All Forum Posts by: William Morrison

I use Mortgage Brokers that can shop loans.
They should be able to use a one or two year lease and when the appraisal is done it should include an appraisal on the going rents.

@Gabe C. Jason will send you the current rates.  You will find then very reasonable and the whole product is basically a commercial loan because it is a Non Recourse Loan.  The closing cost were in line with properties I have outside of my 401k.
Your LTV loan will be based not just on the rental property but more of a business model. The loan is based on the 401k or an IRA and not you or assets outside those resources. Thus your reserve in the 401k, the rental history and lease as well as the street market appeal of the property.
I have contacted several lenders.  Some reasonable and some just seem to be waiting for you to only check one, "them".  And in that case some talk a nice game but have rates closer to hard money.  Try not to laugh while talking to them.  I'm talking 2 to 3% higher than what's competitive.

If your rents are lower on nicer properties you might find your up from 70% to 60%.  You may also find with competitive rates that the 60% loan is cheaper than others 70% rates.  I did.

So how did it work out?

@Steve Kordish be sure to carefully check out how to connect to the structure, which may or may not be what you think is the frame.  If not, the Hurricane Impact Windows are just projectiles in a storm.  Yes it happens.
Not to keep you from doing it yourself, just be familiar with how to connect to the structure.

Ed, you have some really good sources of information above, folks that are in this every day.  So my question is not from that background.  Brian and Dmitriy provide great input on these forums.  I use Dmitriy with Sense Financial on an annual basis and have been very satisfied with his advise.

Have you called any Non Recourse lenders yet?
I would think they could quickly tell you under what conditions they would lend. It might require some changes to your LLC documents. Does yours define reserves and distributions to protect the lender?

Basically what I understand is that if the percentages stay the same you can add money, take distributions or make additional investments in the LLC. And a Non Recourse lender will look at the assets, income, expenses and reserves to determine risk, and maybe the distribution track record.

Seems the rates and terms are all over the map from what I've found, not even close for the exact same property.  I'm talking whole or multiple percents not tenths and quarters.
You might call NASB.  I know they do Solo 401ks and IRAs loans.  Those I know about outside of 401ks require a relationship, a track record and maybe only accredited investors as partners. 

 Mark, I didn't see your question answered.   The states I've checked out all require a live person available during normal working hours, five days a week to receive on your behalf papers being served.  A PO or UPS mail box specifically listed as not meeting that.  Check out Registered Agents.  Mine are $49 per year, some $100 or so.

 Good point Kimberly, my daughter's has five dog breads for which they will not insure her house.  A couple were not dogs you would expect.  Those were normally friendly but fiercely loyal.

So "Free Legal Advise" 

 Rich, saw you question and wasn't sure if you knew you are paying yourself the interest.

Don, it's also possible to take assets from your ROTH as distributions.  One reference I have speaks of a vacation house as a rental until you reach retirement age, then taking it as a distribution. Vacation rentals you can't use are not always the best strategy but with the end goal of a distribution it may change your evaluation.
Probably not the strategy for someone starting out, but for someone maxing their 401k as the sole owner of a successful business worth looking at.