All Forum Posts by: Linda L.

For some non preforming notes, after a serial of work outs, they are paid off. I work out these notes directly and operate as part time business. These are hold longer than a year. How do I report either gain or loss on the disposition of these notes? Is form 4797 the correct form to use?

What if you receive K1 with your EIN#, do you report it in Schedule E with your SS# there?

Thank everyone for great inputs. It’s interesting to see how others take on the expected return rate.

I am fairly conservative in terms of risk taking. Reserving the capital is the top priority, the profit comes second. In the end of day, the loss of capital takes another deal yielding 100% return or more to make it up to where you start, let alone of the opportunity costs.

When I look at note interest rate, I will translate it into after tax rate.

With regular or deferred tax account, it’s common to pay 37% tax including state tax, unless you invest inside “Roth” account or your income drop significantly when you withdraw deferred tax account money.

Between 8%- 12%, it's really 5% - 7.6% after tax. Is this additional 2.6% well compensated for this particular deal? I often ponder this before I pull the trigger. The interesting fact is that sometimes 8% deals are not really less risky than 12% deal, while looking at the borrower's paying history and CLTV.

My understanding is that solo 401K can have max 2 people to participate. 
So the plan can include the owner and another person. This person can be the business partner or the spouse.

Also, solo 401K can have employees, as long as they are part time working less than 1000 hours.

For a sole proprietor business with net income around $50-60K, if I like to include one family member(brother) in my solo 401K, what will be best structure to be cost effective and tax efficient?

To form a partnership or sole proprietor business issue him W2?

We both have other day jobs W2 income.

@David S. Thank you for the input. So under your 401k, you have both a bank account and a brokerage account? So for bank account, any will do? and any particular reason to choose TD Ameritrade as the brokerage account?

@JOSE LIRA Can you explain this?

"They also helped me with filing a distribution I made last year to offset some losses."--How is 401K distribution to offset the losses?

Didn't you have to pay tax on 401K distribution?

I am also interested in how others' first hand experiences with

mysolo401k.net.

When it comes rental property, it makes sense to create LLC under the state where the property is located.

I am curious if it's the same with holding notes? For instance, if the secured properties of your notes are located in state A and the payor/borrower are located in state B, and you as the note holder is in the state C, do you create the LLC under the state A?

coc 28% with great tenants, that's very impressive!

Personally, I think that working with local licensed private mortgage brokers is a good start. Before the loan is originated, you will have the first hand insight with the clean and completed documents to review and do your due diligence from there.

Sometimes, brokers will tell you that this is very safe loan due to the low LTV. Ignore that. "Safe" is very relative term for different person. Set your own criteria on what type of deals you want to invest. (Terms, LTV, and type of collateral, etc)

With private note sellers, sometimes the notes have changed a few hands. It’s much easier to encounter defect notes and missing papers, etc. As a beginner, it’s hard to identify what to watch out for or even understand enough to price the note correctly.

20-50K might not seems a lot of capitals to work on, but it’s your hard earned money. You want to know where it’s going and you want to be at least comfortable knowing that interests and your invested capital will come back to you according to the terms. You also want to know what your options are if it does not go as planned.

No need to rush. Invest your time to do some readings, questions will arise while you read more. You can ask more questions, and then do your due diligence again. BP is great source to get perspectives on things that you might not even think about in the first place or realize the importance of certain key areas.