All Forum Posts by: Daniel Dietz

Thanks, I'll keep my eyes peeled.

Dan

Good-morning,

I am wondering if there is a way to 'bookmark' within the BP wedsite pages that I would like to keep track of? I have found the 'moniter topic' button, but it seems that is only for forum posts. I am asking this as I often log on from different computers, like when at a friends house and telling them about BP and wanting to show them what a great resource it is! :)

Any help is appriciated,

Dan Dietz

Micheal,

We just recently purchased a very similar property within our SDIRAs (3 way partnership, all SDIRAs and we plan to buy more). You are on the right track to think about all your options on this. I see many people who do not do that and wish they had latter.

Our property was right around 80K all in, and we are taking in $1300 month. We used all our own funds as we could not find a Bank that did Non-recourse loans for anything under a 100K purchase (this is a duplex), or on pre 1940 income properties. I would LOVE to find a traditional lender that would do this deal to free up some cash within the SDIRAs.

It will be interesting to see what others have to say on this.

Dan Dietz

The island would not be a bad idea either. Its hard to tell if there is enough walk room or nor from the photo. In our market, remember they are all different, we are seeing some remodels go from an island BACK to a peninsula. Still more islands, but some customers are looking for more 'definition' of the spaces too.

As for the electrical, isn't there already 220 electric going to the cooktop? Is there a basement for access under the kitchen?

Dan Dietz

Christian,

Unfortunately I am in WI and usually dont work that far away ;-).

Let me start by saying all areas of the country are different and have different 'norms'. with that said, here are some thoughts...........

1) I avoid the stove/refer next to each-other at almost all costs. I have probably done it once or twice in over 500 kitchens, and they were much smaller than what you have here.

2)Your budget is tight for that size kitchen in that price of house, so the more you can keep major appliances in the same place the better.

3) It looks like the sink is on an angle under the window? We do a TON of them, even when they are not under a window. I have only had one person not like it. Id keep it. I DONT like the 'L shaped' sink that go into a 90 degree corner.... they look dated to my taste.

4) I would lean towards doing a 'all in one range' on the peninsula where the cook-top is now. Either a 'slide in' that is built into the counter, or tear out the uppers there, build a 'halfwall' behind the range about 45" high (as high as the range backsplash) and use a 'freestanding' one (less $$$). that would give some definition to the space also with out need the overhead ancients to do that.

5) Where the double oven was, that could be more base, counter, and upper cabinet to make up for what you are loosing taking out the uppers over the peninsula. That would also make a great spot for an 'appliance garage' just to the left of refer on the new piece of counter top.

6)If you did go with a slide in range (no backspalsh) I would make the wall behind it 42" high, and have that flow into the raised 'snack bar seating' on the end of peninsula. We sometimes do the snack area as a 'flip down' if space is tight when not needed.

7) At your budget, I would check out some of the new HD Laminates by Wilsonart, or the FX180 Laminates by Formica. Many of our customers need to literally touch them in our showroom to see if they are real stone or not. This is what I have in my own kitchen with an undermounted Blanco Silgranit sink and most guest comment on 'my nice stone counters' :)

Good Luck

Dan Dietz CKD

Hi,

Have you thought about using a small local independent cabinet dealer, such as a member of the NKBA? That is my 'day job' in real life where I live. A person such as this usually can give you a much better design at only a slightly higher cost if any at all than a 'big box retailer'. Typically on a house in your price range you are going to make that up several times over in the resale value you gain.

Questions; what is your total budget for the kitchen portion of this job? What is the room through the patio doors just past the counter? Is the room you are taking the photo from the dining room? What is to the right of the fridge ?

Dan Dietz

I sent that too soon!

The other thing I am planning on at least taking a look at is including a bit more than just a mention of SDIRAs (this is how I think a lot of my potential lenders would do things) as most people have no clue that it can even be done, and if they have heard of it, they dont know many details.

As stated above by a poster, there is also a HUGE 'trust component' to this avenue of funding. So I think a good summary is that there are at least 2 components to this method; relationships AND presentation to those relationships at least in a good number of scenarios.

I guess in my personal example, at least 50% of the people on my 'potential list' of over 200 names are past customers of my 'real job' - Contracting. They know how we treat people, our success rate, our longevity, our reputation for outstanding customer care etc.... We have dealt with large sums of money with them, and we got to know them enough to know somewhat how their financial situation sits. I also know they would like the reassurance of something they could take home and read over, let it soak in etc.... I am guessing that many would be happy with a better return on the 'safe' portion of their portfolios.

