All Forum Posts by: Austin Green

@Kristopher Kyzar thanks for the article!

@Jimmy Woodard I had looked at Airdna already, I just didn’t know how accurate that info was. Seems very optimistic to me..

Appreciate the info guys

@Matt Ruttenberg yeah, it's a beautiful area. Looking on AirBnB and VRBO, looks like there are some nice listings. Just not sure how often they are getting rented

My wife and I use to live in central GA and in North Carolina but moved out to Arizona a couple years ago. So we are familiar with the north GA, western NC area.

My wife's aunt and uncle are selling their house in Franklin, NC. It's a house we love and have visited many times. We were upset when they listed it without letting us know... It had multiple offers the day it was listed (like everywhere) but now the financing of the buyer is falling through. 

We are considering stepping in and trying to buy the place, but looking for some guidance on STR and what kind of money this place can bring in. Part of this is sentimental value (wife's grand father built the house) but I don't want it to be a money loser. It's a 3 bedroom 2 bath north west (10 min drive) of Franklin on top of one of the mountains. Great view with a hot tub. $215k is the offer that is falling through.

It's not something we could self manage. We would want to use it for personal use probably one per year. Wanting to know who we can reach out to for management, estimates on potential income/expenses. Any thoughts would be appreciated. Thanks in advance!

Thanks! @Josh R., I’ll let you know when I move there and we’ll meet up. 

@Nathan McQueen, thanks for the location advice. I’m an outside sales rep, so work location isn’t really a constraint. 

Thanks @Andrew Kerr 

Unfortunately I'll be in the weekend after the next TREIA meeting.. 

My wife and I are moving to Raleigh area for work in a few months. We are looking for some advise on what areas we should look to to either rent or buy a SFH for us. Also, looking for a good real estate agent to work with for potential rental properties. I see that there is a very active TREIA group that I'm sure I'll join when we get there. It also looks like the market is pretty hot and deals are not just going to be found straight off the MLS.

For the first question, where to look for our personal housing, we are in our mid 20's, just sold our house (small live in flip), love anything outdoors and good food. Current plan is to move up there end of May. If anyone has a house for rent that is dog friendly, and would possibly consider a 6-month lease while we look for a house to buy, please reach out.

For the second, I am coming up there from Athens, GA to explore in a few weeks. I am looking for an investor friendly agent(s) to talk to. Looking for long term hold rentals, preferably small multi-family, something I see is in short supply in Raleigh area..

Any help would be appreciated. I look forward to the move and hopefully grabbing coffee or lunch with some of you!

@Brian Lockhart, situation changed at work. I thought I was about to change jobs, allowing me to roll over the 401k. Which was why I was asking the question to begin with. 

If something changes and I’m back in the same position, I will post and let you know how it turned out. Good luck with your decision!

Wow, thank you guys for all the responses! I like the idea of a solo 401k, but I don't think I would be eligible, thanks @Dmitriy Fomichenko for that article. @Jeff Wallace, that's how I feel about this. The problem is that I can't touch for over 30 years, so I would rather pay the taxes on the money now and have access to it instead of complying with the SDIRA rules on real estate, and paying even more taxes on that money in 30 years. This is why rolling into a Roth does sound appealing, being fairly young, but if I'm already paying the taxes why not pay an additional 10% fee and be able to use it NOW. @Steve Vaughan no I do not have any consumer debts besides my current mortgage. I have some cash but not enough to buy a property over ~$50-60k, and I am not interested in single family. With this job change I will have to move and I may use the equity in my current home to invest in something, I just like the idea of cashing out the 401k because to me it feels like a mechanism to keep you trapped. 

@Steven Bishop Thanks Steven. Yeah, guess I should have given a little background. I may be changing jobs in the next few months, so that is why I am considering what I should do with what I have in my 401k. I do need to see what tax bracket the distribution would put me in, I just assumed 30% would be close enough for discussion. I agree completely on the match, that's why I put in up to their limit. While I agree on the 8-12% on any given year, mine has returned ~13.5% in the last year, but over the last 5 years it is around 6%. I just don't see hitting over 5-6% long term. There is always rolling it over into my IRA or converting to a Roth, I just wanted to get some feedback on if it is worth just cashing out and investing in multifamily with it.

I'm considering cashing out a modest 401k and combining that with cash to purchase a 4-plex. I have seen lots of discussions about the pros and cons of cashing out. Some people suggest solo 401k or self directed, or just keeping it in the index funds it is in to stay diversified. I want to run through a hypothetical example to see if my thinking is correct on this. This example is if the company matches 50% of contributions.

Example: 

Contributions: $30,000

Match (50%): $15,000

Total: $45,000

Amount Left (Penalty (10%) Taxes (30%)): $28,350

If you use that to buy a property with conventional 20% down financing you could buy a property worth ~ $138,750 with $3,000 in closing costs. 

If you received a 20% cash on cash return you earn $5,670/year. The 401k would need to return 12.6% to earn that...

Lets say you have a 20 year note on the property, that's a paid off property worth $138,750 (with no appreciation, which is not likely) plus 20 years of cash flow ($5,670 x 20 = $113,400)

Now lets look at the 401k, if no additional money was added and it returned 5% for 20 years, it will be worth ~$120,000. If it returned 8%, which we would all love, it would still only be worth ~$210,000.

I'm completely for contributing to a 401k if your company matches. So lets look at the flip side if that $30,000 contributed was taken as income (30% taxes, but no penalty) we would be left with $21,000. That's $7,350 less than if you take the match and cash out and pay the penalty and taxes later. Plus, it is automated and hopefully earning a better return than sitting in a savings account. What I don't like is the lack of control and the highly regulated environment.

So, what I'm asking here is for someone to show me what I am missing because it seems lost people see cashing out a 401k as a big no-no. Thanks in advance.