All Forum Posts by: Dan Rudolph

I am in Oregon and am interested in a referral to a lawyer or planner that can help set up a Charitable Trust.  If possible we would like to hold income-producing commercial real estate in this trust. 

Thanks for any help you can provide.

I absolutely agree with @Dmitriy Fomichenko

I also made what looked like double-digit returns in Prosper during my first 15 months using all the backtesting algos.  Then the defaults started piling in.  At that point, I stopped buying notes, and since then my interest payments have *almost* kept up with my defaults.  In other words, for the past 16 months I have been *almost* breaking even while trying to extract myself from this investment.

I highly recommend that you check out Peter Renton's website before you jump whole hog into Lending Club.

He is no slouch, and is making low single digits on Lending Club.  Do you really think that you can do better than Peter with his extensive experience and resources?

You are better off buying 20-year treasuries.  Seriously.

So does ameritrade give out routing and account number for this purpose? 

Yes, when you set up checking on your brokerage account you will receive a routing number and checking account number (and a book of checks).  This is separate from your brokerage account number.

I am thinking of going with etrade as I heard they do 401k loans and does Roth conversions too which is not possible in others or possibly Charles schwab...

I think this is confused.  Some brokerage firms will let you set up a 401k (for free) on their platform and their platform only.  You can invest only under their platform (stocks and bonds) with this 401k.  This is not what you have.

You need to think of your brokerage accounts as owned by your 401k.  My solo 401k ROTH owns a separate account at TD Ameritrade and I have done Roth conversions just by moving money between the accounts (and then reporting it to the IRS at the end of the year).

Remember that you will be responsible to do all IRS reporting for contributions, rollovers, distributions (if any), and conversions.  Mark will help you with this reporting.

I am in no way saying that TD Ameritrade is the best, but I have been able to make it work.

I established a solo-401k in 2015 using Mark Nolan and mysolo401k.net. I have been a very satisfied customer.

My 401k has 3 accounts.

1. TD Ameritrade professionally managed brokerage account

2. TD Ameritrade self-managed brokerage account

3. Checking account at a local credit union

I have invested in Prosper with my 401k. As you probably know, Prosper is much like Lending Club. At the time (2015) Lending Club would not support a 401k account.  My Prosper account was set up in the name of my 401k and was funded via ACH from TD Ameritrade (initiated from Prosper).  

For me, there are no monthly fees and no ACH fees.  One gotcha is that I cannot initiate ACH's from my 401k accounts.  I can initiate outgoing wires and I can write checks.

Of late I have been moving funds out of Prosper via ACH to TD Ameritrade as loans are paid off.  I was expecting double-digit returns from Prosper, and am very disappointed with my low single-digit results.

Prosper does issue an annual 1099 reporting earnings for my 401k, which I ignore for my tax filing.

I would suspect that you could deposit personal funds into your 401k's Lending Club account and call it a contribution, but I would check with Mark Nolan to be sure.

But it seems like to would be simpler and cleaner just to deposit the full $18K to your brokerage account and move funds into Lending Club from there.

I am doing some Hard Money Lending.  I have one borrower who can't seem to get it together enough to put a check in the mail each month.  My question:  Is there a service that I can engage that will automatically deduct funds from his account and deposit to mine.  Sending a paper check to my address would also be acceptable.

I do know that he could go online and set this up himself with his bank.  I am assuming he is not capable.  But if I put a form under his nose, he should be able to pen his signature.  I have checked with his bank and they do not offer this except online.

Thanks for any pointers to such a service.

A self-directed IRA is no different from any other IRA in regards to taxes for this discussion. I am not a tax accountant, and the below are simply my personal opinions. Please consult with your advisors.

There are no taxes incurred for a rollover from a conventional (i.e. pre-tax) 401k to a conventional IRA.

There are no taxes incurred for a rollover from a ROTH 401k to a ROTH IRA.

You will receive a 1099 from the sending custodian that should list $0 in box 2a, taxable amount.

Different story if you are trying to get from a conventional 401k to a ROTH IRA. This, of course, generates a tax bill.

If you are self-employed with no employees then you can set up a self-directed solo-401k with checkbook control.  This has some advantages for RE investors.  And it requires that you personally stay within IRS regulations.

It is also possible to set up a self-directed IRA with checkbook control.

Once you move money to a ROTH IRA you cannot move it back to a ROTH 401k. Pre-tax dollars can be moved back and forth between IRAs and 401ks.

I worked on this locally.  You are right about unfamiliarity and lack of understanding, so it is not an easy process.  Also, the DOL's new Fiduciary Rule seems to have made this more difficult.

In the end, US Bank, Wells Fargo, and another regional bank wouldn't touch it.  But I found two credit unions that were willing.  Neither would support ACH transactions, which is a pain.

TD Ameritrade and Fidelity are both good options.  Especially if they have a branch in your area.   For Fidelity, the magic word is "non-prototype account".

Did you consider:

1) The taxes paid when you eventually withdraw from the 401k?  When you take 401k withdrawals it will all be taxed as ordinary income.

2) The fact that many real estate investments come with tax advantages when invested outside of the 401k.

@Mike Dymski really good point about robo advisors creating an unbalanced portfolio for real estate investors. The last thing you would want is a REIT in your portfolio.

@Jenelle H. are you saying that you can customize your Personal Capital portfolio?  For example, can you eliminate REITs?

P.S. Several people have recommended wealthfront.  You should check it out.  It takes the work out of DIY.  And you will be able to set your portfolio to be a well-diversified mix of investments that is tuned to your risk profile.  (I have no association with wealthfront.)