All Forum Posts by: Don Ireland

I thought the 401k could invest in anything (other than purchasing from DQ'd individuals or any illegal trading like drugs or guns), in any proportions. I had planned to diversify somewhat but had no idea that I'd have to maintain any type of proportion (such as 50% is REI).

I don't believe my 401k Plan docs even mention that The Plan would have ANY RE Investments. Let alone a min percentage. 

I have no issue with someone wants G to diversify and buy stocks & bonds with their 401k funds too.  

My question was specifically related to using the 401k to but RE vs using personal funds.  Regardless of what you're investing in, a reduced tax (by way of deductions such as depreciation and others) still means that you're paying SOME TAX.  But if you used ROTH funds to do your investing, you pay NO TAX. 

So would I rather give up the depreciation deduction (or any other deduction) and instead pay no tax? ABSOLUTELY. 

I'm really just trying to make sure I'm not missing something. 

But what I'm getting at is why does it matter if I can deduct depreciation?  If there is NO TAX isn't that better than REDUCED TAX?  And the depreciation would result in reduced tax. 

If I'm wrong, PLEASE CORRECT ME.  I'm asking because I want to understand.

Do you not include setting money aside to cover vacancies to be a part of your operating expenses? 

If you do, then there should be money set aside to deal with waiting for a new tenant. 

If you don't, then WHY? And have you learned to change that for the future?

Too funny! 

Beyond the fridge filter, I think a lot depends upon what your lease says.  Most LLs I've ever dealt with/known had a clause that simply said the tenant may not make any changes without LL approval. 

If your lease has that and they made changes, not only can you refuse to reimburse them, you can charge them for putting it back they way it was.

Now having said that, I have to ask:  what are we talking about on the paint?  You had some neutral color when you showed the place and then painted it some outlandish color (maybr bright red)? If the color difference was major like that, I think I would cut them a little slack on that issue. 

Thanks @Justin Windham.  

Yes this is a Solo 401k (which Justin knows as he set it up for me).

@Rajeev kotyan: I'm using a Roth 401k (hence the thread title). The properties will each be owned by separate LLCs and I will be the manager. Each LLC will have a single member: my 401k Trust.

And Roth money will have been used to acquire/maintain the LLCs as well as their respective properties. 

So at retirement time, it seems the the LLCs could all be amended to name me as the single member.  Essentially taking one large withdrawal.  Any income those LLCs receive would pass to me TAX FREE (at least that's my theory anyway).  That should deal with their RMD requirements. 

I tried to edit my reply and now my reply shows up as part of the quote.