All Forum Posts by: Gregg Pauly

I just came across this thread and, although I don't know of any pizza place owning / real estate investing people, I immediately thought of Ray Kroc (founder of McDonald's as we know it today)...

McDonalds Is a Real Estate Company. Most people don't realize it, but McDonald's (NYSE:MCD) is not a burger-flipping restaurant chain; it is one of the world's best real estate portfolios. Franchisees flip the burgers. McDonald's simply owns the best commercial property all over the world.

Thought it might be interesting to you, Francis.  Good luck!

@Martin Czerwonka Thank you for details of the possible options I have with my 401Ks. All the specifics you provided are incredibly helpful as I learn the ins and outs of working with retirement plans. I think my next step will be to, as you mentioned, get more info from my benefits center - armed with the info everyone's provided me - and see what I come up with. As for household income and expenses, we have a budget and my wife and my coordinate finances. Unfortunately, support from my wife for REI is thin at best. My plan is to come to her with RE results and revisit REI and all it's benefits with her. Of course, I need a deal or two first. Thank you for all your input - I greatly appreciate it!

@Rick Pozos Wholesaling is a great solution to my $ dilemma. That was my first interest when I started checking out REI. I put that on the back burner in lieu of buy-and-hold when I reevaluated my "whys" and the best overall vehicle to help me accomplish my goal of legacy wealth. Being that I'm in agreement with you, admittedly I'm a bit torn on how to proceed because of the little time I have and switching between RE focuses and tactics. Having said all that, wholesaling might just be where I need to start - hardly a bad situation. Great thoughts, Rick! Thanks so much.

@Karen Adams  A self-directed 401K is something I'll be looking at and I really appreciate the sdretirementplsns.com referral.  Thanks so much, Karen.

@Shawn Ackerman   I started this forum post leaning toward the same ideas you mentioned regarding "cost of doing business".  In my newbie estimation I figured that the losses / fees I would have from utilizing a 401K could be justified by the volume of business I could create.  In any regard,  I'm going to run all this by a CPA before I dive in.  I can't wait to get started investing and am doing my best to be informed, rational and thorough to set the tone for my RE biz.  Tough for an emotionally driven guy like myself.  Thank you for your ideas, support and well wishes, Shawn!

....ooops.  Apologies for double post.

@Percy N. I will be doing by and hold investments (the "BRRRR strategy"). As for the two 401Ks I have, one is from a past employer and one is with my current employer. After reading your comments, I'm wondering if I can roll over my old 401K into my current 401K and then convert my current 401K to either a self-directed IRA or self-directed Roth IRA - enabling me to "invest as a money partner in deals". I'm wondering if I could invest in my self-directed IRA or Roth IRA funds into my own LLC on projects under that LLC? Just a newbie thought... In any regard, thank you for taking the time to share your expertise with me. And thanks again to everyone who's put in their two cents. As always, BP is incredible!

@Percy N. I will be doing by and hold investments (the "BRRRR strategy"). As for the two 401Ks I have, one is from a past employer and one is with my current employer. After reading your comments, I'm wondering if I can roll over my old 401K into my current 401K and then convert my current 401K to either a self-directed IRA or self-directed Roth IRA - enabling me to "invest as a money partner in deals". I'm wondering if I could invest in my self-directed IRA or Roth IRA funds into my own LLC on projects under that LLC? Just a newbie thought... In any regard, thank you for taking the time to share your expertise with me. And thanks again to everyone who's put in their two cents. As always, BP is incredible!

@Audrey Ezeh  I really appreciate all your points - they're well taken.   At this point I'm thinking that a private lender has to be the way to go.  Although the financial cost of doing so may lessen profits on my first (maybe second and third) deal(s), the education and track record I would gain by just plain starting my investment career would be invaluable.  As for the 401K, I've been reading about a number of interesting possibilities on the BP forums which I need to run by my benefits center to find out more about.  And yes, your post really did help.  Thanks so much! 

@Mark Nolan  Thank you for your thoughts.  They're sobering for an emotional guy like me.  It doesn't make sense to pay the taxes - throw the money away - to turn around and try to make money on a RE deal.   I really appreciate your consideration!

Hey there everybody.   I'm trying to come up with money so I can put some "skin in the game" for a first real estate investment.  My current income is spoken for being that it goes to family expenses.  I know private loans are an option.  However, networking to meet those that may be able to help via REIAs is difficult due to scheduling (my wife and I both work at night).   Pulling money out of our current home is not an option [insert sad face] because we own it due to my wife being the primary bread winner and, at least at this point, support for RE dreams is tenuous.

So, I have two 401Ks that I'm thinking may be a possible source of funds. My concern about the scenario I'm about to describe is that it may entail being hit with taxes / fees on my joint tax return, thus effecting my wife's finances and, as such, increasing her weariness of REI as a whole.

The situation:  I have a 401K with my employer that I am currently not contributing to (not savvy, I know...just what it is for now) that is vested at $42K.  I currently have a loan out on this 401K for $12.5K on which I still owe just under $11K.      I have another 401K from a previous employer that is sitting around not doing anything that is vested at $14K.     My thought on pulling out money from this whole situation is that I could completely liquidate my $14K 401K and accept state and federal taxes and fees equaling anywhere from 26-36%.  If I did that, I'd be left with $9K-ish, should all 36% be deducted.  I would then take the $9K, add $2K of personal money to it, to then pay off the difference of the 401K loan I have.  Once that loan is paid off, I would then qualify to, once again, take a loan out from the same $401K for up to 50% of the vested amount - receiving roughly $20K.  I would then use that $20K as my "skin in the game" and, over the next several RE deals, use a portion of proceeds to as-quickly-as-possible repay the current $401K loan.

Having said all that, come tax time, how should I expect the above scenario to effect my tax return.  We generally have money returned to us after filing taxes and I'm wondering if my "creative financing" could potentially ruin any chances of getting a return and, more importantly, will my wife kill me afterward??!

Thank you for baring with me on all this.  Any feedback would be gratefully and humbly appreciated.   Numbers are not my forte and I don't have an accountant that's real estate savvy yet.  Thanks everyone! 

@Stephanie Southerland Thanks so much for the info on the REIA group. Just today I found out that I'll have some "boots on the ground" in Tucson so I expect I'll be out that way in the not-too-distant future. I'd like to make connections while I'm out there and will plan on attending a meeting or two. Thanks so much!

@Eric Harding Thanks for the feedback.  Looks like I'll be diving deeper into the research and get the ball rolling.  I appreciate your help!