All Forum Posts by: Dean Weltman

I'm probably the last savvy person chiming in on this post, but I would be all for taking that money out tax free (assuming you meet the criteria) and redeploying it elsewhere. The only way that I would bother to look at the situation in any more detail would be if there was an incredible amount of appreciation in that area, and you were not afraid to play your hand on that appreciation play. You had to live in the house for 2 of the last 5 years, so you could squeeze a few more years of appreciation out and then sell to keep that equity from Uncle Sam. 

However, if that was an option I was considering, I would have to get better information regarding the amount of depreciation recapture and possible repairs after 2+ years of renting it out, figured against any rental income, the current equity, and the appreciation...

Best of luck!

Thanks for this post. I've been wondering about an IUL policy and it never occurred to me to ask on here for opinions. I found one that lets me borrow against it immediately, and I'm seriously thinking about using it for more RE interesting... I had reservations because it seems like I always hear people talking about whole life being a waste of money. It's nice to see knowledgeable opinions that have a different take on the matter. 

 Amen. Last time I was in northern New Mexico the locals I spoke to had the same complaints. Flame on...

Contractors are like cars. What's the saying, you can have fast, reliable, and economical. Now pick two...

Furthermore, if you don't have a relationship with this contractor then you're a nobody. He didn't look for you, you looked for him. Contractors see one time investors all the time. Treat him well and use him several times and you'll have more leverage on pricing (hopefully). But definitely get a few bids while you're still trying to figure out if he's on the up and up...

I haven't slept yet, so I forgot about the other party wanting to invest in your project, but my prior content is still relevant. They're probably telling them they have to own a percentage of an investment because SDIRA funds have to be used in an investment - what you're wanting is a loan to your company. What you'll probably have to do is figure out a way to put their money into that specific property and give them a percentage of ownership. Or, see if they can take a loan on their 401k which they can then loan to you; if their account allows that it will likely be a small percentage of the total balance, so maybe not that helpful to you.

There are some SDIRA, Solo 401k experts on here... I recommend you @ them to bring them into this conversation. Frankly, I only know a little from what I've heard those guys say over and over. 

Good luck!

 If I understand you correctly, you're just wanting to loan yourself money from your 401k, NOT wanting to invest your 401k money. 

Many 401k plans allow this up to $50k (half your balance up to $50k), and after you pay it back you can do it again. You pay yourself a small amount of interest, and have up to 5 years to pay it back. I do this every few years and currently I'm paying myself back about 4%. I believe a lot of this has to do with your employer and the rules they establish with the company that oversees your account.

I do not know how the SDIRA's work, but I'm not sure they can loan you money in the same manner. I'm under the impression you would be investing that IRA money straight into a specific property, and you would be beholden to very specific rules on how everything must be handled. Because of this I haven't researched an SDIRA any further. I like the freedom of the occasional low interest $50k loan. Eventually, when I have more in my account I may do something else with it, but right now my account balance is pretty small.

I hope this helped you a little bit...

I see. Thanks.

I believe the three I mentioned above all have MLS access, but they might not all cover the same areas, so caveat emptor...

@Clayton Natho, @Daniel Moore

I agree with Daniel, get your own MLS access. I wouldn't want to ask my realtor for forty or fifty comps a month, or more, and he sure as hell doesn't want me asking.

There's about 10 posts telling you not to use Zillow... That wasn't very helpful.

Best of luck, and let us know what you used and how you like it. 

@Eddie T.

I'm interested in getting a line of credit in the manner you mentioned, but can't you get a higher percentage of your deposit returned on the credit line? That sounds confusing when I reread it. For example, if I put $100k into a bank on a CD and then they give me a LOC for $250k... At 1:1 like you mentioned earlier there doesn't seem to be much reason to have a LOC - cheaper to use cash...