All Forum Posts by: James Ihssen

Great Job!!! Wait until you close and get that check!!! What a fantastic feeling!!  I read your entire thread and was able to relate to a lot of your emotions, ups and downs, throughout the process....  The key for me is perseverance and the ability to see the bigger picture.  Those two traits will help set you up for success as you continue down your road!

Congratulations again!!

@Pyrrha Rivers   Glad I could help!! I have read many forums and posts and podcasts here that I have taken notes on in the past. The fact that you took notes makes me feel like I am spreading valuable information.  Thank you for saying that!

@David Holland You are correct in your statement but it is not a negative so much as it is a fact. What I mean is you cannot deduct any expenses (off an IRA held property) off your personal returns but that would only be a factor if you had income to write off against that expense. So, in this case where the property is held in an IRA, the income will be sheltered tax free and while the expenses will come out of the IRA account directly, you cannot write those off because they are not generating 'taxable income'. Does that make sense? Hopefully I explained that sufficiently.

Most of my rentals are not held in this manner, but I do love the tax free benefits (rent getting deposited right into your IRA tax free) and will continue to use this as one arm of my multi-faceted strategy in real estate. As the rents snowball in my IRA eventually I will have the buying power for more properties and while there is work involved, I think of it as working for my retirement. I plan on building my IRA portfolio right along side with my existing growing portfolio of rentals.

I do plan to sell at some point, right now 20 years plus out. If the market ever jumps like it did in the late 2000's then I will sell everything I own!! In this specific case the proceeds of the sale would go right into my IRA tax free!!!

Unless my strategy changes drastically (maybe a focus towards commercial only as I get older) then I plan on holding all my rental properties for the long term. I have dreamed of selling everything and buying a commercial strip center (I have managed them in the past) or even a NNN walgreens. Then I can travel the world someday and just get a rental check direct deposited into my account every month by a AAA+ rated commercial tenant.

@Gautam S. The best way for me to explain it is my IRA account, which has a balance, has a facility where I can issue checks either on a one time or recurring basis to cover expenses for the property. All utilities for the property (that are turned on while it gets rehabbed) will go in the name of the trust. It is kind of like bill pay from your checking account.

There are no fees for doing this with my account.  I did some good diligence and called multiple custodian companies, both on the national and regional level and compared their services and fees.   Some companies do charge fees for this.

This property in question is located in Berrien County Michigan.  I am familiar enough with that area to be comfortable investing 'out of state'.  To be fair it is only a few hours away.  I bought my first house out there in 2009 for 25k, put under 10k into it, and have had a quality tenant in there paying me steadily $900 per month for years now.  That place has paid for it self by now at least once and going on twice.  This house is also on five acres, and less than one mile from Lake Michigan.  That place was a score but I bought that when the market was at the very or near bottom of the cycle.  I would have loved to bought 10 back then!!

@Gautam S.  I do not mind to share at all! The way I see it, there is plenty of property for everybody and I am an open book! I love talking about real estate and spreading my knowledge!  My first purchase was a single family house in Seattle in 1999!!  I feel lucky to have witnessed the rapid rise and rapid fall of the market. There is NOTHING Like experience to gain knowledge and wisdom.  This cannot be found in a book!

@Pyrrha Rivers There is a ton of info out there on the subject! I would search these forums for REAL ESTATE in your IRA or google the same to get some good overview information. If you have any specific questions please feel free to ask! Good Luck!!

@Roman Pak   Thank you Sir!! I will do that!

@Justin Howe Using my IRA to purchase property was a decision I made after much thought and planning. Basically, I transferred my 401k to a custodian, in this case Equity Trust (i have no affiliation, just trying to help folks) and via them directed the purchase of the property via letter of direction similar to a Land Trust type of Transaction. I negotiated the deal (this was an out of state purchase) and directed my custodian to purchase the property. All rents go directly back into my Roth IRA Account Tax Free!!!

The house I am purchasing (closing next week, just received closing docs today) will rent for 900 a month once fixed up (needs general cosmetic work and a good cleaning) and my purchase price is 21,500!!   It is a 1100sf brick ranch with 3br and 1ba on 1/2 acre.

