All Forum Posts by: Neil Sinha

I like your idea of requesting the second letter at his price.  Shows you have the funds to talk seriously without overplaying your hand.

Hi Bill.  I'm a Newbie in San Antonio, too.  Still learning and getting myself set up, but happy to network.

How are you getting both the HELOC AND the cash out refinance? Isn't 198K lent to 120K appraisal 165% LTV?

Hello.  Another newbie here.  To hijack this thread a tad, how do people utilize multiple private lenders in your network to fund a deal?  Say you need $50K and have 5 lenders with $10K each.  I would think adding five separate notes with increasingly junior liens is a bad deal for lenders 3+, but am I wrong?  What's the best way to tap multiple people in your network at once and offer them a win-win?

Hi San Antonio BP investors.  I've begun building my team and made contacts with attorneys, CPAs, lenders, etc, but am still looking for good recommendations on team members that are investor friendly:

-CPA firm

-General Contractor

-Insurance Agent

-Title Company

-etc.

Thanks and looking forward to networking!

-Neil Sinha

@Michael S. - It seems to work on the desktop site but not on the mobile page.  That may be the problem.  I've also noticed you can't @ mention someone from the mobile page, either.  Even when switching to full site view, it doesn't help.

I'm having the same problem for the San Antonio sub-forum to Texas. When opening a blank discussion, I can only pull down Texas, not the San Antonio sub-forum. When navigating to the San Antonio sub-forum and clicking "Start a Discussion," it takes me back to the same blank discussion form, which only allows Texas in the pulldown.

@George Blower, I will obviously speak to a 401(K) specialist before proceeding with any of this.  My point of coming to the forums was to try and get feedback.  Do you have any insights into which points are wrong and how?  That will help shape my conversation with the 401(k) provider and my CPA.

@Erik Drentlaw, looking on Corridor's page for buy and hold loans, they talk about their down payment reserve to set aside any up-front cash and then refinance for 100% cost by returning the reserve.  Any experience with that feature?

Hello.  I'm a new investor contemplating structure and strategy.  Based on what I've studied so far, I believe I've learnt the following (somebody correct me if I'm wrong on any points):

1.  Assets procured in a Roth retirement account will produce tax-free income at retirement age.  Rental income from properties held by the Roth trust will not incur passive taxation and sale of Roth assets are not subject to capital gains tax.

2.  Retirement plans can use non-recourse leverage, and 401K accounts specifically can do so without UBIT from UDFI.

3.  Employer profit sharing / matching contributions can be converted into Roth by including them in taxable income in the year converted.

4.  Solo 401K plans must make significant and recurring contributions or be subject to termination (but not necessarily disqualification).

5.  401K plan contributions must be made from earned income, not passive / Schedule E rental income.

6.  Solo 401K plan participants are allowed to borrow against the lesser of 1/2 the plan's value or $50K at a reasonable rate (approximately prime + 1) for an amortization period of five years with payments at least quarterly.

7.  A company cannot make profit sharing contributions if it is running at a loss.

8.  LLCs can check the box for S-Corp election and pay employees W-2 salaries to offset profits subject to self-employment taxation that would be on Schedule C self-employment income as a disregarded entity / sole proprietorship.

9. With a series LLC, each individual series can obtain an EIN and elect to check the box separately for taxation purposes even though the state of formation may not recognize them as separate entities from the parent.

With all those factors assumed true, I have been contemplating the below (complex) structure:

In the future, I may convert the operations entity into a standalone LLC for insulation / asset protection, but for the time being, let's examine it as an individual series off of the parent LLC. The idea is that the operations entity is the only one dealing with external parties and it does so to generate all the revenue for the structure. It collects tenant rent for all the properties held in holding series, and has ancillary streams of revenue by doing mosaics / tilework, property management for other landlords and cleaning / turnover services on other party's rental properties. The wife will be doing real estate work full time and qualify as a professional. The husband will have a day job with companies that offer 401Ks with matching contributions. But he'll have company turnover and thus be moving from plan to plan and roll old plans into the solo 401K between jobs. He'll be pulling W-2s for management and bookkeeping hours worked at night for running the operations entity.

The goal is to provide just enough plan contributions to breach the significant and recurring threshold while minimizing exposure to self-employment taxes. By keeping contributions flowing, it keeps the plan eligible for rollovers from the husbands other accounts and their vested matching contributions. The ancillary revenue should offset the idea that the operations entity's only business purpose is to syphon passive revenue into the 401K. Hopefully, the reduction of rental income by the operations entity's management fee could result in passive losses for the properties held by the holding series and parent LLC (all disregarded entities). Excess profits in the operations entity's account, beyond the W-2 salary payments, would feed the profit sharing contribution into the 401K up to the 25% of W-2 income allowed.

So I know the standard BP answer is "ask a CPA," but what are people's impressions?  Is this out there / bad tax planning or a good idea?