All Forum Posts by: Lynn DeShazo

@Brian Eastman, thanks very much. I am about to call my IRA custodian and go through this. I think the way through this is for me to buy the property through the IRA and use private money as a loan for the acquisition. What about that method. I do understand that all the expenses related to rehab and holding it as a rental property have to come out of the IRA.

I am about to use money from my self-directed Roth IRA to help rehab a property being purchased by the LLC of which I am a member. I am talking with my CPA, but am puzzling out the best way to proceed so that I take the tax advantages of investing from the Roth (I created a Roth IRA LLC , with checkbook control).

I'll put it this way - I am one of a two-member LLC that holds one property. We are about to buy the 2nd one. I had planned to use my SDIRA to provide rehab money, and it's my first time to do this type of investing through my Roth. I'm wondering whether I should loan the money to the LLC and hold a note within my IRA. In that case, I'd provide a lump sum to the LLC and we'd pay contractors through the LLC, not directly from IRA LLC. However, since we're holding the property as a rental, it might be some time before I see the return of the money loaned. Since we'll also have acquistion money to repay (credit line, then a mortgage), another note for the rehab costs would be the case. The difference being, I'm the lender. My question for you BP Pros with more expertise in this area, is there a better way to handle this than to hold a note? Is there a way to make a capital investment in the project and it not be a loan? My CPA is saying I may need to file a 990-T, and right now, I'm not sure what that's about. I will make it a point to learn, of course.

If we were flipping the property (slim possibity), this would be a little more straightforward to me. I loan the money for the rehab and recoup it at the sale with my share of the profit, and back into the IRA it goes. It's the longer-term nature of the investment that I'm trying to work out.

Thanks for any direction. I am in contact with my CPA and will talk again with my IRA custodian.

Thanks Marc and Steve. I may find some general labor to take out and haul off carpet and pad, since that's the biggest part of the Servpro estimate. But I would like  Servpro to do select items. I've heard thermal fogging is very effective in smoke remediation, so I think it would be worth it.

Thanks, Jen. I've heard about using shellac to seal subfloors, but didn't have someone's personal experience with it to go on.

Darryl, great advice thank you. This is a situation where cats have lived in the house - up to 3 - since 2001. The seller still lives there with one cat. I don't know how he lives there, because it'll make your eyes water. Thankfully, house is on a slab, and the vents are in the ceiling; story and a half with wood subfloor in upper level, plus bathroom tile. My question about duct cleaning is because I figured the HVAC has been circulating that odor for quite a while, and it might be an issue. The air filter looked pretty dark - lots of deferred maintenance here.

I'm about to rehab a property in need of odor remediation in a big way - cats. I got an estimate from Servpro, it's so bad. Every scrap of carpet and pad has to come out. Floors will be cleaned and sealed, surfaces and windows cleaned. There will be an ionization and thermal fogging. I think the ducts will need cleaning too - $$$$

I was wondering if anyone on BiggerPockets has any experience with Servpro's  odor remediation services, another company you'd recommend, or if you have a story to tell about what you did to get rid of really pungent odor in a rehab or a rental. What do you think about having the ducts cleaned as part of the cleanup? I'm in central Alabama. Thanks!

Ditto on the BP podcasts @Amy Sommers. Tons of good info there.

Thank you, Michael!

Check out our Birmingham area real estate investors' club:

http://www.aiaclub.com/

Alexandra, check out our local real estate investors club. Meets fourth Monday each month:

http://www.aiaclub.com/