All Forum Posts by: Dustin Dummer

@Gautam Venkatesan I wish the 401K loan was an option but I'm no longer an employee at the oganization which means I can no longer loan against the funds. I now have to roll it into the SDIRA fund to utilize.

@Bernard Reisz The intent is that I may need mixed funds in order come up with enough to invest. I may refinance a loan for part of the down payment. I may use additional money from the SDIRA conversion. My initial understanding is that once a SDIRA is used all funds must come from that account for that investment. And in order to use money from any other source I thought that you had to then use the checkbook control utilizing the LLC? Can this be simplified to not need the checkbook control if I just apply the cash from the refinance directly to the down payment then set up the rest through the SDIRA. Again great that these options are available but very confusing.

@Dmitriy Fomichenko Thanks. It's all very confusing, but it's starting to make sense now.

@Bernard Reisz I think maybe I was confusing something, so let me make sure I understand. I was trying to determine if I could transfer my 401K money into a SD401K plan AND THEN designate that money as a self-employed LLC to invest in properties. But I think what you're saying is that it is where the money comes from that determines whether you can qualify for the SD401K in the first place? In my case all of the monies came from W-2 therefore what you're saying is it would only qualify to be used in a SDIRA, correct? But with the use of an LLC I can still control how the money is applied. I just have to work with a SDIRA party to manage it all. Do I understand this correctly? Thanks so much for your input.

@Bernard Reisz Thanks for the reply. I was trying to figure out if SD401K and Solo IRA were the same thing, I think you're saying they are??? Now the qualifications are still confusing. Currently I am a W-2 earner. But if you do a rollover into one of these SD401K's then from what I'm understanding is many people form an LLC to be able to control how the money is distributed. Does this then qualify as self-employment? If not then the SDIRA would have to be the way to go, right?

@Andrew Postell At first I didn't think a conventional loan was possible. My debt ratio is too high with my mortgage on my primary residence and a lot of banks would not refinance on my secondary residence (rural hunting property with cabin). I'm now starting to find some mortgage companies willing to work with the secondary residence. So I have been following up on some of those. My primary concern with this option is I don't like how expensive the closing cost are when refinancing, it seems excessive. If I could find a way to minimize the closing cost, this would be a great option.

@Steven Hamilton II @Greg B. @Mark H. @J Scott @Jeff S. This is exactly the discussion I was looking for. I'm trying to make the decision what to do to make my first investment. Here's the options: I can refinance a second property that I own for about $19,000. I don't like paying closing cost again but is it more profitable in the end? I have a 415 retirement plan with $27,000 that I could withdraw or move into a SDIRA. There is no 10% penalty on that. I have a 401K with $18,500. I'm assuming the way to go there is to move that into a SDIRA? Some additional info: I have a separate State retirement plan. I'm no longer employed to the entity that provided these deferred comp accounts therefore cannot take a loan on them. I no longer contribute to these accounts. Right now my wife and I qualify for the 15% tax bracket. Even with the SDIRA transactions I might be able to stay in that range. But even if we don't is it profitable given the data provided?: I'm only getting 9.7% on returns. The retirement forecast states I'd have $110,000 ($440 a month) at age 65. I feel like I would do much better with real estate starting now! But I would appreciate advice on the most effective utilization of these funds from financial planners/accountants/investors that have far more knowledgeable. Also I'm seeing some mentions of self-directed 401K's. What's the advantages/disadvantages of each? Sorry for asking for the repeat of the subject but I need the Financing 101 Breakdown for Dummies version. Thanks for all your participation in BP.

@Stephanie P. How does a no income verification loan work?

@Bob Okenwa, @Chris T., thanks for your reply. My opinion at this point is that if the other numbers work then it is a good starting point but I just wanted to make sure. As you mentioned,  I don't want to miss out on an opportunity holding out to meet the 2% rule. Thanks again, the advice is helpful.

Listening to Podcast and reading all the investment books from the real estate god's talk about the 2%. However it seems like those type investments with low purchase prices are difficult for new investors to pull off. I can see where wholesaler's might run across these opportunities or if I want to wait until that type of deal eventually comes along, but I don't want to wait. I want to make things happen. I've been running numbers on properties: I can see deals with $100 or more per month/per unit, greater than 12% ROI but a 1.29%-1.4% Income-Expense ratio. So how important is the 2% rule? If someone can drop some knowledge on this topic it would be greatly appreciated.