All Forum Posts by: Clark Kirkpatrick

Hi Taylor!

I am not a CPA, and I don't play one on the internet, so this is just my opinion.

That said, with a ROTH IRA, you are allowed to withdraw 100% of your contributions (but not gains made on those contributions). I believe the account must have been open for 5 years to do that without a penalty, so it depends on how old the account is.

Also with the IRA, you're allowed to take a distribution of up to $10k for a first time home purchase. I did this to buy the house I'm living in now, which is a duplex house hack for me.

The 401k is a bit more strict. You may be able to take a loan out on it. Maximum allowable loan amounts are up to $50,000 or 50% of the value of the account - whichever is less. Then you're required to pay yourself back, with interest, within 5 years. This is subject to approval from whoever is sponsoring the 401k. 

If you no longer work at the job that provided you with the 401k, you can transfer it into a "roll over IRA" which takes all the funds from the 401k and just makes them into a new account, governed by new rules - so instead of being subject to the stricter 401k rules, you can use the more lenient IRA rules to maximize your allowable distributions.

The guy who helps me through the legalities of all this is Steven Hamilton II, who I met on BP. He's a great accountant and can help you through this stuff if you look up his profile.

Good luck!

@Dan Park I work with a guy who specializes in PA residential real estate. He's good to work with and knows his stuff, so send me a message if you'd like his info!

@Donielle Houston

Don from DJS Home Remodeling has been very helpful for me. I’ll message you with his number.

Hi Donielle!

I've worked with contractors and rehabbed myself in Pottstown, and I'd say that your estimate could be close to accurate.

It's hard to tell though, because some very expensive things are not included in your descriptions. For spending too much on a rehab around here, usually the killer factors are:

1. Plumbing - for example, if the pipes are old iron pipes and they're rusting through, or if the sewer line to the street needs to be replaced because it's old or tree roots grew through it. Also, people sometimes steal copper pipes to sell them as scrap.

2. Electrical - for example, some old houses around here have knob and tube wiring, which is very difficult to get insurance for, and is a legitimate fire hazard. Or if you want to upgrade from 2-prong to 3-prong outlets (which also reduces fire hazards, and also makes your life more convenient if you live there) that requires re-wiring the circuit.

3. Heat/AC systems - a lot of the heat around here is old radiators with a boiler in the basement, and a boiler can run you $10k if it's bad. If you want A/C installed in one of these old houses instead of window units, that's expensive as well.

4. Roof 

The stuff you replace for gutting a house (drywall or plaster, paint, floor coverings, kitchen cabinets and countertops, toilets and vanities, etc.) will run up a decent bill, but if the systems I described above are bad, that can quickly make it completely unfeasible for an investor around here.

I have one rental that I'm managing myself (the other side of the duplex I live in) and I'm closing on a second duplex in a couple weeks that's fully rented. I also have a SFR under contract that needs a rehab, but it's a short sale, so we don't have a closing date yet because the bank likes to take their time.

I'm having Slatehouse manage the next place I'm closing on as well! So hopefully that'll go well. I've had really good experiences with the people there and people they've referred me to for insurance, legal, realtor and title services.

Congrats Craig! 

Pottstown is a great market in this area. I grew up in the Downingtown area and I'm house hacking in Pottstown now, with a couple more places under contract. 

Are you hiring management out or doing it yourself?

I like it, compared with surrounding areas. Prices are comparatively low and there’s lots of B and C class rental opportunities. It seems to be an improving area, with a mix of places that are run down and unloved, places getting fixed up and places that are nice. That means that you have the opportunity to get a run-down place for a good price and fix it up into something nice, and the rental market seems pretty strong. 

Disadvantages include high property taxes, the borough being difficult and pretty overbearing about building permits, and the school district isn’t great. So it just depends on what you’re looking for. 

Hey Mark, I'm in Pottstown and went through one of these a few months ago. I failed the first one because I didn't have a deadbolt on one of the exterior doors, one of the outlets had a hot-neutral reversed, and I needed a GFCI outlet in the kitchen.

I have a scanned copy of the Pottstown rental inspection report, with each thing they check. Let me know if you want to see it.

Hi guys, I'm interested in a Norristown meetup. Currently house hacking in Pottstown.

The Slatehouse group is on meetup, called the Pottstown Real Estate Investing Group. I've gone to a number of their meetups and they do a good job.

Hey guys, I grew up in Glenmoore, went to Downingtown schools and I'm house hacking in a duplex in Pottstown now, and making offers on places looking for a BRRRR. I like Pottstown for investing, and Reading, Norristown and Coatesville look interesting as well.

It's great to see people so local getting a conversation going!