All Forum Posts by: Dana Regan

I am looking to purchase a property and will set up the SDIRA to purchase it.  I want to understand:
- do I need to have an LLC in my SDIRA or can I purchase without one?

- if I want to refinance, how do I get a mortgage within this SDIRA? or do I have to get a different type of loan?

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I have a property that I want to fund with my IRA, but have no idea how to do it and where to start. Please contact me if you can help me!!

Dana

I an in NNJ and have rental properties. I recently purchased a home to flip, and had a contractor (friend) that was going to be my partner.  That is not working, so I need to find a contractor to do my renovation, and have no idea how to find one.  I do not know anyone who is in this business, or has done a renovation, so do not have any recommendations.  Where do I begin? How do I evaluate?  Also, I want a contract with incentives for early completion or penalties for delays- any suggestions/ examples that I can consider?

I am starting a partnership for flipping.  I am responsible to find the property and funding, my partner does the renovations (the contractor- including labor and expenses) and we share the profit.  He wants a bonus on cost savings on expenses if he comes under budget (which would give him the incentive to estimate high on expense estimates), and does not want the cost of his labor to be included in the expenses to determine net profit.  On the other hand, I want the cost of financing (points, interest and carrying costs) included in the expenses.  I am sure someone else has figured this out

Can anyone share their model of this with me?  For example, when we determine costs- are the finance costs to be included? are the costs I pay him to do the work included? then we split profits? or are only actual out of pocket expenses included in the expenses to determine the costs?

I need a model that gives him the incentive to get it done under budget, and one that gives me the incentive to find the lowest cost of financing.  

Thanks for any advice!!!

Dana

I like the origination fee as well- as it makes them "feel good" and that I am not the only one who benefits.  Is it as easy as stating :To protect the Lender, Borrower gives what is known as security interest in the following real estate: ?

Also, for tax purposes (for the Lender) is it more advantageous to pay interest or a "fee" of some sort?

Thank you!

Thank you- I have things to think about. So, If I "pay myself" by distributing funds from one LLC, I can then use that money to fund my other LLC to buy the property? I have not set up my S corp yet, so both LLC are sole member LLCs. I have only been on my own since this year and not had to take any funds out of my consulting company yet. I appreciate the discussions

Thank you all!  I realized the 5% was a scam and got a reasonable 10%.  Now, my family and friends are interested.  Any advice on structuring these loan arrangements would be appreciated!

I am purchasing properties with hard money, then refinancing. I have used hard money companies, but now my family and friends are interested.  I have no problem with this, as long as it is in a contract.  I need ideas on how to establish the contract- are there guidelines on developing a loan contract for this? For example, worst case scenario it could be a 12 month loan- do I establish the loan for 12 months, with a monthly interest payment or payment at the end of 12 months? Or do I do quarterly payouts, with a clause for potential early termination (less than 12 month). Are there loan templates?  Do I position it as interest or a fee?  Thank you!!

I currently have an LLC for my consulting business (not real estate) and want to loan my real estate LLc money for purchase and renovations. Is this allowed? Or do I need to make a disbursement to myself to fund the real estate LLC? What should I be considering? Thank you for your insights.

Daniel - What did you find? I am in this situation now and am looking for a company to refinance my LLC properties as well.