All Forum Posts by: Scott Jensen

@Chris Gawlik @Frank Chin As long as you are conservative with your numbers and have plenty of reserves I say go for it. Nobody can predict the market. Just proceed with caution (as you should in any market and at any time).

For big sums of cash, I like investing it in the market relatively conservatively, and using the stock market portfolio as collateral for a line of credit to do real estate deals. I have a client that we just got approved for over $1m Line of Credit under 2%!  He's putting in a cash offer on a property today. :-)

@Kalin Berger As others have pointed out, rolling the funds to a self directed IRA is pretty straight forward. I would have the IRA provider walk you through it step by step.

@Jason M. I would recommend finding an advisor though the XYPN or NAPFA find an advisor search.

https://www.xyplanningnetwork.com/consumer/find-advisor-new/

https://www.napfa.org/find-an-advisor

@Perry R. It is hard to say without the exact numbers, but clearing $600/month on a $550k property seems pretty low. There are lots of options, but I'll throw 1 out there for you. 

Property 1 - Sell the property (you could 1031 it to better performing properties, or DST, UPREIT, or pay the taxes, (maybe offset some taxes with charitable gifting, or other deductions depending on your tax situation)

Property 2 - Cash-Out Refinance - Pull out as much as you can, do the repairs and increase rents

Property 3 - Pay off the property with Refi money, do the repairs and increase the rents.

You would keep the two better performing properties, improve cash flow and investment returns.

If you want to keep property 1,  I would refinance it and pull out enough cash to pay off the other two properties and do the upgrades.

@Lee Fahy What is the plan for avoiding foreclosure? Do you have any information on the remaining amount of the current mortgage and how much she is behind?  That will need to be caught up (or paid off) to get the deal to work and ten percent down may not be enough.  

I would treat the rent and contract for deed payment separately. Combining the two may be more complicated from a tax standpoint.  (ie: charging her below market rent, and properly filling our her CRP).

@Justin Wright I would 100% recommend @Paul Allen if you're looking for a financial advisor.  He works primarily with the military community and veterans and is well versed in all things real estate, tax, and financial planning. 

@Lucy Iburg Sarah Benson runs a REI group for women. Send me a message and I will send you her contact information.

@Ray Adams I second Northstar Real Estate Conference. They have had to postpone this year's conference from April to October and made it online only this year. I don't remember the price but its really reasonable. Next year's conference is scheduled for April again.

Thanks for the mention @Randy Bloch.

Most financial advisors don't offer any help with real estate but there are some of us that do. A few months ago I started a study group for financial advisors that work with real estate investors (or want to work with real estate investors). So, there are some of us out there, but we're rare. Let me know if you want to chat. I would be happy to help if you're a good fit or to recommend you to someone who would be a better fit.

@Jonathan Doescher 

In general, I don’t recommend new real estate investors withdraw funds from retirement accounts to fund deals or invest in real estate inside of their retirement accounts. The stock market has a long history of growth and until you have some personal experience in real estate investing you should be cautious with your retirement accounts.

I would suggest rolling the 401(k) funds into an IRA and doing annual Roth conversions each year to fill up the lower tax brackets. 5 years after you convert a portion of your IRA to a Roth it is counted as the "basis" and can be taken out of the account without any taxes or penalties. This will free up your retirement funds for penalty-free distributions before 59 ½. In 5 years, after you have some experience investing in real estate, you can decide whether it makes sense for you to use some of your retirement funds for real estate investing.

If I had a pension only earning 4% I would roll it into an IRA with my other investments (and maybe convert it to a Roth IRA.) 72t distributions are pretty restrictive and often times doing annual Roth conversions works out better.

I agree about tax rates being historically low right now. I would be cautious about deferring taxes in this environment.

My last point is that not everyone is eligible to take the Coronavirus related withdrawal. This article does a pretty good job of explaining who qualifies and who doesn’t.

https://www.cnbc.com/2020/06/19/irs-expands-eligibility-to-take-coronavirus-related-withdrawal-from-retirement-savings.html

I hope that helps. Best of luck!

To me, owning some cash, active real estate investments, and broadly diversified stock and bond funds is as good as it gets. I don't see a need to add gold to the mix even from a diversification standpoint. Also, the way gold is taxed (as collectibles) is another drawback.