All Forum Posts by: Jeff Ju

Try contacting the state's contractor licensing board and go from there. Hopefully, you have a contract and he's got a bond that you can sue, if necessary.

@KennethLee I'm in a similar position and so far, I've done one hard money loan and two syndication deals (very minor position but good to get involved slowly). I'm now looking into MFR vs lending money at 10-12%. FWIW, I have no money in the stock market and don't plan on investing in it.

@Logan Allec , I'd be happy to answer any questions you have about the online stuff! Feel free to message me here or privately. I still need to figure out how to @ people without manually typing their name! 

I'm a new member and am shocked by the amount of support the members of BP provide one another. I'm proud to be a new member and hope to give back one day!

I have a business that provides a decent passive income but I have yet to jump deep into my dream of real estate ownership. 

My prior RE experience consists of one private loan and two syndications for apartment buildings. The majority of my assets are in cash because I have not yet learned the basics of real estate investing (and the Southern California market makes it expensive to get your feet wet). I look forward to getting to know you. 

Thank you!

@Dmitriy Fomichenko Thank you!

My CPA did introduce me to an investor who I loaned $200k to at 12%. He's rehabbing the property and then refinancing. 

I guess I'm drawn towards rental property over this method for a few reasons (I'm a beginner so they may very well be flawed):

1. I am unsure how to find borrowers, let alone borrowers that I could trust. Whereas there are investment properties at my fingertips. 
2. The money is earning 0% during the periods of time from when the money is paid back until I find another borrower. 
3. The appreciation of property while tenants pay off the mortgage
4. The returns seem much higher on real estate due to the power of leverage. If I put down 30% on a $300k property that earns 7%, isn't that return based on $300k rather than the $90k cash? In other words, wouldn't I be earning $21,000 whereas a 12% deed for the same cash would be earning $10,800? 

Thanks again, guys! Such a wonderful community.

@Nicholas Aiola Thanks so much! 

Yes, it's a defined benefit plan and I contribute anywhere from $150k - $325k a year. It has been sitting in a checking account other than one hard money loan I made to an RE investor which earns tax-deferred interest and a syndicated minority stake in an apartment building which has UBTI. I just don't want to use it in the stock market (regret that now!) but I realize sitting in a bank account isn't the wisest decision either. 

I could potentially buy something out-of-state for all cash but not utilizing leverage doesn't sound like a great strategy. While I understand depreciation is tax-deferred, it's my understanding that the tax liability for recapture when selling can be avoided via 1031 exchange. 

Would I be able to use depreciation to offset UBTI for investments made through the self-directed defined benefit retirement account? 

Thanks again for providing this wonderful thread. 

the personal cash instead. Specifically:

1. I hear that one of the best things about real estate investment is the tax benefits - namely, depreciation. Since the income of the retirement plan is tax-free, doesn't this make depreciation a moot point?
2. Leverage seems to be a key ingredient of real estate; however, this creates a taxable income (unrelated taxable business income) in an investment vehicle that has an otherwise tax-free environment.

Thanks again!

Any experience with this? 

I've got an accountant who has been encouraging me to maximize contributions to a defined benefit plan despite my goals to invest in real estate. 

While I appreciate the tax deferment, I'm concerned about the following two points that I am hoping to get clearer answers to here. 

1. I hear that one of the best things about real estate investment is the tax benefits - namely, depreciation. Since the income of the retirement plan is tax-free, doesn't this make depreciation a moot point?
2. Leverage seems to be a key ingredient of real estate; however, this creates a taxable income (unrelated taxable business income) in an investment vehicle that has an otherwise tax-free environment. 

So is it better to provide hard money / private money to investors through the pension? 

For real estate investments, perhaps stop stuffing the pension and, instead, pay a little more tax up front on the personal side and use that to invest in real estate instead?