All Forum Posts by: Hjiorst Fjioords

After looking into the question of whether or not to create an LLC for our investment properties, we decided the better option for us was to simply get more liability insurance, specifically an umbrella policy to cover all properties up to a few million dollars.

Trouble is, getting such a policy has proven difficult.  Our regular insurer, State Farm, does not do such coverage anymore, and after checking with several well-known national carriers, I found only one that offered it, but the lead agent couldn't be bothered to put the details in writing in an email.

There must be companies that specialize in this kind of coverage, I figure, and there must be other property owners in a similar situation who have such insurance.  Hopefully there are some reading this post.  Does anyone have any suggestions?

Thanks for the insights.  I'll wait and see if I get audited.

We have five rental units within two addresses.  My property manager has provided me with a 1099 for each of the five, but also provided one with the total amount of all combined.

I don't think this is right.  Do you? 

Adding to the problem is that each 1099 has no indication of which unit it belongs to, and the big one does not state anywhere on it that it is for all units combined.

What scheme does your property manager follow?

So, yeah, that is precisely the case.  Thank you for the comment.  Just confirmed that with another source, who happens to be the guy who set up my SD trust at Rocket Dollar.  Took about five minutes to reply to my email.  

This is such a violation, apparently, that nobody hesitates to offer what might be called legal advice to say so.  I am just surprised that my broker would not understand the issue.

This thread may be resolved quickly, but let it serve as a warning to all that many otherwise experienced professionals in real estate financing are just not familiar with self-directed retirement trusts and how they work. 

I am pre-qualifying for a real estate loan for my self-directed 401k.  This is the first purchase I've done this way.  The loan broker tells me that the loan will have to be in my name, even though the purchase can be made by the SD 401k trust.

Amongst the rules for SD trust investing are that the only the trust may pay for the property, with no outside money coming from me or anyone else.  No co-mingling.  I have enough in the trust to cover all expenses and down payments, but I am concerned about the loan being in my name.  

Has anyone else done it this way?  Is this normal? 

Not asking for legal advice, just checking to see if anyone else has done this in this way, or knows of someone who has done it this way.

Thanks!

Hmmm... Sounds like you should investigate the things said by the one guy who directly answered your question.  Looks like he has some experience.  I personally don't know what you mean by "Equity Trust".  Is that a financial company or a type of financial device?

However, If you wanted to ask a more general question about the idea of investing in real estate with money from a self-directed 401k or IRA, you need not invest in an Equity Trust variety.  I converted my solo 401k to a garden variety self-directed solo 401k to buy real estate.  PM me if you want to know the details of who I finally went with to handle setting that up.  

I would spread that investment across two or three multi-family rentals, and perhaps be more open to rehabbing a distressed structure that otherwise wouldn't qualify for a typical loan.  Perhaps I would be open to new cities beyond where I currently own.

But I would definitely restrict my investments to states and communities that have democratic governors that take corona virus seriously and which have the most stringent rules in place to combat the spread of the virus.  Leaders that make decisions based on fantasies are going to see their states financially ruined by the consequences.  People will flee them.  Values will plummet.  Perhaps we should close blue state borders and not let in immigrants from red states?

Jebus Christmas you people!  "Might as well just pitch it all into the sea!" First world problems much?

First: I believe you are being trolled. I just googled "Joe Biden 1031 Exchange." and came up with two results. This page is one, and an article by Americans for Tax Reform from January (hardly a reliable source). I found nothing which verifies that this idea of eliminating 1031 exchange has been proposed by Joe Biden.

Individual tax laws would be crafted by and voted on by congress, anyway.

The assumptions and prognostications in this thread range from propagandistic hyperbole to Q-Anon-level paranoia.  

FDR raised taxes on Millionaires to 70%.  This created the massively productive and obscenely wealthy America that we've had since then. 

Every reduction in taxes on the rich since then has been accompanied by a degradation of quality of life and a shrinking of the middle class.

So get over yourselves, and you'll find that you will actually benefit from paying something that's closer to your fair share of taxes. 

And please consider voting for candidates that won't kill hundreds of thousands of other Americans in an act of political revenge.

This is all great information, I'm grateful for the insights.

It sounds like, in most cases, an unlisted property is not ready to be listed, such as foundation problems or needing repairs, or something else that would make it ineligible for a typical housing loan.  Is that always the case? 

If not, what would the advantage be to a seller to not have it listed?  Why not try to get the best price by getting offers from the whole world, rather than a select group of savvy investors?  Seems counter-productive, unless the seller is in a big hurry.

I can see this method being used to engage in housing discrimination, also.  How does one avoid that?

Please excuse the hyperbole. It is the extreme, paranoid version of something I have been wondering about: Are there properties out there up for sale that are not listed and which won't show up on Zillow? 

This idea occurred to me while reading discussions about hard money lenders, etc.  I wondered if there are properties that some owners or brokers might not want to list publicly, and only offer to their group of associates and those in their private "Buyers" lists. 

I do not think this is likely.  It seems to me that any seller would want as many people as possible bidding on a property.  Then again, I once attended a trial which involved an agent not listing a property (not properly, anyway), and offering it only to a favorite investor client.  The trial did not end well for the agent.

So are there such private groups?  Is there some advantage to not listing?  Could any agent do this while maintaining their responsibilities to their client?