All Forum Posts by: Jed Wood

Thanks @Dovid Preil and @Alina Trigub

@Dovid Preil no fees, although I proposed to the partner that we could go that route if they'd prefer, rather than larger equity split. And yes, recourse loans with only me personally guaranteeing.

A potential partner and I are trying to come to terms on an equity split for our partnership. I'd love to hear opinions of all kinds regarding what's fair, preferably from those that have been a part of this type of deal before (as either the cash/limited partner or the deal provider/general partner). Would also love to hear alternative arrangements that have worked well for you. Here are the facts:

Deal type: a batch of SFH and small multi-family spread across two geographic markets. Buy and hold for 8-12 years.

Deal value: $1MM

Cash invested: $250k (split, each providing $125k)

Projected CAGR: ~14%

As the managing/general partner, I will be managing the property managers, securing financing and having sole liability for the loans, keeping the books and coordinating with the accountant for filing taxes. I also found the deals, which are off market and at a bit of a discount.

I'm proposing a 60/40 equity split. The limited partner wants to do 55/45. I've been buying and overseeing rentals in these markets for a couple years. The limited partner is coming in new.

Thanks!

Hello Spokane from Utah! Sounds like you beat us to the first snowfall this year. :)

I own a small house that needs some basic exterior work done; some siding replaced and repainted, some beams on the front porch repaired/replaced, and some missing screws on the metal roof replaced. 

I'm not looking for the cheapest best price. I just want somebody that's responsive and will do a good job in a reasonably timely fashion. I would appreciate any recommendations you can provide. Thanks! 

Okay here's a fun one: what about a situation where a person becomes disqualified _after_ the initial transaction? For example, let's say a non-disqualified person provides a loan to my SDIRA. A year later, while my SDIRA is still paying on that loan, I personally want to start a new business venture with that person, of which I'm going to own 50%. Do the SDIRA loan repayments then count as prohibited transactions? Any suggestions for how to proceed in creating the venture?

If I understand correctly, as long as I'm only a 49% owner, the new entity is not a disqualified person per se, though I would still need to be careful of any self-dealing issues. 

@Justin Windham yep, Roth. 

@Dmitriy Fomichenko let's say I want to buy a property for $100k. From what I understand, my Solo401k could partner with my SDIRA, each putting in $50k, and from then on splitting all profits and expenses accordingly, and making sure to never change ownership %, and all the other rules around prohibited transactions.

My question is: instead of the added complexity that comes with dual ownership, is it legal for my SDIRA to provide the mortgage to my Solo401k when buying the property, thus leaving just one entity responsible for expenses and profits?

Thanks @Justin Windham and @Dmitriy Fomichenko !

@Dmitriy Fomichenko when buying a property with my Solo401k, how much financing can I get without triggering issues? For example, let's say I want to use $25k of my Solo401k funds. I have an investor that is willing to give me a $50k non-recourse loan. The target property is $50k, but requires $25k in immediate rehab. Can I use the investor's funds for the purchase, and then pay for the rehab from my Solo401k funds? If not, what's the simplest way to structure this kind of deal?

I'm sure you'll get better insights in to this, but since it's been quiet for a few days here are some things I would consider:

- Opportunity cost. If you flip and sell, are you able to quickly put *all* of that money back into profitable flips (or other investments that are more profitable than keeping the rental)?

- Re-fi rate: If you hold, do you have a lender that will give you a good amount of cash-out, and is it at a good interest rate?

- HELOC: I've found one credit union here in Utah that has good terms on rental property HELOCs. That could be a good compromise between holding and selling; you don't have the high closing cost of a re-fi, you can take the cash out if you need to to jump into a new great investment, but put it back when you don't need it.

And of course, how would you rather spend your time? Assuming you have lots of flips available to you, you could focus solely on that if that's your jam, or you could slow things down a tad and BRRRR, buying fewer properties and spending part of your time (and capital) being a landlord (or managing your property manager). I would probably hedge my bets: sell the ones that you can get the most profit for, keep the ones that are in areas with more potential appreciation.