All Forum Posts by: Heather Horton

Mel, that sounds extremely high for the size/zip.  Has there been a major claim on the house that causes it to be high?  Have you made a major claim on any other property that would cause you as the insured to have a high rate?  Is it in a flood zone?  and are they quoting you for earthquake coverage?  I'd be happy to recommend some local contacts for insurance if you'd like another opinion.

Thank you all for the advice! I went ahead and made the decision to make an offer and got the house! I am working with Equity Trust as custodian for my IRA and so far am happy with the decision! I understand holding real estate in an IRA is not ideal in every situation, but in this case, it was the only choice I had and I couldn't pass up the opportunity to purchase this property- it is on the same street where I bought my first home (as owner-occupant).

Does anyone have experience buying real estate in a self-directed IRA? I made an offer today to buy a piece of property in my IRA, but still have some questions. Specifically, I am a real estate agent, so am representing myself, but believe that the IRS will not like me being involved? How can I make sure that my commission as the buyer's agent is not considered self-dealing? If I need to defer my commission, I am fine with that, but am I still able to represent myself? Thanks!

Yes, I just worked with Alan Castleman.  He's with Hickman Realty in Jackson and is great :)  

Thank you all for your replies!

@John Thedford, that is a good point!  I know there are limitations to how much you are allowed to use it for personal use, but will need to look deeper into that.

@Jon Latorre Yes, I have noticed PCB is a lot cheaper and not sure if that's where we'd want to be or not.  That's part of what spurred my question about the best area!  Might be a good starting place!

@Arianne L. Good to know!  I would be quite happy with 5-10% and a place to stay a few times a year!

Looking forward to more comments as well.

I have been visiting the Florida Panhandle (Destin, Sandestin, 30A, etc.) my whole life as we have family there and it is a good driveable distance for us to travel. Recently I've been thinking that if I'm going to invest in RE, why not aspire to own a beach condo that I could rent out and use a few times a year!? I would be looking for a good deal (under $200k) on the beach with good rental income potential. Does anyone suggest a certain area to look in or areas to avoid? I wouldn't be looking for a super high ROI., just hopefully be able to cover the bills and get a free vacation out of it a few times a year. I'm open to hearing any pros and cons of short-term rentals as well. This would be brand new to me! Thanks in advance!

I have a 3/1.5 rental with only a shower in the full bath.  When we listed it for rent, I had 1 or 2 folks that cancelled their viewing appointments when they found out it didn't have a tub.  But, we ultimately rented it pretty quickly to a young couple that didn't care about a tub.

I think you just have to look at the neighborhood to determine whether you will most likely be selling/renting to singles/couples/families/etc.  If it's a family neighborhood, definitely put in a tub!

On a side note, I personally would never buy (or rent) a house without a tub, but I'm a bubble bath kind-of person :)

Jo Garner with Evolve Bank is very helpful.  She works with a lot of investors.  Maybe start with her.

Hey Joe,

How are you planning to finance?  Will you need to borrow the money or do you have cash to cover the purchase, closing costs, rehab, etc?  That question is what helped me decide the route to go. Banks are very unlikely to finance a flip (you would need all cash or hard money loan), however, they are quite happy to loan for a rental.  Since I did not have enough cash to cover the entire purchase price and rehab costs, I went with the rental option for my first investment.  However, I was very particular with the location of my rental property, as I wanted something that would appreciate and I will have the option to sell after 1 year for a profit if I do not like the landlord game.  Hope that helps!

Heather Horton

Hi! I just recently did the same thing and have never looked back!  There are a few points to mention:

1. Your Roth was intended for retirement income.  Just make sure you have other retirement savings before going another route with this money.  Hopefully you will be earning a higher return than you were in the stock market, but you will lose the liquidity you have in the Roth.  Just make sure you have enough other savings to cover unexpected expenses in retirement (or now) as you won't have access to the principal once it's invested in real estate, only the income.

2. You will not be penalized on any contributions you made to the Roth.  Go back through your tax records and calculate how much you contributed to the Roth vs. how much of your balance is from earnings.  I would leave the earnings alone (keep in Roth to avoid penalty) and just withdraw the contributions.  You will not be taxed on that, but you will want to make sure you have the tax records to prove it.

Hope this helps!  Let me know if you have any questions.