All Forum Posts by: Fred F.

Brian,

Thanks for the info. Good to know my existing LLC can sponsor a Solo 401k. The single pool of self-directed funds with checkbook control seems to better fit in with my goals.

Justin,

Thanks for your response. As all of you have pointed out, not needing a new LLC for the Solo 401k is a huge takeaway. In past research, I was under the impression it was a requirement to do business with a new Solo 401k, or at least of some benefit. And there is that point about not having to pay the $800 fee for the privilege of starting up and owning an LLC here in CA.

All,

Thanks very much for clearing up the murky waters. Your responses really shortened the path to what I needed to know. My next step is to sit down with my CPA and ask him to back-fill into this discussion. Thanks, and prosperous investing to you.

Hi Brian and Mark, thank you both for your responses.

Let me address Brian’s response first.

I think you’re right, it appears I may be missing the finer details.

You brought up a key point that caught my eye. So, just to confirm, when investing, the entire amount in the S401k is available and borrowing invokes the 50%/50k rule?

Which leads me to ask, if my goal is to build my SDIRA/S401k balances through real estate, and maybe take an occasional distribution, can you give me an example when it would it be prudent to “borrow”?

And just for fyi, my LLC is a single member entity, no employees other than myself.SDIRA is not a Roth.

I find my real estate investing is more efficient by focusing more on the projects and not so much the financial administration side of things. I tend to like things streamlined.

So, that said, my SDIRA custodian mentioned that they basically hold the checkbook and all payments are made by them, at my direction; ok when purchasing property, not so convenient when paying the trades.

If my business model is buy property to mainly flip, and have the convenience of paying bills as needed, it seems I should look further into the S401k since it appears I can run my business all from that?

Mark, thanks for your response.

I think my mistaken understanding regarding the limits of the S401k made me think the 2 funds were somehow necessary.

Regarding the LLC, my understanding is that most non-recourse lenders lend to LLCs and not individuals. My LLC is a standalone (not associated to my SDIRA) and my CPA filed my last returns under a Schedule C; if I associate a Solo 401k to an LLC, does this now make it a partnership (subject to Form 1065)?

Thanks Brian and Mark, a bit wordy, but appreciate your patience and feedback!

Hello BP Community,

Not a visit goes by where I don't learn something new. I recently completed a rehab on a SFR thru my LLC using a loan from a private lender for the purchase, and funded the remodel using a HELOC on my primary residence.

Since doing some reading here, it appears I can use better options in the future.

I have a question that I haven’t seen posted, so far.

• Can funds from a self-directed IRA AND a solo 401k be used on the same property? i.e., purchase a property using the IRA and remodel using the solo 401k?

After leaving my last job, I set up a self-directed IRA and moved my old 401k to it.

I still have funds in that company’s defined benefits plan that I believe will be best used by moving to a Solo 401k (I understand the rule of being able to use a max of 50% or $50k, whichever is less.  Other than that, I’m still coming up to speed on the solo…much to learn).

Thanks in advance.

Thanks Kyle, that seems to make the most sense.  Now that you mention it, there are probably buyers with the intent to live in the properties.  Thanks again.