All Forum Posts by: Garrett F Anderson

@Christopher Janney It definitely sounds like your preparedness played a key part in your success on this deal. Thank you for sharing some extra details! That's awesome that your ARV and repair costs were so close. I am working under a wholesaler here in CLE so I'm just trying to learn as much as I can in order to better help him (and myself eventually).

Congrats on your first deal!  Would you mind giving some of your numbers?  What did you buy it for, resell for, closing costs (if any), etc?

@Carl Fischer Thank you for your feedback. I will definitely look into a self-directed IRA or 401(K). I just want to make the most use of my money while I'm young.

@Jacob Sampson  Okay thank you for your feedback and advice!  If I did option 2, do you recommend I put that money into index funds so I get some kind of return or should I just leave it in the bank?

Hello!  

So I am recently starting a career as an analyst and I need to start making decisions as far as my 401K is concerned.  I have this idea that I'm not sure is good/ bad or allowed with 401K's.  I will explain my two options below.  Keep in mind I would like to use this money to invest in real estate within 3-5 years, this would be a post-tax 401K (for option 1), and I want to avoid withdraw penalties.

Option 1:

My company matches 6% of my contributions to my 401K.  I would match the 6%.  At this same time I would be living frugally and saving money, let's say $5000 a year.  I could deposit this $5000 into my 401K and earn a return until I'm ready to take it out.  Then, after 3-5 years I withdraw my money + earnings and invest it into multi-family units.  

Option 2:

I would still match the 6% but now I would just keep the $5000/ year in a savings account.  I would also choose a pre-tax 401K so I will be taxed less every year.  This way I have the money when I'm ready and there are no added fees.

My questions are: Is option 1 possible?  Can I deposit and withdraw in my 401K at will without withdrawal fees?

Also, would it be smarter to do the post-tax 401K while I'm not making a large income or do a pre-tax 401K and have a smaller income to be taxed?

If this doesn't make sense or there is a better idea, please feel free to let me know.

Thanks for reading!

@Maksim Easley

I am in a similar situation. Although, I recently started working under a real estate investor who "wholesales" apartments and SFH and I asked him the same question. His advice to me was to skip the SFH's and go straight to apartments because they are easier to scale, manage, and handle vacancies. So now I am looking to network and save until I can help fund the purchase of a complex!

Have you also thought about trying to get someone to co-sign with you on the loan?  If you are bringing the capital, credit, and management of the property, I'm sure you could find a willing co-signer! 

How long do you plan on holding the property for? If you plan on holding onto it forever, then you would have to replace those CapEx's eventually so it may be best to get it out of the way in the beginning. Then, you can rest easier knowing those things won't break anytime soon! It also depends on how much capital you have available.

@Derek Guivehchi Thank you for the input! I was thinking the same thing.  If I were in that situation, my first action wouldn't be to offer free rent or any kind of monetary compensation and to wait until the insurance company got involved to see the next steps. 

@Levi T.  That makes sense.  I don't know the condition of the staircase before the incident so its hard to say whether it was negligence or an act of God.  Thank you for the info! 

@Ray Harrell Yeah I was also concerned about the legality of his "agreement" with the tenants.  I doubt he got it in writing because he still does everything on a cash only basis.

@Patricia Steiner As far as I know he called the insurance company and his attorney right away to tell them of the incident.  He also had a contractor out to fix the stairs that same day.  

@Dennis M. I was thinking similar thoughts... I feel like the stairs had to have already been falling apart and this was the last straw to break them.