There is another portion of my list of very wealthy (at least for our area) people, some of who I have been in on joint investments before, that would care less about the presentation, and just trust things if it was something in their realm of comfort. They would also be seeking a higher return than the previous group.

Lots of different ways to look at it.

Dan Dietz

Josh,

I am just in the 'thinking/planning' stage of this also. I am going to be targeting three different scenarios: 1) Long term Lenders for ''non-recourse" loans to purchase rentals within our LLC that consists of 3 SDIRAs in a partnership, 2) Lenders (possibly partners) for buy and hold rentals out side our SDIRA LLC, 3) Shorter term lenders to make shorter term loans (2-5 years) on foreclosures to buy and likely hold for rental or possibly flip on occasion.

In addition to the items you listed for inclusion in your 'presentation' (I think you are right on target as far as making a good, professional, first impression) I am thinking of having info for the 'Mom and Pop" investors mentioned above (they are a good share of who I plan to present to) on what their (likely) low risk - low return investment will likely yield over time vs what their loan to us would yield. Mainly because many people have a hard time wrapping their head around how much different a 6% interest investment vs a 3% investment can be over time.

Bariki & All,

If I am understanding right, you are asking if you can live off of the 'other part' of the SDIRA that is not invested in the properties. I assume you are asking if you have 100K in the SDIRA, and buy a property for 40K, can you use the remaining 60K for living expenses?

I think it would depend on if you are 59 1/2 yet, which is the age you can withdrawal with no penalty. It would be no different than a traditional IRA in that regard.

What we do with the portion that we have 'rolled' into our SDIRA from our regular ROTH is put it in a 'brokerage account' in the name of the LLC that is owner by our SDIRA. In essence, the LLC is investing the 'surplus funds' (until we find another property that fits our criteria) in either stocks, ETFs, mutual funds, etc....

Also, we have not rolled our entire regular ROTHs all at once into the SDIRAs. Just enough extra to have funds for repairs, taxes, etc.... and the most we think we would need for Earnest Money to make an offer on another property (15K total).

Solo401K Question..... My understanding is that if you create your own 'business' to enable the setting up of a solo401k program, you could only contribute the amount of 'profit' from that business, not as much as you want. Meaning if your 'side business' made a profit of 5K, but you could afford to contribute 20K from your NON self employed job, you are still limited to ONLY 5K that is related to your self employed business. Is that correct from what the rest of you understand?

Solo401K comment....... I agree they sound like a great idea, but in my case I converted all my IRAs to ROTHs the first year I was able to, so I think it would not make sense in the case of ROTHs.

Dan Dietz

Hi,

I am getting ready to explore the same question here in my market. We are starting to do buy and holds within our SDIRAs.

We have found due to the nature of the properties which our town has an abundance of - older, inexpensive, converted large homes - that traditional 'non-recourse loans' are net to impossible to get.

I am putting together an list of potential lenders and a 'package' to show them as to our plan, and will soon (late this year?) get some feedback on it from a few of them ( my potential list is almost 200 people). Some of them much more likely than others to be interested. I am planning on 'targeting' (maybe seeking is a better word) people who might be happy with a return of say 5-7% for 15 year terms or 6-9% for 20+ year terms. These are folks that I know/feel have a sizable sum in traditional lower return investments like CDs, muni-bonds, etc... and might be willing to seek a bit higher return and at the same time be getting more diversified.

I am also going to exploring doing short term loans of 3 years or less OUTside of my SDIRA with these folks where I could buy a deeply discounted rentals that are foreclosures and use these short term funds to 'season' the properties and them refinance them at close to 100%.

Two interesting side notes.

On my own recent fix up , that I decided to stay living in, wee borrowed the fix up funds (25K) from a family friend. I offered 6% annual rate for 6 months (I knew he has a lot sitting in CDs etc...) He counter offered with 3% and keep it for 3 years! His theory was he would be tripling his return, and if he could lock that in for 3 years he would be tickled about it!

The lender I am currently working with on getting a permanent mortgage with on my own residence is not a 'broker', he is a partner in a 'mortgage house' where they do both traditional second market loans, but also have private clients looking to loan money out for loans that 'do not fit the secondary market standards'. Essentially these clients can fund whatever kind of loan they want to. This came up when we were just talking about my SDIRA and purchasing buy and holds and the challenges of finding loans for that. We will see where it goes.

Good Luck!

Dan Dietz