All Forum Posts by: Eric Schwake

@Brian Eastman Thanks for you response. I've already been looking into IRA custodians and have read pretty much your whole page so expect to hear from me on that soon. You mention UDFI not being a major concern but what about UDIT if I decided to finance? I've heard that can cut into returns when financing through a self directed IRA which is primarily why I'd been thinking of a cash purchase. In a year or two I plan to use income received from sources such as my employer bonus and RSU stock sales and at that time I'd definitely be looking into financing.

@Mark Welp Funny you mention notes because I just listed to BP podcast number 211 that spoke about investing in notes and it sounded intriguing.  Those seem a bit more confusing and harder to get into that rental properties but I need to do more research.  It looks like there is a newer podcast (#273) that goes into notes more so I'll have a listen to that.

@Mark Welp Thanks for the response. I'd love to use cash to pay for rentals but I don't currently have 80k-120K in cash to do that. That's why I was thinking of using a self directed IRA for the purpose. I buy the properties outright and then earn retirement income from the rent-expenses. Plus I'd have the additional benefit of potential appreciation later if I decided to sale the properties. I have 20 years before I can start withdrawing funds from an IRA no matter if it's with Betterment or a Self Directed IRA. The reason I'm thinking about rental property is because I'd like to have more control over my retirement money than I do with it locked up with Betterment.

My first post to BP.  Posted the same to Reddit but think there might be some different opinions here.

I've currently got an IRA with Betterment that has around 180K. I've been looking at RE Investing as an option to get my money out of the stock market. I currently have a full time job where I receive pretty decent bonuses and RSU's so long term I'd like to use that income for RE investing but it will probably be at least a year or two before I can do that because I'll probably use that income this year to buy a house for my family.

So short term my idea was to move the money in my Betterment account to a self directed IRA. I then was planning to use the self directed IRA to buy property through Roofstock. Since this will be my first real estate I am trying to do it fairly hands off and the local real estate market where I am doesn't appear great for cheaper rental properties.

As part of this plan I suppose I'd have a couple options. 1) Buy one or two properties using cash from the self directed IRA. 2) Financing 3-4 properties using funds from the self directed IRA. Because I'm new to all of this I tend to favor option one. The other nice thing about that is that I wouldn't have to worry about mortgage payments. I know that having multiple properties through financing has it's benefits in a normal scenario but from what I've read I could have some issues with UBIT if I do that since I'd be using a self directed IRA.

So having said all this does it make sense to move my money out of Betterment and use it for rental property investing? Is it a good idea to use Roofstock especially considering I want to stay fairly hands off and I don't have great property options locally? Should I just wait until I can start doing rental property investing with cash on hand? I do have a couple meetings set up with local CPA's to see what they recommend and I also will be speaking with Roofstock soon to learn more about them as well. I figured I would check with you all though as well to get any advice you have to offer because I know there is a lot of expertise here.

Thanks in advance for all your assistance.