401? That would obviously be the route to go. 
is there a limit to how much of the account you can use to invest? Say, I bring 250,000 or 500,000, how much or what percentage is useable? 
and if the 401 “makes” more than 69,000 based on investment returns is that fine ? 

The $69k max only relates to contributions. If under 50 the max is $69k.  If over 50 the max is $76,500.  Roth or traditional or combination.  The contributions must be made from business income from the sponsoring business aka your self employment.   You wear two hats, you’re the employee so IRS allows elective deferral (just like your current w-2 401k) up to $23k or $30,500 if over 50 AND the employer so you can also make profit sharing contributions of 20% if profit or 25% if gross payroll.  Total cannot exceed $69 or $76,500

You can invest as much as you want and no limits on returns.  In fact as the fiduciary your responsibility is to grow the account as quickly and effectively as you can.  If you're going to be self employed with no employees other than a spouse there isn’t a better retirement plan than the Solo 401k. 
 I encourage you to check out the link I posted above for more info.