My Illinois Real Estate I hold outside of my IRA but when I can achieve returns like that plus tax free on top of that it is like triple icing on the cake! My IRA Account goes up by $10,800 a year (12x900) and the property is appreciating (it will sell for much more than what I paid in 20 years) And it will all be tax free! Once I have my targeted number of properties generating cash flow into my IRA it will grow quite quickly and almost exponentially.

Regarding the actual specifics of the transaction, all expenses paid and income received have to go through the custodian account.  Another huge plus is that the property can be titled with privacy in mind, keeping your personal name off the records.

Hopefully this answered your question!

@Tuan Le Thank you! Buy and Hold is one of my strategies but I also rehab and resell as well. I am a Huge believer in Buy and Hold for long term wealth but also need short term cash flow so I do both. Regarding the MLS, I do agree that a high percentage of the properties are not ideal for a real estate investor. There are needles amongst the haystack though. That is where you have to be diligent and sometimes persistent. The mls is not my only strategy for acquisition though. I enjoy buying at the courthouse steps, more risk but more reward. More research but that is where my passion lies so I enjoy doing it.

I often track CLSD listings in the mls and say wow I would have bought that for that price and the realization I came to is that you have to make offers and get out there and get going otherwise you will never even put yourself into the situation where the opportunity arises to get that fantastic deal.

@Elizabeth Colegrove  That is awesome! It feels good to be on the path to meeting my real estate goals for this year.  I bet you know what that feels like!!

@Wendell De Guzman  Thank you for the links to your forums. I will check them out.  Good luck with your properties! 

I just wanted to share to the world the success that I have had so far in 2015!  I am a slow and steady type of guy and have decided recently to accelerate my business, and have already seen the results of my work!

First of all, I am a Realtor and love being one! I scout the MLS in real time literally every day with my custom searches looking for good deals. If I had unlimited access to funding I could do a dozen deals a month easy (for both buy and hold & rehab acquisitions) but as anyone knows it is not that easy.

So far I have three accepted deals and two of them are closing here in a few weeks.  The third is a Short Sale so there is a timeline there but I am hoping to set up a pipeline of deals now (many short sales under contract) locked in at the (lower) winter prices for me to work with in the summer.  I have already witnessed prices bouncing a little from the winter doldrums and it is only February!

One of the properties purchased I will be putting into my IRA. This is an exciting strategy that will yield tremendous tax free returns (as soon as I get it rented).

Hopefully this post will serve as inspiration for those out there just sitting and waiting or stuck with analysis paralysis.  Get out there and write some offers if you want some deals!!

I would agree with @Chad Svendsen on the lack of flexibility regarding Fannie Mae pricing. It seems that when they put a bit of work into a property they tend to not come down much on price.

I would just suggest @Account Closed to be patient and be diligent and deals will come your way.  Regarding auctions, do you mean the sheriff sale auctions at the 'courthouse steps'?  If so I would say there are good deals to be had, I have had success purchasing from them but you need to do your research in advance and have cash.  If you are referring to auctions like hubzu and homesearch those are just venues for mostly bank owned homes anyways.  Those you have to be careful with too as they have a knack for creating 'artificial demand' in the form of auto bidding and not necessarily making it super clear that you are sometimes bidding against your self.  There are deals to be had on those venues also, you just have to be careful all the same.  I have seen many 'deals' that were way overbid on these sites for whatever reason, whether it be the 'thrill of the auction' or the sense that there is a lot of people interested.  I feel this comes from inexperienced buyers on these sites.

Best of luck!!

Caleb, 

You can try the following.

"bank owned" "as is" "auction" "HUD" "bank owned" "fannie mae" "homepath" "seller will not provide" "corporate owned"

Good Luck!

Indeed I have noticed the same exact thing. Not necessarily with all bank owned properties but most of the FNMA properties that I have looked at have new carpet, paint, etc.  Mostly cosmetic stuff but it seems they are trying to open the pool of buyers and appealing to the masses and not necessarily the investors (those willing to do the work).

Welcome!! It seems like there are a lot of Chicago people here on BP!!! I would recommend CCIA as a local networking option. It is a fantastic REI club. Check out ccia-info.com.

Best of Luck!