All Forum Posts by: James S.

Thanks Mark Nolan ! I wouldn't expect either type of entity to enforce IRS compliance. I'm more concerned that custodians are government-regulated trust companies and TPAs are not. I've read that this introduces risk when using a TPA, but I'm not sure whether there is material risk in practice or this is just something that someone wrote on a blog. I'm curious to hear the opinions of those who are very familiar with this space.

I understand that SD IRA custodians are regulated where TPAs are not, and this introduces risk when using a TPA. What specific risk and how much of it exists in practice when working with a well established TPA like the Entrust Group?

(For context, I will be opening an SD IRA and my employer's compliance dept has already approved Entrust, and a few custodians I've reached out to don't meet their requirements. I would like to understand the real world implications of proceeding with a TPA if that is the only option).

After lots of searching for my first property, I've come across an interesting one. It is technically a 2-unit that can potentially be converted to a 4-unit. The original structure has near identical up/down spaces that were originally separate units. A previous owner extended the house to have two near identical (to each other) more modernized units up/down towards the back of the structure. It operated illegally as a 4-family before getting notice from the town that it was legally a 2-family. The very surprised current owners converted it back to 2, though I don't know exactly what that entailed.  In its current form, the back of the house is rented and the front unoccupied.

This presents an interesting opportunity, but also several challenges: 

• Front units need updating, and front of building is over 100 years old
• Front units have no stoves/ovens (they once did and were pulled, no visible gas hookups)
• Front units heated by gas, rear by electric
• Some units share utilities, not yet clear which units or utilities
• Zoned as a two-family, like most on the block, though there is a 4 or 6-unit building across the street on a larger lot

This is an ambitious project for someone with my lack of experience, but I would like to explore it further before ruling it out, as I see the potential for considerable forced appreciation and solid cash flow.  It is also part of a community typically known for extremely high end homes and good historical appreciation.

I am very analytical and detail oriented, so I'm somewhat comfortable researching specific questions as they come up, but I need some direction on the big picture.  How would you suggest I approach finding out what needs to be done to convert this to a legal 4-unit, whether the town will allow it at all, what work needs to be done (including separating utilities), and at what cost?  Can I also assume conventional loans are out of the question? If the property is off market and the owners are moving slowly, can I do most of this analysis before making an offer?  Big question, so thanks in advance.

Hey Jay, any thoughts on how a beginning investor could reach this conclusion through their own due diligence?  When you say "these homes" and "those markets" is it specific to this area or low end C class in general?

You mentioned in another thread that turnkey properties are typically for cash flow and not appreciation. Is that a function of the region, the neighborhood class, etc.?  Is it simply that regardless of the market they are investing in, only cheap and ill-maintained homes in C class areas typically have enough profit for the turnkey provider to make out and enough cash flow to attract investors, and those areas won't typically have much growth?  In other words, why couldn't one find a turnkey provider in an area where homes were also expected to appreciate? Very interesting read, thanks.

How is the market in Rockland?

As an aspiring investor looking for my first deal, here are my thoughts. I love learning about investing, creatively solving problems (if only running practice numbers for now), and taking intelligent risks. There are two things stopping me from making my first move: The first is that I am not sure what kind of due diligence is required for various investments. For more active investments (buying and managing a rental property), I'm not sure how to develop confidence in my estimation of a prospective property's value, analyze its condition, etc. I know that there are appraisers, inspectors, and agents, but I feel I need more knowledge first as a baseline to weed out properties that definitely won't work and second to keep those professionals honest and cross check their work. For more passive investments (syndications, JVs, funds) the due diligence varies; I want to figure out how to assess their often larger scale investments, gauge the manager/sponsor's track record, and feel confident that the investment is reasonable. The second thing stopping me is the operational side of things. It can be very daunting building a small team, making offers, and even going to see properties as a first timer. I'd love a better grasp on what to do in what sequence, how to engage sellers and find out how to "solve their problems," how much of that can be done when they're selling via an agent, etc. There is such great information on BP and a handful of other resources, but it can be difficult translating that into small actionable tasks having never been through the process.

I am definitely interested in this as well. I am a software developer, and I could definitely automate some aspects of property analysis given the right data sources.

Very cool. These don't offer any bookkeeping features, just project and task management.

Dan Ossman (and Robert Taylor if you're still looking), here are a few more tools that may be of interest. These are general purpose tools, not specific to REI. Checkvist: This free task manager is the only tool I've ever felt truly streamlined my process. I use it for personal task management, reorganizing the way I think about large and complex projects, and more. There are some features to help collaborate as well, but they may require the $39/yr pro account. Asana: I have seen teams use this project management tool to coordinate and implement very complex projects. Very easy, and worth a demo to see if it can improve your workflow. Free for teams of up to 15 people. Slack: This business-facing chat room tool offers a different way to communicate, and is especially handy when you have a handful of people you want to keep informed as an FYI, but want the ability to @tag whoever you need to notify. I'm curious to hear yours and others' experiences with these and the tools recommended above!

Originally posted by @Paul Kaflinski:

I wouldn't want to recommend anyone since I'm down in Fairfield county, but I would suggest working with an attorney that practices in the area that you are doing business as there are two sides to every deal and if the attorneys are local and have experience working together on prior deals, things can go more smoothly.

Hi Paul, I'm a new investor in lower Fairfield County looking to build a team.  Is there an attorney you can recommend down this way?  Thank you in advance!