All Forum Posts by: Carl Fischer

@Mark Ross

Your welcome

@Mark Ross I understand your concern, and that you want to find honest, transparent, secure custodians. I am in the self-directed business, and therefore I cannot make any specific recommendations so as to adhere with BP guidelines. Speaking with people who have been around for a while, getting recommendations, and doing your due diligence is very important. Good luck. 

Hi @Dave Campos and @Jean Carlo Vilalta. I love Bucks County. It is a great place to visit, live, and invest. I'm not sure if you're aware, but there is a real estate investment group called Diversified Investor Group, or DIG, that meets in Montgomery County and has a Bucks County subgroup. It is a great way to meet seasoned real estate investors as well as other newbies, in addition to the resources you've been checking out here online on BiggerPockets. They also provide vendors and suppliers and professionals, so you can build your network relatively quickly and in-person. 

Real estate investing is great. My father was a real estate investor, and the one thing I improved upon that my father taught me was to buy properties in my Roth account and have tax-free income for life. I think that's a great strategy for anyone to develop; I've passed it onto my children, and I believe it will be a legacy for my family as investors. If either of you have any additional questions, I would be happy to connect.

Hi @Evan Koehler. I think it's great at 23 years old that you're looking into real estate. It's been very good to me in my lifetime. It's good to read books as @Jonathan Greene suggested, but I also think its important to make a decision and take action (you can read all the books you want about swimming, but you don't really know what it is until you're in the water).

@Scott Schultz's recommendation is good (buying your home as a duplex,triplex, or fourplex). That's a good way to ease into real estate with little or no risk. You also need to look at all the different ways to invest in real estate. You can buy single family homes, multifamily homes, large apartment buildings, and raw land and develop those investments including industrial buildings, warehouses, office spaces, etc. and have some sort of diversity just in real estate. It may be worthwhile before your student loans are paid off, as homes generally will provide you tax write-offs, and you may be able to pay off your student loans even faster this way. You may also want to replace your job with real estate income (or you may really love your job and want to stay in it -- if that's the case, you may need to decide what time of real estate you want to be in depending on the time you have available to invest in real estate). I would then look at tax-advantaged investing using IRAs and 401(k)s and other tax-advantaged accounts and real estate, as tax-free income for life has worked well for me and my Roth accounts. If you have any further questions, I would be happy to connect.

@Sean Roland

It is prohibited to lend money to yourself. Your Ira could buy the property and also get financing for it as long as it is non-recourse.

@Robert K. It's easy to pull funds from the custodian at 59.5, and it's easy to pull funds or make distributions prior to being 59.5. The real questions is are they taxable, are there penalties, etc. You can always check with IRS rules and regulations, and your custodians should follow them. Sometimes, these administrators will help your accountants and advisors understand the idiosyncrasies of the IRS. I am not sure if all of those custodians are knowledgeable about how to pull those funds and avoid penalties, but use that as one of your discriminators when choosing your custodian. 

There are many custodians and administrators out there. BiggerPockets provides a list of self-directed IRA custodians for you to reference on this site. You can check out that list here. In addition to knowledge, some things to consider when choosing a SDIRA custodian are customer service, experience, and processing speeds, as they will be integral to ensuring that the investments you have chosen to self-direct are facilitated efficiently. Many investors have found success through investing in alternative assets with their self-directed IRA, including in real estate. You can own residential, commercial, raw or improved land in your IRA. Once you find the custodian that is right for you, you can make investments in alternative assets to grow your future retirement savings through ways that utilize your personal knowledge and expertise. If you have any additional questions, I would be happy to connect. 

Hi @Richard Prillerman. That answer depends on who you are and whether you're talking about tax-free or taxable income. Federal taxes, state taxes, local taxes, medicare, and social security can chew up almost 50% of your taxable income. If you have tax-free income, that means you only need to make half as much. For example, if you were making $120,000 in W2 income, you could probably get away with making $60,000 in a Roth IRA. So, when you are developing your strategies, think about taxable, non-taxable, tax-advantaged plans, etc...whether it's $50,000 or $500,000. I think the older you get, you'll always be amending your strategy, and the first million is always the hardest. As far as making money for your children and grandchildren, it is probably better if you can teach them to make it for themselves, but this is an admirable goal. If you have more questions, feel free to connect.

Hi @Brynn R.. I started working with SDIRAs in the early 1990's. I think they're great. As others have mentioned, Fidelity's self-direction is only what they sell. You cannot buy property, do notes or mortgages, or buy precious metals. My grandfather, my mother, and my father were all in real estate. I am in real estate, and my sons are in real estate. We all use self-directed IRAs and 401(k)s. We find the experience of tax-free income for our life very satisfying. And the additional paperwork utilizing a custodian I feel is still less than the bookkeeping we did filing taxes with real estate outside of the IRA.

There are many custodians and administrators out there. BiggerPockets provides a list of self-directed IRA custodians for you to reference on this site. You can check out that list here. Things to consider when choosing a SDIRA custodian are customer service, knowledge, experience, and processing speeds, as they will be integral to ensuring that the investments you have chosen to self-direct are facilitated efficiently. Many investors have found success through investing in alternative assets with their self-directed IRA, including in real estate. You can own residential, commercial, raw or improved land in your IRA. Once you find the custodian that is right for you, you can make investments in alternative assets to grow your future retirement savings through ways that utilize your personal knowledge and expertise.

Your welcome

Great questions to ask, @Brady Hoffpauir. I invest in real estate outside of my IRA. I invest in real estate in my 401(k). I invest in real estate in my Roth IRA. They all have advantages. My favorite is the Roth IRA or 401(k) for real estate investing. Tax-free income and growth is better than the tax-advantages of real estate outside of the IRA. For example, I pay no capital gains tax, whether in a syndication or not, in my Roth accounts. I don't get the depreciation in the Roth or Traditional accounts, but I don't pay any taxes, so I don't need the depreciation. With my real estate outside of the IRA, I do get the tax advantages, but I also have to pay capital gains and depreciation recapture taxes when I sell the property, or do a 1031 exchange. But overall, Roth accounts are the easiest and the most advantageous to building wealth in my opinion and experience.

As @Eric Johnson said, "it depends" is the answer for most of this, but you have to look at your goals and the best steps to get you there. Nobody that I am aware of is upset with having a Roth IRA, and a lot of people wish they had gotten into them sooner. With 40 years of real estate investing and real estate related investments such as notes, mortgages, and tax liens, I believe that the Roth is the best tool available. The tracking and administration seems to be easier in the tax-advantaged accounts with yearly returns and record-keeping. Also, in reference to the UDFI with a Roth IRA, that can be eliminated by paying off the loan a year before it is sold. If you do have UDFI tax, it is generally very low because you are able to use depreciation and other write-offs to lower that tax. I hope this helps. If you have any other questions, feel free to connect with me.